Sales of medium-voltage drives in the Chinese market are forecast to grow at an average of 16.6 percent per year from 2010 to 2015, according to IMS Research.

(Although the company also reports that the low voltage drives market in China is cooling off.)

Wilmer Zhou, senior analyst, comments, “The market for medium-voltage motor drives is closely related to large projects and capital investment. As the Chinese government tries to transform the economic growth model from investment to consumption, the investment in mines, oil and gas fields and infrastructure expansion will continue, as will energy-saving renovations in factories, which will help to maintain the steady growth of the market for medium-voltage motor drives.”

The Chinese market for medium-voltage motor drives continued to grow steadily in 2011, increasing 15.8 percent to nearly $700 million, because most industries continued to invest steadily in “green” products. Growth will slow slightly in 2012, as municipality spending and investments are slightly lower in 2011 and 2012.

“In China, users of medium-voltage motor drives have the backing often of being in strong, state-owned groups. These key industries are dominated by the Government, and procurement has always been heavily tinged by politics. Suppliers with good government relationships and those with the backing of state-owned groups have more opportunities in the market”, added Zhou.

Overall, the leading suppliers LD-Harvest, Siemens and Hiconics are capturing a greater share of the market share while the smaller suppliers are holding or losing market share. Siemens and LD-Harvest, the market leaders, each accounted for an estimated 15 to 17 percent of total 2011 revenues. With an aggressive market strategy, Hiconics is estimated to have increased its market share to 11.5 percent in 2011.

For small companies looking to enter the medium-voltage drive market the three largest barriers to entry are: having to bid at an unreasonably low price, extended payment terms, and no service fees. However, the higher profit margin in high-end markets (mining hoists, traction, rolling mills, and applications with high power rating) is attracting new suppliers. There are just over 30 suppliers to the market for medium-voltage motor drives in China. Supply is very concentrated, with the top three suppliers accounting for an estimated 45 percent of the total revenues in 2011, and the top 10 suppliers accounting for 77 percent.

IMS Research forecasts that growth from 2013 to 2015 will ramp up. The reasons for this are that investment into infrastructure is expected to come back after a short downturn in 2012, the number of retrofit projects for power saving will increase, and there will be increased installation of high-efficiency motors.

According to IMS Research, the Chinese market for low voltage motor drives slowed considerably in 2011 from an abnormally high 2010. Revenues from motor drives (excluding software and services) are projected to grow at a compound annual growth rate (CAGR) of 13.7 percent from 2010 to 2015.

The total Chinese market for low-voltage AC & DC motor drives (including software and services) was estimated at $2.68 billion in 2010.

“In the first half of 2011, the markets for low-voltage drives were still growing strongly. In the second half of 2011, as the Chinese Government tightened monetary policies and imposed strict lending conditions; this caused delays in numerous large projects, such as high-speed railways, city metros, highways, and factory renovation projects. These policies are also causing financial strain for both end users and machine builders”, said a company spokesperson.

"In June 2011, the market went into a precipitous decline. The bad news first came from local small and medium machine builders in South and East China; many reported no new orders during the second half of the year and many small machine builders went bankrupt and closed. The low-voltage motor drive market has been more affected than that for the medium-voltage drives, because of its greater dependence on machine builders. Nevertheless, with $3.1 billion in revenues in 2011, China still accounted for 25 percent of the world market for low-voltage motor drives."

The company says that ABB and Siemens are the market leaders in the Chinese low-voltage motor-drive market in 2011, with 16 percent and 13 percent share respectively. Market leadership is concentrated, as the top five suppliers accounted for nearly 46 percent of the total. However, there are many other suppliers, each with less than 1 percent of the total revenues.

Growth in the Chinese market will continue, because of implementation of policies regarding motor efficiency and energy-saving renovations in various industries. But market growth will be at a lower rate than in the past few years as investment is reduced in the near future, with concerns over high inflation in China.

