ARC Advisory Group: Control Valve Worldwide Market to Exceed $5B by 2011
December 7, 2007 // Published as a news service by IHS
The market, which approached $4 billion in 2006, is forecast to exceed $5 billion in 2011, according to research by ARC Advisory Group.
The global control valve market is in a phase of unprecedented growth due to booming greenfield plants in developing countries and investment in oil and gas exploration and production.
According to David Clayton, ARC senior analyst, "Much of the growth in the forecast period will occur over the next two years as new construction projects in Asia soar and the oil and gas market boom continues.
"Following this increase, ARC expects a short-term dip in global control valve sales as the period of breakneck growth comes to an end. Long term year-on-year growth is then expected to taper to traditional levels," Clayton said.
Meeting global customer demand with reasonable lead times requires planning and investment as demand for control valves strains many suppliers' manufacturing capacities, according to ARC.
Protecting needed capacity and lead times require establishing long-term agreements with foundries across the globe. Ensuring strong global delivery and service capabilities requires investing in manufacturing and project engineering capabilities globally, with a focus in high-growth future markets such as China, India, Dubai, Saudi Arabia and Russia.
Those suppliers who chose not to make these investments were ill prepared for the recent spike in demand, the ARC research said.
Adoption of wireless technologies can provide customers a cost-effective way to connect production assets, like valves, to asset management and control systems, and it opens up possibilities for improved control and optimized production by adding more field data that was previously too costly.
Many control valve suppliers are adding wireless connectivity to their digital positioner products because wireless allows manufacturers to connect valves to their systems and serves as a justification for them to replace older pneumatic positioners with digital positioners, according to ARC.
Control valve suppliers also are collaborating with manufacturers and wireless standards bodies, such as SP100 and the Wireless Highway Addressable Remote Transducer (HART) initiative, to develop standards-based wireless digital positioners.
Though China still represents significant growth opportunities, the Middle East has become the regional market offering control valve suppliers the greatest growth potential, ARC said.
However, there are signs that China is slowing construction of new manufacturing plants to keep its economy from overheating. Foreign investment in China is also tapering off, as cheap labor and land have become more expensive due to the country's booming economy.
According to ARC, suppliers can expect increasing growth opportunities in the Middle East due to its high concentration of oil and gas activities.
For more details about the ARC report, titled Control Valve Worldwide Outlook, go to http://www.arcweb.com.
Source: ARC Advisory Group.