MANAGEMENT: Environmental Consultants Face Heavy Competition

The EU Directive on packaging waste was adopted in December 1994 and covers all types of packaging placed on the market and all packaging wastes. Its objectives are to harmonize national measures while providing a high level of environmental protection and preventing trade obstacles and, as first priority, to prevent packaging wastes.

The fate of the Belgian eco-taxes may be decided in a May general election. While disposable razors have been taxed since January 1, 1994, packaging taxes have been postponed until July 1, 1995. The existing system exempts producers and distributors who are investing to meet the eco-tax law's reuse/recycling targets.

Austria's Packaging Ordinance targets reuse rates of 80, 83, 94 and 96 percent for beverage containers, with mineral wa-ter at the high end. "Reuse" encompasses refilling plus material and thermal use.

The United States environmental consulting market in 1994 was valued between $10 billion and $14 billion, and 1995's market is ex-pected to grow 5 to 8 percent, ac-cording to analysts. These figures present hope for industry members, who for the past three years have revised services, only to bring in the same revenue.

For example, according to a survey of environmental consulting ex-ecutives in 1991, the top areas of consulting were:

* air quality;

* industrial hazardous waste management;

* water quality;

* site remediation; and

* site assessments.

However, in 1994, Future Tech-nology Surveys Inc., Norcross, Ga., conducted a study (see graph) that found the top five areas of consulting to be:

* pollution prevention and waste minimization;

* site assessments;

* air quality;

* risk assessment and strategic planning; and

* site remediation.

In addition, despite significant growth in the volume of environmental consulting work, revenues are not growing in proportion. En-couraged by excessive competition among consulting firms, clients ex-pect more services for their consulting dollar. Aside from a handful of federal remediation projects, few very large projects exist.

Environmental consulting firms have responded to the competitive market by reducing internal costs, downsizing, focusing on market de-velopment and accepting modest profit margins. To maintain constant revenues, companies are performing more projects at a lower cost-per-project.

The environmental consulting market has become so competitive that firms must continuously re-view their portfolio of services and expand their focus beyond feasibility studies. For example, many consulting firms have been developing stronger construction capabilities, while construction firms are adding more environmental consulting services. In general, clients want full-service capabilities. A company with only one area of expertise likely will not be successful.

Industrial firms prefer to have as few companies as possible handle their waste streams and become intimate with their production processes. With turnkey operations, costs and liabilities are more readily assigned. In the future, a total-systems approach, including e-quipment supply, lab services and treatment and disposal, could be-come a prerequisite for obtaining business in this market.

For the most part, this industry is a buyers' market, and companies must meet client expectations. In commodity services, more agreements are contracted on a per-job basis, compared to time-and-material contracts, such as services for underground storage tanks and site assessments.

Also, industries such as petrochemical manufacturing, which are confronted with environmental problems on a regular basis, are is-suing strict performance standards for frequently-contracted projects. In addition, these companies are asking for lower prices on projects. For more complex projects, industries are asking better questions to evaluate vendors.