RO/UF/MF WORLD MARKET

UPDATE

June 2012

McIlvaine Company

www.mcilvainecompany.com

TABLE OF CONTENTS

FINANCIAL NEWS

Pall 3Q profit up, Results Miss Wall St. Forecasts

INDUSTRY NEWS

Grundfos Acquires U.S. Company Enaqua, Specializing in UV Disinfection and Membrane Filtration Technology

NEW PLANT CONSTRUCTION NEWS

Oxnard's Water Recycling Plant Moving Forward

Dow to Build RO Membrane Plant in Huzhou, China

Pentair X-Flow Supplies Membranes for SWRO in UAE

Aquatech Awarded Contract for Wastewater Recycle System in Turkmenistan Gas Field

Hyflux gets US$14.4 Million Buyer's Credit to Finance Tuaspring Plant Components

Five Reverse Osmosis Plants Being Installed in Lyari

TECHNOLOGY/NEW PRODUCT NEWS

Self-healing Dynamic Membrane

UV-60 Self-contained Transportable Drinking Water System from Novasys Group

SWRO High-pressure Pump Supplies Up to 30,000 m³/d

Desalination: Energy Hog No More?

Company Aims to Desalinate Fracking Water, a $1.6 Billion Market

H2O Inc. Introduces Monsoon Self-Cleaning Filtration System

A Better Way to Treat Water

 

 

FINANCIAL NEWS

Pall 3Q profit up, Results Miss Wall St. Forecasts

Filtration equipment manufacturer Pall Corp. said Wednesday that profit grew 11 percent in its fiscal third quarter, but the results fell short of Wall Street estimates.

Pall's earnings rose to $78.9 million, or 67 cents per share, in the three months ended April 30. A year earlier it reported income of $71.1 million, or 60 cents per share. If one-time items are excluded, the company made 70 cents per share in the most recent quarter. Revenue edged up about 1 percent, to $715.2 million from $709.8 million.

Analysts, who usually exclude one-time items, forecast profit of 76 cents per share on revenue of $706.4 million, according to FactSet.

Pall said the weak European economy hurts its business, and so did disruptions in its supply chain. It said revenue from its life science business rose 2 percent to $318 million on greater revenue from biotech drug customers, while industrial revenue edged down to $340 million from $341 million. It reported $57.2 million in revenue from its blood transfusion business. Pall agreed to sell that division to Haemonetics Corp. for $550 million on April 29.

The company now expects a fiscal-year profit of about $3.10 per share, down from its previous forecast of $3.20 per share. Analysts forecast $3.02 per share, on average.

Pall is projecting "low-single digit organic sales growth" in fiscal 2013, saying greater sales in the Americas and Asia will counteract weaker sales in Europe.

Shares of Pall rose 8 cents to close at $54.63 Wednesday. In aftermarket trading, the shares lost $2.78, or 5.1 percent, to $51.85.

INDUSTRY NEWS

Grundfos Acquires U.S. Company Enaqua, Specializing in UV Disinfection and Membrane Filtration Technology

"The new resources we are getting not only open up new business opportunities for Grundfos, they also help us contribute to alleviating the growing water problems worldwide," said Carsten Bjerg, Grundfos Group CEO.

Peter Røpke, Grundfos Group executive vice president of business development, added: "For many years, Grundfos has proven that we are innovative as regards the development of new pump solutions. But we will also seek additional business opportunities relating to these applications, including water treatment. The partnership with Enaqua doubtlessly strengthens us. Most of all because, in the short view, we shall obtain new technology and competence which will, in the long view, enable us to deliver new solutions for water treatment with strengthened focus on sustainability."

Enaqua will continue to be managed by Manoj Jhawar, who is the second of three generations of the founder’s family that works at the company.

"For a number of years, we have rejected several potential buyers, as we did not find the right match. But with Grundfos it is quite another story, it is a larger version of what we are," said Jhawar. "We share the opinion about future opportunities within water treatment, we have the same set of values and we are sure we complement each other in a way so that we can deliver new and improved solutions for water treatment."

