NEWS RELEASE                                                                                         March 2018

$30 billion/yr Aftermarket and $10 billion/yr Innovation Market for FGD

History: There has been more than $300 billion invested in Flue Gas Desulfurization Systems since the first system was installed at Union Electric in St Louis in 1968. This system was a result of a partnership between Environeering with the scrubber knowledge and Combustion Engineering, the world’s largest coal fired boiler supplier.

In the early years it was a sellers’ market with innovation, knowledge and risk taking being the dominant attributes for success. Since all components were purchased the return on investment (ROI) for knowledge was huge. The only problem was that with a volatile regulation driven market the negative ROI based on risk eventually erased the profits based on knowledge.

Most of the European and U.S. FGD suppliers eventually faced either bankruptcy or fire sales to more diversified companies. Of the early participants only the Mitsubishi/Hitachi, Babcock and Wilcox, and Chiyoda names are still relevant.   Research Cottrell, Joy, Deutche Babcock, Combustion Engineering, Saarberg Holter, KRC, Steinmuller, Peabody and other original participants have disappeared or been integrated.  

The most convoluted is GE. The sequence is Peabody and an Ontario Hydro spin off become part of GE (GE Environmental Systems) which eventually become part of Marsulex. Combustion Engineering was sold to ABB which then sold the division to Alstom which was then sold to GE. The order just received by GE for an FGD system for NTPC is a design originated by Environeering/Combustion Engineering. So over 30 years GE has divested itself of one FGD system company and now owns one of its original competitors.

System Suppliers: The leading FGD suppliers in recent years have been Longking, Wuhan Kaidi, Guodian and other Chinese suppliers. BHEL is suddenly looming as a major supplier based on its awards in India. MHPS is one of the original suppliers who still has a significant market share. This company is a result of the merger between the Hitachi and Mitsubishi power divisions.

In general, the recent contracts are based on much less knowledge and risk than the early ones. Suppliers have failed to innovate. As a result, the system offerings today vary little from the ones offered in the early days. Any difference is in the components, consumables and chemistry.

The quality of limestone, treatment chemicals, bags, nozzles, linings, mist eliminators, filter belts, agitators, gypsum oxidation compressors, pumps, valves, instrumentation, drives, controls, fans, ball mills, cyclones and other components has greatly improved. The control of chemistry is vastly improved. As a result, the modern FGD system has no more downtime than the rest of the boiler system. These improved components also result in SO2 removal above 98% compared to the 80% target in the early days. In fact, China presently has even more stringent limits.

Components and Consumables: The annual cost of nozzles, valves, fans and compressors is approximately 15% of the original cost. By 2023 there will be 2 million MW of FGD systems in place, this means that components for 30,000 MW will be replaced each year. Over the years the new system purchases have varied from 1000 to 90,000 MW. The average has been less than 30,000 MW. As a result, replacement components represent a market larger than that for new components.

The market for consumables such as filter belts, seals, bags, limestone, treatment chemicals, balls for ball mills and others has continued a slow but steady rise over the years. The reduction in the total installed FGD in the U.S. and Europe will be less than 100,000 MW over the next five years and will be offset by 200,000 MW of new systems in Asean countries, India, and South Africa and a few others. The result is a steadily increasing market for components and consumables.

Innovation: The international system suppliers lost market share because they failed to innovate. Large numbers of companies entered the U.S. market in the 1970s. Japanese and German companies entered the market in the 1980s. There was not a large enough or sustainable market for them. So, R&D and innovation was not fundable. The trend continues with many Chinese suppliers and now Indian suppliers (mostly under license). However, because of the big retrofit market the innovation potential is greater than ever.

Here is an example: the successful MgO system at Philadelphia Electric unintentionally created a rare earths feedstock. With the knowledge we now have this system can be slightly modified to produce rare earths, high quality flyash, hydrochloric acid and sulfuric acid or a pure gypsum which can compete with precipitated calcium carbonate. HCl Scrubbing and Rare Earth Recovery from Coal-Fired Power Plants and Gasifiers are the Perfect Marriage

The relatively new catalytic filter combined with dry sorbent injection could carve out a significant market. Lime is a better reagent choice for wet scrubbers as well as dry scrubbers under certain conditions. Under certain conditions there is a good market for ammonium sulfate and certain other by-products. More modest innovations such as improvement of scrubber internals and selection of the natural oxidation and flyash/sulfate for landfills are also attractive.

