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WELCOME
Weekly selected highlights in flow control, treatment
and combustion from the many McIlvaine publications.
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Would You Rather Share Sales Leads with Your Allies or with
Your Competitors?
·
Sales Program based on the 500 Coal Plant Operators that buy
99 Percent of the Combust, Flow and Treat Products
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Briefs
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Would You Rather Share Sales
Leads with Your Allies or with Your Competitors?
Companies have become very successful
through making acquisitions and then allowing each division to function
independently. Many of these same companies rely on sales leads for new
business. Is it fair to ask the question:
Would you rather share sales leads with your other divisions or with
your competition?
The answer may be that the risk to
limiting independence is paramount. If so a bottoms up rather than top down
information sharing program will be a great choice. Another relevant
question: Can you also leverage your relationships with sales
representatives, distributors, complimentary product suppliers, and OEMs to
boost sales?
The answers to these questions depend
on whether the product is general or high performance. A sales lead on a product which will be
purchased next month strictly on price and delivery can best be provided by
a company specializing in sales leads. A high-performance product sales
campaign requires a comprehensive approach which can be achieved with
internal information sharing among divisions.
The market is changing. Products which
would have been purchased just on price in the past are now purchased as if
they were high performance. If decisions are made based on true cost (total
cost of ownership) then the category would be high performance. Price and
delivery play a role but other factors are more important. General
performance product decisions are typically made by purchasing people at
the plant level. High performance product purchase decisions involve a
number of people. They include corporate people who would determine which
suppliers are eligible.
High
performance in a narrow definition can just include products in severe or
critical service and products which require engineering prior to production.
This definition focuses on the physical aspects of the product. A choke
valve fits this category in three ways. The service is severe since
abrasion and corrosion potential is high. The service is critical because
if the valve fails the operation
must cease. There are a number of engineered choke valves which take months
to produce and deliver.
A
broader definition of high performance includes products which otherwise
would be in the general class. The fact that the cost of travel to an
offshore oil rig is high will influence what would normally be just a price
decision. Products which are purchased not just on price but because they
are intelligent would fall into the high performance category. The
product manufacturer can supply
localized software which feeds into an edge computer which then feeds into
the cloud. The supplier expertise about his product can be used to maximize
the product performance. The package
of the product and its smart devices can be sold based on the cost savings
over time rather than on initial price.
Another
category is “guided”. Product decisions can be made based on the guidance
or support furnished by the supplier. With the ability to monitor the
product operation remotely, the
supplier can advise operators and maintenance personnel to insure
that the cost of ownership is minimized. Revenues based on annual contracts
can greatly exceed the initial purchase price.
Bob Buckman wrote a bestselling book
titled “Building a Knowledge Driven Organization” He was the chairman
of Buckman Laboratories, a major
supplier of treatment chemicals. One of the features incorporated at
Buckman is a process where sales or application people can ask a question
in what would now be a chat room and every employee at Buckman who would have
knowledge was urged to weigh in.
We previously used ten divisions of
Idex as an example of how the sharing program could work Bottoms Up Collaboration Around Each Major Flow and Treat
Prospect. Examples of
ten Japanese purchasers were provided. They will buy spend $17 million per
year on products such as specifically available from IDEX (Serviceable
Available Market) and $2 billion per year on pumps, valves, and controls
(Total Available Market).
If one browses LinkedIn for people who would have useful
information in the effort to sell high performance products to these ten
companies, you see hundreds and possibly thousands of people in the various
IDEX divisions who can make contributions. There are regional sales
managers in Singapore and many product specialists in various locations.
But there are also application specialists with titles such as “Natural Gas Dehydration Glycol sales
manager. One division makes material size reduction equipment and has
process knowledge which will be helpful to the pumps, valves, and controls
groups.
The bottoms up knowledge sharing is
one of the features in a whole new sales approach explained in Most
Profitable Market Program at www.mcilvainecompany.com
The foundation of the program is the
forecast of purchases by each major prospect. This information facilitates
coordination with representatives and distributors in new ways. They are
often suppliers of systems and have process knowledge. Their knowledge
about a BASF plant in their territory can be useful in selling to BASF
plants elsewhere. Better yet they can provide successful case histories.
