Amane Advisors recently co-hosted the China Membrane Industry Development Summit sub-forum on membrane technology innovation where we shared insights on growing technology competitiveness and how local players are seeking global partnerships.
On August 21st, Amane China’s Partner Alex Zhang presented at the China Membrane Industry Summit and co-hosted the sub-forums on membrane technology innovation and capital investment. The summit was hosted in Shandong Zibo Huantai, where a national “Membrane Valley” is being built.
Karen Chen, Project Manager at Amane, shared insights from our knowledge and expertise on global membrane market dynamics and M&A opportunities in the space, including how innovative technologies such as energy-efficient high-pressure membranes and selective nanofiltration membranes are gaining popularity among Chinese investors.
According to the China Membrane Association, the membrane market in China has reached over 277.3 billion RMB (40 billion USD) in 2019 with a year-on-year growth rate of 13.7%. Specifically, water treatment membranes, such as microfiltration / ultrafiltration / nanofiltration / reverse osmosis membranes and membrane bio-reactors, together account for approximately 56% of the market share, This is equivalent to 22 billion USD.
In addition, there are over 1,000 domestic membrane suppliers for material & membrane manufacturing and system integration, covering all types of membranes (water treatment membranes, special separation membranes, gas separation membranes, etc.).
Here are Amane’s top four insights from the summit:
After years of devoting resources to technology research and development, many domestic players can now produce low-pressure membranes (microfiltration and ultrafiltration membranes) with performance test results showing comparable product quality to leading global suppliers, but at a much more competitive price.
Stronger competition is also apparent from the greater dominance of domestic low-pressure membrane suppliers in both municipal and industrial water sectors in China, where global membrane suppliers are losing market share.
In addition, there are all kinds of newer low-pressure membrane offerings in the market, such as hollow fiber membranes, flat sheet membranes and ceramic membranes to meet different market needs.
Previously, Chinese reverse osmosis membrane suppliers such as Vontron focused mainly on providing residential & commercial reverse osmosis membranes that are less technically challenging, while more technically challenging industrial and desalination high-pressure membranes have been dominated by imported brands such as Dow, Toray, SUEZ, Dupont and Hydranautics. To compete against these international players and challenge their dominance, a few new domestic suppliers with reverse osmosis membrane offerings have emerged such as Sinochem, Wanhua Chem, Keesen.
The Chinese nanofiltration membrane market is expected to grow rapidly, driven by water reuse and zero liquid discharge regulations for industries, and needs for water polishing in the municipal sector. Thus, many microfiltration and ultrafiltration domestic membrane suppliers have added nanofiltration membranes to their membrane portfolios.
Intensive competition in the domestic membrane market has limited the scalability and profitability of Chinese membrane suppliers. With greater confidence in product quality against top global suppliers, Chinese domestic membrane suppliers are now seeking to expand globally via partnerships, not only with local distributors but also to work directly in connection with municipal and industrial end-users.
Several leading Chinese suppliers in the membrane industry, including ROPV (membrane vessels) and Sinap (MBR) membranes have already started their global expansion in Europe and the Middle East. For example, ROPV was awarded a contract to supply over 16,500 membrane vessels for the Al Taweelah desalination project, which will be one of the world’s largest desalination plants once commissioned in 2022.
About Amane Advisors
Amane Advisors is well-connected to over 100 Chinese membrane companies across value chains, from membrane material, elements, to solutions including Scinor, Vontron, ROPV, etc. We invite companies that are interested in forming financial or strategic partnerships with Chinese membrane suppliers to contact our team at the Amane Advisors China office Alex Zhang (firstname.lastname@example.org) or Karen Chen (email@example.com) to find out more.
About the China Membrane Industry Development Summit
The summit was hosted in Shandong Zibo Huantai, where a national “Membrane Valley” is being built. Local governments have provided strong economic incentives to attract membrane suppliers to build plants in the membrane valley including tax discounts and full subsidies for plant construction.
The summit convened national ministry and local government officials, industry experts, leading membrane corporations, innovative entrepreneurs and global business partners, in a platform where all together could create impactful interactions, make valuable connections, and gain inspiring visions towards a prosper and booming “China Membrane Valley” in 2030.