- Email: [email protected]
The filtration market in France
MARKET REPORT
The filtration market in France
K
en Sutherland looks at the market in France for filtration and related separation equipment, its growth trends and its driving forces. Among the six largest national markets for filtration and other separation equipment, that of France has enough special features to justify a separate look at it. Geographically the largest country of western Europe (although smaller than the Ukraine and Turkey, let alone Russia), France’s main natural resource is land. It is relatively poor in energy resources, and, as a result, has become a major user of nuclear power, which provides around three-quarters of France’s energy needs. It has become a major industrial power, with food and beverage production an important component.
The economic context In common with most of the world, the economy of France has been badly hit by the 2008/2009 credit crisis and consequent world recession. It is the second largest in Europe, although significantly smaller than that of Germany, and the economies of the UK and Italy run it close (and the UK can surpass it, depending upon currency conversion rates). France is a major exporter, although again well behind Germany. The French economy is very protective, with high taxation and regulation. France’s moves to re-activate the economy have concentrated more on public works than on support for the private individual. Its resistance to the recession has been relatively successful, in that the fall in GDP in 2009 has been less than that in other large developed countries. The most recent IMF estimates for GDP change in 2009 are -3.0% for France, compared with -5.5% in Germany (France being less dependent on exports than Germany), -4.3% for the whole Euro area, and -4.1% for the UK (but, it is to be noted, -2.8% for the USA). Household debt in France, measured as a proportion of GDP, is less than half of that in the USA or the UK, while no large French bank has needed to be rescued. France’s enthusiasm for the Euro-area remains high, although other countries have done better out of membership. While such membership has largely been beneficial up until now, it is suggested that it may actually hinder the recovery from recession. Unemployment rates were showing encouraging signs of improvement through 2007, but have increased significantly since mid-2008.
July 2009
To some extent a similar problem to that of Germany, the labour force is less flexible certainly than in the UK, with quite rigid employment laws, and the Government has less freedom of movement even in these troubled times.
The industrial context The relatively strong French economy has been built on the back of the country’s manufacturing industry. Engineering in France is still quite a strong sector, especially in automotive (Peugeot-Citroën and Renault being world class companies), aerospace, and electrical power. France probably leads the world in terms of its high-speed rail network. Bulk chemicals are no longer a major contributor to the economy (the largest chemical company being L’Air Liquide), but the pharmaceutical industry has grown rapidly, the merger of Sanofi and Aventis having created a worldclass company. Food and beverage processing are particular strengths for France, while the oil and petrochemical sector is also strong. France has two of the largest water utility companies in the world (Veolia and GdF Suez), which are both of increasing importance in fresh and waste water treatment. The oil major, Total, is the only French manufacturing company with sales greater than US$200 billion. Total is the eighth largest company in the world by 2008 sales value. There is another French entry in the second 10 by sales volume, the retail company Carrefour, which is followed in size by the two utilities GdF Suez and EdF, the latter of which still retains an element of monopoly (in electricity supply), despite EU efforts to open the French market to other suppliers. There are eight French companies in all in the top 100 by sales, and another six in the next 100. Sonofi-Aventis is France’s largest pharmaceutical company, 107th in sales size, but the 5th largest global pharma company. Danone is the largest French food company, just in the top 200 companies by sales volume (but less than a quarter the size of Nestlé, the largest such manufacturer). The engineering companies Schneider and Alstom are also in the top 200.