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Quality of
Various Sales Lead Sources
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Rank
|
Relationship
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Competitor Risk
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Quality
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Process
Knowledge
|
|
1
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Other
Divisions
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None
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Good
|
Valuable
|
|
2
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Representatives
and Distributors
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Care
Needed
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High
|
Can
be High
|
|
3
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Complimentary
Product Suppliers
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Care
Needed
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Good
|
Useful
|
|
4
|
Your
Suppliers
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Care
Needed
|
Fair
|
Spotty
|
|
5
|
Sales
Leads
|
High
|
General
Only
|
None
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Many sales reps sell complimentary
products. Why shouldn’t the OEMs leverage the synergies proactively rather
than rely on representatives to do so.
Suppliers of materials and components are another resource. The concern
is that they may also be dealing with your competitors.
Except for very limited general
purpose CFT products, a very cost effective sales approach is to utilize
allies. Bob McIlvaine can answer your questions on the program at office -
847 784 0013, cell - 847 226 2391 or
rmcilvaine@mcilvainecompany.com
Sales Program based on the 500
Coal Plant Operators that buy 99 Percent of the Combust, Flow and Treat
Products
Coal fired power is the ideal industry
for which to adopt a sales approach based on predicting purchases for each
prospect rather than reactively responding to sales leads.
Ninety-nine percent of all the
combust, flow, and treat products and services are purchased by just 500
companies. Fifty percent are purchased by just 50 companies. With data
analytics and centralized monitoring an increasing percentage of the
purchases are made based on lowest total cost ownership. The decision
making involves multiple individuals.
Success requires major sales efforts long before a request for
quotation is issued.
The Shenhua/Guodian merger resulted in
an owner with 200,000 MW of coal fired capacity. However, there remain several entities
from a decision making perspective.
Seventy percent of the purchasing decisions for existing plants are
made by 27 companies with more than 10,000 MW of capacity. However, 150 owners are making the
decisions for 70 percent of the new plants.
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Coal
Fired Capacity for
Individual
Owners
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Above
MW
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Planned Cumulative
#
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Operating
Cumulative
#
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80,000
|
|
1
|
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60,000
|
|
2
|
|
50,000
|
|
3
|
|
40,000
|
|
3
|
|
30,000
|
|
8
|
|
20,000
|
2
|
10
|
|
10,000
|
8
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27
|
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5000
|
25
|
63
|
|
3000
|
50
|
110
|
|
2000
|
70
|
164
|
|
1500
|
90
|
196
|
|
1000
|
150
|
255
|
|
700
|
200
|
307
|
|
500
|
250
|
379
|
|
300
|
300
|
491
|
|
200
|
350
|
570
|
|
100
|
400
|
710
|
|
? 100
|
|
900
|
There is a logical disparity between
the ratio of new plants to existing plants by owner. For comparison we
picked owners with 6000 – 9000 MW
range of existing and planned capacity.
J Power is the only company appearing on both lists.
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Planned Coal Fired
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Company
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MW
|
|
Power Finance
Corporation
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8,000
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Egyptian
Electricity Holding Company
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7,920
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KEPCO
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7,698
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China Resources
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7,035
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NLC India
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6,700
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TANGEDCO
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6,640
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J-POWER
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6,356
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Eskom
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6,352
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UPRVUNL
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6,270
|
|
Operating Coal Fired
|
|
Company
|
MW
|
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E.ON
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8,772
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J-POWER
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8,482
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Inter RAO
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8,372
|
|
Vedanta Resources
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8,327
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|
Xcel Energy
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7,915
|
|
Henan Investment
Group
|
7,840
|
|
Beijing Energy
Group
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7,772
|
|
Engie
|
7,387
|
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Damodar Valley
Corporation
|
7,240
|
|
AES
|
7,025
|
The big growth in coal is in South
East Asia and Africa where existing capacity is small. The existing
capacity is mostly in countries where new coal fired plants are being
discouraged.
McIlvaine provides a comprehensive
program to help suppliers pursue this market. The weekly Utility E-Alert has new project
information as well as technical and regulatory developments. The tracking system database has
information on each plant. The Utility
Tracking System website also has a coal fired forecast by country through
2024. There are detailed profiles of the largest purchasers as well as
identification of all 500 purchasers.
