Japanese Media: Chinese Enterprises Are Breaking Japan’s Monopoly in Desalination

According to a report by Japanese media outlet Nikkei Business on May 29: The reverse osmosis membrane (RO membrane) developed by Japan’s Toray, which has deeply penetrated Saudi Arabia—one of the largest markets in the Middle East—has long been a key indicator of Japanese companies’ technological strength in desalination equipment. In the Middle East, desalination primarily relies on reverse osmosis membranes, using pressure to remove salt and impurities from seawater.

Naoaki Ōkuma, a membrane technology expert and Executive Director at the Water Production Promotion Center, stated that Japanese-made RO membranes still hold over 50% of the global market share. This sector is dominated worldwide by four major companies: DuPont (USA), Toray, Nitto Denko, and Toyo Boseki MC (Osaka City), collectively accounting for more than 90% of the global market.

However, Chinese influence is beginning to challenge this established market dominance. Japanese RO membrane manufacturers are now facing a new round of competitive battles.

First comes price competition. While Japanese RO membranes still lead in performance, Chinese manufacturers are entering the market through aggressive low pricing. Chinese enterprises—including state-owned ones—are launching price campaigns almost regardless of cost. A senior official from Japan’s Ministry of Economy, Trade and Industry remarked: “Chinese firms are rapidly catching up in the RO membrane field, and Japanese companies are already feeling intense crisis awareness.”

At the same time, Chinese companies are also getting involved in setting product standards. Market strategies are no longer limited to price alone. Chinese enterprises have begun participating in international conferences to discuss the formulation of standards for desalination membranes.

Membrane performance can vary significantly depending on conditions such as water temperature. Chinese companies are incorporating parameters favorable to their own interests into international standards. At international meetings, Europe and the United States typically send about one expert each, Japan sends only a few experts, while China dispatches over 20 experts. Japan’s traditionally dominant technology is thus entering a new phase of market competition.

Naturally, past failures in sectors like solar panels and household appliances have made Japan highly vigilant. Each company is exploring ways to avoid price wars. Nitto Denko, which began manufacturing reverse osmosis membranes in 1976, was Japan’s earliest developer in this field. Based in Kusatsu City, Shiga Prefecture, the company focuses on new product development. However, it is currently reducing its proportion of desalination products and shifting emphasis toward high-value-added applications such as industrial wastewater treatment and recycling.

In civilian industrial applications, membrane performance is crucial—but so are sales performance and technical support during operation. Nitto Denko’s executive emphasized: “We will not compete with Chinese manufacturers who sell at nearly half our price,” but added: “The real challenge lies in technology leakage. Similar products to ours appear at exhibitions in China, so we cannot afford to lower our guard against imitation and intellectual property leaks.”

Toray is advancing local production in Saudi Arabia. It has partnered with local enterprises to establish a large-scale RO membrane component manufacturing base. A new factory is scheduled to begin operations locally in 2025. Shinta Akira, an advisor at the Middle East Cooperation Center, noted: “Establishing regional headquarters in Saudi Arabia, hiring local personnel, and producing locally all affect tender outcomes.” Whether local production and technical services directly influence the decision-making of engineering, procurement, and construction (EPC) contractors is critical. Toray aims to consolidate its market position through a supply system that cannot be challenged solely by price competition.

Toyo Boseki MC’s advantage lies in its “hollow fiber membranes.” These consist of bundles of thin, straw-like fibers that maintain stable equipment operation even in areas prone to clogging due to fouling.

The waters in the Middle East tend to accumulate fouling easily. Hollow fiber membranes offer superior strength under high salinity, reducing replacement costs and delivering long-term economic benefits. In Saudi Arabia alone, Toyo Boseki MC holds a 20% market share.

Yet, technology alone cannot secure market dominance. Masamoto Nobuyuki, head of the membrane sales department at Toyo Boseki MC, admitted: “We possess technical capability, but our sales efforts are relatively weak.” A turning point came through collaboration with Mitsubishi Corporation. Hiroshi Tsujino, Tokyo-based representative of Toyo Boseki MC, said: “To convince top-level decision-makers that our membranes are better, that’s exactly Mitsubishi’s sales approach.” It’s not just about selling to construction companies; it’s about engaging directly with government officials responsible for decisions and participating in plant design to build an organizational structure capable of being adopted.

Japanese companies have made efforts, but they cannot avoid continuous breakthroughs by Chinese competitors.

Thus, Japanese companies are now exploring whether used membranes can be reused, creating a different market segment to counter price competition?

RO membranes are replaced at fixed intervals. However, high-quality membranes produced in Japan, Europe, or the U.S., after proper cleaning treatment, can partially recover their performance. If applied in industrial or agricultural settings, they can be reused.

Zeolite, a water treatment company based in Fukuoka City, collects and cleans used reverse osmosis membranes using chemicals and precise temperature control. After evaluation, these membranes are mainly resold overseas. Zeolite President Kenji Shimamura stated: “The price has become attractive, and inquiries from sales companies are increasing.” Processing capacity is nearing limits, and plans are underway to expand cleaning facilities.

Under Japanese leadership, international standards for recycling and resale of used reverse osmosis membranes have already been established. If quality can be proven according to international standards, promoting secondhand recycled membranes into the market will become easier. The main challenge lies in the small size of the current market. The secondary market for recycled membranes is just beginning globally—and convincing customers remains a hurdle.

Environmental regulations in regions like the European Union (EU) and investment trends in the Middle East provide potential for expanding the recycled membrane market.

The era when Japanese companies could dominate markets simply through superior technology is ending. Beyond aggressive low-price strategies, Chinese firms are now actively participating in shaping international rules. For Japanese companies, merely improving technical performance is no longer sufficient—they must build localized operations, strengthen sales networks, and engage in standard-setting.

Competition in the water treatment industry is shifting from individual product performance to competition determined by “design capability.”

Original source: toutiao.com/article/1866490012684288/

Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of any organization.