Founded in 1985, Enaqua is headquartered in San Diego, California.

NEW PLANT CONSTRUCTION NEWS

Oxnard's Water Recycling Plant Moving Forward

The state is calling Oxnard's water fat. Actually, that would be FAT, short for "full advanced treatment," and referring to the ultrapure recycled water a city facility will produce.

Anthony Emmert, Oxnard's water resources manager, said at a meeting of the Utilities Task Force on Thursday he'd been waiting for state regulators to come up with a term for the superclean treated wastewater.

He said he's already a bit tired of the city's cumbersome moniker for its $376 million water infrastructure program, the Groundwater Recovery Enhancement and Treatment, or GREAT, program, which includes the recycling plant.

Now, Emmert quipped, he'll have to talk about Oxnard's GREAT, FAT water.

The observations were part of an update on the city's Advanced Water Purification Facility on Perkins Road south of Hueneme Road.

Construction costs for the facility, one of only a few such plants in the world, have run about $55.7 million, with work 95 percent complete.

A deadline to obtain $20 million in federal stimulus funds has been extended until December. The deadline was September but was extended until June. Daniel Rydberg, capital projects manager, called the latest extension the drop-dead date to get the federal money.

Key milestones have been met. Microfiltration, reverse osmosis and ultraviolet systems that make up the guts of the treatment have successfully passed regulators' tests. The backbone of a $13.2 million pipeline system to transport recycled water was finished nearly $519,000 under budget, and surplus funds will be used for more segments.

The plant's first phase, which will recycle about 7,000 acre-feet of sewage water annually, will provide about 1,800 acre-feet to the city-owned River Ridge Golf Club, the RiverPark development north of Highway 101 and International Paper, an industrial user next to the plant. An acre-foot is about 326,000 gallons, or enough to supply a family of four for a year.

It is hoped that agricultural users will sop up the rest, Emmert told the task force. Possible deals with giant greenhouse tomato grower Houweling Nurseries Oxnard Inc. and the Pleasant Valley County Water District are promising, he said.

Construction of the recycling plant should end by September, with water delivery expected next spring or summer.

The city's cost to produce the recycled water is estimated at about $1,680 per acre-foot for the first phase, which is considerably more than current costs for groundwater and imported river water supplies.

But that should decrease to $1,191 when the plant's second phase is built. Phase 2 will treat 7,000 more acre-feet annually.

In addition, Emmert said, costs of imported water are expected to rise dramatically in coming years, and the recycled water will eventually be cheaper. The local supply also will be more reliable. Though the ultrapure recycled water is cleaner than what comes out of most home faucets, regulations ban so-called toilet-to-tap supplies to be used for drinking. That could change in coming years, Emmert said, and it would add value to the recycled supply.

Dow to Build RO Membrane Plant in Huzhou, China

A world-class manufacturing facility for Dow FilmTec™ reverse osmosis (RO) elements for desalination and water reuse is to be built in Huzhou, China, the Dow Chemical Co announced on 7 June 2012.

The new facility will be online in 2013.

"This investment is directly aligned to our growth strategy to maximize value as a leading science company, benefiting our customers in China and the China economy while contributing to Dow's global growth," said Peter Sykes, president of Dow Greater China. "Dow Greater China is built on a solid foundation and we're very confident about our ability to contribute to the China market and customer growth with a business focus which fits China's 12th Five-Year Plan."

The proposed facility would deliver local supply security of cutting-edge technology for potable, non-potable and industrial water serving China. The facility would also serve as a sourcing point for global demand, boosting supply of Dow's products worldwide.

The facility joins Dow's ultrafiltration manufacturing facility in Huzhou and ionexchange resin facility in Qingpu, which supply global products.

"Establishing a China manufacturing facility at our site in Huzhou represents a significant milestone in the growth strategy for our business," said Ian Barbour, general manager, Dow Water & Process Solutions (DWPS). "Reverse osmosis investment in China is an integral part of the DWPS business growth strategy and by following this strategy we consistently enhance our capability."