The biggest innovation potential is remote operation and maintenance support for FGD systems around the world. Europe and the U.S. have an excess of FGD experts. Asia has a big need. With cloud-based systems an expert in Windsor, Connecticut can be making judgements based on feed from a remote-control center in the Philippines and a plant operating in Vietnam. MHPS already has the remote-control center in the Philippines’ but it is presently mostly monitoring rotating equipment. With cloud-based software MHPS could extract the world’s expertise for each component and each consumable.

The potential for component and consumables suppliers is very high. An international limestone supplier can work with local suppliers and guide them. He can provide optimum limestone quantities and qualities to plants all over the world. The international nozzle supplier has the same opportunity.   Valve and pump suppliers have not only the FGD opportunities but those in all the other plant processes. The compressor delivering oxygen for FGD gypsum can be controlled based on local electricity costs, needed gypsum quality and other parameters.

The McIlvaine Company is in the position of guiding suppliers based on a combination of standard reports and “Forecasting”. In addition to the FGD report (N027 FGD Market and Strategies ), there are also reports on IIoT and Remote O&M, valves, pumps, treatment chemicals, liquid filtration, fabric filters and precipitators. Special reports are also available for all other components. All the projects are tracked in the Utility Tracking System which also includes purchases by all the largest utility companies. Details on the reports are available at   For more information on custom forecasting contact Bob McIlvaine at This email address is being protected from spambots. You need JavaScript enabled to view it.

NEWS RELEASE                                                                                         March 2018

Lowest Total Cost of Ownership Validation (LTCOV) will be Essential for High Performance Combust, Flow and Treat Products and Services Success

The sea change in the market route for combust, flow and treat companies has been assessed at . One aspect is that IIoT and data analytics will be providing vast amounts of data on total cost of ownership. Current data will be available to the corporate specialists who increasingly will be making the major purchasing decisions.

These corporate specialists will have not only current TCO’s on each product but they will have the knowledge of their processes and the unique TCO parameters. These will not be people easily persuaded by a standard sales presentation or even a comprehensive analysis which does not take into account unique TCO parameters for the process in question.

TCO has long been a desired but expensive, time consuming and difficult basis for decision making. As a result initial price has had unwarranted influence on purchasing decisions for high performance products. More than half of the combust, flow and treat products are in the high-performance category. This includes both critical and severe service where performance has a bigger impact than initial price.

The most important navigation tool for this sea-change in the route to market will be the Lowest Total Cost of Ownership Validation (LTCOV). The obvious question is how does the LTCOV differ from the common “white paper”. Here are the differences

  • The LTCOV addresses the unique process parameters for a specific purchase
  • Validation is achieved by the input of Subject Matter Ultra Experts (SMUES)
  • The unique process parameters and cost factors are supported by decision systems with case histories, analyses and economic tables.
  • The LTCOV is kept current
  • The LTCO is further validated by addressing criticisms of third parties including competitors
  • This input from third parties is implemented through the decision systems.

The digital generation with access to data analytics and the Industrial Internet of Wisdom” will be leading the way in the market sea-change. The LTCOV will be a primary navigation tool. Therefore, those suppliers who have the best products and can validate LTCO will be the most successful. How can a supplier address this sea-change and provide the desired LTCOV’s? Here is the step by step recommendation.

  1. Use “Advanced Forecasting” to prioritize industries, processes and even all the major individual prospects
  2. Start with the most potentially lucrative segment and create an LTCOV for it.
  3. The LTCOV process steps are
    1. Select a vendor to coordinate the LTCOV. McIlvaine would be one of the consulting companies to consider
    2. Understand the process as well as the process operator does.
    3. Gather all the cost data relevant to the application of your product or service relative to that process
    4. Support that data with case histories, customer testimony. and verifiable analyses
    5. Validate the LTCO with the input from one or more Subject Matter Ultra Experts
    6. Disseminate the LTCOV to the potential purchasers
    7. Provide open on line discussions of the LTCO
    8. Support decision systems covering the process and all the relevant products and services
    9. Provide continuous review and updating of the LTCO
    10. Encourage the development of subject matter ultra-experts both within the organization and without
    11. Interconnect all the people within the supplier organization to improve and leverage the LTCO market approach.