The market The market for the equipment used in filtration and related separations in France is given in the accompanying table. The estimates include: UÊ >ʵÕ`ɵÕ`]ʵÕ`ÉÃ`]Ê}>Ãɵuid and gas/solid separations where the
components before separation exist as distinct phases, in which the separations are achieved by filtration through a porous barrier (ie the effect of suspended particle size) or by sedimentation (ie the effect of density differences); UÊ >ÊÃ>ÀÊÃi«>À>ÌÃÊÜ iÀiÊÌ iÊëiViÃÊ being separated are large molecules or ions in solution and the separation process is akin to filtration ie reverse osmosis, nanofiltration and ultrafiltration, dialysis and electrodialysis; UÊ >Ê>««V>ÌÃÊvÊÌ iÃiÊÃi«>À>ÌÃ]Ê whether industrial (manufacturing or service), commercial, or domestic, and including laboratory uses as well as full scale applications; and UÊ >Ê«iÀ>Ì}Êë>ÀiÃÊ>ÞÊvÌiÀÊi`>ÊÀÊ elements) sold separately to the end user. These inclusions relate to separations from a fluid, gas or liquid. It should be noted, however, that dry screening and related separations are also included, where mixtures of solid particles are separated, usually into fractions of different particle size, by sieving or magnetic separations. Other noteworthy inclusions are deep bed filters, lamellar separators, droplet coalescers, screw presses, cyclones and hydrocyclones. In terms of scope, only that ancillary equipment necessary for the safe operation of the equipment is included, such as the motor which drives a centrifuge or the agitator of a clariflocculator, but not the pumps or compressors required to create the fluid flow through the separator – the market concerns individual filters or centrifuges, not complete systems. This is to be noted especially in the case of cross-flow membrane systems, where only the replaceable module is counted. The sale of filter media, in bulk or as finished elements, to the makers of filters is not included as a separate item, because such media sales are covered by the sales of the complete filters. Media sales are only included where they are made directly to their enduser as part of the supply of spares. The data given are for the calendar year 2008, in millions of US dollars, analysed by equipment types as follows: UÊ }À>ÛÌÞÊÃi`iÌ>ÌÊVÛiÀ}Ê>À}iÊL>ÃÊ clarifiers, thickeners, flotation and lamellar separators); UÊ iÀÌ>Ê>`ÊViÌÀvÕ}>ÊÃi`iÌ>ÌÊ (covering cyclones and hydrocyclones, and sedimenting centrifuges); UÊ ÃVÀiiÃÊ>`ÊÃÌÀ>iÀÃÊvÀÊ`ÀÞÊ>`ÊÜiÌÊ screening, including demisters for gases
Filtration Industry Analyst
5
DIVIDENDS/MARKET REPORT
Dividends UÊ ÌÊ ÌÃÊ ÕiÊ iiÌ}]Ê Ì iÊ Clarcor Inc board of directors declared a regular quarterly dividend of US$0.09 per share. The dividend is payable on 24 July 2009 to shareholders of record on 10 July 2009. www.clarcor.com UÊ iëÌiÊÀi«ÀÌ}Ê>ÊÌiÀÊÃÃÊ«iÀÊ share of 1.0p for the six months ended 31 May 2009, the Porvair plc board believes that the Group has shown a good measure of resilience in managing through the challenges of the last six months and will continue to do so in the months ahead. As a result, the Porvair board is again declaring an interim dividend of 1.0p (2008: 1.0p) in keeping with the filtration group’s dividend policy. www.porvair.com UÊ / iÊHamworthy plc board is recommending a final ordinary dividend of 5.68p per share. If approved by shareholders this would result in a total dividend declared for the year of 8.73p per share when added to the interim dividend of 3.05p per share paid in January 2009 (see Filtration Industry Analyst, January 2009). www.hamworthy.com UÊ >Û}ÊÃÃÕi`Ê>`iÊv>Ê>`ÊÌiÀim dividends to shareholders in the last calendar year, the Clyde Process Solutions board has decided that cash should be retained in the business to strengthen its balance sheet. As a result, the board did not recommend a final dividend to shareholders. The company says it plans to re-adopt a progressive dividend policy once the macro economic situation has improved and the company has benefited from renewed growth. www.clydeprocesssolutions.com UÊ / iÊCummins Inc board has declared a quarterly common stock cash dividend of US$0.175 per share, payable on 1 September 2009 to shareholders of record on 21 August 2009. www.cummins.com UÊ ÀiVÌÀÃÊ vÊ Pentair Inc directors have declared a regular quarterly cash dividend of US$0.18 per share which is payable on 14 August 2009 to shareholders of record at the close of business on 31 July 2009. www.pentair.com
