Pharmaceutical Industry Candidates for Direct Sales Programs

Consolidation and international expansion are resulting in the concentration of decision making about cleanroom consumables. The top 25 pharmaceutical companies will purchase 45 percent of cleanroom consumables in 2020. The top three will purchase more than 10 percent of the total. The top 100 pharmaceutical manufacturers will make 70 percent of the purchases.

For more information on this program contact Bob McIlvaine at rmcilvaine@mcilvaine company.com 847 784 0012 ext. 112

Semiconductor Direct Sales Program Candidates

The semiconductor industry is a large and growing market for combust, flow and treat (CFT) products. In 2019 the industry will spend $15.4 billion for these products. The top five purchasers will account for 40 percent of the total.

Four of the top five purchasers are integrated suppliers with both chip fabrication and proprietary designs. TSMC is not an integrated supplier but has a 56 percent share of the independent foundry market.

The processes used by these manufacturers include ultrapure water to wash chips, acids to etch them, cleanrooms with sophisticated HVAC systems to prevent particulate damage, wastewater treatment and air pollution control. There are many individual steps as a chip moves from tool to tool.

The top 100 purchasers represent over 80 percent of the market. These companies are centralizing decision making and purchasing. They are also remotely monitoring operations and utilizing total cost of ownership evaluations to make decisions.

Consolidation is continuing and it is likely that the top 100 purchasers will account for 90 percent of the market within a decade. These purchasers have plants throughout the world. Therefore market research based on the market size in China or the U.S. is not nearly as relevant as the market size for each of the top 100 purchasers.

The challenges to improve performance increase as line size decreases. Chips with 7nm line sizes are now in production and 5nm production is slated for 2020. This progression needs to be accompanied by similar advancement of CFT products. This means that suppliers must understand the processes generally but also the unique variations applied by individual purchasers.

This focus on individual purchasers and their unique processes dictates collaboration among disparate supplier divisions. ABB makes cleanroom robots as well as a range of guide, control and measurement products. Danaher has acquired Pall and Chemtreat to supplement its Hach operations and now can supply a range of filters, treatment chemicals and measurement equipment.

x= some market share, xx= significant market share, xxx= market leader, 0 = Edge computer package opportunity

Danaher can use its strong position in cross flow membranes and measurement to increase penetration for its other products. The right treatment chemical in an accurately measured amount is necessary to keep the cross-flow membrane clean. Danaher now has all the products to provide the operational synergy to maximize membrane performance.

Emerson purchased Tyco Valves from Pentair. This expands its synergy between valves, controls and instrumentation.

Now with low cost sensors, wireless technology and capable partners, CFT suppliers can add remote monitoring and edge computer packages to their offerings and substantially increase revenues.

Multi product suppliers would be well served to determine the opportunity at each of the top semiconductor purchasers and then devise a strategy to encourage collaboration among divisions to pursue each. This represents a sea change in the route to market caused by international consolidation, IIoT and the Industrial Internet of Wisdom (IIoW) to empower IIoT.

The opportunity for controls and instrumentation for each large purchaser is included in N031 Industrial IOT and Remote O&M.

The potential for purchases of specific products such as valves, pumps, scrubbers, filters, etc. by each large semiconductor purchaser as well as purchasers in other industries is included in the individual market reports shown at http://home.mcilvainecompany.com/index.php/markets.

Chemical Industry Direct Sales Program Candidates

Forecasts of combust, flow and treat products can be obtained for each plant and each corporation based on plant capacity. The investment for new products, replacement products and repairs can all be related to projected and existing capacity. The power industry forecasts start with the capacity of each generator. Municipal wastewater forecasts can be determined based on the MGD of primary and secondary treatment. The same approach can be used for refineries. Pulp and paper forecasts can be achieved with tons/yr of pulp. Mining is more of a challenge because purchases vary with each type of ore.

The industry which is most challenging is the chemical/fertilizer industry. There are many different products requiring many different processes. This necessitates forecasting production of each chemical and then grouping these chemicals by common requirements. For example, TDI, Cl, and MOP/DAP all include processes with highly corrosive fluids. The forecasts for corrosion resistant products for each plant can be determined based on the production or usage of corrosive chemicals at each plant. Here is an example tabulation for chlorine.

The same procedure can then be repeated for other corrosive chemicals and forecasts made for each CFT product. McIlvaine routinely forecasts purchases for the top 30 chemical companies. However, many of the top purchasers of corrosion resistant products are not in the top group for all CFT products. The challenge is to segment the corrosion resistant purchases separately from the others. The following companies are all significant purchasers of corrosion resistant products.

This group includes the top 20 chemical companies and the top companies in the chlorine, TDI and MAP, DAP segments. Exxon is the seventh largest purchaser of valves in the chemical industry (their oil, gas and refining purchases are determined separately). However, they are not a major player in production of the three corrosive chemicals displayed in this chart.

