Multiple Investment Opportunities for Investors as the GCC Waste Management Sector Experiences Dynamic Changes

Waste is becoming a major issue in many developing countries world over and in the Gulf Cooperation Council (GCC) as well. Earlier, many countries in the GCC have dealt with waste through the simple mechanism of landfills.

However, the said mechanism is not a workable model in future, considering the ongoing developments in influencing factors like increasing population and urbanisation, increasing social awareness and concerns (globally and in the region) relating to environment damage, the emanating potential of waste as a source of energy / recycled materials owing to more advancements in technology. These factors are driving a need towards doing things differently.

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses global challenges and related growth opportunities that will make or break today’s market participants. For more than 50 years, they have been developing growth strategies for the Global 1000, emerging businesses, the public sector, and the investment community.

In line with the company’s ongoing research on the combined sectors of Environment and Energy, Frost & Sullivan believes that ‘The Changing Dynamics of the GCC Waste Management Market’ is an important category to address, and hence carried out a detailed analysis of the GCC waste management sector. The company indicated that it aims at giving its clients visibility to the most extensive range of growth opportunities, as having the broadest industry and market research coverage of any company globally.

Mr. Abhay Bhargava, Associate Director and Regional Head (Middle East) for Energy & Environment Practice at Frost & Sullivan, said in an interview with our reporter Joshua Amponsem (Africa Business Magazine), “The purpose is to highlight the fact that the waste industry in the GCC is set to undergo a disruption, and ‘business-as-usual’ is not going to work. The study is to showcase to the industry how the market will change, what is driving the change, and what is the impact on the market participants.”  He added, “It is also to increase awareness for the market participants on what to expect from the industry, especially in terms of untapped opportunities in the future”.

The GCC is continuously expressing commitment towards sustainable development. The Waste Management sector is growing fast within the block of countries and the Frost & Sullivan study gives an outlook on how the market will shape up in terms of growth for the next decade.

According to Frost & Sullivan, “Total waste generation is set to rise from 94 Million Metric Tonne in 2015 to about 120 million Metric Tonne in 2020. According to the study, municipalities in the GCC are not braced to handle such volume of waste. Current strategies, mainly landfill, will not be enough and, thus, other solutions need to be welcomed into the sector.

The Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) will marginally be responsible for the rise in waste in the region. Considering the energy provision targets of the region, it is essential to integrate new methodologies, mainly “trash-to-cash” strategies not limited to recycling, in handling waste to the region. Source separation of waste needs to be enhanced to limit the quantity of waste that ends up at landfill sites. This will go a long way to help the recovery of valuable materials, which could serve as raw materials to other manufacturing sectors if separation is done properly.

As it stands now, waste in the GCC is majorly municipal waste and construction waste. However, management should expect a swift introduction of e-waste, and hazardous waste management into their schemes. These sources of waste, including bio-medical waste, will need robust eco-friendly measures in its management.

According to the study, which focusses on the changing dynamics of waste management in the GCC, potential market growth of the sector could steadily rise to about 1.5-2 times by 2020. Also, such an increase is possible to displace the current chain of waste management limited collection and transport, while providing an opportunity for new and rising measures of waste management. Companies that work to provide solutions in the area of waste separation, municipal waste treatment and recycling, trash to cash, biogas, and waste utilisation to generate energy, should be prepared to welcome and best access the opportunities ahead of them. Also, equipment manufacturers for waste management solutions expect high demand for boilers, incinerators, flue-gas treatment systems, geo-membrane liners, and recycling plant machinery.

Mr. Bhargava added, “Frost & Sullivan has currently analysed the market for the Middle East and North Africa only. In this broader region, investors are best advised to look at Egypt, the KSA, and the UAE as target countries for waste management and waste-to-energy investments.” He also highlighted that there is an urgent need for technological advancements and know-how, as well as skills development to meet the changing sector of the region.