With the search engine it is possible to extract the latest
information on each purchaser.
Details on the program are found at 42EI Utility Tracking System
This service can be combined with any
of the market reports to obtain individual product forecasts http://home.mcilvainecompany.com/index.php/markets
Similar programs in each industry are
available as explained in Most Profitable Market Program at www.mcilvainecompany.com
For more information on these services
contact Bob McIlvaine 847 226 2391 rmcilvaine@mcilvainecompany.com
Briefs
Here are links to the News Releases
published in the last month and updates to them from the last few days.
$10 Billion Market for SCR Systems, Reagents and
Catalyst
At least one U.S.
power plant has avoided SCR due to the changes in policy at EPA. But Europe
is facing more stringent limits. India is moving forward and China wants to
make coal plants as clean as natural gas. One way to is encourage third
party ownership of pollution control systems.
Maximizing CFT Profits in the Coal Fired Power
Generation Industry
For smaller companies
collaboration with those offering complimentary products is a way to
economically reach the international Market. McIlvaine will be one of the speakers in
a half-day session at PowerGen on this subject.
SiloBuster Webinar Program for Combust, Flow, and
Treat (CFT) Suppliers
There is a large
opportunity to leverage the employee knowledge residing in various
divisions and geographies.
Oil, Gas, Refining Daily Project Tracking and Monthly
Analysis
The seizure of a
British ship by Iran makes 25
percent of the world oil shipments uncertain. This is likely to result in even greater
shale investment in the U.S.
Indonesia is One of Many Asian Countries Relying on
Coal
The Chinese Belt and
Road initiative is contributing to some new coal fired activity. But the
preference for coal is in S.E. Asia is due to the need for power and the
promise that coal is the most
reliable way to obtain it.
Factors Shaping the Combust, Flow and Treat (CFT)
Market
Asia continues to be
the big growth area. Some European and U.S. CFT suppliers have as big a
market share in Asia as in their home region. However, most have weak sales
in Asia. Instead what we see is Asian suppliers moving into the western
markets.
Large Maintenance and Repair Market for World’s Coal
Fired Boilers
Upgrading plants to
increase efficiency is another
revenue generator. China has
a big program to upgrade sub critical plants and even supercritical plants
to approach ultra-supercritical and efficiencies near 50 percent.
Innovation in the Combust, Flow and Treat Industry is
a Product of Wisdom through Interconnection
Media and conference
organizers are one source of new developments which can reduce cost of
ownership McIlvaine, IFN, INDA, and FILTXPO are collaborating on a true
cost analysis program. The most
recent issue of IFN covers Hot Gas Filtration True Costs.
Pump Companies Continuing to Change Strategy and
Ownership
Absent substantive engagement this week, Crane
will cease its efforts to acquire CIRCOR and will not extend its tender
offer, amended on July 8, 2019, to acquire all outstanding shares of CIRCOR
for $48 per share. The tender offer is scheduled to expire at Midnight, New
York City Time, on July 19, 2019. The offer represents a 57% premium to the
undisturbed market close on May 20, 2019 and 46% and 61% premiums over the
three- and six-month volume weighted average share prices, respectively.
Flow and Treat Purchases by TSMC and Other Chip
Producers
Taiwan is expected to
overtake South Korea as the largest semiconductor equipment market, with
estimated purchases of over US$12 billion this year, according to SEMI, a
global industry association of semiconductor equipment and material
suppliers.
Due to slow growth of the industry, global semiconductor equipment sales
are likely to fall this year by an annual 18.4 percent to US$52.7 billion,
SEMI said.
Only the Taiwanese and North American markets are expected to see growth,
while those in South Korea, China, Japan and Europe may slide, the
association said.
LNG is a Most Profitable Market for CFT Suppliers
_____________________________________________________________________________
Here are several
entries in our N049 Oil, Gas, Shale and Refining
Markets and Projects
Venture Global LNG Announces Expansion to 60
MTPA, Expands LNG Process System Agreement with BHGE
Venture Global LNG, Inc.
announced that it will expand the scope of its LNG development business to
60 million tonnes per annum (MTPA) of production based on customer demand.
