Moderate growth for Process Gas Compressors Market

Edited by the Engineeringtalk editorial team Apr 26, 2001

Frost and Sullivan anticipates moderate but stable growth in the European Process Gas Compressors Market in future years as the market continues to recover

The oil and gas industries are driving the European process gas market forward as it recovers from a downward phase in capital investments by key end-users and loss of revenues owing to falling prices.

Latest research from international marketing consulting company Frost and Sullivan valued the market at $911.2 million in 2000: a marginal increase on the last three years.

Frost and Sullivan anticipates moderate but stable growth in future years as the market continues to recover.

It is expected to increase by 2.4 percent to $1.06 billion in 2007.

The growth has and will mainly be driven by the cyclical nature of the end-user industries, particularly oil and gas which are currently enjoying the upward stage of the general five to eight year cyclical swing with a phase of higher investment to increase production levels to meet demand.

The market is also being driven by the need for equipment that complies with stringent regulations on safety.

The study found stringent legislation relating to safety, noise, energy consumption and environmental issues had forced vast levels of spending by both manufacturers of process gas compressors and end-users alike.

Frost and Sullivan estimates the quality and performance of process gas compressors will be incrementally improved by manufacturers to meet legislative requirements.

Additionally, end-users are expected to turn to advanced products to meet stricter regulations that are likely to come into place in the coming years.

The increasing demand for new equipment has also driven use of the Internet as a tool to communicate, place orders, monitor processes and improve customer services.

"Manufacturers are able to reduce costs and improve response times to customers.

As a direct result, demand for process gas compressors is growing for those manufacturers that have implemented the Internet as a business tool," the study says.

The study segments the European process gas compressors market into six sections: turbo process gas compressors (worth $495.9 million in 2000), reciprocating process gas compressors, screw process gas compressors (worth $41.1 million), diaphragm process gas compressors, liquid ring process gas compressors, and process gas compressors spare parts (worth $279.1 million).

It showed a fall in demand for reciprocating and turbo process gas compressors, sectors strongly influenced by severe competition and price discounting in many European regions.

In contrast, the other product markets covered by the study ? screw, diaphragm and liquid ring process gas compressors, and process gas compressor spare parts - experienced stable growth, although their small overall size in comparison to the reciprocating and turbo process gas compressors markets meant this had less impact on the market.

The main market developments are expected in the spare parts markets, while demand for reciprocating and turbo process gas compressors are forecast to stabilise as the core end-user market maintains growth However, Frost and Sullivan forecasts market growth will be restrained by several factors, especially fierce price competition, globalisation, market maturity, and the dominance of a small number of leading manufacturers who collectively generated over 60 percent of Europe's market revenues in 2000.

Leading countries include Germany, which remains the largest market for process gas compressors, representing 24.4 percent of European revenues in 2000.

This was due to the large number of end-users and the region's strength in industrial processing.

The UK was second with 16.4 percent of revenues, Italy third with 14.5 percent, and France fourth with 12.4 percent.