"China continues to be the largest growth market for RO," said Dr Wang Xiaolan, Asia Pacific commercial director, DWPS. "As the global separation and purification technology leader, producing Dow FilmTec RO elements in China continues Dow's history of investment in technologies and production capacity to meet the growing challenges for clean and affordable water supply in China needed by our customers and consumers."

Pentair X-Flow Supplies Membranes for SWRO in UAE

Pentair X-Flow has received an order to supply Seaflex 55 ultrafiltration (UF) membranes and skids to a Federal Electricity & Water Authority (FEWA) Seawater Reverse Osmosis plant in Ghallilah, Ras Al Khaimah, United Arab Emirates.

The X-Flow UF membranes were selected to provide pretreatment for the RO membranes. They will be installed with an inline configuration, which lowers energy consumption and helps avoid contamination as additional pumps and storage tanks are eliminated. Operating costs are also reduced as cartridge filters are not needed with the design.

The FEWA project will be executed by Aquatech Eastern on a complete EPC basis including civil works, buildings, balance of plant, and electrical and mechanical installation. The 68,000 m3/day drinking water plant is scheduled to be operational late next year.

Aquatech Awarded Contract for Wastewater Recycle System in Turkmenistan Gas Field

Aquatech, a global leader in water purification for industrial and infrastructure markets, has been awarded a contract to design and supply a wastewater recycle system in a gas field development project in Turkmenistan.

Because the plant is in an area where effluents cannot be discharged and reuse is the only option, a Zero Liquid Discharge (ZLD) technology was specified in the project.

Aquatech, an industry leader in ZLD systems, is supplying the patented HERO(TM) (High Efficiency Reverse Osmosis) technology to achieve 90% recovery of the total wastewater. The plant capacity is 120 cubic meters per hour, and the system is designed to operate the outdoor equipment in an ambient condition of minus 28 degrees C.

Aquatech was awarded this project based on its extensive experience in achieving consistently higher recoveries from difficult wastewater, such as refinery wastewater, using HERO. The company also has previous experience in executing projects under similar ambient conditions, notably in China.

The plant is expected to be completed in one year.

Speaking about the contract, Sreekumar Pillai, General Manager International Sales & Marketing for Aquatech, commented that, "Aquatech has won this project based on our established expertise and experience in treating challenging waters, as well as our successful previous experience in similar projects. We are very pleased to have been awarded this contract in spite of facing tough competition from neighboring countries like Russia."

Hyflux gets US$14.4 Million Buyer's Credit to Finance Tuaspring Plant Components

Hyflux Ltd recently said its wholly-owned subsidiary, Hydrochem (S) Pte Ltd, has signed a buyer's credit agreement for US$14.4 million with the Japan Bank for International Cooperation (JBIC) for financing the purchase of key components for the Tuaspring Desalination Plant.

The loan is co-financed by Mizuho Corporate Bank Ltd, while Nippon Export and Investment Insurance (NEXI) will provide the buyer's credit insurance for the co-financed portion.

The key components that will be purchased with the financing facility include reverse osmosis membrane elements manufactured by Toray Industries Inc and high pressure pumps manufactured by Torishima Pump Mfg Co Ltd. These components will be purchased from Mitsui & Co Plant Systems Ltd.

Hyflux was awarded the design, build, own and operate contract for Singapore's second seawater reverse osmosis project in March 2011.

Five Reverse Osmosis Plants Being Installed in Lyari

Work on establishing five reverse osmosis (RO) plants at different places in Lyari to provide the residents with purified water is under way.

Out of the five plants, two are about to be completed and are expected to start functioning soon. The two RO plants are being installed at the People’s Football Stadium and Grid Station on Mauripur Road. Work on rest of the RO plants would also be completed soon. This information was given to the Deputy Commissioner (South) and Project Director of Lyari Development Package, Jamal Mustafa Qazi, during his six-hour-long visit to the area to inspect the ongoing projects. The deputy commissioner also inspected the renovation work on school buildings, including provision of furniture, electricity, water coolers and generators, besides the construction and repair of roads.

