This Year 133 Companies Will Buy 55 Percent of the Fabric Filters

Purchases of fabric filter systems will exceed $8 billion in 2015.  One hundred thirty-three companies will account for more than $4 billion in purchases.  Steel, stone and power industries comprise two-thirds of the entire market.  These three industries are relatively consolidated.  So by tracking the activities of the major producers, the supplier reaches the majority of the market.

The following chart shows purchases by individual companies and groups.  The list is ranked by 2015 contribution to purchases. The largest individual purchaser is Eskom with 10 percent of the system purchases.

The cement industry accounts for over 20 percent of fabric filter purchases.  The 2014 production was 4.2 billion tons.  Lafarge accounted for 5 percent of the total production.  Lafarge accounts for 1.25 percent of the total fabric filter purchases. Holcim, CNBM and Ahui Conch each purchase more than 1 percent of the collectors and bags.

World crude steel production reached 1,662 million tons (Mt) for the year 2014, up by 1.2 percent compared to 2013.  Arcelor Mittal produced 6 percent of the total, whereas the next eight companies average 3 percent each.

ArcelorMittal purchases a high percentage of the total fabric filters because of its involvement in several industries. It has both iron ore and metallurgical coal reserves and is among the largest iron ore producers in the world. Iron ore mining operations are located in the United States, Canada, Mexico, Brazil, Liberia, Bosnia, Ukraine, Algeria and Kazakhstan. In Canada, the company is developing a large greenfield project on Baffin Island. Metallurgical coal mining operations are located in the United States and Kazakhstan.

The potential in the power industry is huge.  Ninety percent of coal-fired power plants still use precipitators.  If all power plants converted to fabric filtration, the investment would be $80 billion just for the hardware and over $200 billion for the installed systems.  The systems would clean 8 billion cfm of flue gas and would require 4 billion square feet of filter bags.  The challenge is to determine how fast and how much capacity will switch. The potential in China is the largest, but this year Eskom in South Africa will be the biggest purchaser.

The large purchasers such as Arcelor Mittal are moving toward global sourcing.  One reason is to determine total cost of ownership for products and services purchased.  Individual plants without the analytical resources are forced to buy based on lowest price.  The companies who pursue these large purchasers and can demonstrate lowest cost of ownership will boost sales and margins.  McIlvaine has a program to provide Detailed Forecasting of Markets, Prospects and Projects for Fabric Filters.  This program is built around N021 World Fabric Filter and Element Market, N032 Industrial Air Plants and Projects and 42EI Utility Tracking System  For more information on the program contact Bob McIlvaine at rmcilvaine@mcilvainecompany.com.

The fact that power plants in many different countries have shifted to fabric filters is indicative of the most important development in the history of the industry.

There is great concentration among OEMs.  FLSmidth supplies a very significant percentage of filters for their cement kiln systems. However, they make both collectors and bags.  Other kiln suppliers are major purchasers of filters.  Large power plant suppliers such as B&W and Alstom make their own collectors but buy bags.

End Users/AEs/OEMs

The 200 largest end users, architect engineers and OEMs make 75 percent of the decisions relative to fabric filter purchases.  This is a small enough group that detailed forecasting can be achieved at modest cost compared to the potential to increase in sales and create greater sales efficiency.

Seventeen Power Plant Owners Have Purchased 56 Percent of All the World’s FGD Systems

Seventeen corporations have purchased FGD systems for 725,000 MW of coal-fired boilers.  This represents 56 percent of the total installed capacity.  The top seven purchasers have invested over $80 billion. The supply of FGD systems is also concentrated with just nine companies accounting for 45 percent of the total.  Suppliers of components and repair parts can, therefore, focus on less than 100 companies to address 90 percent of the available market. The participation analysis is included in FGD Market and Strategies published by the McIlvaine Company.   (www.mcilvainecompany.com)

Annual repair and replacement for the installed systems exceeds $9 billion.  Fifty-two companies will account for purchases of over $6 billion.

Over the next five years, 318,000 MW are forecast to be installed on new power plants.  The five largest purchasers are expected to purchase 33 percent of the total.  Twenty companies are expected to purchase 75 percent of the total in terms of MW and total dollars.  New players in Vietnam and Indonesia plus large owners in China will be the main buyers.  So concentration of expenditures in the top 100 companies will continue.

The system suppliers are typically purchasing pumps, valves, filters, nozzles and controls.  So the sales spectrum for a component supplier must include this group.  There are relatively few system suppliers for large FGD systems.  The McIlvaine analysis only includes the FGD systems purchased for electricity generators.  These systems typically are sold for $25 million to $1 billion, so smaller suppliers do not have the resources to address this market.  McIlvaine also publishes N008 Scrubber/Adsorber/Biofilter World Markets which covers SO₂ and other acid gas removal for industrial plants.  There are several hundred suppliers to this market.

The Chinese suppliers along with a few U.S. and Japanese companies dominate the FGD market.

A number of Chinese companies have supplied more than 50,000 MW of FGD systems.  One supplier has installed more than 100,000 MW.  A number of these systems are through licenses with international companies. The analysis is based on the actual supplier rather than the licensor.  MHPS, MET, B&W, Alstom and some others have large numbers of systems when both the direct supply and licensed totals are included. The Chinese license payments are dropping as a percentage of revenue.  Design improvements are being initiated in China. As a result, suppliers need to deal directly with the Chinese companies and not the licensors.

McIlvaine has introduced a program incorporating detailed forecasting of total potential sales revenue for each major prospect, project and supplier. For more information on Detailed Forecasts of Markets, Prospects and Projects contact Bob McIlvaine at rmcilvaine@mcilvainecompany.com. 

For more information on N027 FGD Market and Strategies, click on:  http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/107-n027.  

U.S. Second Quarter Wind Installations Exceed 1.6 GW

The American Wind Energy Association (AWEA) says more than 1.6 GW of newly installed capacity wind turbines came online during the second quarter, with more than 13.6 GW currently under construction.

According to AWEA, more than 10 wind projects are under construction in 24 states representing more than 13,600 MW of total wind capacity and over $20 billion worth of private investment. The majority of new wind construction activity is in Texas, with Oklahoma, Kansas, Iowa and North Dakota also benefiting from large amounts of new investment.

The McIlvaine Company tracks wind projects around the world in Renewable Energy Projects and Update. For more information please visit
http://www.mcilvainecompany.com/brochures/Renewable_Energy_Projects_Brochure/renewable_energy_projects_brochure.htm

McIlvaine Hot Topic Hours and Recordings

McIlvaine webinars offer the opportunity to view the latest presentations and join discussions while sitting at your desk. Hot Topic Hours cater to the end users as well as suppliers while the Market Updates cater to the suppliers and investors.  Since McIlvaine records and provides streaming media access to these webinars there is a treasure trove of value only a click away. McIlvaine webinars are free to certain McIlvaine service subscribers. There is a charge for others.  Hot Topic Hours are free to owner/operators.  Sponsored webinars provide insights to particular products and services.  They are free.  Recordings can be immediately viewed from the list provided below.

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Bob McIlvaine
President
847-784-0012 ext. 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com