Driven by strong project activity, the worldwide control valve market experienced double-digit growth in 2006 and is expected continue to grow at a compounded annual growth rate (CAGR) exceeding 5 percent over the next five years, according to a study by ARC Advisory Group (www.arcweb.com). The market, which approached $4 billion in 2006, is forecasted to exceed $5 billion in 2011.
ARC’s study, titled Control Valve Worldwide Outlook, says the global control valve market is in the midst of a phase of unprecedented growth due to booming greenfield plants in developing countries and exploding investment in oil & gas exploration and production.
Effectively meeting global customer demand with reasonable lead times will require significant planning and investment as strong demand for control valves strains many suppliers’ manufacturing capacities, says ARC. Protecting needed capacity and lead times require establishing long-term agreements with foundries across the globe. Ensuring strong global delivery and service capabilities require investing heavily in manufacturing and project engineering capabilities throughout the globe, with a particular focus in high-growth future markets such as China, India, Dubai, Saudi Arabia, and Russia. ARC says those suppliers who chose not to make these necessary investments were ill prepared for the recent spike in demand.
According to ARC, adoption of wireless technologies is a means of providing customers a cost effective solution to connecting production assets, like valves, to asset management and control systems, and it opens up many possibilities for improved control and optimized production by adding more field data that was previously too costly. As such, ARC says many of the leading control valve suppliers are adding wireless connectivity to their digital positioner products, because wireless not only allows manufacturers to connect valves to their systems, but also serves as a justification for them to replace older pneumatic positioners with digital positioners. In addition, ARC says control valve suppliers are increasingly collaborating with manufacturers and wireless standards bodies, such as SP100 and the Wireless HART initiative, to develop standards-based wireless digital positioners that fulfill customer needs and expectations.
Though China still represents significant growth opportunities, the Middle East has quickly become the regional market offering control valve suppliers the greatest growth potential, says ARC. There are signs that China is slowing construction of new manufacturing plants to keep its economy from over-heating. Foreign investment in China is also tapering off, as cheap labor — arguably one of China’s most attractive attributes — and land have become more expensive due to the country’s booming economy. On the other side, suppliers can expect increasing growth opportunities in the Middle East due to its high concentration of oil & gas activities, notes ARC.
For more information on this study, visit www.arcweb.com/res/cvap.