6
Filtration Industry Analyst
Filtration and Related Separation Equipment Market 2008 - France Equipment Type
US$ million
Gravity Sedimentation
162
Inertial & Centrifugal Sedimentation
204
Screens & Strainers
131
Depth Filters
301
Cartridge Filters
282
Process Pressure Filters
155
Membrane Filters
511
Gravitational & Vacuum Filters
246
Centrifugal Filters
113
Other Equipment
50
Total
2155
and coalescers for liquids, and coarse inline strainers); UÊ `i«Ì ÊvÌÀ>ÌÊVÛiÀ}Ê>ÊÌ VÊi`>Êvtration, including those in cartridge format, intended to capture solids within the thickness of the filter medium rather than on its surface, and deep bed granular media filters); UÊ V>ÀÌÀ`}iÊvÌiÀÃÊ>ÊÌ iÀÊÀi«>Vi>LiÊiiment units, except for membrane filters); UÊ «ÀViÃÃÊ«ÀiÃÃÕÀiÊvÌÀ>ÌÊvÌiÀÊ«ÀiÃÃiÃ]Ê band filters, variable volume presses); UÊ iLÀ>iÊÃÞÃÌiÃÊÀiÛiÀÃiÊÃÃÃ]Ê>filtration, ultrafiltration and micro-filtration modules, employing membranes as filter media, whether operating in throughflow or cross-flow mode); UÊ }À>ÛÌÞÊ>`ÊÛ>VÕÕÊvÌiÀÃÆ UÊ ViÌÀvÕ}>ÊvÌiÀÃÆÊ>` UÊ Ì iÀÊiµÕ«iÌÊ>ÞÊ>}iÌVÊ separators, electrically assisted filters and mechanical presses). The filtration and related separation equipment market in France is estimated to have approached US$2.2 billion in 2008. Although only about two-thirds the size of the market in Germany, this was still large enough to put France in third place among western European countries, just smaller than that in the UK. Very approximately, this market would have been split about 15% as gas filtration and 85% liquid phase, while the Table shows that sedimentation represents about 17% of the total market. Spare part sales (covering filter media and mechanical components) were about 40% of the total market. Overall, the French market was about 4.5% of the global total. Much more difficult to forecast is the likely market for 2009. It is expected that the global market will show little or no real growth, with continued growth in China and India offset by falls in other parts of the world. The French market will mirror the
global figure, or perhaps rise by up to 1%. Higher growth is forecast for 2010, perhaps as much as 5% or 6% over 2009. The main driving forces for change and improvement in the industry, independently of the economic situation, continue to be environmental pressures and the need for ever-finer degrees of separation. Environmental protection requires that what were once acceptable exhaust streams may no longer be allowed, or may have to have their pollutant contents markedly reduced, thus providing many opportunities for new or extended separation processes. Improved application performance requirements are to be found everywhere, from a need for a better quality of recycled machine tool coolant to a need for “absolute” purity of air entering a clean room. Increased purity of process streams or utility fluids is an almost self-perpetuating process: no sooner can a filter maker provide a higher level of purity than the uses of such a filter multiply rapidly, while the original application seeks still better purification. Population growth, and the related trend, a steady demand for an increase in standards of living, are major drivers in many parts of the world, but less so in western Europe, and especially France, where the population growth rate is quite low.
The filtration business The relative strength of the French engineering industry as a whole is not repeated in the filtration and other separations sector. Some well-known names are now, of course, under foreign ownership, such as Eurofiltec, Groupe Aoustin (with Filtres Philippe), Guédu and Membralox, but there are still companies of the calibre of CECA, Choquenet, Degrémont, Gaudfrin, Lautrette, Novasep, Sofrance and TTL France to maintain a French presence in the marketplace. Other important manufacturers are Rousselet Robatel, a major supplier of basket centrifuges, and TAMI Industries, one of Europe’s leading ceramic membrane makers. Many global filtration companies have significant subsidiaries based in France, which should remain in place through the present recession. Also based in France is the research institute IFTS, which has an important role in the development of filter testing standards, while there is also a strong professional filtration society.