This sea-change will not only impact market shares but margins, R&D and the fundamental building blocks for success. Those companies who leverage TCO information to develop better products will find ready acceptance. The result will be faster process improvement and higher profit margins to those companies who divert more funds from promotion to R&D.

A five-step program to address the sea change is found at

For more information on a consulting program to coordinate the LTOV contact Bob Mcilvaine at This email address is being protected from spambots. You need JavaScript enabled to view it. 847 784 0012 ext. 112.

NEWS RELEASE                                                                                         March 2018

Impact of Free Trade on the $400 billion Combust, Flow and Treat Industry

After World War II the U.S. led the way to world prosperity with the attitude that a rising tide lifts all boats. The better each country does, the bigger the potential market. Now the world is facing trade restrictions which are based on the opposite philosophy.

Last week China eliminated the two-term presidential limit and the U.S. announced plans for tariffs on steel and aluminum. Neither initiative bodes well for the $400 billion Combust, Flow and Treat (CFT) industry. (1) In fact, any individual efforts toward trade restrictions will have a negative impact on the industry. Here are some of the reasons why this is so.

  • CFT purchasers are rapidly becoming more global
  • The CFT supplier industry is rapidly becoming more global
  • The U.S. market share shrunk from 60% after WWII to 15% today
  • The ratio of profits based on knowledge/manufacturing is increasing
  • Knowledge has no geographical limits

CFT purchasers are rapidly becoming more global: Alcoa just received a big contract to ship bauxite from its Australian operations to companies in China. The U.S. produces less than 1% of the world’s aluminum because of the locations of bauxite and cheap electricity. In the last year Alcoa received contracts totaling $665 million to supply bauxite from mines around the world to China, Brazil, the U.S. and Europe. The Alcoa “Smelting Center of Excellence” is in Canada. So, Alcoa cast products made in the U.S. from ingots made in Canada will be more costly.

With annual achievable production capacity of approximately 113 million tons of crude steel and some 199,000 employees across 60 countries, ArcelorMittal is the world’s leading steel and mining company. It is the largest producer of steel in North and South America and Africa, a significant steel producer in the CIS region and has a growing presence in Asia, including investments in China and India. It is also   the largest steel producer in the EU, with significant operations in France, Germany, Belgium, Spain, Luxembourg, Poland, the Czech Republic and Romania.

ArcelorMittal recently purchased dust collector systems for multiple plants on two continents from Hamon. The order was placed in Europe. Hamon has a European base but the dust collector technology comes from its purchase of Research Cottrell which was a U.S. company.

The U.S. steel production in 2017 was 82 million tons. So, Arcelor Mittal is a more important customer than all the plants in the U.S. World crude steel production reached 1,691.2 million tons (Mt) for the year 2017, up by 5.3% compared to 2016. Crude steel production increased in all regions in 2017 except in the CIS, which has remained stable. Since U.S. steel production is only 5% of the world production a tariff which increased U.S. production by 20% would only have a world total redistribution of just 1% of the market. It would also mean a lower output in the rest of the world.

Fewer than 2000 major international corporations will purchase the majority of the CFT products and services this year. Purchasing is becoming centralized. Arcelor Mittal has made huge savings by centralizing decision making and purchasing based on total cost of ownership for all plants. BASF has made decisions from Germany on valve and instrument vendors for condition monitoring systems at all their plants

Conclusion: The 2000 international customers are much more important than individual countries to the CFT industry. A tariff which helps one country hurts the international players and therefore the CFT industry.

The CFT supplier industry is rapidly becoming more global. CFT companies are increasing their market share in the areas of the world with the large and growing markets. Emerson purchased Pentair Valves which had purchased Tyco valves which had purchased many dozens of local valve companies. Xylem purchased a European pump company to become a major international pump supplier. Most major CFT companies now have a significant presence in China and vice versa. Neway Valves headquartered in China is a major supplier of valves on a worldwide basis. Andritz has made major purchases in the U.S. and other countries to expand beyond its European roots.

The Chinese air pollution system and product companies are now focusing on the international market. Since the market for FGD and SCR has peaked in China the local suppliers are aggressively pursuing markets in Asia, the Middle East and Africa. International catalyst suppliers with joint ownership of Chinese plants are expanding their global presence through this path.

Conclusion: Most of the CFT products and services are sold by international companies who are negatively impacted by trade restrictions.