TECHNOLOGY/NEW PRODUCT NEWS

Self-healing Dynamic Membrane

The market for membranes, porous materials used mainly to filter liquids, is booming. However, their design leaves room for improvement. Taking their inspiration from cellular membranes, researchers from the Institut Européen des Membranes (CNRS / ENSCM / Université Montpellier 2) in collaboration with the Institut de Chimie Radicalaire (CNRS / Aix-Marseille Université) have developed the first dynamic membrane for water filtration which, depending on the water pressure, can adjust the size of its pores in an autonomous manner. In addition, it is capable of repairing itself if it breaks, thereby prolonging its lifetime and ensuring greater safety of the filtered product. This research is published in the journal Angewandte Chemie ("Dynamic Interactive Membranes with Pressure-Driven Tunable Porosity and Self-Healing Ability").

UV-60 Self-contained Transportable Drinking Water System from Novasys Group

UV-60 self-contained transportable drinking water system Novasys Group presents an integrated water purification and disinfection system designed to function as a small-scale water treatment plant in various environments.

Originally developed for use in military camps related to the UN peace-keeping mission in Bosnia, the WYCKOMAR UV-60 is an innovative self-contained drinking water treatment system, ready for use anywhere, and can purify and disinfect up to 60 GPM of water when certain basic conditions are met.

Supplied with fully automatic or manual controls, the UV-60 transportable drinking water system can fill a 200,000-litre storage bladder in 14 hours with less than 4% wastewater discharge. The system delivers at least a 4-log (99.99%) removal of most common bacterial and viral contaminants including E.coli, coliform, polio, cryptosporidium, giardia, tuberculosis, influenza (including avian flu), streptococcus, typhoid, cholera, legionella, anthrax and coxsackie among others.

The UV-60 is ideal for military camps, disaster relief, refugee camps, emergency preparedness, cholera epidemics, remote construction projects, small community systems and environmental clean-up sites.

Key features of the UV-60 transportable drinking water system:

SWRO High-pressure Pump Supplies Up to 30,000 m³/d

Sulzer Pumps chose the recent European Desalination Society conference in Barcelona to launch a new high-pressure pump aimed at large seawater reverse-osmosis (SWRO) desalination plants.

The MSD-RO pump, derived from Sulzer's MSD range is an axially split, multistage, double-volute pump for membrane feed in SWRO plants. Train capacities range from 20,00030,000 m³/d. MSD-RO is the result of Sulzer's experience in supplying high-pressure pumps for large SWRO plants worldwide totaling 2.5 million m³/d installed capacity.

The pump delivers a high level of hydraulic performance over its defined operating range, including exceptionally high efficiencies and optimum suction performance. Its top efficiency and robustness complies with the most stringent requirements of the desalination market.

The MSD follows the release in December 2011 of the MBN-RO, Sulzer's latest ring- section multistage high-pressure pump for membrane feed in RO desalination plants. It has also been designed specifically for high-pressure membrane feed services in SWRO applications.

In addition to its very good efficiency, it allows simple maintenance with quick and easy access to main wear parts, such as mechanical seals or bearings, without disassembling the suction and discharge nozzle. Manufactured in Duplex or Superduplex as standard materials for a variety of seawater qualities to avoid pitting and crevice corrosion, it covers capacities up to 24,000 m³/d.

Desalination: Energy Hog No More?

Desalination has long been the domain of arid, energy-rich states like those in the Persian Gulf thanks to its high-energy footprint. But as populations have boomed, as climate change makes water supplies more uncertain and as clean water regulations are tightening on industry, more governments and businesses have been looking to desalination.

Efficiency and reallocation are much cheaper and sustainable options for obtaining new water supplies for municipalities. Water reuse in cities is also up and coming, but the market to clean industrial wastewater of all kinds is booming.

For all these reasons, innovation in desalination has been continuing apace. At the Blue Tech Forum in San Francisco yesterday, Tyler Algeo, a research analyst at BlueTech Research, said that patents for desalination technologies in 2010 were double the number filed in 2005. Desalination energy inputs have been reduced more than 50 percent in the past decade.

