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KSB buys SA joint venture
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Pump manufacturers opt for service approach Rising competition and increasing price pressures in the water and wastewater pumps market are pushing manufacturers to adopt a more service-oriented approach with end users, says a new analysis report from Frost & Sullivan, World Pumps Market in the Water and Wastewater Industry. This is because, the report suggests, the market is approaching maturity and pump manufacturers must find new ways to increase sales and revenues. Adding service and maintenance functions to products could help manufacturers gain much-needed customer loyalty in a fiercely competitive market. Frost & Sullivan says that the market earned revenues of US$8.73 billion in 2005 and estimates that it will reach US$12.08 billion in 2012. “The key success factor for manufacturers is to supply a one-stop shop for all the services and solutions requirements of end users including on-site assistance, maintenance and spare parts,” says Frost & Sullivan research analyst Dushyant Mehra. “This trend is gaining strength as end users can get the knowledge outsourced at minimal risks, while ensuring proper application and operation of the equipment.” Providing solutions in line with end-user needs could considerably strengthen demand for pumps, as could the upgrading of old water treatment plants and new construction activity in
emerging economies, the report suggests. In particular, Latin America and Asia Pacific seem to hold good potential for pump manufacturers since these regions are experiencing robust economic growth and a related increase in water and wastewater activities. Other factors likely to contribute to demand are the energy- saving potential of pumps, along with longer equipment life and the ability to monitor flow. However, energy-saving benefits can only be realised only if manufacturers significantly enhance the efficiency of pumps, Frost & Sullivan says. This will be a major challenge for manufacturers if regulations on energy consumption become stricter during 2006 to 2007. “To remain competitive and retain the ability to offer lower prices, pump manufacturers have to reduce overheads and production costs to a minimum,” says Mehra. “Currently, the loss of energy is as high as 70%, compelling m anufacturers to enhance efficiency to address this problem.” Pressure is also mounting on manufacturers to provide life cycle cost (LCC) saving solutions, the report suggests. LCC plays a much bigger role in end users’ pump purchasing decisions than the initial purchase price. Since LCC includes the purchase, installing, operating, maintaining and disposing of the equipment, higher energy costs could weigh heavily with end users.
Valve market to reach US$53 billion The valve market will grow from sales of US$43 billion in 2007 to US$53 billion in 2010, says McIlvaine’s Industrial Valves World Markets report. The report suggests that growth will be fuelled by new applications and industrial expansion. Currently, the valve industry is highly fragmented, with the top 20 companies accounted for only 25% of sales and many small, highly specialised companies making up the rest.
KSB buys SA joint venture KSB has acquired its former joint venture partner’s 50% share in KSB Pumps (Pty) Ltd, the company’s South African base. The company transferred the operative business of KSB Pumps (SA) (Pty) Ltd. to a newly established subsidiary of that company, KSB Pumps and Valves (Pty) Ltd, based in Germiston, South Africa. KSB holds 74.9% of this subsidiary’s share capital. 25.1% of the new company’s shares are held by Medu Capital (Pty.) Ltd, and the participation of this South-African investment management company will improve KSB’s chances of securing government contracts, the company says. Contracts are preferentially awarded to companies supporting the government’s Black Economic Empowerment policy. KSB started business operations in South Africa in 1920 and established its own company there in 1959, in Germiston near Johannesburg. It has a staff of 320 that manufactures pumps for water, industrial and mining applications.
Iwaki America expands production capability Iwaki America has completed a renovation and expansion of its chemical process pump production facilities at its Holliston, Massachusetts, USA operation. These improvements
4
www.worldpumps.com
will nearly double the company’s CPI pump throughput capabilities, the company says. “The CPI moves are the first in a series of planned operational
improvements,“ said Peter Brule, the company’s engineering manager. “Next, industrial pump production capacity will be expanded followed by changes in the OEM product cells.”
Oil and gas is the largest application sector with 2006 sales of over US$7 billion, but this sector is undergoing substantial change, the report says. The rapid growth of liquefied natural gas (LNG) is presenting big opportunities for companies that can meet the extreme pressure and temperature demands. The environment also represents a continuing growth area for valve suppliers – especially the remediation of ground water, desalination of seawater, and the conventional treatment of drinking water.
Weir sells Glasgow base to Sulzer The Weir Group PLC is expected to sell its Glasgow, Scotland based business unit of Weir Pumps for £48 million. Weir Pumps manufactures custom-engineered pumps for the upstream oil and power generation markets. Under the terms being discussed, all 596 employees will transfer to Sulzer, which will retain a significant engineering, design and technical sales presence in addition to a spares and aftermarket manufacturing facility in Glasgow. The company warns, however, that significant operational redundancies related to the original equipment business are to be anticipated in the run up to the previously announced closure of the Cathcart facility in 2009. Appropriate retention incentives and redundancy packages will be offered to affected employees. “Weir Pumps’ business represents 8% of Weir Group revenue and a lower percentage of annual profits. The business competes in the global marketplace against manufacturers who have an established presence in low cost countries,” said Mark Selway, chief executive of The Weir Group PLC.