The market for industrial networking is still strong according to a new report from IMS Research, an independent provider of market research and consultancy. An estimated 31 million new fieldbus and Ethernet nodes were installed worldwide in 2011; this number is forecast to grow by an average of 10% a year, to just over 45 million new connected nodes in 2015.

The report, “The World Market for Industrial Networking – 2011 Edition”, forecasts that, in EMEA and the Americas, new connected nodes will grow fastest in servo and inverter drives. Their grow rate will be 11.8% a year, resulting in 3.5 million inverter drives and 0.8 million servo drives being connected to a network in 2015.

“These new network nodes will grow so fast because of the high growth in shipments of servo and inverter drives” explains Graham Brown, a market analyst. “Drive shipments are growing quickly in all regions, although the industry sectors creating this growth differ by drive type and region. The adoption of medium-voltage drives, for example, is growing in the oil and gas industry; growth in shipments of servo drives is in the machine-tool industry.”

While shipment growth is a key factor, IMS Research is also seeing a steady increase in the percentage of drives that are network-enabled and connected. The current focus on improving energy efficiency in factories is largely due to the potential reduction in running costs it offers; this may also be legislated in the coming years. Networked drives offer an effective means of improving overall factory efficiency;  the number of new networked drives will likely increase by a substantial amount if such legislation is introduced. However, this is not likely to happen before 2015.

Many more networked drives are forecast to be shipped in Asia Pacific, partly because of many new greenfield projects. IMS Research projects that there will be about 4.3 million new servo and inverter drives networked in this region; equating to a growth rate of well over 15% a year, significantly above the world average rate.

“This is not surprising.” commented Brown. “Since 2009, several countries in Asia, especially China, have enjoyed strong economic growth. Heavy spending on industrial and infrastructure projects means that markets for several industrial products, particularly operator terminals and industrial PCs, are also growing quickly at over 14% a year. This suggests that the strong growth already seen in automation and in turn industrial networking in Asia Pacific is likely to continue.”

Growth in the Brazilian medium voltage drives market will outpace that of the Chinese market by 2% over the next three years, with revenue growth forecast at 18.5% annually in Brazil from 2011 to 2014, according to two new studies by IMS Research.

The two markets are vastly different in size, as the Chinese market represents 28% of the global consumption of drives compared with Brazil’s 3% share. High growth in Brazil is predominately driven by oil & gas and mining expansion, as well as projects for infrastructure improvement. Brazil’s state-run energy company’s plan to achieve daily production of 500,000 barrels of oil from the Tupi field discovered off the coast of Brazil by 2020 is one of the many projects propelling growth.

Increasingly, the Brazilian market is dependent on China’s demand for iron concentrate and crude petroleum, as China tops Brazil’s export countries. China has also increased its foreign direct investment in Brazil, with totals reaching almost $10 billion in 2010 and 2011, focused largely on the oil & gas and mining sectors.

Analyst Michelle Figgs explains, “With China’s need for raw materials fueling sales of medium voltage drives in Brazil, high forecasted growth for this market will depend in part on China’s future economic health. The good news for drives suppliers is the International Monetary Fund’s predictions include growth of China’s GDP to remain higher than any other country during the next few years, with economic expansion forecast at 9.4% in 2011 and 8.9% in 2012.”

Unlike Brazil, growth in the Chinese medium voltage drives market is slowing. Since June 2011, the Chinese Government has tightened monetary policies on bank loans, which has held up many large projects, such as high speed railways, city metros, highways, and factory renovation projects. Both end users and machine builders are facing financial strain from these policies as investments in many industries slowed quickly.

Still, growth in the Chinese market will remain strong due to implementation of policies regarding motor efficiency and continued  government support of energy -saving renovations in various industries including mining, metals, and oil & gas. Also, resumed investments are expected by the end of 2012 for  large scale projects, particularly those involving high speed railways, city metros, nuclear power stations and water conservancy. Average annual revenue growth in the Chinese market for medium voltage drives is forecast at 16.6% from 2010 to 2015.

