The industrial valve industry has been experiencing a healthy recovery from the economic downturn of 2007–2008 with signs of growth in demand expected to continue for years to come, according to recent industry forecasts. This trend is particularly true for North America, where valve demand is projected to outpace the global average as industry shipments continue to increase.
According to World Industrial Valves, a new study from The Freedonia Group, Inc., global demand for industrial valves is forecast to increase 5.4 percent per year through 2015 to $93.5 billion. The study shows gains will be driven by continuing robust growth in the Asia/Pacific region, as well as strong recovery in the United States and West European markets from a weak 2010 base. Valve demand in Japan and Western Europe will also recover from recent declines, but advances will continue to considerably lag the world average through 2015.
For the third year in a row, shipments for the U.S. and Canadian industrial valve industry will grow, rising to about $4 billion in 2012, according to the Valve Manufacturers Association (VMA). That’s a rise of about 2.2 percent from 2011 levels of $3.915 billion and equal to the industry’s 10-year peak in 2008. The figures were released as part of VMA’s annual market forecast.
“Although the rise is slight compared to some year-to-year increases early in this decade, the fact that we witnessed three years of growth through a difficult economy shows how strong the valve industry is,” said VMA Chairman, Bruce Broxterman, president of Richards Industries, in a prepared statement. “We expect the gains to continue over the next few years.”
Like all manufacturing industries, valves saw a decline at one point during the recent world economic woes, dropping about 5 percent in 2009. However, shipments have been rising steadily since then, according to VMA.
The VMA believes one factor that will contribute to growth in 2012 is a rise in domestic shipments, which have remained about the same during the last few years. Meanwhile, the association predicts exports of valves will again grow, with a forecast of more than $790 million for 2012.
The projected growth for valve shipments in the industry for 2012 will occur across the entire range of end-users with most industries expected to gain slightly in total dollar shipments of valves, the VMA forecast shows.
Growth by Sector
The Freedonia study predicts the oil and gas industry will see strong growth in valve demand, with increasing offshore-, shale- and tar-sand-related exploration activities helping boost sales of higher-end products. Among the countries that will record healthy increases in the unconventional oil and gas sector are Brazil, Canada, Nigeria, and the U.S. Freedonia says the nuclear power market for valves will see weak gains in the developed world in the aftermath of the 2011 Fukushima disaster in Japan. Weakness in the nuclear power-generation sector will be offset by increasing valve sales to coal-fired and combined-cycle natural gas power plants.
Despite a predicted weakness, there is some movement on the nuclear front. For example, Virginia-based Curtiss-Wright Flow Control Company, a manufacturer of valves, pumps, electronics and related products for the commercial nuclear power industry, recently announced its business unit Enertech and Chalmers & Kubeck Inc. have signed an exclusive agreement to collaborate in providing integrated services and life-cycle management of specialized, critical components to the nuclear power industry. The alliance is intended to leverage Enertech’s nuclear quality assurance program for components in safety-related applications.
Valve Shipment Highlights
Along with its annual market forecast for valve shipments, the Valve Manufacturers Association (VMA) released historical data on past valve shipments by product category and total shipments, as well as its annual breakdown of valve shipments by end-user markets. A few highlights include:
Shipments by Valve Categories (2002-2011) – In 2011, automated valves accounted for the biggest share among valve types ($1.2 billion), followed by ball valves ($718 million), and gate, globe and check valves ($577 million).
Total Individual Valve Shipments Over the Past 10 Years – Valve shipments in 2011 at $3.915 billion were the strongest they’ve been during the past decade except during their peak in 2008 at $4.0 billion in sales. In 2001, valve shipments were about $3.1 billion.
Distribution Forecast of End-Users in the 2011 Valve Market – Of the 15 markets tracked by VMA in 2011, Water & Wastewater had the largest share at about 18 percent, followed by Chemical (17 percent), Petroleum Production and Petroleum Refining (each at about 12 percent), and Power Generation (11 percent).
Automatic to Outpace Conventional
According to Freedonia, the global market for automatic valves will outpace that for conventional valves, due to the continuing efforts of process manufacturers to improve operational efficiencies. The strongest gains will be registered in sales of separately sold automatic actuators, which are used together with standard valves to allow for automated valve functions, and are less expensive than automatic control and regulator valves with actuators pre-installed.
The study shows conventional valves will still account for 54 percent of world valve demand in 2015, with suppliers benefiting from the lower cost of these products relative to highly engineered automatic valves.
Control Valve Growth in India
One country poised for growth in the control valve market is India. The overall robust market gains in the Asia/Pacific region that Freedonia predicts could be, in part, due to India’s booming process control industry. India’s export revenues of control valves are growing in double digits, a trend that will gain further momentum as process industries continue to grow there, according to recent research from the ARC Advisory Group (ARC).
India is seeing process industries, such as chemical, oil and gas, power, refining, and others that extensively use control valves, expanding. As demand grows, global competitors such as Azbil, CCI, Emerson, Flowserve, and others have established facilities for manufacturing, engineering, sourcing, and marketing of control valves in India, ARC reports. These and other control valves supplier companies are competing with domestic suppliers, such as Instrumentation Limited and MIL Controls.
India now produces a range of valves including special-purpose valves, such as severe-service valves conforming to global standards, factors which ARC says can set the country up to emerge as a leading manufacturer and exporter of control valves. ARC says because India’s economy is driven by domestic consumer demand, recession is less likely and suppliers of control valves should maintain steady growth.
Also in Asia, it was recently reported that Abahsain Group and Flowserve inaugurated a state-of-the-art, 55,000 square-foot valve manufacturing plant and training center at Dammam’s Second Industrial City in the Eastern Province of Saudi Arabia. According to Arab News, in 2011 the joint venture manufactured its first large-bore control valves to be completely assembled and tested in Saudi Arabia.?
Amy W. Richardson is the managing ?editor of Flow Control magazine. Contact her at [email protected].
