Industrial water users set out spending priorities

UK industrial water users have set out their investment priorities for the coming years, with cost saving measures for wastewater management and production processes topping the list of spending areas

UK industrial water users have set out their investment priorities for the coming two years, with cost saving measures for wastewater management and production processes topping the list of spending areas.

A new IWEX Report, commissioned by the organisers of IWEX 2005 and the publishers of WET News, found that more than a quarter (26%) of UK industrial water users intend to invest in their water and effluent management programmes within the next two years, with 16% planning major spending sprees in the coming year.

Their main investment priorities centre around the treatment and disposal of wastewater and effluent, which, with an average annual spend of 2.55% of turnover, is a major cost area for UK businesses.

According to the IWEX Report, the main investment priorities are.

* Reducing the strength of wastewater/effluent produced.

* Reducing disposal costs of wastewater.

* Reducing water consumption.

* Reducing the volume of wastewater/effluent produced.

* Re-using more water in the manufacturing process.

13% of businesses questioned predicted that their spending on wastewater and effluent management would increase over the coming year, with only 6% expecting a drop in spending, so it is no surprise that reducing costs is a priority.

The biggest spenders on wastewater management are in the brewing and food manufacturing sectors, spending on average 4.25% of their turnover in the area.

On top of that 24% of brewers and food manufacturers also expect their spend in that area to further increase over the next 12 months - although a hopeful 17% expect it to decrease.

It follows then that the brewing and food industries should be the biggest investors, with 45% planning to spend on new plant and equipment at some point during the coming two years and 31% intending to invest in the next 12 months.

The chemical and pharmaceutical industries are the second biggest spenders on wastewater management at an average of 4.18% of turnover.

However they seem to have their costs more in control as only 18% of companies in the sector expect to see their spend increase in the next 12 months, and only 18% plan to invest in new or upgraded equipment over the coming two years, falling to 12% during the next year.

In fact it is the pulp, paper and packaging industries that are the second biggest investors, with 42% of companies in the sector planning to shell out during the next two-year period, and 18% planning to do so over the next year.

But UK businesses are also investing in other areas of their water programme, and after reducing wastewater management costs it seems the main aim is to lower production costs, primarily by reducing the amount of water they use or by making plant and equipment last longer.

A general 'lowering of production costs' topped the list of areas of interest, as identified by 47% of the companies questioned, but this was closely followed by a number of issues relating to the life of equipment.

38% of industrial water users wanted to reduce the formation of scale and deposits, 31% wanted to extend plant longevity, and 27% wanted to reduce the amount of metal corrosion found in equipment.

The IWEX Report found that on average all UK industrial water users spend 1.88% of their turnover on water usage, or GBP376,000 for the average medium sized business with a GBP20 million annual turnover.

Here again the brewing and food manufacturing industries lead the way in spending, clocking a way above average 3.6% of turnover spent on water.

In terms of specific areas of investment, water equipment and pumps lead way and take the biggest slice of investment budget, accounting on average for 1.27% of a company's turnover.

Water recycling and environmental monitoring are on fairly equal footing with 0.99% and 0.96% of turnover respectively, but on average UK industrial water users only spend 0.38% on consultants.

However this figure increases the bigger a company gets, with the largest businesses spending on average 1.28% on consultants to help develop their water strategies and presumably cut spending and costs in the long term.

As the IWEX Report has already discovered, many businesses feel poorly served by suppliers in the water and effluent industry.

But with the level of investment by companies continuing to grow, especially when it comes to strategies to reduce their spending on water and wastewater management, it seems there are a great number of opportunities for suppliers to cut themselves a bigger slice of the market.

For a copy of this new IWEX Report please visit the show website.

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