NEWS RELEASE                                                                                                    MAY 2012

$2 Billion Replacement Membrane Market This Year

Revenues for reverse osmosis, microfiltration and ultrafiltration modules will exceed $2 billion this year. This is the latest finding in the McIlvaine report, RO, UF, MF World Market. This forecast is in 2010 dollars not adjusted for inflation, so the revenues in current dollars will be closer to $2.1 billion. The forecast is also based on equivalent unit sales in developing countries. The actual revenues in China will be only 65 percent and even lower in India. This is due to lower prices per unit. Hence, the net effect when adjusting for purchasing parity and inflation is a market of $1.9 billion.

The Asian market will grow at a faster rate than the other regions. This is due to the increased purchase of membrane systems for desalination, water reuse, mining, food and beverage, residential and commercial buildings and semiconductors. The only market where other regions are keeping pace is pharmaceuticals.

The trends toward larger membrane modules are promising to increase the market even though the cost per unit of throughput are less. The reason is that lower costs of membrane filtration cause capture of market share away from thermal treatment and other alternative routes.

Water reuse is becoming increasingly popular and necessary in many parts of Asia. Much of China is arid. The rainfall per capital is low compared to the U.S. The increase in industrial output is accelerating the need for pure water. The solution is the reuse of municipal wastewater for power plant cooling water as well as for golf courses and lawns. Microfiltration and ultrafiltration membranes combined with biological treatment can provide acceptable purity for these applications.

Sewer mining is the terminology used for the extraction of sewage and treatment in membrane systems. The membrane reject flow is directed back to the sewer while the gray water is used for the golf courses or lawns. Membrane bioreactors provide a unique hybrid system. The membranes are submerged in the biological reaction tank. This incorporation of two processes in one tank cuts costs, size and energy consumption.

Dow Chemical is the largest supplier of replacement membrane modules. A number of Japanese, European and now Chinese suppliers are also now in the market place. The replacement cycle for modules can be as long as seven years or as short as a few months depending on the application. Even seawater varies depending on the location. Module life in plants desalinating Gulf Coast U.S. water can be considerably different than plants in the Red Sea.

Applications in various industries differ greatly. Semiconductor chip rinsing requires high performance. Ultrapure water for power plant steam cycles and pharmaceutical water for injection (WFI) also demand high purity and reliability.

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