Despite the outlook for the Photo Voltaic (PV) manufacturing equipment market remaining bleak in 2012, a new report from IMS Research claims that there could be a 20GW opportunity for the upgrade or replacement of existing capacity over the next 4 years.

Revenue declines of over 65% are forecast for the PV manufacturing equipment market in 2012. However, there may be a bright spot: aging equipment requiring upgrade or complete replacement is where the majority of equipment revenues will come from in 2012. The research report found that this could provide a 20 GW opportunity for equipment suppliers, generating some $25 billion in revenues during the period.

Ingot, wafer, cell and module makers are all placing less importance on expanding production, and are instead focusing on increasing end-product quality and overall efficiencies. Utilization rates are at an all-time low and the current lull in new demand and capacity across the supply chain will provide a potential opportunity for PV makers to gain market share longer-term through upgrading equipment now.

A company representative said, “The inevitable market shake-out that will see less competitive product makers fall by the wayside, will stimulate further demand for equipment as existing manufacturing capacity goes offline. Manufacturing equipment companies that stand to benefit most are those that have a clear equipment upgrade strategy available to their customers. Furthermore, companies that will resist the shake-out best will be those who can go through these equipment upgrades with the least disruption, readying themselves for the time when end-demand does ultimately pick-up.”

Use of Ethernet-based technologies in industrial communications will grow faster than use of fieldbus, especially in the Asia-Pacific region; according to IMS Research. This is largely driven by the need to improve efficiency as currency and wage pressures sound warning bells, threatening the cost advantage that has fueled the meteoric growth of manufacturing in the region. The company says that  worldwide growth in the installation of new Ethernet based nodes was forecast to be 13% CAGR from 2010 to 2015; regional growth rates were 11% in EMEA, 10.4% in the Americas, 18.6% in Asia Pacific.

John Morse, company representative, said “...the rate of growth seems to be gathering pace in the recovery from the 2008/9 recession. The Asia-Pacific growth rate is high despite the pressure on local manufacturing costs from increasing wages in the growing economies of Asia, most notably China. In addition, the demand for products from both America and Europe is currently slowing, adding an additional threat to the economies of scale needed to maintain profitability.”

Morse added “The market in Japan is somewhat different and has been much slower to adopt Ethernet-based communication technologies in industry. Even there, this is changing with the introduction of CC-Link IE, a Gigabit technology form Mitsubishi Electric; and with extensive promotion by other organizations including ODVA and Profibus International promoting Ethernet/IP and PROFINET respectively”.

According to a recent report from IMS Research, pumping applications account for the majority of the global medium voltage motor control centers market. From an industry perspective, this market is heavily concentrated in the oil & gas and mining sectors, which account for more than half of total revenues in 2010. Other notable industries in this market included chemicals, commercial HVAC, power generation, pulp & paper and water & waste-water. Together, these sectors contributed another 26% of market revenues during the year. Highest growth forecasts are projected for the oil & gas and mining segments of this market from 2010 to 2015, largely due to high commodity prices that are expected to persist.

The global market for medium voltage motor control centers was worth more than $140 million in 2010, with more than 5,300 units shipped during the year. It was a recovery year following a dismal 2009, albeit as slow one. The US market comprised more than 60% of the global market during the year, while Canada accounted for nearly 20% of total revenues. The markets in EMEA and in Asia Pacific were much smaller, together comprising only 13% of total market revenues in 2010.

The main reason for the market’s concentration in North America stems from the fact that US end-users have a different approach to systems engineering. In the US, for example, much of the engineering expertise at many OEMs and end-users continues to be downsized, and companies increasingly rely on system engineering services from some of the larger industrial automation suppliers such as ABB, Eaton, Rockwell Automation, Schneider Electric and Siemens, who carry-in their own MCC solutions.

