Suppliers to miss the boat amid record water industry spend

Manchester, UK – The UK water industry is set to make record investments in capital equipment, infrastructure and operational activities over the next five years, according to IMS Business Information Services. However, it warns, many suppliers are likely to miss out by not being up to speed with the opportunities on offer.

For the period April 2010 to March 2015, water companies in England and Wales have committed to a £22.1bn capital expenditure, with a further £2.5bn scheduled to be spent in Scotland and £564m in Northern Ireland during the same period, a new IMS report estimates.

“What this level of investment means is that suppliers into the sector, the manufacturers of the equipment needed to maintain the water and sewerage infrastructure in the UK, are in for a profitable few years,” commented Elaine Coles, author of the report.

Water utilities, however, face some tough challenges throughout the industry’s next investment cycle, AMP5, the study noted. Companies, it said, will be obliged to invest at agreed levels in a range of improvements to water treatment and supply, while facing tight restrictions from industry’s watchdog OFWAT on the amount they can charge customers.

Nevertheless, AMP5 should provide “excellent opportunities for growth” for suppliers of goods and services to the water industry, reckons the IMS report, titled Selling into the UK Water and Wastewater Treatment Industry 2010- Key Drivers and Opportunities.

Significantly, though, many companies that could be benefiting from the investment are failing to capitalise on the market opportunities. Although all water companies have to make detailed plans about their investment and procurement public, many suppliers simply don’t know how to approach the market or fail to understand the tendering systems in sufficient detail.

“Despite the current economic conditions, the UK water and wastewater sector has one of the country’s most significant investment programmes firmly in place,” concluded Coles. “Manufacturers and consulting engineers could and should be making more of the opportunities presented to them.”