Energía
Costa Azul LNG Receives US Non-FTA Approval for Liquefaction Infrastructure
Project in Mexico
Authorizes the Export of US
LNG from both ECA LNG Phase 1 and Phase 2 - North American West Coast
Location provides direct access to US Natural Gas to Markets in the Pacific
Rim - ECA LNG is one of Sempra Energy's 5 Strategically Located LNG
Projects in Development
Sempra Energy's Port Arthur LNG Project and
Two Natural Gas Pipelines Receive Final Environmental Impact Statement
Sempra Energy announced January
31 it received the Final Environmental Impact Statement (FEIS) from the
Federal Energy Regulatory Commission (FERC) to construct the Port Arthur
LNG natural gas liquefaction-export project in Jefferson County, Texas, as
well as the Texas and Louisiana connector pipeline projects that will
deliver natural gas to the new export facility.
FERC Staff Issues the DEIS for the Annova LNG
Brownsville Project (CP16-480-000)
The Federal Energy
Regulatory Commission (FERC or Commission) has prepared a draft
environmental impact statement (EIS) for the Annova LNG Brownsville Project
(Project) proposed by Annova LNG Common Infrastructure, LLC; Annova LNG
Brownsville A, LLC; Annova LNG Brownsville B, LLC; and Annova LNG
Brownsville C, LLC (collectively Annova). Annova requests authorization
under Section 3(a) of the Natural Gas Act and Part 153 of the Commission’s
regulations to site, construct, and operate a liquefied natural gas (LNG)
terminal (LNG terminal) to liquefy and export natural gas at a proposed
site on the Brownsville Ship Channel in Cameron County, Texas. The Project
consists of the following facilities: • pipeline meter station; • liquefaction
facilities; • two LNG storage tanks; • marine and LNG transfer facilities;
• control room, administration/maintenance building; • site access road;
and • utilities (power, water, and communication systems).
_____________________________________________________________________________________________
Treatment Chemicals Most Profitable Market Analyses
based on Knowledge
Ecolab has achieved
double digit growth for 20 years and 12 percent in the most recent period.
Fifty-eight percent of the sales are in North America and only 12 percent
in Asia/Pacific. So the market share in Asia Pacific is only 1/10 of the
share in North America. The choice of treatment chemicals for
ultrasupercritical boilers in China is critical. The suppliers who are successful in this
application have an advantage in pursuing the international markets.
The Lowest Total Cost of Ownership Cycle for Oil and
Gas CFT Products
In hydraulic
fracturing understanding the process is critical to assessing the market.
Resin bonded sands can decrease erosion of the transfer pumps which decreases
the cost of oil production which reduces the price of resin which reduces
the cost of resin bonded sand.
U.S. Petrochemical Industry is a Most Profitable
Market (MPM) Opportunity for CFT Providers
______________________________________________________________________________
Here are entries in N049 Oil, Gas, Shale and Refining
Markets and Projects U.S based sales people will be
responsible for projects contracted to McDermott and other U.S. based EPC
firms.
Petrochemicals Set To Be the Largest Driver
of World Oil Demand, Latest IEA Analysis Finds
Petrochemicals –
components derived from oil and gas that are used in all sorts of daily
products such as plastics, fertilizers, packaging, clothing, digital
devices, medical equipment, detergents and tires – are becoming the largest
drivers of global oil demand, in front of cars, planes and trucks,
according to a major study by the International Energy Agency.
McDermott
wins petrochemicals contract in Kuwait
Kuwait
Integrated Petroleum Industries Company (KIPIC), a subsidiary of Kuwait
Petroleum Corporation (KPC), has awarded McDermott International a
technology contract for a petrochemical project in Al Zour, Kuwait. The
award is for the basic engineering, technology license and catalyst for an
integrated Low Pressure Recovery (LPR) and Olefins Conversion Technology
(OCT) unit at KIPIC's Petrochemical Refinery Integration Project (PRIZe).
