Oil and gas producers are expected to continue to be the largest purchasers of valves during the period through 2012, with the market in this sector exceeding $10 billion in 2015. Growth will be driven by the substitution of unconventional sources for the traditional ones. For example, the valves required in the extraction of gas from the Marcellus shale involve those associated with large quantities of water used for fracturing. Additional valves are need in the systems treating the flowback wastewater.
McIlvaine says power will be the next largest sector. This industry is expected to spend $8 billion for valves in 2015. The construction of new coal-fired power plants in Asia will be the biggest growth factor. The recent nuclear disaster in Japan will have long-term effects, but will have a small impact on the 2015 market. The market for combined cycle gas turbine plant valves is expected to be strong in the United States during the next few years.
Municipal wastewater plants are expected to spend $4.4 billion for valves in 2015. McIlvaine says Asia will lead the way due to its large infrastructure program. Factors include the expansion of treatment facilities to people who presently have no sewer connections, upgrading of primary plants to add secondary treatment and the addition of technology to reduce nitrogen and phosphorous.
The only markets where the Americas and Europe will maintain an edge over Asia are pharmaceuticals and biotechnology, according to McIlvaine. Other high-technology applications, such as semiconductors and flat panel displays, will continue to be concentrated in Asia.
The top five valve companies account for 13 percent of the world market with average sales over $1 billion each. Sales for the next five companies range from $500 million to $800 million each. The sales drop rapidly moving down the rankings. Weir valve at #20 has sales of $270 million. At #30, ITT valve has sales of $130 million. At the bottom of the top 100 list is a company with just $17 million in valve revenues. Number 160 has sales of just $4 million.
The market remains relatively fractured with thousands of companies focusing on geographical, product, or application niches. Growth opportunities include the value added from making valves “smarter” to reduce process and maintenance costs, according to McIlvaine.
