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Consulting Services available from Robert McIlvaine

Consulting Services from Robert McIlvaine

 

 

 

 

 

 

We live in a silo world where the insights we need for a decision are inaccessible. 

In McIlvaine’s Instant Market Answers program discussions are conducted by Bob McIlvaine as on line video conferences.  Revenue forecasts for many flow and treat applications in different countries and industries can be displayed. McIlvaine has 15 reports with an average of 50,000 forecasts per report which are current and can be instantly accessed on line.

Market share data on thousands of companies is on display as well as lots of project data. The client may not need to know the details but if they can see a display of gas turbine installations in Algeria, coal fired power plants in India or the cleanrooms in California it will provide an instant insight.

Much time has been spent in the last six months analyzing the coronavirus impacts on the flow and treat industry. There are major negative impacts for most flow and treat companies but for suppliers of air filters and masks it is an unprecedented opportunity. McIlvaine has services with daily alerts on both the technology and pharmaceutical solutions. This provides perspective on the longer term impact by country and product.

Bob McIlvaine is available for conferences as short as 30 minutes or for extended engagements. There is much to contribute relative to sales or product decisions. Another great value can be advice for senior management relative to organic  growth or acquisitions.

Bob was in the flow and treat industry from 1958 to 1974 when he started the McIlvaine Company. In the last 46 years he has been involved in many of the company’s publications as well as consulting projects.  This includes acquisition advice. The first assignment was with Brown Boveri to evaluate Asea prior to the merger and launch of ABB.  He have represented buyers, sellers, or bidders in over 30 assignments.  He has been an expert witness in lawsuits where the size of the market or ease of entry was in dispute.  Consulting assignments have been conducted for many of the world’s largest companies.

For Cardinal Health he led a team in an assignment to compare reusable vs surgical gowns. They needed to create a common metric to measure all harm and good. This metric was well received and has been featured in hospital magazines.  It is equally applicable to evaluating any flow and treat product.

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.

Purchases of Cleanroom Consumables by Pharmaceutical Manufacturers
$ millions - 2020

Rank

Company

Gloves

Wipes

Disposable Clothing

1 Pfizer 7.70 4.66 8.36
2 Roche 5.76 3.49 6.25
3 Merck 5.25 3.18 5.70
4 Sanofi 5.23 3.17 5.68
5 Johnson & Johnson 4.88 2.96 5.30
6 Novartis 4.74 2.87 5.15
7 AbbVie 3.75 2.27 4.07
8 Gilead 3.57 2.16 3.88
9 AstraZeneca 3.36 2.04 3.65
10 Amgen 3.36 2.04 3.65

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.

Semiconductor Purchases - $ millions – 2019 - World

Company

Total

Intel Samsung TSMC SK Hynix Micron
Cleanroom
Hardware
5500 935 715 605 330 275
Cleanroom
Consumables
2800 476 364 308 168 140
Ultrapure Water Systems 900 153 117 99 54 45
Scrubbers,
Oxidizers
240 41 31 26 14 12
Pumps 240 41 31 26 14 12
Valves 400 68 52 44 24 20
Cartridges 475 81 62 52 29 24
Other Filters,
Separators
380 65 49 42 23 19
Cross Flow
Membranes
250 43 33 28 15 13
Fans, Compressors 290 49 38 32 17 15
Treatment Chemicals 420 71 55 46 25 21
Guide 700 119 91 77 42 35
Control 600 102 78 66 36 30
Measure-
Liquids
140 24 18 15 8 7
Measure-
Gases
70 12 9 8 4 4
Measure –Powders 40 7 5 4 2 2
Other 2,000 340 260 220 120 100
Total 15445 2627 2008 1698 925 774

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.

Company

Total

Danaher Eaton Emerson ITW ABB Crane IDEX CECO
Cleanroom
Hardware
5500       x xx      
Cleanroom
Consumables
2800       xxx        
Ultrapure Water Systems 900 xxx              
Scrubbers,
Oxidizers
240               xx
Pumps 240   x x     xx xx x
Valves 400   x xxx   x xx xx  
Cartridges 475 xx xx   x       x

Other Filters,

Separators

380 xx xxx   x       x
Cross Flow
Membranes
250 xxx xx            
Fans, Compressors 290             x  
Treatment Chemicals 420 xx              
Guide 700 x 0 xxx 0 xxx 0 0 xxx 0 0 0 0
Control 600 x xxx xxx   xxx x x  
Measure-Liquids 140 xxx   xxx x xx   x  
Measure-Gases 70 xxx   xxx x xx      
Measure –Powders 40 xx   xxx x xx      
Other 2,000 x x x xxx xxx   x  

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.