The Petrochemical Refinery Integration project (PRIZe) will add a gasoline
block, an aromatics block, OCT unit, polypropylene units, associated
utility and offsite facilities to the existing refinery site. The new units
will be closely integrated with the ZOR Refinery and LNGI projects which
will be operated as an integrated facility once complete
______________________________________________________________________________
Gas Turbines are a Most Profitable Market for CFT
Suppliers
Here are recent
headlines in 9EI Gas Turbine and Reciprocating
Engine Supplier Program
COLORADO: Atlantic Power Announces
Agreement for the Sale of Manchief Plant
LOUISANA: Entergy Louisiana Delivers
Important Milestone Ahead of Schedule and on Budget
MINNESOTA: Southern Power announces
Completion of Mankato Energy Center Expansion
PUERTO RICO: PW Power Systems
Provides Energy Security for Puerto Rico’s Power Supply
EGYPT: MHPS
Receives Contract to Upgrade Sidi Krir and El Atf Power Stations in Egypt
INDONESIA: MHPS
Ships Gas Turbine for 500 MW Natural-gas-fired GTCC Power Generation System
in Indonesia
IRAQ: GE
Commissions Advanced Gas Turbine at Iraq’s Al Qudus Power Plant to Help
Meet Summer 2019 Power Needs
RUSSIA: Nizhnekamsk Ccpp 495 MW:
Natural Draft Cooling Tower Awarded To Hamon
______________________________________________________________________________
Wet FGD: Most Profitable Markets
The transition of Boqi from a systems supplier to an
owner and operator of FGD systems is significant. This approach was initiated at NIPSCO in
the U.S by Air Products and Chemicals and Mitsubishi and proved to be
profitable for the supplier and a low cost solution for the owner. The Chinese government is facilitating
this approach as a way to minimize emissions.
Hydraulic Fracturing Presents a Most Profitable
Market Opportunity for CFT Product and Service Companies
Argentina is a promising market. On
July 19 President Energy said fracturing activities at a well in Argentina
had so far generated results at the high end of initial expectations. The
company is conducting a trial hydraulic fracturing, at the PFO-16 well at
the Puesto Flores field in Rio Negro Province. The frac operation was
completed successfully with over 100,000 pounds of proppant going into the
formation.
______________________________________________________________________________
Power Market Guidance in Weekly Twenty Page Alert
Here are two articles from the 7/19
Alert
Thermax is building momentum in the World APC Industry
Thermax Limited has concluded an order of INR 471
crore from an Indian government power company to set up two flue gas
desulfurization (FGD) systems at their thermal power plant in the state of
Jharkhand.
As a part of the
customer’s drive to meet the mandates for regulating SOx emissions from
coal fired power plants, they plan to install two units of FGD systems of
500 MW capacity each at their plant.
“Since its
inception, Thermax has been one of the key contributors to the nation’s
pollution abatement journey by providing sustainable solutions. This
prestigious order reinforces our capabilities in supporting power plants to
meet the stringent emission laws laid by the government in line with its
commitment to the environment,” says M.S. Unnikrishnan, MD & CEO,
Thermax Limited.
The scope of supply
includes design, engineering, manufacturing, civil work, construction and
commissioning of the FGD systems. The delivery of the project is scheduled
over 30 months.
Naveen Sadhu, Global Head (S&P),
Environment Business, Thermax Limited
Naveen was interviewed by PowerLine where
he reflected on his two decades of APC experience.
In 2013, Sadhu took charge of
Thermax’s international business on the particulate and gaseous emissions
side, with a special focus on Latin American markets. He was instrumental
in the development of Thermax’s brand in the international market. Now,
with new norms in the domestic business, he has been focusing on
strengthening the company’s footprint in the FGD and deNOx space. Thermax
is currently bidding for multiple projects for FGD in the country, he
informs.
Sadhu remarks that although
there has been progress in the power sector in meeting the new norms, more
efforts are needed to ensure implementation. According to him, while
particulate matter emissions control by thermal power plants has progressed
well, issues still remain in terms of SOx and NOx control.
One of the challenges is technology constraints. Despite the presence of an
adequate number of equipment players, the capacity to deliver falls short.
Other
issues are inadequate availability
of limestone and water, space constraints for FGD systems, installation,
high capex and opex needs. In terms of pricing trends, in the emission
control market, he notes that going forward with greater indigenization
prices should remain competitive.
