Dedham, MA; February, 27, 2003: The worldwide Control Valve market, which totaled almost $3 billion in 2002, will reach almost $3.5 billion by the end of 2007, expanding at a Cumulative Annual Growth Rate (CAGR) of just over 3%, according to a new study by the ARC Advisory Group.
Even as global uncertainties and slack market conditions continue to pull down sales, "the long-term business prospects for control valves look reasonably bright," according to senior analyst Dave Clayton (dclayton@arcweb.com) and senior analyst Srinivas Macha (smacha@arcweb.com), the authors of ARC's Control Valve Worldwide Outlook.
"Relatively immature markets such as food & beverage, drugs & pharmaceuticals, and specialty chemicals," they say, "constitute high growth sectors, while such traditional markets as chemicals and pulp & paper continue to remain subdued. The power and oil & gas industries are witnessing new investments, renovation, and modernization activities. With global oil crude prices and refining margins perking up, this trend should continue for a while."
Even as the replacement and upgrade market grows, an opportunity is also emerging for control valve suppliers to enhance their service revenues by leveraging their skills in offering maintenance, repair, and upgrade services. The notion of intelligent automation, which started at the supervisory level, has become pervasive at the final control element level. This is helping suppliers expand the control valves, actuators, and positioners (CVAP) market by meeting the hitherto unfulfilled needs of users to better control their processes. With users seeking to maximize the returns from their plant assets through Real-time Production Management (RPM) strategies and optimize their maintenance spending through Plant Asset Management (PAM) strategies, there is an increasing interest in intelligent CVAP assemblies.
Factors Contributing to Growth
The recent movement among leading manufacturers to achieve RPM, and the importance of accurate plant data in the RPM model, will spur control valve investments over the forecast period. With users evaluating investments to analyze real-time plant data on the basis of measurable yardsticks, demand for control valves in the forecast period will grow. The increasing need for real-time plant data also is driving manufacturers to increasingly deploy intelligent CVAP assemblies. ARC believes that demand for intelligent valves will help revive the stagnant control valve market.
Digital positioners offer improved performance and enhanced functionality permitting predictive and remote diagnostics. With the adoption of digital positioners and fieldbus networks, control valves are finally beginning to shed their image as the weakest link in the loop, thereby providing the economic justifications for users to invest in the new breed of CVAP assemblies.
Given the huge aging installed base of control valves, particularly in the oil & gas and chemical sectors, the ongoing replacement market looks significant. In addition, with manufacturing companies becoming leaner, the repair, maintenance, and after market service-related businesses will further enhance revenues for suppliers capable of providing these services.