Outside of the US, the most common approach to starting and stopping medium voltage motors is to use vacuum breaker based medium voltage switchgear, normally designed and installed by a systems integrator, not one of the larger automation suppliers.

Process Engineers have a wide choice of technologies and products at their disposal for custody transfer flow measurement, a transaction involving transporting physical substance from one operator. Newer flowmeter technologies such as coriolis and ultrasonic offer increased reliability, reduced pressure drop, and high accuracy. At the same time, flowmeter suppliers are making improvements in the performance of meters using more established technologies. Turbine flowmeters, for example, are being made with stronger bearings, offering longer life.

Paul Everett at IMS Research comments, “differential pressure (DP) flowmeters appear to be holding their own. DP flowmeters still have the largest installed base of any type of flowmeter, and customers appreciate the meters versatility to measure liquid, gas, and steam flows. Manufacturers have been very diligent in researching and developing technological improvements in their products”.

There are several flowmeter technologies available today; some are well established, whereas others are emerging. In its latest flowmeter report, IMS Research confirms coriolis flowmeters steady hold on the custody transfer market. Everett continues, “Coriolis meters are gaining industry approval for custody transfer of natural gas. In addition, several European standards organizations include coriolis meters on their list of meters approved for custody transfer. There is also a significant trend occuring in the production and use of ultrasonic flowmeters making the custody transfer market one to watch”.

Ultrasonic flowmeters used in custody transfer are growing at a faster rate than any other flowmeter type available today. Despite the rapid growth, differential pressure flowmeters still account for the largest share of a custody transfer, estimated to be worth some $500 million in 2010.

Until 2009, Asia Pacific was still the smallest regional DCS (Distributed Control Systems) market, but it has grown quickly in the last few years, particularly in China and India. Although DCS revenues in EMEA and the Americas fell in the 2009 recession, the market in Asia Pacific still managed to continue to grow, despite a decline in Japan.  In this market, much of the revenues from Asia can be attributed to DCS hardware bought for greenfield projects, such as for addressing the energy and infrastructure needs of a growing population with more disposable income, and of continued urbanization in India and China.

An Analyst at IMS Research explains “Governments have been addressing the needs of the population with investment in various large-scale projects designed to provide more power and energy. This will be reflected in the above-average growth in DCS product revenues in the petrochemical, oil & gas, and power industries of the region. Plans in Asia Pacific to expand or install nuclear power capacity were much less affected than those of other parts of the world, by 2011’s Fukushima disaster in Japan. With higher disposable incomes, the demand for processed food and drink is projected to increase; thus sales of DCS for food and beverage processing equipment are also projected to grow at an above average rate. The investment in China is centered on its 12th Five Year-Plan, which addresses the growing need to shift China’s dependency on export to the development of an internal market.  In 2013, revenues in China from DCS products are projected to higher than those in Japan.”

The world market for hydraulic components used in industrial applications grew 25% to reach $7.9 billion in 2010 as almost two thirds of revenues lost during the downturn in 2009 were recovered. This strong growth carried over into 2011, and the latest indications are that growth of 13% will ensure global revenues reach almost $9 billion by the end of the year representing a return to 2008 levels. However, while overall revenues may have returned to familiar levels, the proportion of the market accounted for by each major region continues to change significantly.

As of 2008, EMEA represented over 40% of the industrial market for hydraulic components, and estimated to be $3.6B, 10% larger than the Asia Pacific market. After the 2009 market decline and subsequent recovery in 2010, the sustained momentum of Chinese industry has effectively offset the 40% contractions seen in Japan. Asia Pacific accounts now for almost 35% of global revenues. This represented a market shift of five percent in two years.

It may not last.

Analyst Robert Carter of IMS Research says, “In 2010, EMEA was still the largest market for industrial hydraulic components. However, sustained recovery of the European market in 2011, combined with high demand from within Middle Eastern oil, gas and mining sectors after 2012, will add significant growth stimulus to the EMEA market, and slow the rate at which Asia increases global share.”