industry/Business
Water management is growing chemical outlet Success of suppliers depends on ability to provide right mixture of chemicals, service, and technology For sheer size and political touchiness, no commodity can match ordinary water. With use heading this decade for 500 billion gallons per day in the U.S. and concern for cleanup growing, water promises greater supply headaches for the chemical industry but also a fast-growing potential outlet for chemical products and technology. Whether water makes a particular chemical company merely pay or possibly profit will depend on the firm's ability to serve up a special combination of antipollution and other treatment chemicals and the technology for using them. At least, this is the considered opinion of consultants giving the field a close look. Handful. Although water management appears at first glance to beckon many chemical companies into new enterprises, only a handful of firms with deep roots in one part of the business, water services, have put much black ink on the ledger, according to Dr. Charles H. Kline, head of the Fairfield, N.J., consultant company bearing his name. Speaking late last month at the European Chemical Marketing Research Association's annual meeting in Vienna, Austria, Dr. Kline pointed out that specialties and services, not basic chemicals, hold the key for chemical companies serving water management. Total sales of chemicals for water treatment and pollution control will reach $410 million this year, Dr. Kline estimates. A five-year forecast puts compound growth at 5.7% per year to $540 million in 1976. By far the largest part of this market for chemicals goes for industrial water treatment, which accounts for 73% of the total, or $300 million. Municipal water treatment will account for $55 million worth of chemicals in 1971, and total pollution con20
C&EN OCT. 4, 1971
trol barely the same amount. Although the market for pollution control chemicals will grow briskly at 10% per year, Dr. Kline predicts it will still trail far behind the market for industrial water treatment chemicals. Larger. Earlier this year, Arthur D. Little, Inc., consultants in Cambridge, Mass., put chemical sales of water and waste water treatment chemicals in the U.S. at $320 million in 1970. A fiveyear growth of 9.1% per year, even larger than Dr. Kline's figure, would make the chemicals market $495 million in 1975. A. D. Little estimates that chemicals took about one half of the total market of $600 million in 1970 for all products and services specifically oriented toward water and waste water treatment. The other half included specialty equipment and instrumentation. The $600 million in turn is part of a total capital and operating budget of $5.5 billion for water and waste water treatment. A look at use patterns of water in the U.S. shows that the largest chemical outlets in manufacturing and utilities are also, combined, the biggest total use area for water—and the fastest growing. The U.S. Department of Commerce estimates that total U.S. water consumption was 411.2 billion gallons per day in 1970, up 2.4% per year from 322.9 billion gallons per day in 1960. Commerce foresees total use of 494 billion gallons per day in 1980 for a compound growth rate of 1.9% in the 1970's. Attractive. By far the most attractive segment of this picture for chemical companies is industrial and utility consumption of water, Dr. Kline finds. Two specific water uses by industry—in boilers and recirculating cooling—outdistance all the rest in demand for chemicals. In 1971 boiler water contained $120 million in chemicals, cooling water $105 million. The boiler market for chemicals is split among low-, medium-, and highpressure boilers (the last in utilities), and between pretreatment and internal treatment. Pretreatment ranges from softening or nothing at all in low-pressure boilers to complete demineralization in sensitive high-pres-
sure boilers. Chemicals involved include soda ash and ion exchange resins with regenerating heavy acids or bases. Internal boiler treatment is more complicated in all but high-pressure systems, which use pure water at the outset. A number of chemicals find use here in removing oxygen, control-
Chlorine is workhorse of water treatment chemicals U.S. sales (Millions of dollars) a 1,971 1976
Basic chemicals, total b
$215
$275
Chlorine
40
52
Calcium oxide, hydroxide
33
46
Aluminum sulfate
18
20
Sodium phosphates, polyphosphates
14
17
Sodium hydroxide
12
15
11 11
13
Sodium carbonate
8
10
Sodium chloride
7
10
Ferric chloride
7
8
Sulfuric acid
5
7
Sodium dichromate, chromate
Copper sulfate
4
6
Sodium sulfite
4
5
52
66
27
49
Other Selected specialty chemicals, totalb
17
31
Activated carbon
5
10
Chelates0
5
8
Organic polyelectrolytes
Proprietary formulations, total d
200
260
Recirculating cooling water
80
110
Boiler water
80
100
Water for papermaking
35
40
Odor control for sewage plants
2
4
Other
3
6
a Sales at manufacturers' level, b Includes chemicals sold to water service companies for resale in proprietary formulations, c Includes ethylenediaminetetraacetic acid (EDTA), nitriiotriacetic acid (NTA), and others, d Excludes products for treatment of water in oil fields. Source: C. H. Kline & Co.
