Development of Reverse Osmosis Technology

Enterprise Development

The sales revenue of the ultrapure water equipment manufacturing industry related to reverse osmosis technology reached an estimated 8 billion RMB in 2001. This signifies that the reverse osmosis equipment manufacturing and pure water preparation industry has become one of the fastest-growing and most sustainable industries in China. In Shanghai, Beijing, Guangzhou, Shenzhen, Tianjin, Hangzhou, Huzhou, Xi'an, and other places, a group of professional enterprises specializing in RO membrane technology, including product agency, equipment manufacturing, engineering installation, and the production of supporting products, have emerged. After nearly ten years of rapid development, this industry has begun to enter a period of stable development. Although turnover is still growing rapidly, the growth of operating profits has slowed down. Currently, a fundamental problem facing all enterprises in the industry is to conduct in-depth research on products and technologies while doing well in the market, seeking development through intensive management.

Faced with such a huge and continuously growing membrane product market, and facing the pressure of WTO accession and the severe situation of foreign companies establishing factories in China, the pace of localization of technology and materials in my country's membrane production industry is slow. Yuchai Group's acquisition of Northern Membrane Industry Co., Ltd. has given industry insiders hope, but truly forming research capabilities requires extraordinary efforts from enterprises. To achieve a significant market share, the Chinese people need to show the same trust and enthusiasm as they do for supporting products. For the equipment manufacturing industry, both ultrapure water system manufacturers and component suppliers lack effective industry association coordination, and disorderly price competition severely restricts industry development. Due to various reasons, companies in the industry face not only market competition pressures but also the threat of frequent internal fragmentation, making it difficult to form internationally competitive flagship enterprises. Only by relying on flagship enterprises can large-scale domestic projects avoid easily falling into the hands of large foreign companies, and only then can we make significant strides into the international RO ultrapure water treatment engineering and product market.

Furthermore, domestic companies must learn from the business communities of South Korea and Taiwan, applying the management skills honed in the domestic market to markets in less developed countries. We must shift the battlefield of our fierce competition among companies to overseas fronts, allowing the success of expanding the domestic market to be replicated in less developed countries. The speed and success of this process largely depend on the formation and development of the industry's core enterprise group.

Product and Market Development

The pure water equipment manufacturing and related product manufacturing industry will see two major development trends in the coming years. First, it will continue to achieve domestic production, continuously improve product quality, establish a robust domestic sales network and mechanism, and achieve large-scale production. Second, it will leverage China's WTO accession to aggressively promote domestically produced products to the international market. The localization of small vane pumps, multi-way valves for water softeners, and specialized instruments will inevitably accelerate. Several domestic companies have already developed the technological capabilities to enter the international market for products such as 4-inch seamless and slotted stainless steel membrane pressure vessels, 4-inch and 8-inch fiberglass membrane pressure vessels from the Harbin Fiberglass Research Institute, vertical multistage centrifugal pumps from Wuxi Tianhe Water Supply and Drainage Equipment Factory and Hangzhou Southern Special Pump Factory, fiberglass filter barrels from the Xi'an Composite Materials Research Institute, and fine filtration media from Beijing Chaolun Company. Hollow fiber ultrafiltration membranes, with their high domestic adoption rate, large production volume, low price, and extremely high market share, have deterred foreign products; however, their product range is limited, lacking high-quality and high-end products. If this situation improves, a major entry into the international market is imminent. Our products going global is not only necessary for the survival and development of related enterprises, but has also proven to be entirely feasible. More importantly, our business community should focus more on the international market. Chinese-made goods are already ubiquitous in the US, Japanese, and European markets; the only missing piece is the availability of membrane-related products.