Many entities are interested in these technology breakthroughs, said Algeo: large water technology corporations, venture capital firms, Fortune 500 companies, research groups, consulting engineering practices, and government agencies.

In addition to the Middle East, Australia, Algeria, and Spain now have major desalination programs, he said.

The Forum selected three companies with various approaches to desalination: carbon nanotubes, radial deionization, and biomimetic aquaporin membranes. Today I report highlights from the company that is innovating with carbon nanotubes. Look for the other two technologies in subsequent days.

Porifera Inc. is a two-year-old company based in Hayward, Calif. Vice president of business development, Jeffrey Mendelssohn, said it has achieved a breakthrough in forward osmosis membranes by using carbon nanotubes.

Reverse osmosis is a common filtration technology that uses a pump to push water through a filter. It can be energy intensive, which is why a lot of innovation is happening in forward osmosis.

Forward osmosis uses the thermodynamic law of entropy to separate solids from a fluid. Using a vessel separated into two compartments by a membrane filter, you put a dirty liquid on one side and clean water on the other. The water passes through the membrane until the percentage of solids on both sides is the same.

"Forward osmosis works better in high fouling environments [severely contaminated water] much better than pressure-driven membrane processes [reverse osmosis] because particulate matter in high fouling environments will scrunch up against the membrane under pressure and cause membrane performance to fail," said Mendelssohn.

Porifera’s membrane isn’t just for desal, although Mendelssohn claims that it can perform salt rejection 10 times better than existing forward-osmosis processes. The company claims it has superior permeability, durability, and selectivity for water purification to other membranes. This innovation was reported in Science magazine in 2006 and was discovered at the Lawrence Livermore National Laboratory by a group of scientists led by Porifera’s principal R&D team.

Carbon nanotubes are seamless, atomically smooth carbon "straws" whose diameters range from less than a nanometer to tens of nanometers (a water molecule is ~0.3nm). Water flows through these unique pores 1,000 times faster than through any other pore of similar diameter. Moreover, gases also flow through the nanotubes pores more than 100 times faster than through any other nanometer scale pore. This reduction in flow resistance manifests itself in large enhancements of the membrane permeability and in drastic reduction of viscous losses.

Other applications include dewatering and water treatment of all kinds.

Markets include the Department of Defense, said Mendelssohn, which needs portable on-site desalination to reduce the number of water and fuel resupply convoys in Afghanistan.

The developing world is also a potent marketplace. Dubai’s famous Burj Khalifa skyscraper has no wastewater service, said Mendelssohn, like many newly developed areas of the city. Instead, tanker trucks remove sewage regularly. By installing an on-site water treatment and reuse facility, Porifera could reduce those truck trips by 90 percent, said Mendelssohn.

On the domestic market, the company could clean water from oil and gas hydrofracking at half the cost of current forward osmosis systems and also recycle the water for reuse onsite, said Mendelssohn.

Commercial elements will begin shipping in July, he said.

Company Aims to Desalinate Fracking Water, a $1.6 Billion Market

Innovation in desalination was a feature at the Blue Tech Forum in San Francisco last week. Tyler Algeo, a research analyst at BlueTech Research, that patents for desalination technologies in 2010 were double the number filed in 2005. Desalination energy inputs have been reduced more than 50 percent in the past decade.

Markets for desal are broad: large water technology corporations, venture capital firms, Fortune 500 companies, research groups, consulting engineering practices, and government agencies.

On Thursday, I reviewed Porifera’s innovation: making a filter out of carbon nanotubes. Today I report highlights from a company working on radial deionization.

The startup Atlantis Technologies has created "a low-cost, chemical-free desalination system that can remove salt from oil, gas, mining, and industrial waste water," according to its website. The company is calling the technology radial deionization.

To desalinate salt water, the technology passes it between two oppositely charged super capacitors, which attract charged ions. The ions pass through a charge-specific membrane and are adsorbed onto the surface of the electrode. When the capacitors have filled with ions, the system reverses the polarity, discharging the ions and removing them.

