Fast-paced infrastructure development in processing and related industries is driving the growth of the Chinese market for positive displacement and centrifugal pumps, according to a recent report by Frost & Sullivan.
The research indicated that the market saw revenues of $5.06 billion in 2006 and is expected to reach $14.96 billion in 2013.
Demand is expected to increase in the pump manufacturer target markets of water and wastewater treatment, power generation, chemicals, petrochemicals, oil and gas, with wastewater treatment seeing the highest growth potential, according to the report.
“The government is investing large amounts of funds into water treatment in order to achieve the goal that the average concentrated sewage treatment must reach from 60 percent to 80 percent in 2010, to match the rate of urbanization,” said Frost & Sullivan Research Analyst Vickertal Chen. “The launch of a national key project named ‘South-to-North Water Diversion Project’ is also anticipated to boost revenues.”
Over the next five years, according to the report, 15 large-scale ethylene-related projects in the coastal areas and a natural gas transmission project are expected to boost demand for pumps within the chemical market.
Pump improvements will reduce the need for pump replacements and stricter controls in several industries may slow growth, the report noted.
The research also showed the tendency for domestic manufacturers to focus on the low-end market, leading to overcapacity, an unbalanced product mix and price wars caused by intense competition that will also detract from market growth.
“In order to improve their position in a highly price-sensitive market, most participants in the low-end market are providing extremely low prices which leave slim profit margins for manufacturers,” Chen said. “Such vicious price wars lead to lower revenues for the total market and diminishing product quality.”
To improve competition and market shares, Chen suggests that domestic manufacturers focus on emphasizing technological improvements and advanced manufacturing practices, as well as improving the product mix to gain access to the mid and high-end markets.(For more information, click here.)