Why Membrane Module Manufacturers should not use Independent Sales Reps

 

In recent years a few of the membrane module manufacturers have been using independent sales representatives which I believe is a bad idea and a case of biting the hand that feeds you. Typically, module manufacturers’ internal salespeople, and I am referring to MF/UF modules here, have directly sold to OEMs/System Integrators as well as marketing to end users and consulting engineers so that their products get specified. I am perfectly OK with that. What I am not OK with is the module manufacturers signing up independent sales reps to sell their products which opens up a can of conflicts. Let me clarify that I am talking about new MF/UF systems and not replacement modules at existing systems. I get that some new module suppliers on the market want to find opportunities ASAP and see independent reps as a way to get directly to engineers and end users rather than have to go through OEMs, but this is going to do more harm than good for the following reasons:

The module manufacturers don’t build the MF/UF systems and won’t be bidding the projects, so they still need OEMs to bid with their modules. The rep may also represent one of the OEMs bidding a project who may or may not want (or be able) to bid a system using that module and that likely will prevent competitor OEMs from bidding with that module. So now there is possible conflict created between the rep, his OEM and the module manufacturer as well as conflict between the module manufacturer and other OEMs. At best you may get the rep’s membrane system OEM bidding with the module, assuming that OEM isn’t a proprietary system supplier (Pall, Suez, Memcor/Dupont) and is willing to bid with the module. You also have to understand the dynamics between reps – the module rep will expect a commission for a sale whether his OEM or a competitor’s OEM wins the job as long as the module is selected. Competing reps that win the job don’t want to see commissions going to their competitor for the membranes and will therefore encourage another membrane to be used. This is a very messy arrangement (and difficult to explain) and is going to steer many reps and OEMs away from using the module.

I understand that the objective of using a rep who may be close to the specifying engineers, is to get the membrane listed in the specs and ideally flat spec’d so all OEMs have to use it. It is a very rare situation where you will get a module flat spec’d so in the case where it is listed with other modules, at best only the module manufacturer rep’s OEM will bid the job with that module. I had a project a few years ago where one such module was listed for a project and our sales rep represented that module as well as another OEM who was also listed for the project (not an ideal situation for an OEM but with all the mergers, etc in the industry you can end up with a rep having two competing OEMs). I called the module manufacturer for a quote and was told “sorry we are teaming with the other OEM on this one, but would love to work with you on another project”….. That is the last time we seriously considered that module and it wasn’t long before we also found a new rep in that region.

Before I get some module manufacturers too angry, I’m not talking about membrane replacements on existing systems where there is no role for the OEM. In that case it can make sense to have a rep involved to get the new replacement module qualified and help with the bidding process. But the reps should not be provided any incentive to push this module on new systems and risk opening the can of conflicts.

So how does a new module manufacturer get to market? Obviously, you have to sell to OEMs with the objective of having as many as possible bid a project to increase the chances of the module being selected by the winning bidder. In parallel you have to go direct to the engineers and end users to get a comfort level with the module and have it put in the specification. This latter point is very important. As an OEM, you have a lot of options (this applies to RO membranes also) and OEMs often don’t have time to market a new product to get it spec’d. There are exceptions when the OEM sees an advantage in bidding the new product, but in this crazy busy world right now, very few have time to pause and find the right opportunity do this up-front missionary work. So that is why some module manufacturers are using reps, right? I get it, and it may help on a specific project if all the stars align but in the long run to maximize sales opportunities it is better for module manufacturers to not use reps. Don’t bite the OEM hand that feeds you!

The comments and opinions in this post are my own and not those of my employer.

’21 Membrane Technology Conference Exceeds Expectations – The Wrap

With almost 600 attendees, around 200 more than expected, the 2021 Membrane Technology Conference (MTC) at West Palm Beach, July 19-23, was a resounding success! While this show normally has 900-1200 attendees, getting 60% of this number was a fantastic result for the first National water industry conference since the Covid cancellations (this show was cancelled the week before it was due to be held in early March 2020).

So why was MTC such a success?

For me, it was seeing the beaming faces of colleagues reuniting face to face after 18 months or more of working at home. The networking opportunities that can’t be replaced by Zoom calls. The large parties of conferences past were not held but the outdoor bar at Copper Blues became a popular hangout after dinners each night.