About the author Ken Sutherland has managed Northdoe Ltd, his process engineering and marketing consultancy, for over 30 years. Email: [email protected]
July 2009
The filtration market in France
K
en Sutherland looks at the market in France for filtration and related separation equipment, its growth trends and its driving forces. Among the six largest national markets for filtration and other separation equipment, that of France has enough special features to justify a separate look at it. Geographically the largest country of western Europe (although smaller than the Ukraine and Turkey, let alone Russia), France’s main natural resource is land. It is relatively poor in energy resources, and, as a result, has become a major user of nuclear power, which provides around three-quarters of France’s energy needs. It has become a major industrial power, with food and beverage production an important component.
The economic context In common with most of the world, the economy of France has been badly hit by the 2008/2009 credit crisis and consequent world recession. It is the second largest in Europe, although significantly smaller than that of Germany, and the economies of the UK and Italy run it close (and the UK can surpass it, depending upon currency conversion rates). France is a major exporter, although again well behind Germany. The French economy is very protective, with high taxation and regulation. France’s moves to re-activate the economy have concentrated more on public works than on support for the private individual. Its resistance to the recession has been relatively successful, in that the fall in GDP in 2009 has been less than that in other large developed countries. The most recent IMF estimates for GDP change in 2009 are -3.0% for France, compared with -5.5% in Germany (France being less dependent on exports than Germany), -4.3% for the whole Euro area, and -4.1% for the UK (but, it is to be noted, -2.8% for the USA). Household debt in France, measured as a proportion of GDP, is less than half of that in the USA or the UK, while no large French bank has needed to be rescued. France’s enthusiasm for the Euro-area remains high, although other countries have done better out of membership. While such membership has largely been beneficial up until now, it is suggested that it may actually hinder the recovery from recession. Unemployment rates were showing encouraging signs of improvement through 2007, but have increased significantly since mid-2008.
July 2009
To some extent a similar problem to that of Germany, the labour force is less flexible certainly than in the UK, with quite rigid employment laws, and the Government has less freedom of movement even in these troubled times.
The industrial context The relatively strong French economy has been built on the back of the country’s manufacturing industry. Engineering in France is still quite a strong sector, especially in automotive (Peugeot-Citroën and Renault being world class companies), aerospace, and electrical power. France probably leads the world in terms of its high-speed rail network. Bulk chemicals are no longer a major contributor to the economy (the largest chemical company being L’Air Liquide), but the pharmaceutical industry has grown rapidly, the merger of Sanofi and Aventis having created a worldclass company. Food and beverage processing are particular strengths for France, while the oil and petrochemical sector is also strong. France has two of the largest water utility companies in the world (Veolia and GdF Suez), which are both of increasing importance in fresh and waste water treatment. The oil major, Total, is the only French manufacturing company with sales greater than US$200 billion. Total is the eighth largest company in the world by 2008 sales value. There is another French entry in the second 10 by sales volume, the retail company Carrefour, which is followed in size by the two utilities GdF Suez and EdF, the latter of which still retains an element of monopoly (in electricity supply), despite EU efforts to open the French market to other suppliers. There are eight French companies in all in the top 100 by sales, and another six in the next 100. Sonofi-Aventis is France’s largest pharmaceutical company, 107th in sales size, but the 5th largest global pharma company. Danone is the largest French food company, just in the top 200 companies by sales volume (but less than a quarter the size of Nestlé, the largest such manufacturer). The engineering companies Schneider and Alstom are also in the top 200.
