Daikin Now has Over a Nine Percent Market Share in Air Filtration with the
Purchase of Flanders
Daikin Industries Ltd., through its subsidiary American Air Filter Co. Inc., has
acquired Flanders. The acquisition price was $430 million. As a result of the
merger, the Daikin’s filter sales will exceed ¥100 billion ($890 million)
annually. Approximately 75 percent of that business is in the $7.3 billion air
filtration segment. So Daikin will enjoy almost 10 percent of a world market.
This is a market which is quite splintered and no competitors are dominating.
Flanders is a U.S. based corporation as is AAF. Both have long histories dating
back to the post World War II period where the U.S. was the center of the
semiconductor industry and warm air heating (steam radiators were used
elsewhere). The U.S. filter market share was greater than 50 percent at that
time. Now the market share is falling toward 10 percent. Semiconductor
production is centered in East Asia. Residential filter sales are soaring in
countries such as China and India with highly polluted air.
Flanders has high value-added products such as those used in cleanrooms for
semiconductors, pharmaceuticals and food processing. There is also a middle
value added product range used in gas turbine intakes. There has been a movement
to much higher efficiency to better protect the high performance turbines
produced today. So the high efficiency microfiber glass filters from Flanders
will be more relevant.
Flanders also has the low end products - a broad product lineup ranging from
commercial to residential and a nationwide sales network. Flanders has
manufacturing bases near most major U.S. cities, including Chicago and New York,
and provides short lead times and low logistics costs to deliver products that
are cost competitive in the low end market.
Having established manufacturing bases in the regions of Japan, North America,
Europe, China and Southeast Asia, Daikin has expanded its filter business
through its subsidiaries AAF and Nippon Muki Co. Ltd. Products have focused on
commercial-use air conditioning filters used in buildings and factories and the
engineering fields, including dust collection systems for production facilities.
AAF has established itself in each region of the world and performs development,
production, sales and service for products satisfying the needs of an extensive
market.
Daikin, through AAF, is also a participant in the equally large dust collector
filter market. However, it has chosen to pursue the low end value filters in
this market and, therefore, has a tiny market share. Some of the same cartridges
used in gas turbine intakes are also used in woodworking, welding and other low
temperature dust collector exhaust applications. Some competitors such as
Donaldson and Clarcor are in both markets. Clarcor recently expanded into the
high end dust collector market with the purchase of the BHA division of GE. Both
the dust collector and air filter markets will show high growth over the next
decade.
For more information click on: N022 Air Filtration and Purification World Market
For more information click on: N021 World Fabric Filter and Element Market
Gas Turbine after Market is both substantial and concentrated
As the U.S. switches from coal to gas a very large after market is developing
for intake filters, valves, pumps, turbine and HRSG components. McIlvaine
quantifies and tracks all the activity in Gas Turbine and Combined Cycle
Supplier Program.
Of the 440 GW of gas turbine-generated power operating in the U.S. as of the end
of 2015, 170 GW or over one-third is produced by the top ten producers.
Largest Gas-Turbine Power Producers in the U.S.
Based on Capacity as of the end of 2015
Rank Power Producer Gas-Turbine Power Production
Total Capacity (MW) Number of Facilities Total Number of Units
1 Calpine 27,894 63 190
2 Duke Energy 25,061 42 242
3 NextEra Energy 20.735 18 132
4 Southern Co 19,919 30 138
5 NRG Energy 18,946 57 238
6 Dynegy 14,022 23 96
7 TVA 12,201 15 118
8 Berkshire Hathaway 11,812 24 107
9 Engie 10,260 19 57
10 LS Power 9,492 17 70
Note: “Total Number of Units” includes both combustion and steam turbines.
Most of these producers are large, U.S.-based energy companies. However, Engie
(known as GDF Suez until April 2015) is a France-based multinational energy
company and one of the largest independent power producers in the world. In 2011
and 2012, Engie doubled its U.S. power generation capacity through acquisitions.
Berkshire Hathaway is essentially a holding company with an energy division
which includes MidAmerican Energy (acquired in 1999), PacifiCorp (2005) and NV
Energy (2013).
Identifying key decision makers has become particularly difficult over the last
decade due to electricity restructuring in the U.S. The distinction between
regulated and deregulated companies has become blurred. Power plants are bought
and sold frequently as companies and utilities seek to make a profit in the new
market-oriented environment.
McIlvaine has been tracking ownership changes and reports on them regularly
along with identifying every new and existing power plant and project worldwide.
For more information on 59EI Gas Turbine and Combined Cycle Supplier Program
click on: http://home.mcilvainecompany.com/index.php/markets/28-energy/610-59ei.
The Flow Control Future Belongs to International Companies with Holistic and
Proactive Development, Supply and Sales Programs
The $350 billion flow control and treatment market is undergoing a steady change
caused by:
• Growth disparity between regions
• Expansion of international companies in the high growth regions
There have been many acquisitions in recent years as international companies
seek to adjust to these changes. However, acquisitions are only part of the
adaptation process. Some international companies are very successful in their
expansion efforts. Others are not doing as well. The differences can be
attributed to six factors.