While the technical program had a few less sessions, the quality of the presentations I went to was excellent. One thing I noticed that was a lot different from other years was a lot livelier discussion after presentations – maybe people were bursting to be heard after being locked up for so long. Whatever the reason, it was great to hear these discussions.

There were less exhibitors this year, maybe 70% of other years, but the turnout was still strong and provided a great opportunity for delegates to catch up with manufacturers. Representatives from some manufacturers who didn’t exhibit were still present. Of course, there have been a lot of acquisitions since the last MTC in March 2019, so for instance, Dupont, Inge and Memcor shared a large booth for the first time.

 I think the timing also helped with a late surge of registrations. In late June/early July the country was very optimistic about vaccines slowing Covid and the Delta variant was in its early stages.

 What was new?

The hottest technology trend that I saw was a large number of presentations on novel high recovery RO processes that are now being adopted full-scale. We have heard of CCRO applications at past shows and also this one, but we are now hearing of Pulse Flow RO and Reverse Flow RO starting to be scaled up, so the folks at Dupont/Desalitech may have some competition in the near future. I still think these are niche technologies that are a fit in certain situations and not yet mainstream technologies, but I’m open to changing my mind as more data from different applications at full scale installations becomes available.

Congratulations to AMTA/AWWA for taking the risk with the first national in-person water conference since the Covid shut-downs and pulling off a great show! With this years MTC delayed 4 months due to Covid, it wont be long until MTC22 in Las Vegas, February 21-15. I can’t wait!

Increasing RO recovery is not just a case of adding stages!

I had an engineer recently tell me he was working on a project where they needed to minimize RO brine volume and he wanted at least 90% recovery, so please quote a 3-stage system… Antiscalant projections on the raw water quality showed 78% recovery at best, even with acid dosing. The chemistry won’t allow any higher recovery on this water on matter how many stages the RO system has, and don’t get me started on whether CCRO can do better (I’ll discuss this later).

That is the fourth inquiry like this I have had in the past 6 months and the second from this engineer who is finding it hard to understand the limitations on recovery… so I thought I would put the explanation in print here.

Before you start to think of how many stages you need to design the RO system for, you first need to look at the water chemistry to see what recovery is possible. All the antiscalant manufacturers have projection programs where the raw water quality data is entered, an antiscalant is selected and from the empirical data the program calculates the maximum recovery that can be achieved and what are the limiting salts. You can adjust the feed pH to see the impact of pH correction and you can also change some feed parameters so see how pretreatment will impact recovery. At this point, stages do not even come into the equation. For a customer that wants to get as high a recovery as possible, I also often ask the antiscalant suppliers to do a projection for me, because sometimes they have a product I may not be aware of or that is not part of the projection software version I have.

PLEASE NOTE - INCREASING THE NUMBER OF STAGES DOES NOT ALLOW A HIGHER RECOVERY THAN WHAT THE ANTISCALANT PROJECTIONS PREDICT!!! ALSO, INCREASING THE NUMBER OF STAGES DOES NOT ALLOW A HIGHER RECOVERY THAN WHAT THE ANTISCALANT PROJECTIONS PREDICT!!! Got the message??

Some antiscalant projection programs incorporate calculations on RO unit arrays, but I prefer to first optimize recovery then use the membrane manufacturer’s projection programs to design the best array – I just feel more confident with the RO/NF system design when I use the membrane vendor programs.

Now that I know the maximum recovery that is possible determined by the water chemistry, not the number of RO unit stages, I then go about working out how many stages are needed to achieve this recovery. When designing an array for an RO system there are several important design conditions that need to be accounted for, including crossflow velocity and flux across the membrane elements. The projection programs have built in warnings when these are too high or low. Operating outside the safe ranges will result in membrane fouling.

