I. Overview of the industry
1. industry attributes
Water treatment refers to the process of settling, filtering, coagulation, flocculation, corrosion inhibition, scale inhibition, etc., which are carried out by a series of water treatment equipment, using physical and chemical means to remove some harmful substances in water that are unnecessary for production and life. Because social production and life are closely related to water, the water treatment field involves a wide range of applications, which constitutes a huge industrial application.
2. Industry classification
According to different classification standards, the water treatment industry can be divided as follows:
Classification of water treatment
3. Industrial chain structure
The upstream industry of water treatment industry is sewage equipment raw materials and spare parts industry, including steel structure tanks, membrane equipment, instruments, meters, pumps, valves and other fields. These fields are in a fully competitive state, products are easy to purchase, and the water treatment industry is not related to the upstream industry; Downstream industries include domestic sewage and domestic sewage, among which the industrial sewage discharged from production sewage accounts for a large proportion, mainly including electric power, paper making, petrochemical industry, metallurgy industry, textile industry, chemical industry and other industries. Downstream industries play an important driving role in the development of this industry, and their development directly affects the changes in demand for products in this industry.
water treatment
Second, the market operation
1. current market situation
With the increasingly serious environmental pollution and resource shortage, ecological environmental protection and resource conservation and utilization have received unprecedented attention. According to the report "National Environmental Protection Industry Forecast and Policy Analysis during the 12th Five-Year Plan" provided by the Environmental Planning Institute of the Ministry of Environmental Protection, according to preliminary estimates, the environmental protection investment demand during the 12th Five-Year Plan period is about 3.1 trillion yuan, with an average annual environmental protection investment of about 620 billion yuan. Environmental protection industry is a typical policy-oriented industry, and a strong emission reduction policy will give birth to huge market demand for environmental protection industry, which will become a new growth point in the next round of economic development.
At present, there are about 35,000 employees in the national environmental protection industry, with nearly 3 million employees, and the total industrial income is nearly 1,000 billion yuan. With the further increase of investment in environmental protection, China's environmental protection industry will usher in a broader development space. According to the requirements of the 12th Five-Year Development Plan of Environmental Protection Equipment, the total output value of environmental protection equipment industry will increase by 20% annually during the 12th Five-Year Plan period, reaching 500 billion yuan in 2015, and the rapid development of environmental protection industry will certainly drive the rapid development of water treatment industry.
2. Forecast of market scale
The industrial sewage market is huge. Industrial water treatment is greatly affected by upstream industrial investment. With the slowdown of macroeconomic growth, the growth rate of investment in thermal power, steel and other fields has also slowed down, which has an impact on the market growth of the corresponding industrial water treatment industry. It is estimated that the total investment in industrial water treatment during the 12th Five-Year Plan will be reduced, but it is still a huge market.
Scale of water treatment market
It is estimated that the investment in industrial sewage treatment from 2014 to 2018 will be about 110 billion yuan, with an average annual investment of 22 billion yuan. Excluding the data disturbance caused by the financial crisis (2008-2009), the average annual growth rate of domestic industrial wastewater treatment investment from 2002 to 2011 was about 10%, which was slightly lower than the average annual growth rate of industrial added value of 11.5% in the same period. At present, the peak of investment and construction of domestic industrial sewage treatment facilities has passed, and industrial sewage investment will mainly take place in the upgrading of equipment driven by the improvement of emission standards. Therefore, the growth rate of investment in industrial sewage treatment will decline. It is estimated that the average annual growth rate of investment in industrial sewage treatment will drop to 8% in the next five years. According to the 8% growth rate, it is estimated that the investment scale of industrial sewage treatment in 2014-2018 will be about 110 billion yuan, with an annual average of 22 billion yuan, of which the investment scale in 2014/2015 will be 19.3/20.7 billion yuan respectively.
It is estimated that the total operating cost of industrial wastewater from 2014 to 2018 will be 448 billion yuan, with an average annual cost of 89.7 billion yuan. From 2002 to 2011, the average annual growth rate of domestic industrial wastewater treatment operation cost was about 15%, and the operation cost increased from 18.1 billion yuan in 2002 to 73.2 billion yuan in 2011. Affected by the adjustment of economic structure, it is expected that the discharge of industrial wastewater will slow down, which will drag down the operating expenses of wastewater; However, because the average operating load rate of industrial wastewater is only 54%, and many treatment facilities are in a state of half-stop and half-open or long-term idle, the strengthening of government supervision will push up the operating load rate of the industry, and the increase of the load rate will partially offset the influence of the slow growth of wastewater discharge. From 2014 to 2018, the average growth rate of operating expenses of industrial wastewater will fall back to 10%. According to this growth rate, the operating expenses of industrial water treatment in 2014-2018 will be 448 billion yuan, with an average annual average of 89.7 billion yuan, of which the average annual operating expenses in 2014/2015 are 73.4/80.6 billion yuan respectively.