WORLD PUMPS March 2007
Pump manufacturers opt for service approach Rising competition and increasing price pressures in the water and wastewater pumps market are pushing manufacturers to adopt a more service-oriented approach with end users, says a new analysis report from Frost & Sullivan, World Pumps Market in the Water and Wastewater Industry. This is because, the report suggests, the market is approaching maturity and pump manufacturers must find new ways to increase sales and revenues. Adding service and maintenance functions to products could help manufacturers gain much-needed customer loyalty in a fiercely competitive market. Frost & Sullivan says that the market earned revenues of US$8.73 billion in 2005 and estimates that it will reach US$12.08 billion in 2012. “The key success factor for manufacturers is to supply a one-stop shop for all the services and solutions requirements of end users including on-site assistance, maintenance and spare parts,” says Frost & Sullivan research analyst Dushyant Mehra. “This trend is gaining strength as end users can get the knowledge outsourced at minimal risks, while ensuring proper application and operation of the equipment.” Providing solutions in line with end-user needs could considerably strengthen demand for pumps, as could the upgrading of old water treatment plants and new construction activity in
emerging economies, the report suggests. In particular, Latin America and Asia Pacific seem to hold good potential for pump manufacturers since these regions are experiencing robust economic growth and a related increase in water and wastewater activities. Other factors likely to contribute to demand are the energy- saving potential of pumps, along with longer equipment life and the ability to monitor flow. However, energy-saving benefits can only be realised only if manufacturers significantly enhance the efficiency of pumps, Frost & Sullivan says. This will be a major challenge for manufacturers if regulations on energy consumption become stricter during 2006 to 2007. “To remain competitive and retain the ability to offer lower prices, pump manufacturers have to reduce overheads and production costs to a minimum,” says Mehra. “Currently, the loss of energy is as high as 70%, compelling m anufacturers to enhance efficiency to address this problem.” Pressure is also mounting on manufacturers to provide life cycle cost (LCC) saving solutions, the report suggests. LCC plays a much bigger role in end users’ pump purchasing decisions than the initial purchase price. Since LCC includes the purchase, installing, operating, maintaining and disposing of the equipment, higher energy costs could weigh heavily with end users.
Valve market to reach US$53 billion The valve market will grow from sales of US$43 billion in 2007 to US$53 billion in 2010, says McIlvaine’s Industrial Valves World Markets report. The report suggests that growth will be fuelled by new applications and industrial expansion. Currently, the valve industry is highly fragmented, with the top 20 companies accounted for only 25% of sales and many small, highly specialised companies making up the rest.
KSB buys SA joint venture KSB has acquired its former joint venture partner’s 50% share in KSB Pumps (Pty) Ltd, the company’s South African base. The company transferred the operative business of KSB Pumps (SA) (Pty) Ltd. to a newly established subsidiary of that company, KSB Pumps and Valves (Pty) Ltd, based in Germiston, South Africa. KSB holds 74.9% of this subsidiary’s share capital. 25.1% of the new company’s shares are held by Medu Capital (Pty.) Ltd, and the participation of this South-African investment management company will improve KSB’s chances of securing government contracts, the company says. Contracts are preferentially awarded to companies supporting the government’s Black Economic Empowerment policy. KSB started business operations in South Africa in 1920 and established its own company there in 1959, in Germiston near Johannesburg. It has a staff of 320 that manufactures pumps for water, industrial and mining applications.
Iwaki America expands production capability Iwaki America has completed a renovation and expansion of its chemical process pump production facilities at its Holliston, Massachusetts, USA operation. These improvements
4
www.worldpumps.com
will nearly double the company’s CPI pump throughput capabilities, the company says. “The CPI moves are the first in a series of planned operational
improvements,“ said Peter Brule, the company’s engineering manager. “Next, industrial pump production capacity will be expanded followed by changes in the OEM product cells.”
Oil and gas is the largest application sector with 2006 sales of over US$7 billion, but this sector is undergoing substantial change, the report says. The rapid growth of liquefied natural gas (LNG) is presenting big opportunities for companies that can meet the extreme pressure and temperature demands. The environment also represents a continuing growth area for valve suppliers – especially the remediation of ground water, desalination of seawater, and the conventional treatment of drinking water.
Weir sells Glasgow base to Sulzer The Weir Group PLC is expected to sell its Glasgow, Scotland based business unit of Weir Pumps for £48 million. Weir Pumps manufactures custom-engineered pumps for the upstream oil and power generation markets. Under the terms being discussed, all 596 employees will transfer to Sulzer, which will retain a significant engineering, design and technical sales presence in addition to a spares and aftermarket manufacturing facility in Glasgow. The company warns, however, that significant operational redundancies related to the original equipment business are to be anticipated in the run up to the previously announced closure of the Cathcart facility in 2009. Appropriate retention incentives and redundancy packages will be offered to affected employees. “Weir Pumps’ business represents 8% of Weir Group revenue and a lower percentage of annual profits. The business competes in the global marketplace against manufacturers who have an established presence in low cost countries,” said Mark Selway, chief executive of The Weir Group PLC.
WORLD PUMPS March 2007