The U.S. market share shrunk from 60% after WWII to 15% today. The U.S market is small compared to the world market. Japan, Europe and the U.S. once represented more than 90% of the world CFT market. The Asian countries absent Japan now represent larger markets than the three onetime leaders for most CFT products. The coal fired boiler market represents one of the most significant shifts. Twenty years ago, 90% of the FGD and SCR markets were in the former big three. Over the last decade China purchased more of these products than that three combined. Now ASEAN and India are the big markets with purchases greater than the former big three. Most of the new coal fired boilers are being built in countries in Asia other than Japan and China. Africa will buy more coal fired boilers than the U.S. and Western Europe combined. Most of the new wastewater treatment plants are being built in Asia.

Conclusion: No one country and specifically the U.S. is the dominant success determinator for CFT. In fact, when a big market opens up in one country the wise CFT company needs to ask, “How do I take advantage of this opportunity in the short term while focusing on the longer-term world opportunity?”

The ratio of profits based on knowledge/manufacturing is increasing: In the future the Industrial Internet of Things (IIoT) will be empowered by the Industrial Internet of Wisdom (IIoW). (2) CFT companies will be selling packages justifying higher margins and selling prices because they will offer lower total cost of ownership (TCO). This lowest TCO is achieved with process wisdom which results in better specific products for the application. The added revenue from remote monitoring and operational support will be very significant.

The manufacturing and transport costs for high performance products will be less important than product design and process knowledge. Many valve companies have retired foundries and are buying castings. (3) Most suppliers of pollution control systems purchase all the products and or parts and have only a few assembly or special part manufacturing facilities. (4) High performance products generate more revenue than general performance price-based products.

Conclusion: Knowledge is more important than low cost manufacturing. With IIoT empowered by IIoW the importance of knowledge will increase.

Knowledge has no geographical limits: MHPS is monitoring coal fired power plants in Asia from a remote-control center in the Philippines and gas turbine power plants from a center in Florida. Donaldson can remotely monitor filter performance of off road vehicles. With cloud-based systems subject matter experts anywhere on earth can be made available for instant advice based on data analytics of performance at any plant. An avalanche of data analytical information will allow subject matter experts to become subject matter ultra-experts (SMUE’s) who will make a major impact on TCO.

Knowledge knows no geographical boundaries. Greater knowledge will lead to international success. Those companies who allow SME employees to become SMUE’s will obtain a large market slice. Trade restrictions are a negative factor in the success equation for CFT companies.

The ethical behavior of international corporations may be no better or worse than that of the politicians who run the countries of the world. However, corporate self-interest dictates the same type of ethical policy that led the U.S. to create the international free trade structure after World War II. Therefore, the greater impact international corporations can have limiting trade restrictions the better.

  1. Market ‘Forecasts
  2. N031 Industrial IOT and Remote O&M
  3. N028 Industrial Valves: World Market
  4. 5AB Air Pollution Management


NEWS RELEASE                                                                                         March 2018

Municipal Wastewater Plants to Spend $64 billion for Flow and Treat Equipment This Year

Municipal wastewater treatment plant operators world-wide are anticipated to spend $64 billion for selected flow and treat products and services this year. The majority of these purchases will be made by just 200 operators and 30 engineering/consulting firms.

Suez is supplying more than 30 million people with water and wastewater services. They are also designing plants and purchasing flow and treat products for new as well as existing plants. Beijing Enterprises Water Group (BEWG) operates more than 400 wastewater plants in China and other countries and is also involved in design build projects where they would specify flow and treat products. Chicago MSD operates seven wastewater reclamation plants.  It is also expanding its scope by encouraging nearby food processors to send waste to the plant for conversion to biogas. This will increase its sludge processing, compressor and air pollution control purchases.  Los Angeles Sanitation’s operations are approximately half the size of those in Chicago.

