June 2016 - Filtration and Centrifugation Insights 66

Large Individual Projects and Multiple Small Projects by Large Treatment Plants make Sales easier for Suppliers to North American Municipal Wastewater Plants

Ten percent of North America’s 20,000 wastewater plants buy the majority of the flow control and treatment equipment purchased by wastewater treatment plants in North America. Their large expansions and upgrades account for a majority of capital expenditures. This allows the supplier to identify his prospects months or years in advance of the actual sale. If the supplier is relying on quality rather than price to sell his product, then the opportunity to shape the final decision well in advance is critical.

An example of a large project is The Lions Gate Wastewater Treatment Plant in Vancouver. It has been told by the federal government it must upgrade to secondary treatment by December 31, 2020. The plant is one of two remaining primary treatment plants in the region. New federal regulations require all primary treatment plants be upgraded to secondary treatment. The cost will exceed $2 billion. So this is a project which will involve contacts with the city and A/E over the next two years in order to maximize order potential.

Some smaller projects are predictable long in advance due to new regulations or outdated technology. Plants with lagoons for sludge dewatering are likely to be considering changes. The City of Alliance, Ohio plans to build a dewatering system. Its lagoons are full. Over the 20 year life of a new plant there is economic justification for this investment. It is good to be alerted to specific projects but, if you are selling dewatering equipment, you should be calling on every plant with lagoons and every plant with 20 year old dewatering equipment.

One way to make sure that you thoroughly pursue the large opportunities is to single out the largest prospects in each state. Here is a sample for Colorado:

Numeric by Flow Rate (MGD)	Plant Name
40	Aqua Nueva Wastewater Treatment Plant
30	Pima County Wastewater Treatment Plant
17.5	Tolleson, City Of
14.74	Nogales International Wastewater Treatment Plant
102.24	Total

Wastewater Industry - Percent of U. S. Market by State
STATE	2015	2016	2017	2018	2019	2020
Alaska	0.24	0.24	0.25	0.25	0.25	0.26
California	12.20	12.42	12.65	12.87	13.11	13.34
Hawaii	0.43	0.44	0.44	0.44	0.44	0.45
Oregon	1.26	1.28	1.30	1.33	1.35	1.38
Washington	2.21	2.25	2.29	2.34	2.38	2.42
TOTAL Pacific States	16.35	16.64	16.93	17.23	17.53	17.84
Arizona	2.13	2.16	2.20	2.24	2.28	2.32
Colorado	1.71	1.74	1.77	1.80	1.83	1.87
Idaho

In 2017, Colorado’s secondary municipal wastewater capacity will be 1.77 percent of the total 40,000 mgd for the U.S. The top four plants have a total of over 100 mgd capacity which is 14.7 percent of the 680 mgd for the entire state.

The best way to raise prices without losing business is to provide a product which justifies a higher initial price. To accomplish this you need to:

McIlvaine is currently preparing a Decision Guide on choke valves for oil and gas applications. These are tough applications and require custom valves designed for severe service. This is only part of the story according to George Gorman of the Valve Institute. The success or failure of a valve rests not only on the valve merits but on how it is applied. Subsea pipeline valve needs are different from sub-sea Christmas tree needs. Both are certainly different from the needs at the surface or on shore. The best valve choice requires detailed knowledge of the unit operations. When it comes to subsea valves his Institute is dedicated to providing insights on best choices with separate training courses on subsea pipeline and Christmas tree valves.

But what are the needs of the long-time valve practitioner? Does he need an even more robust system? Input from a number of both supplier and end user experts in the McIlvaine Insights discussions leads to the conclusion that considerable analysis and discussion is needed. Muktiadi Rahardjo of Shell is the valve and sealing specialist at the Shell Pernis refinery and, based on this experience, recommends better communication relative to valve issues. He cited a lack of application knowledge on the part of some vendors and the inability to utilize the wisdom existing within the end user community.

If you rank the impact of a product on the process, the valve is at the bottom of the rankings. The product using the valve, e.g. a pump system, will be more important by virtue of the fact that it typically would include a pump and at least three valves. The scrubber company product which includes the valves, pumps, fans, nozzles and scrubbing tower is obviously of most impact on the process. So, if we agree that process knowledge is necessary to provide the best valves, then it follows that even more process knowledge is needed for suppliers of the sub processes What can we conclude from all of this?

· IN ORDER TO DEVELOP A SUPERIOR PRODUCT YOU HAVE TO UNDERSTAND THE PROCESS WHERE THE PRODUCT WILL BE APPLIED.

· TO CONTINUE TO PROVIDE THE SUPERIOR PRODUCT YOU HAVE TO KEEP UP WITH PROCESS CHANGES AND NEW REGULATORY AND OTHER CUSTOMER NEEDS.

· FOCUS YOUR PRODUCT DEVELOPMENT EFFORTS BY PRIORITIZING CUSTOMER NEEDS IN SUCH A WAY TO MAXIMIZE MARGINS AND PROFITABILITY.

The best product is defined here as the product with the lowest total cost of ownership. This definition is couched in the broadest terms. It has to take into account the severity of the service but also the criticality. A peaking gas turbine which cycles a few times per year and can be easily accessed for maintenance is in a non-critical application compared to the base-loaded turbine which is in operation 24/7 and cycles hundreds of times per year.

It is easy to pick the lowest cost product but much more difficult when you have to assess the lifetime cost based on both severity and criticality. The first step in creating a convincing program is to understand how decisions will be and could be made.

· Decision making is a series of classifications. Whether it is the initial bidders list, the criteria in the specifications or the ultimate selection the decision maker is moving from one set of classifications to the next.

· The elements of the classifications are: what, which, why and how. In order to be successful you have to convince some people of just the “what” and “which” and others you also need to add the “why.” The “how” is the big challenge which provides credibility to the other elements.

o What are the classifications?: If you are going to remove SO₂,should you consider wet limestone, wet lime, dry sorbent injection, spray driers, or seawater scrubbing?

o How does the product perform uniquely enough to justify the prediction that it will result in the lowest total cost of ownership?

· The what, which and why can be communicated through normal sales channels. The decision guides add clarity. The problem is that the credibility depends on the “how.” It is a lot easier to claim the highest efficiency or lowest maintenance cycle than it is to prove it.

McIlvaine recognizes the challenge of convincing customers that a product has the lowest total cost of ownership and has a whole program to address it: 4 Lane Knowledge Bridge to the End User

This alert is being issued twice per month for suppliers in flow control and treatment who are coordinating market research with targeted pursuit of the larger and longer term orders.

The following projects each will result in millions of dollars of orders for flow control and treatment products. Each project has been rated. The opportunity size is rated from 1-10 with 1 being small and 10 being very large. The timing for flow and treatment orders has been provided by year, e.g. T 16 = timing of order is 2016.

Williams Advances Unique Position in Canada with Startup of Second Offgas Processing Plant

Rangeland Energy Begins Development of South Texas Energy Products System (STEPS)

Primus Green Energy’s North American Methanol Plants Allow for Local, Cost-Advantaged Production

Veresen Concludes Key Terms with JERA for Jordan Cove Liquefaction Capacity (T17)

Amec Foster Wheeler Awarded Feasibility Study Contract for Karachi Refinery Upgrade (T16)

These projects are covered in more detail and are integrated in a database which is part of Oil, Gas, Shale and Refining Markets and Projects. This semi-monthly report is available as part of this service or as a stand-alone subscription.

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