A 2-stage RO system is limited to up to 80-85% recovery because somewhere in this range you will violate the minimum crossflow requirements for the membranes. When the crossflow is too low you can get concentration polarization at the membrane surface resulting in scaling. By adding a third stage you can reduce the number of housings required in the first 2 stages to increase the crossflow velocity to within the desired range and add back those housings via the third stage to maintain the desired flux rate. For instance, rather than try achieving 85% recovery using a 4:2, 7M array at an average flux of 15 gfd at a permeate flow of 175 gpm which sends some low crossflow warnings for the first stage, you could change this array to a 3:2:1, 7M 3-stage system which has the same flux but the crossflows are better balanced across the membranes.

When attempting really high recoveries, where the water chemistry allows, you may even need to add a fourth stage. Another option to adding stages, is to recycle some Stage 2 concentrate back to the Stage 1 feed to increase cross flow velocity and allow higher recoveries but this increases the concentration of feed water constituents and subsequently the permeate quality is worse.

 And CCRO is not the silver bullet either!

Now a short discussion on ClosedCircuit RO (CCRO). The recovery rate of a CCRO system, like conventional RO, is limited by the chemistry and how much the feed water salts can be concentrated with antiscalant addition. In most cases, the recovery of CCRO is predicted by the antiscalant projections exactly the same as for conventional RO. Because CCRO purges the recycled concentrate every 15-45 minutes, if silica is the constituent limiting the recovery, due to the saturated silica concentration being reached towards the end of this cycle and the slower induction time for silica to precipitate once it reaches saturation (say 10 minutes), CCRO can push past the maximum recovery predicted by antiscalant projections. For that scenario, CCRO will achieve a higher recovery than a conventional RO system.

But for more common scalants such as calcium carbonate and calcium sulfate, the induction time is just seconds and the CCRO process offers no advantage over conventional RO if these are the limiting salts. I would be happy for someone to give me a good technical explanation how CCRO can achieve a higher recovery when CaCO3 and CaSO4 are the limiting salts because from my investigations I have not found one. Don't get me wrong, I'm all for new technologies that can improve on the recovery of conventional RO systems, but I also want to see good science on how this is achieved.

The main message I want you to get from this post though is the following:

INCREASING THE NUMBER OF STAGES DOES NOT ALLOW A HIGHER RECOVERY THAN WHAT THE ANTISCALANT PROJECTIONS PREDICT!!!

The comments and opinions in this post are my own and not those of my employer.

Westech joins Club of Foreign Aquired Companies

The announcement in late November that Westech was being acquired Swire, a diversified global group headquartered in the UK, signaled another previously US owned water treatment company being purchased by foreign interests. This follows Wigen being purchased by Metawater earlier in the year and Tonka/US Water and Avista being purchased by Kurita in recent years. Metawater also purchased Aqua-Aerobic Systems in 2016. Suez bought the RO business of Lanxess in late 2020 making it a very active year for acquisitions by foreign companies (of course Lanxess is German).

It raises the question; why are foreign investors so interested in acquiring home grown US water treatment companies while large US companies are not? A few decades ago there was US Filter who quickly gobbled up a lot of water companies to create the US Filter empire before these were eventually sold off to Veolia in 1999…..we also had GE getting into the water treatment business in 2006 with the notable acquisition of membrane company Zenon which has since been sold to Suez. But in the last 10 years the purchases have mostly all been off shore with companies such as Suez, Veolia, Siemens, Xylem, Kurita and Metawater picking up the best of the local companies. The notable exception is Dupont’s acquisition spree in 2019 (see previous post).

 

I don’t know much about M&As but from my perspective it seems like US investors are not interested in the steady but unspectacular rate of growth of the water treatment market. The potential for water treatment products in a drier and more crowded planet is alluring, but those companies that have bought into it expecting water will be the ‘new oil’ have been disappointed by the long sales cycles for capital infrastructure and government procurement processes and rules. You can’t just buy say an OEM in the desalination market, cut costs, standardize the products, increase revenue then flip the company… In fact, for large custom capital equipment you standardize at your own peril as some large OEMs have found out when trying to cut costs then becoming uncompetitive for large custom projects.

 

I understand that as a small self-funded company you can only grow so much before outside investment is needed to provide the resources to take that next growth leap, but from a local industry perspective it is disappointing there are not large local companies willing to invest in so many successful local homegrown businesses.

The comments and opinions in this post are my own and not those of my employer.