|SOUTH-EAST EUROPEAN INDUSTRIAL МARKET » South-East European INDUSTRIAL Мarket - issue 2/2016, JUNE
Water and wastewater management in Romania
Romania joined the European Union (EU) in 2007. According to the latest demographic data, the country has a population of over 21,5 million inhabitants. It is the largest state in the Danube River Basin and draws its drinking water from surface waters, such as the Danube River, and groundwater resources. Annually, each Romanian citizen disposes of some 1,870 m3 of water.
Some of the biggest issues challenging the water and wastewater management sectors in Romania are the undergoing development and reform, problems related to climate changes (e.g. large fluctuations in available water quantities in rivers and lakes), unbalanced access to water (many consumers still don't have access to piped water), water pollution, deteriorated water distribution and sewer networks, and deteriorated wastewater treatment plants, which necessitates the construction of new wastewater treatment facilities.
Recent reports on the water supply situation in Romania show that 91% of the urban population and only 21% of the rural population have access to piped drinking water. In relation to wastewater management, 9,2 million people (43% of the total population) are connected to urban wastewater collecting systems, while 3,9 million people (18% of the total population) have access to wastewater treatment plants with sufficient treatment. Currently, 18 m3 of untreated wastewater are being discharged every second.
Water and wastewater management projects funded by the EU
Implementation of the strategy and distribution of the funds on the environment sectors in Romania are performed through the Sector Operational Programme Environment (SOP Environment). Its main priorities include extension and modernisation of water and wastewater systems, development of integrated waste management systems and rehabilitation of historically contaminated sites and reduction of pollution, and mitigation of climate change by restructuring and renovating urban heating systems towards energy efficiency targets in the identified local environmental hotspots.
Other priority axes of SOP Environment are the implementation of adequate management systems for nature protection and providing adequate infrastructure of natural risk prevention in the most vulnerable areas.
One of the specific objectives of the Programme is improving the quality and access to the water and wastewater infrastructure, by providing water supply and wastewater services in most urban areas and by setting efficient regional water and wastewater management structures. Statistics from the Romanian Government show that during the period 2007 - February 2011 within the SOP Environment a total of 290 projects were submitted, 170 projects were approved and the total payments to the beneficiaries amounted to 1348,29 million RON.
Relevant organisations and companies
The Romanian water management body is called The National Administration "Romanian Waters". It is under the direct authority of the Ministry of Environment and Forests. The Administration is divided into units - Water Directorates, through which 11 river basins are managed. It is responsible for the management of water resources, operation of the integrated water monitoring system, administration of the hydraulic structures, water protection against pollution and over use, flood control management, coordination of the national investments in the water resources field, implementation of the EU Directives related to water, application of the international and bilateral water conventions.
The Intercommunity Development Association - Water Sewerage in Arad county regulates, organises, finances, manages and monitors the water supply and sewerage services on the competence area of the member administrative territorial units. It also develops public investment projects of regional and local interest for setting up, modernisation and/or development of the public utility systems associated with the water supply and sewerage services. Members of the Association include the Arad city and various other cities and communes in the Arad county.
The Fast Eco company provides external water supply and sewerage networks, modular thermal stations, electrical and automation installations, measurement and control systems for cold water, hot water and thermal energy, etc. Some of the company's relevant projects in the water field are: Execution of internal and external networks of cold water - for Acvatot company in 2007; Execution of external networks and interior installations for heating and cold water - for Conarg company in 2006; Execution of pump units - for Wilo Romania company in 2005.
Veolia Water Solutions & Technologies Romania (VWST Romania) is part of the French Group Veolia Water Solutions and Technologies. It specialises in the applications for municipal water treatment. The company is certified to the quality management system SR EN ISO 9001:2001. VWST Romania is focused on design of technological solutions, construction of drinking water facilities or wastewater treatment plants for municipalities, small sized water treatment plants adapted to the requirements of rural or small urban areas communities and commissioning of projects.
Neyserv International offers a range of domestic and industrial wastewater treatment stations, drinking water treatment plants, process water treatment plants, grease oil separators, mechanical equipment for water treatment, pumping stations, solid waste treatment stations etc. The company also provides services like consultancy, key solutions, project design and engineering, management, maintenance, assembling and commissioning.