Third, the industry supervision system and policies
1, industry departments and management system
China's water treatment industry implements a regulatory system that combines national administrative supervision with self-regulatory supervision. In terms of administrative supervision, the Ministry of Environmental Protection and local environmental protection departments at all levels are responsible for the unified supervision and management of environmental protection work, and are the competent departments of China's environmental protection industry. The Ministry of Construction, the Ministry of Environmental Protection and the National Development and Reform Commission and other government departments are responsible for the business areas and business scope of environmental protection enterprises. Qualification management; The self-discipline organization is the water pollution control committee under the China Environmental Protection Industry Association, which focuses on the self-discipline management within the industry.
2. Industry policy
In recent years, with our country attaching great importance to environmental protection, the state has issued a series of policies and regulations on water pollution control. With the Environmental Protection Law of the People's Republic of China promulgated in 1989 as the core, many laws and regulations and industrial development plans have been promulgated around environmental protection and water resources utilization. In recent years, the central and local governments have successively formulated the National Groundwater Pollution Prevention and Control Plan (2011-2020), the Twelfth Five-Year Plan for the Construction of Urban Sewage Treatment and Recycling Facilities, the Key Watershed Water Pollution Prevention and Control Plan (2011-2015) and other related plans, as well as the new edition of the Sanitary Standard for Drinking Water and other industry standards, which will guide and standardize water pollution control
Four, the basic situation of the industry analysis
1. Periodic, regional and seasonal characteristics
(1) periodicity: the water treatment industry is closely related to the change of economic cycle, which is largely affected by the operation of national economy and the fluctuation of investment scale of industrial fixed assets. However, with the increasing shortage of water resources in China, the water treatment industry
As a sunrise industry, benefiting from the rapid growth of national economy and the public's increasing attention to environmental protection, it will usher in a favorable period of rapid development, with relatively stable demand and weak cyclical characteristics.
(2) Regionality: Industrial water treatment is related to the economic development level and water resources endowment of each region, so there is a certain regionality. Industrial development in eastern China is relatively developed, and there is a great demand for industrial water supply and wastewater treatment. With the development of industry in the central and western regions, the management of industrial water supply and the treatment of industrial waste water in the central and western regions are also facing great development space. In areas where water resources are scarce in northwest China, when choosing water treatment schemes, the proportion of schemes that choose reclaimed water as water supply source is increasing, and the corresponding market demand for reclaimed water reuse and installation is large; In China's coastal areas lacking fresh water resources, it is more likely to choose seawater as water supply source when choosing water treatment schemes, and the market demand of corresponding seawater desalination devices is greater.
(3) Seasonal: there is no obvious seasonal change in the whole industrial water treatment industry. However, from the perspective of water treatment in thermal power industry, the five major power generation groups and local power groups usually make investment plans in the first quarter of each year, and then arrange investment funds and implement investment plans one after another. Therefore, power companies mainly sign supply contracts through bidding in the first and second quarters, enter the design, manufacture and commissioning stages in the third and fourth quarters, and deliver them to the owners for use before the end of the year, thus obtaining sales revenue, showing certain seasonal characteristics.
2. Barriers to industry access
(1) qualification barriers
China implements a strict access system for water treatment business, and only qualified service providers are qualified to undertake business. According to Engineering Design Qualification Standard, different levels of qualifications clearly define the project scale, and service providers are not allowed to undertake business beyond their qualifications. Electric power, coal chemical industry, petrochemical industry and other industries have a large amount of investment. Therefore, only qualified service providers are usually qualified to participate in the project bidding of the above industries. Customers themselves will strictly check the qualifications and level of service providers and choose among qualified service providers. According to relevant regulations, service providers need to meet relevant requirements in terms of operating time, registered capital, project experience, number of personnel, etc., new entrants need to accumulate for a certain period of time before they can obtain quality, and they need to meet higher requirements before they can obtain high-level qualifications.