Dry Scrubber Users will meet to “Work Smarter not
Harder”
The 2019 Dry Scrubber Users Group will
take place the week of September 9th in Kansas City, Kansas
bringing together a multitude of end users and vendors for dry scrubber
applications and technologies such as spray dryer absorbers (SDAs),
circulating dry scrubbers (CDS) and dry sorbent injection (DSI). The
theme of this year’s conference is “Work Smarter, Not Harder”. We
have all experienced the change in the power industry over the past few
years coupled with a generation of engineers and operators that have or
will be retiring as we usher in a new generation of young engineers and
operators who will take the reins. As a result the industry will have
to continuously evolve to new technologies as well as new operating
philosophies in order to minimize operating and maintenance costs while
maximizing plant performance. While these constraints pose many
problems this also presents opportunities for new solutions which is the
essence of this year’s theme.
This year’s conference will
consist of the following:
- 3rd annual
pre-conference golf tournament on September 9th
- Welcome reception on
September 9th
- Technical presentations and
break-out sessions on September 10th and 12th
- Plant tours and social activities
as well as vendor exhibit night on September 11th
This year the conference has three (3) plant
tours lined up consisting of the following:
- Kansas City Power & Light
Hawthorn Station to showcase the SDA technology
- Kansas City Board of Public
Utilities Nearman Creek Station to showcase the CDS technology
- Kansas City Power &
Light Iatan Station to showcase the Spray Dryer Evaporator technology
for disposal of wet scrubber blow down for zero liquid discharge
operations
This year is unique in that not only will
there be discussions and content on various dry scrubbing technologies that
will attract the typical audience but with Iatan’s participation this year
opens the door for facilities with wet scrubbers installed that are
interested in future regulations that may drive them towards zero liquid
discharge to attend to see the Iatan facility in person and talk directly
to Iatan representatives to learn from their use of the Spray Dryer
Evaporator technology.
If anyone is interested in registering for
the conference, sponsorship, exhibiting, submitting abstracts for giving a
presentation or simply have questions please visit http://www.dryscrubberusers.org/conference/ or contact the Dry Scrubber Users
Group President, Gerald Hunt, at gerald.hunt@lhoist.com.
Dry Scrubber Silo Busting
The DSUA conference
will be busting the silos in four areas. One is the retained knowledge of
the soon to be retired engineers. The conference is a path for the younger
engineers into the silo. Another silo is the new
technology. While the semiconductor industry works hard to avoid
silos, the power industry is known to be conservative. This is another
way of saying that some very large silos have to be busted in order for a
new and better technology to be accepted.
A third silo is the
experience in other industries. Instrumentation, valves, nozzles and other
components with unique and valuable features may first be developed for
mining or cement applications. DSUA also provides a forum for users in
waste to energy to interface with users in power, steel and other
industries. A fourth silo is the knowledge in other parts of the world.
China has the most-dry scrubber installations in the world.
The question is posed as to how the DSUA
silo busting can be enhanced. DSUA has a website and links to past papers.
So previous attendees have access to them. An analysis has been
prepared listing the resources supplied by DSUA and the opportunities
for making a larger international contribution to furthering the use of dry
scrubbing and DSI.
http://www.mcilvainecompany.com/Decision_Tree/DSUA_Silobusting.pdf
Part of that effort
could be quarterly webinars. Another aspect would be collaboration by
DSUA with media and conference organizers. McIlvaine is an organizer of a
half-day session at PowerGen in November. The session will use dry
scrubbing and DSUA silo busting as an example to show how U.S. suppliers
can expand into Asian and other developing markets. This can be
followed by discussions on the exhibit floor with Andritz, Beth and other
dry scrubber system suppliers. It is interesting that there are more
offshore dry scrubber exhibitors than U.S.- based although Andritz is in
the U.S. based on an acquisition.
There is a SOx-NOx
conference in India at the same time as DSUA A brief discussion relative to DSUA could
also take place. The
powering sponsor will be NTPC who is the largest Indian utility. It is installing 4 x 250 MW of DSI and is
installing a number of FGD systems.
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