The pump market in Romania
Compared to pump markets in other European countries, the Romanian one is relatively small. There are only a few production facilities in the country. Developing Country (DC) producers should concentrate on targeting specialised distributors. Another opportunity for DC exporters is to become a parts subcontractor to manufacturers in Romania. Thus they would be able to sometimes supply them with finished pumps as well. Generally, DC manufacturers should focus on just a few specialised pumps from their product range. It should also be considered that the pricing strategy should be as competitive as possible, because Romanian labour costs are relatively low.
Romania occupies the fourth position in the list of pump importers in the Central and Eastern European region. Latest marketing studies show that the highest share of all imports from DCs is for centrifugal pumps (37%), followed by "other pumps" (29%). In the 2009-2013 period the pump parts, "other pumps" and rotary positive displacement pumps shares from the DCs experienced strong growth. The observed decline in imports of reciprocating positive displacement pumps from the DCs is remarkable, but unfortunately there is no reasonable explanation for it yet. The import of pumps is expected to grow by 0-3% in the next few years.
Romania's main trading partners are Germany, France and Italy. Some companies from these countries have established production facilities in Romania, but all of them have developed a strong sales network in Romania. Almost 71% of all Romanian imports from the DCs come from China, with the remainder coming from India, Turkey and Brazil, all trailing China by quite a distance.
It is obvious that Romanian buyers rely mainly on Chinese suppliers and are not very open to suppliers from other DC countries. This can be considered as a challenge for DC exporters. According to a market report conducted by the Centre for the Promotion of Imports from developing countries, the disposition of DC suppliers is not likely to change substantially in the next few years.
Exports of pumps from Romania are limited, as local production in the country is not large. However, Romanian exports are doing well, aside from a decrease in 2010. The average growth in the 2009-2013 period reached 7,9% per year. Estimates show that 29% of Romanian exports go to the DCs, mainly China and Iraq, followed by Brazil and Colombia. This is an attractive opportunity for DC manufacturers of pumps and pump parts, because as long as they prove they can meet the product specifications, they could also supply these pumps and/or pump parts.
Only a few small local manufacturers of pumps operate in Romania. The country is the 12th largest market for pumps and pump parts in the EU, with a value of EUR 175 million in 2013. It is still developing, the food and water industries in particular, and it consists to a relatively large extent of new installations. According to market forecasts, Romanian demand for pumps is expected to remain limited in the foreseeable future.
Analysers expect investments in pumps and other process equipment in Romania not to register the same high growth in the coming years as they did in the 2009-2012 period. It is more likely that figures will remain stable or exhibit a slight decline.
There is certain potential among Romanian manufacturers in terms of supplying not only pump parts, but possibly some finished pumps. The best opportunities for specialised products, such as positive displacement pumps, are offered through subcontracting. DC exporters aiming to export large volumes of commodity-type products, such as common pumps, should focus on distributors. They are an attractive target because they often buy and/or import commodities in relatively large volumes on a scheduled basis. In most cases the distributor is usually also the importer.
Distributors often have their own stock, which is the reason why they are also called 'stockists'. Products must be kept in stock as they have to be available to end-users in the event of an urgent delivery.
Studies show that pumps for water and wastewater applications represent about 30% of all pump sales. Changes in environmental legislation in this segment have led to several investments in infrastructure and water treatment equipment. However, increasing pressure on local government funding threatens the stability of this market. Reduced budgets for water and wastewater treatment could result in significantly lower demand for pumps and pump parts in this sector.
When purchasing a pump buyers more and more frequently consider lifecycle costs instead of initial expenses, which only makes the 'design to costs' concept all the more important for pump manufacturers. Therefore, pump manufacturers from the DCs should also focus on developing pumps that are simple and have low lifecycle and maintenance costs.
Price has gained importance in the last few years owing to reduced demand caused by the economic recession, especially with regard to standard pumps. Increased competition among EU suppliers (the result of ongoing rationalisation) and from suppliers from low-cost countries such as China, Turkey, India and Brazil, caused a decline in price levels. Market trends predict that in the next 5-10 years, suppliers from these countries will become even stronger competitors in the Romanian pump market.
Етикети: Sector Operational Programme Environment SOP Environment National Administration “Romanian Waters” Intercommunity Development Association Fast Eco Veolia Water Solutions & Technologies Romania VWST Romania Neyserv International