(2) Technical barriers
Water treatment has a wide range of applications, involving many products. At present, most enterprises can only provide water treatment services for one or part of the production fields, and few enterprises in the industry can master complete water treatment technology. Taking water treatment in power industry as an example, it is necessary to provide targeted project design according to the different characteristics of each project. Besides meeting the effluent quality required by power plants, it also has higher safety and stability and higher technical requirements. And with the country's "festival"
With the continuous improvement of the requirements of water and emission reduction and the continuous development of power plant units towards high power and high energy efficiency, enterprises in the industry have increased the intensity of technology research and development, and the applied technologies are constantly updated. It is difficult for enterprises outside the industry to master relevant technical systems.
(3) Performance barriers
Generally speaking, water treatment in different sub-sectors has different industry certification requirements. Except for some licensed industries, most enterprises in the industry pay more attention to the past performance of water treatment equipment providers, and the quality of customers they serve will affect the ability of enterprises in the industrial water treatment industry to obtain new customers to a great extent. Taking the power industry as an example, the water treatment system, as an important auxiliary system, plays a very important role in the stable operation of power plants. Customers have high requirements on the safety, reliability and durability of products, and usually purchase them in the form of bidding. Power plant water treatment manufacturers must not only have the corresponding product certification, but also have the supply experience of projects with similar nature and complexity before entering the bidding process of customers. Therefore, the past performance of the same type of project constitutes an important barrier for the industry.
(4) Brand and customer relationship barriers
Water treatment enterprises need to expand marketing channels through various forms, and establish long-term cooperative relations with customers with good product quality and enterprise integrity. Taking power plant water treatment as an example, there are many enterprises engaged in water treatment business in the industry, including Huadian Water Engineering Co., Ltd., Nanjing Zhongdian Environmental Protection Co., Ltd., Beijing Zhongdian Jiamei Environmental Protection Technology Co., Ltd., Jiangsu Bada Technology Co., Ltd. and other enterprises engaged in water treatment business for many years. This kind of enterprise has high recognition and reputation in the industry. For new entrants to the industry, this kind of customer relationship and brand effect based on long-term cooperation is a big obstacle for them to enter the industry.
3. Favorable and unfavorable factors affecting the development of the industry
(1) favorable factors
1) industrial policy support
In recent years, with the increasing emphasis on environmental protection and the shortage of water resources in China, the state has issued a series of policies and regulations on the protection and utilization of water resources. With the Environmental Protection Law of the People's Republic of China promulgated in 1989 as the core, many laws and regulations have been promulgated around environmental protection and water resources utilization. For example, in terms of water resources protection, the Water Law of the People's Republic of China, the Law of the People's Republic of China on Water Pollution Prevention and Control, and the Implementation Rules of the Law of the People's Republic of China on Water Pollution Prevention and Control have been promulgated successively. In terms of water saving and emission reduction, the Circular Economy Promotion Law was passed in 2008. The promulgation of the above laws has laid a solid policy foundation for the development of industrial water treatment industry.
Subsequently, a series of policies and regulations have been issued, such as the Outline of China's Water Saving Technology Policy, the Notice of the State Council on Printing and Distributing the Comprehensive Work Plan for Energy Saving and Emission Reduction, the Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries, the Comprehensive Work Plan for Energy Saving and Emission Reduction in the Twelfth Five-Year Plan, and the Technical Guide for Compiling the Plan for Total Control of Major Pollutants in the Twelfth Five-Year Plan (Draft for Soliciting Opinions). It is clear that the first key area of China's environmental protection development in the 12th Five-Year Plan is sewage treatment, and specific requirements are put forward for industrial water supply, water saving, seawater utilization, waste water treatment and reclaimed water reuse, energy conservation and environmental protection, which will improve financial incentive policies, improve tax support policies and strengthen financial support. The implementation of the above plans will provide broad market development space for the development of industrial water treatment industry.
2) Sustained growth of national economy
China's economy has maintained rapid growth for nearly 30 years. According to international precedents, when the economy grows to a certain period, governments at all levels pay more attention to environmental protection than economic growth. In China, this rule has been verified in economically developed regions. The sustained development of the national economy not only puts forward increasing demand for the water pollution control industry, but also provides greater investment support for the development of the industry.