Advanced Forecasting to determine the purchases of a specific product by a specific company in the next year allows for a direct effort by the supplier well in advance of the actual purchase. This effort can result in specifications and decisions ahead of time which greatly improve the order potential. The cost of this type of analysis is no longer prohibitive.

Power Industry Direct Sales Program Candidates

It is now possible to obtain product forecasts for each potential power plant customer. These forecasts can become the foundation of a sales program. McIlvaine can provide forecasts for more than 20,000 large units and another 30,000 smaller utility and industrial units.

The power industry represents a large market for combust flow and treat (CFT) products and services. Coal fired power plants will be the largest purchasers but the gap is shrinking as gas turbine capacity grows. Nuclear plants will continue to rank below coal and gas.

The amount of CFT purchases by solar and wind generators will remain small even though the share of generation by these plants will be growing robustly. Geothermal and biomass are big purchasers of CFT products but their share of total generation will be small. Hydropower will remain a big market for pumps and valves but not for most other CFT products.

Between 2018 and 2021 the capacity of coal plants worldwide will grow from 2440 GW to 2600 GW. The average boiler size is 0.2 GW. There are 12,200 existing boilers. The average size of new boilers is 500 MW. So the number of boilers will grow by 320 during the next three years Each existing unit and details on the new boilers are provided in 42EI Utility Tracking System.

Nuclear capacity will grow from 433 GW in 2018 to 453 GW in 2021. The average reactor is approaching 1 GW and many sites have multiple reactors. So the number of units is less than 500 and the number of sites less than 300. Weekly details on these plants are included in 41F Utility E-Alert.

Gas turbine capacity will rise from 1670 GW in 2018 to 1890 GW in 2021. The average unit size is 0.1 GW resulting in 18,900 units in place by 2021 Data on all existing plants as well as new projects is included in 59EI Gas Turbine and Reciprocating Engine Supplier Program.

There are thousands of geothermal, biomass, biogas and hydro plants. Most are small. Each is tracked in 31I Renewable Energy Update and Projects.

The projected CFT product revenues for each type of generator are included in the market reports http://home.mcilvainecompany.com/index.php/markets

Innovations and insights to future revenues are included in Decision Systems 44I Coal Fired Power Plant Decisions and 59D Gas Turbine and Reciprocating Engine Decisions

This aggregation of services allows McIlvaine to cost effectively predict product purchases at each plant.

Operators of simple cycle and combined cycle gas turbine plants will spend $180 billion per year for hardware, consumables, instrumentation and services on an annual basis over the next 10 years.

The top 15 power companies will spend more than $750 million for gas measurement devices in 2022.  This includes analyzers to measure CO, CO₂, O₂, NO_x, NH₃, SO₂, SO₃, mercury and dust. The requirements for mass measurement of dust are boosting the market because their cost is considerably greater than the previously required opacity monitors.

Five Companies will be Responsible for 39 Percent of the Combust, Flow and Treat Purchases in the Nuclear Power segment in 2018.

Global nuclear power generation is now predicted to grow by 2.3 percent per annum out to 2035. Over 90 percent of the combust, flow and treat expenditures will be made by fewer than 50 companies.  Thirty-nine percent will be made by just three operators and one supplier.

Nuclear plants will spend $200 million for cross flow membranes. This represents 20 percent of the total membrane purchases by the power industry.

Most new coal fired plants will incorporate flue gas desulfurization. Many existing plants have FGD systems or will install them. So this is a big market for pumps, valves, controls, chemicals, nozzles, fans, packing, seals and other CFT products. The purchases are concentrated among a few large operators. Guodian and Shenhua are merging and will make 12 percent of global FGD purchases.

Forecasts can also be supplied for power plants at industrial sites.

* SCR included on this reformer

There are nearly 30,000 industrial boilers in the U.S. However, there are only 350 plants with coal fired boilers and 2000 plants with large gas fired boilers. In the case of a chemical plant such as BASF Freeport, the total market for valves and pumps is large. The boilers just become one of a number of relevant processes within the plant. In Asia there are a large number of independent coal fired power plants operated in conjunction with mining, steel, and chemical products.

Setting up a program built around individual power plants

The program can be structured to place larger effort on the plants with the greatest potential.

Maximum effort with custom websites can be set up for 2000 individual units at the top 20 purchasers with 50 percent of the potential. So this would be just 20 custom websites. There would be 200 direct sales programs covering corporations with 10,000 units representing 80 percent of the potential. Forecasts for 45,000 units would account for 95 percent of the potential and would be an evaluation tool for the general sales effort.

The forecasts for each individual plant will allow the sales team to effectively deploy resources and maximize sales.