Survey shows optimism in valves and actuators

The latest findings by Frost and Sullivan reveal that the European industrial valves and actuators industry is in a stable position, pointing to consistent levels of optimism.

The latest findings by Frost and Sullivan, the international marketing consulting company, reveal that the European industrial valves and actuators industry is in a stable position, pointing to consistent levels of optimism as the global economy comes back to life.

A stronger performance across crucial application sectors and more innovative technological inroads into valve automation make key players in the mature industrial valves and actuators market confident about future growth prospects.

With revenues valued at $3.53 billion in 2001, Frost and Sullivan projects sales in the European industrial valves and actuators market to reach $4.10 billion in 2008, representing a compound annual growth rate (CAGR) of 2.2%.

The stabilisation of oil prices and increasing use of natural gas are expected to boost new investment and growth in the oil and gas application sector, accounting for the largest portion of end-user revenues.

Sales of replacement parts and products also contribute towards a significant proportion of total revenue.

The large installed base of industrial valves and actuators should continue to generate constant demand for upgrades to more advanced or sophisticated products, ensuring long-term buoyancy.

The advent of smart valves, coupled with widening acceptance and growing uptake of sophisticated fieldbus networks, will further entice growth in the industry.

As more end-users in the industrial sector adopt sophisticated automation systems, intelligent valves should become an integral part of all improved valve systems.

The trend towards online systems and remote manufacturing will heighten the popularity of smart valves, energising sales in the process.

The overall market should be stimulated by the increasing dynamism of the quarter-turn and actuator product segments.

Benefiting from the strength of this design's simplicity, ease-of-use and compatibility with a wider range of chemicals than multiturn valves, the quarter-turn segment is expected to display steady growth in coming years.

Followed by the multiturn valves sector, control and self-acting valves - comprising control valves, check valves and relief valves - claim the top spot in Frost and Sullivan's product market ranking, accounting for 39.5% of revenues in 2001.

This product group is expected to show increasing growth over the forecast period, fuelled by the distinct move towards factory automation.

Meanwhile, the actuators segment is expected to experience the highest growth in the total industrial valves and actuators market.

Strong demand for automated products and the rising uptake of premium-priced electric actuators is anticipated to stimulate revenue growth over the next few years.

The quality of a product cannot be underestimated as a crucial competitive differentiator, especially in severe applications where high pressures and corrosive substances are involved.

End-users expectations continue to grow, so it is important that manufacturers are able to meet discerning end-users demands of 'more for less' by delivering added value in their products and continuously reducing costs.

Ozan Dogruer, Research Analyst at Frost and Sullivan, believes that the consolidation drive sweeping the industrial valves and actuators market is set to continue as manufacturers face growing competition from global conglomerates and pressures to reduce costs.

"Although the market is highly mature, with limited scope for significant growth at macro level, our research identifies numerous opportunities for manufacturers to grow through acquisitions or by attracting customers with superior products and services at competitive prices", he emphasises.

Gabriela Martinho, Research Analyst at Frost and Sullivan and co-author of the report also notes the importance of the trend towards globalisation.

"End-users are increasingly seeking out manufacturers that can provide complete solutions on a global basis.

This trend underlines the importance for manufacturers to build an international presence".

"The market is still relatively large and remains highly fragmented, with a significant proportion of manufacturers focusing on speciality products and specific applications.

Targeted acquisitions reinforce the scope for improved market presence as industry demands become ever more global", she states.

Reacting to these trends, the result is that the European industrial valves and actuators market has witnessed a rash of mergers and acquisitions over the last few years, which is resulting in a gradually more consolidated market.

The relatively flat growth of the market is one of the main underlying factors that has driven some companies to seek growth through acquisition.

Tyco Flow Control has acquired a number of speciality manufacturers over previous years and now dominates the European industrial valves and actuators market.

Invensys Flow control, also composed of several speciality manufacturers, obtained the second largest share of the market in 2001.

The company's recent acquisition by Flowserve has created an even larger conglomerate.

Other major manufacturers in the market include Dresser Flow Control, Emerson Process Management, KSB, Metso and Velan.

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