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Most the major producers of
flow and treat equipment and services are headquartered in developed
countries. The major exception is
China. Domestic companies such as
Neway have become international producers.
Neway is supplying high performance valves for critical applications
around the world. The big growth
markets are in India and other Asian countries along with Africa. The challenge for international suppliers
relying on the U.S. market is to adjust to the new reality and capture a
higher market share than they have in China.
The U.S. has an advantage
which is likely to be temporary. It is the largest combined producer of oil
and natural gas. This not due to having the largest reserves but to the
American technology which perfected hydraulic fracturing. The flow and
treat industry benefited with purchases for extraction, gas processing,
transmission, refining and petrochemical expansions.
The problem is that China has
more potential in shale oil and gas than the U.S. Other countries such as
Argentina are moving forward to develop shale potential. The economies of
China and India are growing faster than the U.S. Their combined population
is more than six times that of the U.S. When their per capita GDP reaches
just half of that in the U.S. their GDP will be three times that of the
U.S.
Africa will experience
economic growth as will developing countries in Asia and elsewhere in the
world. As a result, flow and treat
purchases in the U.S. are likely to drop from an 11 percent share in 2020
to an 8 percent share in 2030.
The biggest
loss of share will be in municipal wastewater. The U.S. has been slow to
invest in infrastructure whereas the rest of the world is investing in
treatment facilities which in some cases will exceed the quality of those
in the U.S.
The
developing countries will continue to invest in coal fired power over the
next ten years. China is upgrading
its plants so that they will be as clean as natural gas combined cycle
generators. The expenditure for flow
and treat products per MW of coal fired power is more than 40 times that
for wind or solar. As a result, the U.S. power plant flow and treat
revenues will represent just 8 percent of the total in 2030.
The
U.S. will benefit from the rapid growth of the biopharmaceutical industry.
Even though the world market share percent will drop the year to year
growth will be significant. However, the trend is away from stainless steel
products to those made from polymers for single use. Semiconductor and flat panel display manufacturing
will continue to grow in Asia. The U.S. mining flow and treat market share
will drop from 10 percent to just 5 percent as both coal and iron ore
production fall.
The
food industry has been a strong market for U.S. flow and treat
manufacturers. However, food processors are moving to where the people
are. Raw materials such as palm oil
will continue to gain market share over other vegetable oils grown in the
U.S. cane will be a greater source of sugar than beets. The economics continue to favor sugar
cane as ways have been found to produce ethanol from the bagasse as well as
from the sugar itself.
Flow
and treat suppliers have to devise strategies around the slower growth in
the U.S. market compared to the rest of the world. Many of the purchasers
such as BASF and Arcelor Mittal are international companies. They will
increasingly centralize purchasing for plants around the world. Fortunately, for U.S. based suppliers,
many of the international purchasers are home based in the U.S. This
includes, food, oil and gas, and chemical companies.
Sales
strategies centered around companies rather than geographies will be more
cost effective. The development of
products which have lower total cost of ownership will be desirable in
order to meet local competition in the rest of the world. The initiative underway at Power-Gen this
week is an example of how companies can validate lowest true cost to local
purchasers.
Power-Gen
and the Most Profitable Markets
Power-Gen International (November 18-21 in New Orleans) will
include lots of flow and treat activity. There are a number of pump, valve,
instrumentation and pollution control stands and relevant speeches. A new
feature is the personal meeting program which helps set up meetings between
individuals.
The McIlvaine Company assists suppliers with the Most
Profitable Market Program www.mcilvainecompany.com. This
includes quantifying applications where the supplier has the lowest true
cost and can therefore generate the most profit. As a result, McIlvaine is
working with conference organizers, associations, media, end users and
others on True Cost Investigations.
This effort is continuous. The true cost data gathered for the
Dry Scrubber Users Group, INDA, the association of non-woven
producers, or Mission Energy (representing Indian power plants) is then
made available and expanded at exhibitions such as
Power-Gen. Much of the data is linked to articles in magazines
such as Power Engineering. One magazine, International
Filtration News, is taking a proactive approach with True Cost
Investigations as feature articles in each issue. This can be expanded with
true cost webinars for direct validation of cost claims.
McIlvaine was a scheduled speaker at the Power-Gen workshop on
the 18th relative to helping companies pursue the
international market. The workshop was canceled due to low
registration. On the other hand, there are Power-Gen events
all over the world where access will be available to international suppliers
through True Cost Investigations.
The Most Profitable Market is not only one where the supplier
has competitive true costs but where he can validate
them. Exhibitions such as Power-Gen and magazines such as Power
Engineering are vehicles for reaching the purchasers and
communicating the true costs. The investigations become some of the
evidence needed for the effort. The available Investigations for Power-Gen
include:
Updates: Contact information and
arrangements are being continuously revised. So, keep checking
this document.
Overview: This provides the schedule of
speeches, details on relevant exhibitors, and contacts for relevant
personnel.
 
Electrostatic
Precipitator Power Supplies True Cost Investigation
Gas Turbine Inlet
Filter True Cost Investigation
Turbine Bypass
Valve True Cost Investigation
Dry Scrubbing True
Cost Investigation
CCR True Cost
Investigation
FGD Recycle
Pumps
Improving
Limestone Scrubber Efficiency
This Power-Gen initiative is part of a collaborative program.
The program is a collaborative effort
involving associations, media, suppliers, consultants and the
power plant operators.
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Effort
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McIlvaine
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Magazines
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Conferences
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Associations
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Supplier
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True Cost Investigation
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x
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x
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Most Profitable Market Forecast
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x
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x
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Lowest True Cost Claims
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x
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Indirect Validation
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x
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x
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Direct Validation
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x
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x
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x
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Suppliers use the true cost validation and most profitable
market forecast to initiate a sales program which will validate their
claims of lowest true cost and result in high margin sales. From the
customer perspective the payment of the higher product prices is more than
offset by life cycle cost reductions and more efficient operations.
Bob McIlvaine can answer questions prior to and during the
show. You can reach him by cell phone at 847 226 2391 or email rmcilvaine@mcilvainecompany.com.
Activities
at the show are updated continually at
http://www.mcilvainecompany.com/PowerGen_2019/MPM/powergen_and_the_most_profitable.htm
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