ling alkalinity, preventing embrittlement by sodium hydroxide, preventing scale, dispersing sludge, preventing foam, and preventing corrosion by condensates. Chemicals for these uses include sodium sulfite, hydrazine, sodium nitrate, sodium phosphates, chelates, sodium silicates, starch, lignin sulfonates, poly electrolytes, polyamides, polyethylene glycol, morpholine, cyclohexylamine, and ammonia. The cooling water market for chemicals, like the market in boiler water, involves high-profit proprietary formulations. Specific needs are preventing corrosion, scale, growth of microorganisms, and foam. Chemicals involved include sodium compounds (chromâtes, nitrite, phosphates, and silicates), zinc sulfate, organic phosphonates, organic polyelectrolytes, chelates, chlorine, and heavy acids. Municipal. Although better known, municipal water treatment offers a far smaller market for chemicals than the industrial water sphere, coming to only $55 million this year. Nearly all the chemicals used in municipal water treatment, Dr. Kline notes, are bulk commodities such as chlorine, aluminum sulfate, and lime. Most of these chemicals find much larger markets in nonwater fields and are hardly attractive to basic chemical companies as water management chemicals. The market stance of chemicals in water pollution control is not much better than in municipal water treatment, Dr. Kline remarks. Here, too, low-cost bulk chemicals predominate —ferric chloride, ferric sulfate, alum, lime, sulfuric acid, and chlorine. The total chemicals market in water pollution control is $55 million this year, the consultant says, divided between $35 million in industrial and $20 million in municipal waste treatment. The chief sales items in pollution control are pH control chemicals in industry, and sludge conditioners in cities. Among industries, primary metals companies buy the most water pollution control chemicals, spending $9 million this year. Second is the chemical industry, which Dr. Kline figures will spend $6 million on waste water chemicals this year and $11 million in 1976. Other outlets are mining, metalworking, petroleum, and food. A characteristic of the largest purchasers is that they produce large inorganic wastes not subject to biological digestion. Calling this market generally disappointing for chemical companies, Dr. Kline still singles out polyelectrolytes and activated carbon as growing specialties. He says that at least 15 U.S. companies now offer polyelectrolytes.
Chemicals use in water treatment dwarfs that in pollution control U.S. market (Millions of dollars) 1971 1976
Water treatment, total
Increase (Percent per year)
$355
$450
4.8%
Industrial
300
385
5.0
Municipal
55
65
3.8
Pollution control, total
55
90
10.0
Industrial
35
60
10.7
Municipal TOTAL
20 $410
30 $540
8.5 5.7%
Source: C. H. Kline & Co.
A dramatic increase in use of polyelectrolytes could well come out of the U.S. Government's reversed stand on detergent phosphates. Surgeon General Jesse Steinfeld has advised continued use of phosphate detergents and switched the emphasis in phosphate control to sewage treatment. This dramatic t u r n of events throws a sudden bright light on phosphate removal technology developed by a number of organizations, including the former Federal Water Pollution Control Administration, Dow Chemical, Biospherics, and W. R. Grace. Dow, which has always maintained that it's better to take phosphates out of sewage, has labored on a phosphateremoval process for about five years, much of the time without much interest from buyers. However, the company has now run 47 test plants and commercial plants in the Great Lakes area, among them a fully auto-
mated phosphate removal process in Grand Rapids, Mich. After the Surgeon General's new policy, Dow plans an extensive adver tising campaign beginning this week to alert cities to its process. The company scoffs at high investment costs for phosphate control given by government officials. Its own rule of thumb is that scarcely any capital additions are necessary in existing sewage treatment plants and that op erating costs rise about 2.5 cents per 1000 gallons of treated effluent. In one city, this amounted to an extra charge of $1.14 per person per year. Until Dow's and other companies' municipal processes reach large-scale use, however, the profitable chem icals market in water management still belongs to formulation- and ser vice-minded companies serving indus try. Dr. Kline cites Nalco, Betz Lab oratories, Calgon subsidiary of Merck, Drew Chemical division of Slick, Dear born Chemical division of W. R. Grace, and Mogul as the top water service companies. The success of these firms illustrates the high profits possible from special formulations and techni cal service. As Dr. Kline sums up, the leaders in water management chemicals empha size "more and more the exploitation of chemical technology broadly rather than merely the sale of chemicals in bags, drums, or carloads. In other words, knowledge and service are be coming more valuable than products alone."
City water works, such as Chicago's, promise expanding market tor chemicals
OCT. 4, 1971 C&EN 21