The two-and-a-half year-old company was a finalist in the 2011 ImagineH2O Competition.

The technology came out of funding from the Defense Advanced Research Projects Agency (DARPA) to develop a super capacitor to desalinate ocean water into drinking water for the troops.

The device has advantages in removing problematic salts, said CEO Pat Curran, and can clean water at up to 75 percent less cost than systems such as reverse osmosis and brine concentrators. The system can also handle silica, barium/calcium strontium sulfate, produced water from fracking, and the waste from reverse osmosis processes.

Atlantis is "going after the 1 trillion gallons of salty wastewater in United States and North America" from the oil and gas industry, said Curran. With the boom in shale gas, the market is growing at 14 percent a year, he said, and is expected to be worth $1.6 billion in five years.

While the technology is pre-commercial right now, Atlantis has built full-scale, functional unit, he said. Patents have been filed, the senior team assembled, and letters of intent collected from Aera Energy (heavy oil), PERC Water (municipal wastewater), Filterboxx (oil sands in Calgary), and EPRI.

The technology is an attractive value proposition, he said:

Its operating expense is 40 to 70 percent less than existing technologies. It can recover up to 95 percent of the water, depending upon salinity level. It’s modular: It can plug and play into a plant or mobile trailer. Its energy usage is low. It can handle salinity up to 150,000 mg/L chlorides, which reverse osmosis technologies cannot. It can remove some particulates than other systems cannot, such as organics, certain chemicals, sulfate, and silica, "which is a big problem up in oil sands," said Curran.

H2O Inc. Introduces Monsoon Self-Cleaning Filtration System

H2O, Inc., a leading water system equipment provider, has added the Monsoon self-cleaning filtration system to its product line, announced H2O President Jess Fike.

New to the industry and available only through H2O, the Monsoon is a compact, lightweight, self-cleaning filtration package that removes 99.9 percent of particles larger than 20 microns from seawater. The Monsoon replaces all large, heavy multimedia filters currently used for seawater filtration.

"Our Monsoon filter is a revolution in self-cleaning filtration technology and ideal for use with seawater or other corrosives because it is constructed with high alloy and fiberglass," said Fike. "Our reverse osmosis systems require less maintenance than any other system using this technology, and now we can operate in shallow or turbid water, where other systems cannot."

The Monsoon does not require regular filter changes or maintenance, all while filtering much finer particles without complex control systems like other self-cleaning filters on the market. It is a fraction of the size and weight of standard self-cleaning filters and can also be used in concentration mode to dewater.

A Better Way to Treat Water

Water treatment companies could shave up to two-thirds off their operation costs with the development of a water monitoring system that uses one device to perform three processes that are now carried out separately.

The system – known as Memshield – is developed by Membrane Instruments and Technology (MINT), a company associated with the Nanyang Technological University. It has been purchased for trial by two companies in France and Australia and has been under testing by the PUB since February.

To ensure water quality, water treatment plants which use membrane technology have to perform three monitoring processes on a daily basis, including pressure-based tests to detect damaged membrane filters. If a damaged filter is detected, the entire section of the plant has to be shut down for a closer check to pinpoint it.

With Memshield, the same check can be done without shutting down the whole section. It can also detect broken membrane filters in the plant to an accuracy of one filter among 100,000, which current technology is unable to do.

Said MINT founder Adrian Yeo: "By replacing a defective membrane filter in time, the operator can avoid damaging downstream water treatment processes. It would also mean that individual failed filters can now be replaced as and when it is required."

Memshield reduces the time spent pinpointing a faulty filter by 75 per cent, while manpower is cut by half, translating to as much as S$200,000 in savings per year.

A PUB spokesperson said results have so far met expectations. "If it is proven to be successful, we intend to deploy it in all our micro-filtration and ultra-filtration systems in our water facilities," he said. MINT is also looking to develop the technology further so that it can be used in reverse-osmosis water treatment.

McIlvaine Company

Northfield, IL 60093-2743

Tel: 847-784-0012; Fax: 847-784-0061

E-mail: editor@mcilvainecompany.com

www.mcilvainecompany.com