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Mcilvaine Insights |
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No. 64 June 6, 2018 |
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Mcilvaine Insights |
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No. 64 June 6, 2018 |
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WELCOME
Briefs
Fugitive Emissions Summit:
This two-day conference June
26-27 will be held at the same
time as the Pump Summit in
Houston.
An exhibition on both
subjects will also be held. Bob
McIlvaine will be there and
looks forward to discussing both
subjects with one and all.
McIlvaine is covering
fugitive emissions in its
valves, pumps, and IIoT
publications but also in
202I Refinery Decisions.
To learn more about the
conferences or to register click
on
www.amercas.fugitive-emissions-summit.com
$20
billion Market for Cartridges by
2024
Power Industry will Spend over
$1.5 billion for Gas Measurement
in 2022
$180 billion Market for Combust,
Flow and Treat for Gas Turbines Power Plant Cross Flow Membrane Revenue Opportunity to Exceed $1.2 billion by 2025
Accurate Forecasting of the
Combust, Flow and Treat Markets
Would Cost $2 billion
Top
25 Pharmaceutical Companies will
buy 45 Percent of Cleanroom
Consumables
Is
3M Leading the Way to IIoT for
Industrial Filter Suppliers?
Customer Based Sales of Combust,
Flow and Treat Products
There is a sea change in the
market for combust, flow and
treat (CFT) products.
Navigating that change is
going to be challenging but it
can be accomplished
progressively with immediate
returns to offset costs.
If you sell high performance CFT
products you will need a
business program which is
oriented around large corporate
customers and not around sales
leads. This program can be
implemented one customer at a
time.
If you start with the low
hanging fruit the program will
be self-supporting. Here are the
details.
Sea change:
The sea change is
occurring rapidly because:
·
Most CFT products are or will be
considered high performance
(initial price is less important
than performance).
·
CFT purchasers are merging and
consolidating purchasing and
selection decisions in central
corporate operations.
·
The corporate staff is employing
remote O&M and data analytics to
determine the total cost of
ownership of each product in
each process.
·
The Industrial Internet of
Wisdom (IIoW) is empowering the
corporate staff to validate the
lowest total cost of ownership
for each product in a process in
each plant.
The challenge:
It will be necessary to
persuade a knowledgeable
corporate staff that the
suppliers product has the lowest
total cost of ownership for a
specific process.
This in turn requires
knowledge of the customer's
processes and a mechanism to
convey this to the decision
makers.
The progressive approach:
This sea change can be
navigated one customer at a time
as follows.
·
Pick the customer based on
o
Size of the revenue potential
o
The total cost of ownership
advantage of the supplier
product
o
Sales experience with this
customer
·
Organize the campaign
o
Coordinate the regional and
corporate sales, engineering and
other personnel in the most
effective manner.
o
Interface with the customer
based on knowledge of his
processes and valid total cost
of ownership analyses which
takes into account the
site-specific factors for each
plant.
The McIlvaine company has a
program which will provide you
with cost effective support for
this campaign.
This includes forecasts
of CFT purchases for the 1000
corporations who will buy most
of the CFT products, details on
the plants and projects and the
building blocks for lowest total
cost of ownership validation
(LTOV). This includes general
factors such as country by
country electricity costs but
also knowledge of many of the
most important processes and the
performance of CFT products in
those processes. A free webinar can be arranged to discuss a progressive program.
Just contact Bob McIlvaine at
847 784 0012 ext. 112 or
rmcilvaine@mcilvainecompany.com.
Which Pump Purchaser to Target
First?
The sea change in the market for
pumps will require prioritizing
corporate prospects and then
initiating a program for each on
a progressive basis? Which is
the best first target? Here are
the criteria.
Size.
The top 3000 purchasers
are buying most of the
high-performance pumps
(performance is more important
than initial price).
Their average purchases
are $7 million.
However the top 50 each
purchase over $50 million per
year.
The largest is Sinopec
with purchases of over $800
million per year.
Gaining a market share of
10% with any of these 50
companies could therefore add
revenues of $5 to $80 million
per year. So any of the top 50
prospects would warrant
significant effort.
Product Fit
There are a number of different
pump types. Each is available in
multiple materials depending on
the service.
A pump company
specializing in exotic alloy
pumps would want to focus on
industries such as chlorine
manufacture where exotic alloys
are required.
Here are pump purchases
for the top chlorine
manufacturers.
These are just purchases for
chlorine service. All these
manufacturers also purchase
pumps for processes using
chlorine, as well as for power,
water, wastewater and cooling.
For these specialized
applications it is possible to
achieve high market shares.
A 30% market share at
one company can result in
revenues of more than $5
million/yr.
There is lots of differentiation
in materials to withstand
corrosion, temperature and
erosion. Manufacturers are
willing to spend whatever is
necessary to minimize leaks of
dangerous acids. The company
which can provide the lowest
total cost of ownership
validation (LTCOV) can capture a
large market share.
Sales Fit
The corporate office is likely
to be the primary decision maker
but local sales and service will
also be important. If you have
strong sales and service support
in the Americas you will want to
consider that the second largest
purchaser in the food industry
(ADM) buys 66% of its pumps for
the Americas region.
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