China offers growth for control valve suppliers

Edited by the Engineeringtalk editorial team Sep 28, 2004

China is the only country worldwide currently providing double-digit growth for control valve suppliers, according to a new report.

China is the only country worldwide currently providing double-digit growth for control valve suppliers.

China's control valve market is expected to grow at a compound annual growth rate (CAGR) approaching 11% over the next five years.

The market was $212 million in 2003 and is forecast to be over $350 million in 2008 according to a new ARC Advisory Group study, "Control valve outlook for China".

As new investments continue to pour into China's core process industry sectors, the market offers excellent growth potential for both the near and long-term.

Local and global manufacturing companies are creating world-class, production facilities across all the vertical industries.

"These facilities provide cheap labour for export requirements and a local facility to take advantage of exploding local demand for a wide range of products, created by growing disposable incomes of China's large population".

"Both global and home-grown suppliers see tremendous opportunities in China, making the market intensely competitive", according to Senior Analyst David Clayton, principal author of ARC's new "Control valve outlook for China".

As China continues to make progress towards becoming a global market economy and the country becomes synonymous with low-cost manufacturing, control valve suppliers around the world are increasing efforts to gain access to the country's huge potential.

Most control valve suppliers investing in China are thinking beyond the short-term opportunity of obtaining low-cost labour.

Despite concerns over such issues as intellectual property protection, fair business practices, and regulatory mechanisms, a number of suppliers are pushing ahead to set up technology transfer alliances, joint ventures, and wholly owned subsidiaries in China.

A large number of new power plants, coupled with an up-grade/modernisation of older plants, are injecting demand for control valves in China.

The demand for electric power continues to grow as the country's economy and manufacturing industries prospers.

These investments will continue to take place in infrastructure developments while growing environmental concerns will drive investments in plant upgrades and life-extension projects.

China's power industry reforms of 2002 and the recommendations of the 2000-2010 Strategy Plan of the State Council to invest in electricity generation to meet the country's economic development requirements is creating accelerated growth in the electric power industry.

Based on the Strategy Plan, the Chinese government has approved 30 new electric power projects that will add 22GW to the country's generating capacity over the course of the plan.

China's industries consume nearly three-quarters of the current electric power generated.

China's electric power industry has a large number of thermal power plants, accounting for roughly three-quarters of the country's power capacity.

Many of the country's thermal power plants use outdated technology and require improvement.

Growing realisation in China that adopting new technologies and improving plant efficiency as an efficient way of lowering capital expenditures is creating vast opportunities for control valve suppliers.