Frost: Escalating Orders, Production Output in Euro Shipbuilding Industry Boosts Welding Equipment, Consumables Market
February 27, 2007 // Published as a news service by IHS
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According to Frost & Sullivan, healthy orders from shipyards over the next three years will boost revenues for welding equipment and consumable manufacturers. At the same time, the intensifying trend toward shipyard automation will help support revenue growth.
Recent analysis from Frost & Sullivan found that the European welding equipment market for shipbuilding applications earned revenues of $43.2M in 2006, with estimates to reach $70.1M in 2013.
The European welding consumables market for shipbuilding applications earned revenues of $61.5M in 2006, with projections to achieve $99.8M in 2013.
The market is in an upswing owing to dynamic developments in the European shipbuilding industry.
Analysts said the push to modernize and expand fleets, accompanied by improved technology and highly productive equipment, is creating exciting growth potential in the welding equipment and consumables market.
"Shipbuilders are increasingly investing in more reliable and effective equipment and consumables that can reduce production costs and address issues of smoother welding processes and enhanced productivity," said Frost & Sullivan research analyst Archana Chauhan.
"Shipyards are also constantly trying to automate welding processes, which is triggering demand for more sophisticated welding equipment. Such trends are expected to continue and result in higher revenues over the long term."
Despite this optimistic scenario, analysts said it is becoming increasingly difficult for European-based companies to expand their market share, as manufacturing projects are shifting to East Asia. Another key challenge for market participants will be clearly demonstrating the high quality and standards of their equipment and consumable offerings to customers.
Advanced welding equipment and automated processes undoubtedly encourage faster, superior-quality welding. However, analysts said the recent rise in steel prices is having a negative ripple effect on market growth.
"To counteract the lack of revenue potential from declining sectors in the shipbuilding industry, welding manufacturers should investigate untapped applications in the area," said Chauhan. "Product differentiation, effective cost-cutting and sales strategies, accompanied by a parallel emphasis on new technologies that offer improved productivity, will also be critical for manufacturers to safeguard their position in this end-user sector."
Growth strategies of large multinational companies include imparting product knowledge to end-users through demonstrations, seminars and related events. Analysts said efforts to maintain and strengthen traditional relationships with several shipyards have also continued, enabling manufacturers to gain further contracts.
Source: Frost & Sullivan.