The market The market for the equipment used in filtration and related separations in France is given in the accompanying table. The estimates include: UÊ >ʵÕ`ɵÕ`]ʵÕ`ÉÃ`]Ê}>Ãɵuid and gas/solid separations where the
components before separation exist as distinct phases, in which the separations are achieved by filtration through a porous barrier (ie the effect of suspended particle size) or by sedimentation (ie the effect of density differences); UÊ >ÊÃ>ÀÊÃi«>À>ÌÃÊÜ iÀiÊÌ iÊëiViÃÊ being separated are large molecules or ions in solution and the separation process is akin to filtration ie reverse osmosis, nanofiltration and ultrafiltration, dialysis and electrodialysis; UÊ >Ê>««V>ÌÃÊvÊÌ iÃiÊÃi«>À>ÌÃ]Ê whether industrial (manufacturing or service), commercial, or domestic, and including laboratory uses as well as full scale applications; and UÊ >Ê«iÀ>Ì}Êë>ÀiÃÊ>ÞÊvÌiÀÊi`>ÊÀÊ elements) sold separately to the end user. These inclusions relate to separations from a fluid, gas or liquid. It should be noted, however, that dry screening and related separations are also included, where mixtures of solid particles are separated, usually into fractions of different particle size, by sieving or magnetic separations. Other noteworthy inclusions are deep bed filters, lamellar separators, droplet coalescers, screw presses, cyclones and hydrocyclones. In terms of scope, only that ancillary equipment necessary for the safe operation of the equipment is included, such as the motor which drives a centrifuge or the agitator of a clariflocculator, but not the pumps or compressors required to create the fluid flow through the separator – the market concerns individual filters or centrifuges, not complete systems. This is to be noted especially in the case of cross-flow membrane systems, where only the replaceable module is counted. The sale of filter media, in bulk or as finished elements, to the makers of filters is not included as a separate item, because such media sales are covered by the sales of the complete filters. Media sales are only included where they are made directly to their enduser as part of the supply of spares. The data given are for the calendar year 2008, in millions of US dollars, analysed by equipment types as follows: UÊ }À>ÛÌÞÊÃi`iÌ>ÌÊVÛiÀ}Ê>À}iÊL>ÃÊ clarifiers, thickeners, flotation and lamellar separators); UÊ iÀÌ>Ê>`ÊViÌÀvÕ}>ÊÃi`iÌ>ÌÊ (covering cyclones and hydrocyclones, and sedimenting centrifuges); UÊ ÃVÀiiÃÊ>`ÊÃÌÀ>iÀÃÊvÀÊ`ÀÞÊ>`ÊÜiÌÊ screening, including demisters for gases
Filtration Industry Analyst
5
DIVIDENDS/MARKET REPORT
Dividends UÊ ÌÊ ÌÃÊ ÕiÊ iiÌ}]Ê Ì iÊ Clarcor Inc board of directors declared a regular quarterly dividend of US$0.09 per share. The dividend is payable on 24 July 2009 to shareholders of record on 10 July 2009. www.clarcor.com UÊ iëÌiÊÀi«ÀÌ}Ê>ÊÌiÀÊÃÃÊ«iÀÊ share of 1.0p for the six months ended 31 May 2009, the Porvair plc board believes that the Group has shown a good measure of resilience in managing through the challenges of the last six months and will continue to do so in the months ahead. As a result, the Porvair board is again declaring an interim dividend of 1.0p (2008: 1.0p) in keeping with the filtration group’s dividend policy. www.porvair.com UÊ / iÊHamworthy plc board is recommending a final ordinary dividend of 5.68p per share. If approved by shareholders this would result in a total dividend declared for the year of 8.73p per share when added to the interim dividend of 3.05p per share paid in January 2009 (see Filtration Industry Analyst, January 2009). www.hamworthy.com UÊ >Û}ÊÃÃÕi`Ê>`iÊv>Ê>`ÊÌiÀim dividends to shareholders in the last calendar year, the Clyde Process Solutions board has decided that cash should be retained in the business to strengthen its balance sheet. As a result, the board did not recommend a final dividend to shareholders. The company says it plans to re-adopt a progressive dividend policy once the macro economic situation has improved and the company has benefited from renewed growth. www.clydeprocesssolutions.com UÊ / iÊCummins Inc board has declared a quarterly common stock cash dividend of US$0.175 per share, payable on 1 September 2009 to shareholders of record on 21 August 2009. www.cummins.com UÊ ÀiVÌÀÃÊ vÊ Pentair Inc directors have declared a regular quarterly cash dividend of US$0.18 per share which is payable on 14 August 2009 to shareholders of record at the close of business on 31 July 2009. www.pentair.com
6
