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Market Overview
Water is an essential resource. Although more than 70% of the earth’s surface is covered with water, less than 1% is available as potable water. Xogen targets both the industrial and municipal wastewater markets. The industrial and municipal wastewater markets are expected to grow from $85 billion in 2010 to $115 billion by 2016 and each market continues to grow at a rate of 6.6% and 6.9% respectively.
In 2010, the industrial water and wastewater equipment market represented US$14.3 billion and was forecasted to increase to US$22 billion by 2016, representing a Compound Annual Growth Rate (“CAGR”) of 7.5%. The oil and gas wastewater equipment market is projected to increase from US$719 million in 2010 to US$2.6 billion in 2016. Various industry participants and governments have recently announced commitments to clean tech industrial practice, for example, a recent announcement of the Alberta Government to make a $2 billion commitment to clean energy technology. A portion of the Alberta Government’s budget is intended to support the movement towards “green” oil sands. Xogen anticipates targeting the oil and gas industry as a key market. A U.S. provisional patent has been filed for this application.
Capital expenditures in the municipal water and wastewater market is forecasted to grow from US$95 billion to US$115 billion in 2016, representing a CAGR of 5.6%. North America and Western Europe represent approximately $6.7 billion or 47% of this market and is projected to have a cumulative average compounded annual growth of 9.4% over the same period. It is forecast that North American cities will spend approximately $80 billion over the next 20 years upgrading and expanding municipal wastewater systems due to aging infrastructure and increased demand due to population growth. In March 2010, Environment Canada published new regulations stating that roughly one thousand, or one in four, municipal facilities will require replacement or retrofit. For higher-risk wastewater effluent discharges, facilities will have until 2020 to upgrade, whereas others would have until 2030 or 2040 depending on level of risk associated with existing effluent quality and environmental considerations.