NR2215

NEWS RELEASE                                                                                                    MARCH 2016

International Strategy is Critical for Survival in the Flow Control and Treatment Industries

Whether you sell pumps, valves, filters, fans, compressors, treatment chemicals, scrubbers or centrifuges you cannot focus on just the U.S., China, or EU market.   Here are some examples of major opportunities elsewhere:

Industry Country
Aquaculture Indonesia
Bauxite Kazakhstan
Cement Turkey
Coal-fired power Vietnam
Coal mining Columbia
Copper Chile
Desalination Israel
Flat Panels South Korea
Gas Extraction Nigeria
Iron Ore Ukraine
LNG Australia
Pharmaceuticals India
Petrochemicals Saudi Arabia
Phosphate Morocco
Pulp/Paper Brazil
Potash Canada
Refineries Algeria
Semiconductors Taiwan
Steel UAE

The U.S. has placed a moratorium on new coal-fired power plants but China will build far more than the EU or that the U.S. will retire.  Vietnam, Indonesia and Myanmar are building power plants with a combined capacity of 150,000 MW.

China is the largest fish farming country, but Indonesia is also large.  The industry is moving to sophisticated recirculating systems with a big investment in flow control and treatment equipment.

Australia, a leader in iron ore and coal mining, has become a recent player in LNG with successful conversion of coal bed methane.

Individual projects can measurably impact the market in a given year. There are nine large Canadian potash projects underway with a combined capital investment of over $30 billion.  The largest project will require a $4 billion investment. Algeria’s state-ownedSonatrach has let a series of contracts to Amec Foster Wheeler to provide front-end engineering and design (FEED) for three grassroots refineries that will add a total of 15 million tons/year in refining capacity in the country.  So these few projects represent a significant percentage of the yearly flow control and treatment revenues for the worldwide industry.

Coal-fired projects in Indonesia could result in an investment of over $100 billion.  Vietnam is vacillating on plans which would require a coal-fired power plant investment of over $200 billion.  Delay or cancellation of large projects can materially affect the revenues of the flow control and treatment suppliers.

Flow control and treatment companies need to pursue the world market.  There are 196 countries with more than 50 major industries who purchase flow control and treatment equipment.  Many of these countries are quite small.  McIlvaine forecasts divide the world into 80 purchasing entities which include 72 separate countries and 8 country groups.  The pump forecast example below shows pump sales in Pakistan will be $216 million in 2021, but sales will only be $22 million in a group of countries labeled “Other Western Europe.”

Industrial Pump 2021 Revenues
Country or Entity

Revenues

$ Billions

New Zealand  69.51
Nigeria  411.34
Norway  283.79
Other Africa  775.41
Other CIS  198.22
Other East Asia  89.62
Other Eastern Europe  108.45
Other Middle East  825.15
Other South & Central America  462.79
Other West Asia  14.15
Other Western Europe  21.90
Pakistan  216.54
Peru  165.93
Philippines  260.63
Poland  377.89

The countries aggregated in the Other Western Europe category are Andorra, Faroe Islands, Gibraltar, Greenland, Guernsey, Iceland, Isle of Man, Jersey, Lichtenstein, Luxembourg, Malta, Monaco, San Marino and Vatican.

The average for the 80 entities in a $60 billion annual market is 0.75 percent. While, as individual countries, many in the “other” category are insignificant, as a group they are relevant.  This is particularly true for the Other Africa group which accounts for 0.75 percent of the total market and the Other Middle East group which in the aggregate is bigger than the average.

McIlvaine has created a program to help international flow control and treatment suppliers maximize the global opportunity.  It is described at: Detailed Forecasting of Markets, Prospects and Projects

Bob McIlvaine is available to answer your questions and can be reached at 847 784 0012 ext. 112  This email address is being protected from spambots. You need JavaScript enabled to view it.