Investors Target Brazilian Water Market
Analysts Predicts Huge Growth in Water Infrastructure
Mar 5, 2009
Since 2004, the Brazilian municipal water and wastewater treatment markets have experienced strong growth. Frost & Sullivan reported the market for water in 2008 was $126 million and is expected to double over the next seven years largely due to substantial investments toward setting up and improving water and wastewater facilities. The Brazilian government must do many things to match the treatment levels of the United States and European countries, Branco said. Because of this need, Brazil is considered a place for current and economic development. Russia, India and China are others.
Worldwide Investment Spurring Growth
In the last five years, American companies have taken advantage of the market potential in the Brazilian water infrastructure. Besides American companies, international institutions, such as the World Bank, are contributing to investments made by federal and local governments. The United Nations also has set goals for safe drinking water worldwide.
Companies have focused on the industrial sectors instead of municipal for three reasons, Branco said.
- The companies are busy meeting a growing demand of the industrial sectors.
- Projects in the municipal sector can take up to five years to complete.
- Industrial clients require less paperwork and pay faster than governmental clients.
Companies Must Overcome Obstacles
Despite the growth potential, American companies remain cautious because of a few road blocks to growth in Brazil. Municipal clients are sensitive to prices of new technologies. Brazil doesn’t have an adequate procurement law. The selection criteria to work in the municipal sector are challenging. It takes too long to complete a project. In addition, the ability to speak Portuguese can cause problems, he noted.
Branco said companies still have time to get their foot in the Brazilian door. He compared the market to American football.
“If we use as comparison a football game, the market isn’t at half time yet, hence companies that might feel they have missed the timing to enter and benefit from the Brazilian Municipal and Industrial markets might be proven wrong,” he said in an interview.
Frost & Sullivan Predicts Recession Impact on Power Supply Markets
The recession is taking its toll on the European power supplies market, according to Frost & Sullivan, a market analyst company. Manufacturers are seeing an impact of the recession on sales and growth rates, said Chandni Raj, a research analyst with the company. Manufacturers should develop strategies for the short-term to survive and prepare for the post-recession era, she said.