3) Continuous progress of water treatment technology
In recent ten years, with the emphasis on water resources protection in China, industrial water treatment technology has made comprehensive progress in physical, chemical and biological treatment. The progress of technology makes the original relatively complex water treatment process simple, thus greatly reducing the investment cost and operating cost of water pollution control facilities, and playing a positive role in promoting the benign development of water pollution control industry
4) The great opportunities brought by the leap-forward development of new fields and new markets have greatly broadened the development space of the industry
In the field of nuclear power, with the promulgation of the Medium-and Long-Term Development Plan of Nuclear Power, China's nuclear power construction presents a leap-forward development situation, and related industries will also benefit from it. As a directly related industry of nuclear power construction, the water treatment industry will gain more opportunities for industry development. In the field of reclaimed water reuse and seawater desalination, the annual discharge of waste water in China is huge, and the proportion of waste water used for treatment and reuse is less than 10%. With the increasing shortage of water in China and the country's increasing attention to "water saving and emission reduction", the market gap of reclaimed water reuse will become increasingly apparent, and power plants, as large water users, will be the key customers of reclaimed water reuse.
(2) Unfavorable factors
1) industry multi-head management system
At present, the Ministry of Environmental Protection and local environmental protection departments at all levels are responsible for the unified supervision and management of environmental protection work, and are the competent departments of China's environmental protection industry; The Ministry of Construction, the Ministry of Environmental Protection, the National Development and Reform Commission and other government departments are responsible for the qualification management of the business areas and business scope of environmental protection enterprises; The water conservancy department is responsible for examining and approving the sewage capacity of the waters near the industrial water treatment project, and putting forward opinions on limiting the total amount of sewage discharged. Due to the above reasons, the industrial water treatment industry presents a multi-head management situation. In the pattern of multi-head management, there will occasionally be situations of overlapping functions and multi-administration. The industry standards, service standards and charging standards stipulated by different government departments cannot be completely unified, and the industry management system needs to be improved.
2) The standardization of market competition is low
Due to the huge development potential of the industry, many foreign large-scale water treatment companies have entered China one after another, and multinational companies have intervened in China's water treatment market with their advantages in capital and technology, thus increasing the competitiveness of the industry. Most of the products in the industrial water treatment industry are personalized customized products, and the needs of various users are quite different. Different users have different requirements for water treatment, and the degree of marketization is high, which leads to large differences in technical schemes and prices during bidding, which is easy to cause disorderly competition; However, in the field of municipal wastewater treatment, industry protection and local protection still exist, the standardization of the market is still insufficient, and the market mechanism of healthy competition among enterprises has not yet been fully formed.
3) The bidding procedures are not uniform
Due to historical reasons, the bidding operation of engineering projects in China lags behind that of developed countries. The current Bidding Law has relatively general provisions on bidding procedures. Due to different understandings, there will be differences in specific operation methods in the implementation of the bidding, which leads to the bidder not being fully adapted. The disunity of bidding procedures and specific operation methods will lead to unnecessary bidding costs, reduce the resource utilization efficiency of the companies in the industry, and then affect the profitability of the industry.
V. Industry risks
1. Economic cycle and macro policy risks
The water treatment industry is closely related to the change of economic cycle, which is greatly influenced by the operation of national economy and the fluctuation of investment scale of industrial fixed assets. In different periods of national economic development, the national macro policy will be adjusted, which will directly or indirectly affect the development of water treatment industry.
2. Competitive risks
Our government attaches great importance to environmental protection investment, and various industrial planning schemes and economic stimulus plans have invested heavily in the environmental protection industry, so the water treatment industry has great prospects. But on the other hand, due to the huge development potential of the industry, many foreign large-scale water treatment companies have entered China, and multinational companies have intervened in China's water treatment market with their advantages in capital and technology, thus increasing
Competitiveness of the industry. In addition, most of the products in the industrial water treatment industry are customized products, and the needs of various users are quite different, and different users have different requirements for water treatment, which leads to great differences in technical schemes and prices during bidding, which easily leads to low-price competition.
3. Regional risks
The regional development of water treatment construction in China is unbalanced. The water treatment rates in the big cities along the southeast coast are higher than the national average level, and the sewage supporting facilities are relatively complete. The economic development in the western region is slow, water resources are scarce, and there is a clear gap between the construction of water treatment facilities and economically developed regions. The problem of insufficient water treatment facilities in northeast and central and western provinces is also relatively large. From the perspective of city scale, there are many large-scale water treatment enterprises in first-class cities, and the competition and mergers and acquisitions of enterprises in the region are relatively fierce; There are few enterprises in secondary cities, so the water treatment market needs to be developed and the risk is small. For areas with good water treatment, the regional risks that are easy to face include market saturation and fierce competition in the industry; The regional risks in backward areas of water treatment industry include insufficient demand and low technical level of enterprises.