Filtration Industry Analyst
Filtration and Related Separation Equipment Market 2008 - France Equipment Type
US$ million
Gravity Sedimentation
162
Inertial & Centrifugal Sedimentation
204
Screens & Strainers
131
Depth Filters
301
Cartridge Filters
282
Process Pressure Filters
155
Membrane Filters
511
Gravitational & Vacuum Filters
246
Centrifugal Filters
113
Other Equipment
50
Total
2155
and coalescers for liquids, and coarse inline strainers); UÊ `i«Ì ÊvÌÀ>ÌÊVÛiÀ}Ê>ÊÌ VÊi`>Êvtration, including those in cartridge format, intended to capture solids within the thickness of the filter medium rather than on its surface, and deep bed granular media filters); UÊ V>ÀÌÀ`}iÊvÌiÀÃÊ>ÊÌ iÀÊÀi«>Vi>LiÊiiment units, except for membrane filters); UÊ «ÀViÃÃÊ«ÀiÃÃÕÀiÊvÌÀ>ÌÊvÌiÀÊ«ÀiÃÃiÃ]Ê band filters, variable volume presses); UÊ iLÀ>iÊÃÞÃÌiÃÊÀiÛiÀÃiÊÃÃÃ]Ê>filtration, ultrafiltration and micro-filtration modules, employing membranes as filter media, whether operating in throughflow or cross-flow mode); UÊ }À>ÛÌÞÊ>`ÊÛ>VÕÕÊvÌiÀÃÆ UÊ ViÌÀvÕ}>ÊvÌiÀÃÆÊ>` UÊ Ì iÀÊiµÕ«iÌÊ>ÞÊ>}iÌVÊ separators, electrically assisted filters and mechanical presses). The filtration and related separation equipment market in France is estimated to have approached US$2.2 billion in 2008. Although only about two-thirds the size of the market in Germany, this was still large enough to put France in third place among western European countries, just smaller than that in the UK. Very approximately, this market would have been split about 15% as gas filtration and 85% liquid phase, while the Table shows that sedimentation represents about 17% of the total market. Spare part sales (covering filter media and mechanical components) were about 40% of the total market. Overall, the French market was about 4.5% of the global total. Much more difficult to forecast is the likely market for 2009. It is expected that the global market will show little or no real growth, with continued growth in China and India offset by falls in other parts of the world. The French market will mirror the
global figure, or perhaps rise by up to 1%. Higher growth is forecast for 2010, perhaps as much as 5% or 6% over 2009. The main driving forces for change and improvement in the industry, independently of the economic situation, continue to be environmental pressures and the need for ever-finer degrees of separation. Environmental protection requires that what were once acceptable exhaust streams may no longer be allowed, or may have to have their pollutant contents markedly reduced, thus providing many opportunities for new or extended separation processes. Improved application performance requirements are to be found everywhere, from a need for a better quality of recycled machine tool coolant to a need for “absolute” purity of air entering a clean room. Increased purity of process streams or utility fluids is an almost self-perpetuating process: no sooner can a filter maker provide a higher level of purity than the uses of such a filter multiply rapidly, while the original application seeks still better purification. Population growth, and the related trend, a steady demand for an increase in standards of living, are major drivers in many parts of the world, but less so in western Europe, and especially France, where the population growth rate is quite low.
The filtration business The relative strength of the French engineering industry as a whole is not repeated in the filtration and other separations sector. Some well-known names are now, of course, under foreign ownership, such as Eurofiltec, Groupe Aoustin (with Filtres Philippe), Guédu and Membralox, but there are still companies of the calibre of CECA, Choquenet, Degrémont, Gaudfrin, Lautrette, Novasep, Sofrance and TTL France to maintain a French presence in the marketplace. Other important manufacturers are Rousselet Robatel, a major supplier of basket centrifuges, and TAMI Industries, one of Europe’s leading ceramic membrane makers. Many global filtration companies have significant subsidiaries based in France, which should remain in place through the present recession. Also based in France is the research institute IFTS, which has an important role in the development of filter testing standards, while there is also a strong professional filtration society.
About the author Ken Sutherland has managed Northdoe Ltd, his process engineering and marketing consultancy, for over 30 years. Email: [email protected]
July 2009