France - 2017 Chlorine Production – kT/yr
Company Location Production
PPChemicals Thann 43
Vencorex Pont de Claix 170
Kem One Fos 340
Arkema Jarrie 72
Kem One Lavera 363
Arkema St. Auban 20
MSSA Pomblière 42
PC Harbonnières Harbonnières 23
Inovyn Tavaux 360
PC Loos Loos 18
Total   1451

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.

CFT Purchases by Process and Revenue - 2018 Chemical Industry Example  
 

TDI

Cl

MOP/

DAP #

2018

Rank

Valves

$ mill

Plastic

Rubber

Ceramic

Thermal

Spray

Other CFT products

Air Liquide         84        

6 types of On/off Valves

6 types of Control Valves

4 types of Pumps

13 types of Treatment Chemicals

Stack gas Neutralizing Agents such as lime and sodium

4 types of Cartridges

6 types of Liquid Filtration equipment

5 types of Sedimentation /Centrifugation equipment

Cross-Flow RO, UF, MF membranes

Ultrapure Water Systems

Stainless Steel plate

FRP Vessels and Piping

Thermal Coatings

Hose and Couplings

Drives and Motors

Dampers and Stacks

Ductwork

HVAC Filters

Agrium     10            
Akzo Nobel   x     80        
Anwil                  
Aventis                  
BASF x x   2 311 Analysis with 150 slides
Braskem         69        
Bayer                  
Belaruskali                  
Covestro   x     65        
CUF                  
Degussa                  
DOW-Dupont x x   1 339 Analysis with 100 slides
DSM                  
Ercos                  
Evonik         73        
Exxon       7 137 Also separate oil/gas forecasts
Formosa x     5 142        
                       

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, NOx, 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 Power Plant Combust, Flow and Treat Purchases

2018 - $ millions

  World EDF Bechtel KEPCO Exelon
Percent 100 20 10 5 4
Guide 1400 280 140 70 56
Control 2200 440 220 110 88
Measure 1200 240 120 60 48
Valves 2000 400 200 100 80
Macrofiltration (Belt Presses, Sand Filters) 200 40 20 10 8
Pumps 1100 220 110 55 44
Treatment Chemicals 1400 280 140 70 56
Sedimentation and Centrifugation 300 60 30 15 12
Variable Speed Drives and Motors 600 120 60 30 24
RO/UF/MF Cross Flow Membrane Systems 200 40 20 10 8
Air Purification and Protection 400 80 40 20 16
Total 11,000 2200 1100 550 440
 

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.

FGD System, Component, Consumables and Repair Purchases in 2018
Company Country Rank % of Total Coal-fired FGD Purchases in 2018 FGD Purchases
($ millions)
AEP U.S. 9 1.1 209
BWE U.S. 14 0.6 114
Datang China 3 7 1,330
Duke U.S. 10 1 190
Enel Italy 13 1 190
Eskom South Africa 5 6 1,140
Guodian China 2 7.5 1,425
Huaneng China 1 9 1,710
Huadian China 6 6 1,140
J-Power Japan 16 0.5 95
National Thermal Power Corporation (NTPC) India 4 7 1,330
NRG U.S. 11 1 190
Shenhua China 7 4.5 855
Southern U.S. 12 1 190
Uniper Germany 15 0.6 114
Vietnam Power (EVN) Vietnam 8 2 380
Sub Total     55.8 10,602
Other     44.2 8,398
TOTAL       19,000
 

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

Boilers at BASF Freeport Texas
Boiler # Fuel Size mm btu/hr Operating Hours Date Installed
B 20C Natural gas 325 8500 1991
B2500 Natural gas 178 8592 2001
BX 5470 Natural gas 210 4350 1996
*H1 Reformer

Natural gas/Process gas

404 8000 1998

* 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.

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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.

Steps to a Program Based on Forecasts for Each Plant
Segment products in to two categories: High performance and general performance
Determine product revenue for each potential purchaser at each plant
Prioritize customers based on size of Serviceable Obtainable Market (SOM) and product category
Where the product is in the general performance category use the forecasts as an evaluation tool on a retrospective basis and to replace sales leads on a proactive basis.
Where the SOM is below a revenue size warranting direct sales the existing sales approach can be used.
For high performance products and for prospects with sizable SOM revenue potential initiate a 5 step program as explained at www.mcilvainecompany.com
Revise specific forecasts based on feedback from the sales personnel