Valve and Pump Company Growth through Acquisition or Organically

As discussed earlier in the E-Alert, Crane Co. has made a hostile $896 million offer for Circor International Inc. after an earlier proposal to the rival industrial products manufacturer’s board was rejected this month. Crane believes it can improve on what it charts to be relatively poor performance of Circor.

This Utility E-Alert is identifying worldwide decision makers relative to valve and pump choices by power plants. Several Crane Co. distributors are also providers of solutions. They influence the performance requirements of components in these systems. Other segments of this Alert deal with the Chinese goal of reducing emissions and improving efficiency of coal-fired power plants through third party O&M contracts. This means that contractors, such as Boqi, have a big incentive to pay more for pumps and valves with lowest total cost of ownership.

We cover the IMI approach, which is to pursue the service valve market. Their Vietnamese distributor is also a solutions provider. These seemingly random facts crystalize into some very key questions.

·         If low market share in Asia is a vulnerability for a large international pump and valve supplier, does the combination of two such companies rectify the situation?

·         Does the availability of detailed forecasts for every power plant in the world change not only the marketing approach but the pursuit of acquisitions?

·         Should the severe service and general service markets be approached differently?

·         How important is Asian coal-fired power to valve and pump companies?

·         Are Chinese pump and valve companies spending more on R&D than U.S. and European companies?

·         Is innovation through R&D an under-utilized route to gaining market share?

·         Is the total solutions approach with IIoT the future for valve and pump companies?

We are addressing these questions continually in this Alert and in the Valve and Pump Market reports.

Circor is pursuing IIoT with Leslie Controls. Its primary subsidiary companies are home-based in the U.S. and Europe. The acquisition of the Colfax Fluid Handling Group provides a leadership position in screw pumps.

Circor has a valve manufacturing facility in China, which produces distributed valves. Its Schroedahl division supplies high performance valves. Schroedahl produces custom-engineered high-pressure auto-recirculation (ARC) and control valves for pump protection applications.

Schroedahl control valves can be applied in pressure-, temperature-, and level-regulator circuits as well as in volume regulator circuits in all areas of power plants and in many industrial processes.

Schroedahl products in the power & process segment:

·         Automatic pump protection valves

·         Control valves for pump protection

·         Special high-pressure control valves for water- and steam-circuits

·         Steam conversion valves and turbine bypass stations

·         Superheated steam cooler

Crane is only generating 10% of its sales in the power sector and the trend is down. But since most of the market in power is now in Asia and only 19% of the Crane revenue is in emerging markets and developed Asia Pacific, it is not surprising that the revenues are small.

Crane is consolidating production into existing plants in the U.S., Mexico, and India. So, production for the Asian power market should not be a problem.

Crane^® FKX 9000 triple offset butterfly valves make them ideal for inclusion in numerous applications. The triple offset design provides bidirectional zero leakage shut-off in high-pressure, high-temperature applications, through a precision machined metal-to-metal sealing design. There is a big potential in ultrasupercritical applications. Nearly all the ultrasupercritical plants now being built are in Asia.

IMI has identified the high-performance market as one where it can compete in power plant applications around the world.  It singles out severe service.

IMI results in 2018 for the Critical Engineering segment show that a big portion of its business is now in Asia and that it is a leader in the fossil power market