1a Holistic product development 1b Proactive product development
2a Holistic supply 2b Proactive supply
3a Holistic sales 3b Proactive sales
Product development is much more important in flow control and treatment than in
some other industries where the pace of change is slow. A holistic program takes
into account the range of opportunities whereas a myopic program is the victim
of an existing culture e.g., IBM and personal computers. W.L. Gore has developed
unique products in retail clothing as well as flow control and treatment where
it supplies pump packings, liquid filtration bags, gas turbine filters, dust
collector bags, NOx and VOC removal technologies and most recently a novel
device for mercury removal. The company shows the holistic strength by the
breadth of industries and products. It has demonstrated its proactive strength
by unique approaches which take an industry in a different direction.
Companies without strong product development programs complain that the Chinese
are stealing their designs. Thermo Fisher, with a strong development program,
has built its main air pollution research center in China.
Supply includes manufacturing, purchasing, engineering and service.
International flow control companies have been investing in manufacturing
facilities in Asia. Filtration media companies have been generally successful in
setting up plants in China. The biggest opportunity lies in a holistic approach
which combines manufacturing with service. Pentair, for example, has worked on a
repair business based on expensive valves which can be repaired rather than
replaced. This initiative combines the holistic manufacturing/repair combination
plus the proactive concept to take the industry in a new direction.
The potential for remote monitoring, service and then maintenance support can be
realized with holistic and proactive approaches. This potential is highest in
developing countries moving to high tech production e.g., pharmaceuticals in
India, semiconductors in China and ultrasupercritical coal-fired power plants in
Vietnam.
Most international companies are failing to take the proper holistic approach to
sales. Divisions are not sharing intelligence or collaborating. Management has
initiated top down approaches to take advantage of synergies but efforts have
often been unsuccessful. There is considerable potential for multi-company
initiatives. Various governments are helping. The Italian government has a
strong initiative to promote industrial valve exports. The Industrial Valve
Summit held last year in Bergamo, Italy was an effective promotional aid to the
Italian valve manufacturing industry.
The McIlvaine Company is focused on helping international companies with all six
of the important factors for international success. In addition, McIlvaine is
creating unique tools which can be shared by suppliers and end users around the
world. They include:
• Decision guides with classification of options for each industry.
• Cross pollination among industries: McIlvaine conducted a cross industry
pollination webinar on mercury removal for sewage sludge incinerators,
coal-fired boilers, cement plants, waste-to-energy plants and natural gas
pipelines. New developments applied to natural gas pipelines may be applicable
to the other industries. Decision guides on NOx, hot gas filtration and acid gas
removal in multiple industries will be discussed in a series of webinars in
March and April.
• White papers and analyses on products focused on the total cost of ownership.
• Identification of all supplier and end user parent companies by a corporate
identification number with spelling in Chinese and English.
• Supplier programs including many market reports and databases along with KOC
Sales Strategy, 4 Lane Knowledge Bridge, and Detailed Forecasting of Markets,
Prospects and Projects.
For more information click on: N064 Air/Gas/Water/Fluid Treatment and Control:
World Market
Utility E-Alert Tracks Billions of Dollars of New Coal-fired Power Plants on a
Weekly Basis
Here are some headlines from the Utility E-Alert
UTILITY E-ALERT
#1262 – March 4, 2016
Table of Contents
COAL – US
Supreme Court bars Coal Industry Petition for unlimited Mercury Emissions
COAL – WORLD
POSCO Energy to build Coal-fired Power Plant in Vietnam
China and Pakistan sign Contract to build a Coal-fired Power Plant in Pakistan
Edenville Energy to invest in Coal-fired Power Plant and Coal Mine in Tanzania
Marubeni may build a Coal-fired Power Plant in Egypt
Meubolah Coal-fired Power Station Two Unit expansion in Aceh Province,
Indonesia
Proposed 625 MW Unit 9 planned for Banten Suralaya Power Station in Banten
Province, Indonesia
300 MW Unit 3 Kaltim Teluk Balikpapan Power Station expansion announced in
East Kalimantan Province, Indonesia
PLN to build $2 Billion Coal-fired Power Plant in Banten, Indonesia Next Year
BHEL wins $822.9 Million Contract to build thermal power plant in Tamil Nadu,
India
The 41F Utility E-Alert is issued weekly and covers the coal-fired projects,
regulations and other information important to the suppliers. It is $950/yr. but
is included in the $3020 42EI Utility Tracking System which has data on every
plant and project plus networking directories and many other features.
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You can register for our free McIlvaine Newsletters at:
http://www.mcilvainecompany.com/brochures/Free_Newsletter_Registration_Form.htm.
Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com