2018 Municipal Wastewater Purchases ($ millions)










Los Angeles

Chicago MSD

Guide 5280 1100 106 63 33 11 22
Control 8640 1800 173 104 54 18 36
Measure 4320 900 86 52 27 9 18
Valves 4800 1000 96 58 30 10 20
Macrofiltration (belt presses, sand filters) 2400 500 48 29 15 5 10
Pumps 9600 2000 192 115 60 20 40
Treatment Chemicals 6720 1400 134 81 42 14 28
Sedimentation and Centrifugation 4320 900 86 52 27 9 18
Variable Speed Drives and Motors 4800 1000 96 58 30 10 20
Turbines, Fans, and Compressors 10560 2200 211 127 66 22 44
RO/UF/MF Cross Flow Membrane Systems 1200 250 24 14 7 3 6
Air Pollution Control 960 200 19 12 6 2 4
Total 63,600 13,250 1271 765 397 133 266

McIlvaine is forecasting flow and treat product and service expenditures for all industries and for 550 operating companies and 400 OEMS, EPCs and process sub system companies worldwide.  Municipal wastewater is one of 14 industries which are covered. The wastewater purchases in many countries are concentrated among just a few operators.  Suez operates more than half the plants in Chile. In the U.S. the engineering/consulting firms play a big role. 

There is a metamorphosis in the way purchases will be made in the near future. Process management system suppliers are providing monitoring and control of every valve, pump and filter from remote monitoring centers.  Suez is monitoring hundreds of plants from its European base.  The equivalent of millions of total lowest cost of ownership analyses are continually generated.  This development will profoundly change the route to market as explained in N031 Industrial IOT and Remote O&M.

Profiles of the 100 largest operators and EPCs worldwide are included in 62EI North American Municipal Wastewater Treatment Facilities and People Database  which is being expanded to include the major worldwide purchasers.

A decision system for municipal wastewater flow and treat purchases includes a number of decision guides. One is on aeration blowers. Another system provides the odor control options. There is a guide just on mercury control options for sewage sludge incinerators Details are found at Municipal Wastewater Decisions.

Detailed forecasts for each of the 550 major purchasers are shown in the relevant market reports listed at

A free webinar to discuss the municipal wastewater flow and treat market and the sea change in the way purchasing decisions will be made will be held at 10:AM Central time on the March 28. To register click on Free Market Webinars

NEWS RELEASE                                                                                         February 2018

Advanced Forecasting for Individual Regions Now Available

The combust, flow and treat markets are undergoing a sea change due to utilization of the Industrial Internet of Wisdom (IIoW) to empower the Industrial Internet of things (IIoT). One of the approaches to navigating this sea change is a five-step program, explained at

The first step is Advanced Forecasting. The goal is to create reliable forecasts which will guide local sales personnel as well as top management. This means creating forecasts for the relevant products in each industry in each sales territory. McIlvaine is introducing a regional purchase option which will allow a company to move forward without a commitment to a worldwide program.

The world can be divided into 80 individual segments each of which provides a significant market opportunity. The entities are then aggregated by sub region, region, continent and summarized with world totals as explained at Decisive Classification.

Small countries in sub regions are grouped into more significant entities. An example is the following Western European countries which are grouped into Other Western Europe which is one of the 80 entities.

Andorra, Faroe Islands, Gibraltar, Greenland, Guernsey, Iceland, Isle of Man, Jersey, Lichtenstein, Luxembourg, Malta, Monaco, San Marino, Vatican

The U.S. and China each represents 15-25% of the market whereas the average country represents only 1.25% of the market. Therefore, these two countries can be further segmented in to regions or states and provinces. The regional segmentation results in individual markets ranging from 1-3% of the world totals. As a result, individual territory difference is kept under one order of magnitude.

Due to consolidation in the end user market along with centralization of decision making due to IIoW empowered IIoT the market is shifting so that most of the purchasing decisions for high performance products will be made by corporate and not the individual plants. Therefore, it is also necessary to forecast purchases for all major customers by corporate entity rather than geography.

Advanced forecasting is available for each type of combust, flow, and treat equipment, consumables and process systems. Due to the magnitude of the adjustment needed to navigate the sea change McIlvaine is offering a staged program. To introduce this approach McIlvaine is making available individual excel files based on region for pumps, valves and IIoT products including guide, control and measure further divided into liquids, air/gases and free flowing solids.   Excel files with forecasts for purchases by corporate entities can also be purchased separately. Therefore, a regional sales manager can move forward without needing the commitment of the other regions. The sales manager for OEM accounts can just purchases the forecasts of purchases by large customers.

For more information on this program click on or contact Bob McIlvaine at This email address is being protected from spambots. You need JavaScript enabled to view it. or call him at 847 784 0012 ext. 112