Asia-Pacific to become largest flowmeter market in 2013

From 2011 to 2017, Asia-Pacific is also forecast to be the fastest-expanding region for flowmeter sales with a compound annual growth rate (CAGR) of 10.5%. See chart.

07/17/2013


IMS Research (acquired by IHS, Inc.)The Asia-Pacific region this year will become the world’s largest market for flowmeters with sales revenue of $1.7 billion, according to IMS Research, now part of IHS Inc.

From 2011 to 2017, Asia-Pacific is also forecast to be the fastest-expanding region for flowmeter sales with a compound annual growth rate (CAGR) of 10.5%. This high growth can be attributed to greenfield investment, together with an increasing need for greater flow-measurement accuracy.

Growth drivers

“China and India in 2013 will continue their decade-long effort to invest in infrastructure to address the needs of their growing population and rising energy requirements,” said Kiran Patel, process instrumentation and control analyst at IHS. “Capital expenditures in the oil and gas, chemical and power, and refining and petrochemical industries in these countries will drive demand for process instrumentation and measuring devices, including flowmeters.”

Many of the factors that are driving revenue growth for flowmeters in China and India are also evident globally.

 “With a growing focus on environmental conservation, the monitoring of greenhouse gas emissions is increasingly important as businesses are keen to portray themselves as being green,” Patel said. “Another progressively important application is custody transfer. In the oil and gas industry, for instance, rising energy costs have driven the need for greater flow-measurement accuracy given that small percentage errors can result in significant costs.”

Cheap labor vs. flowmeters—and the price of quality

While China historically has had an abundance of human resources for low-skilled jobs, labor costs are rising and young people overall are choosing to pursue higher education, likely leading to the reduction in supply of cheap, low-skilled labor in the country. Such constraints in the labor force have affected process facilities in particular, resulting in a lack of technical, hands-on expertise at plant sites because low-skilled staff for the most part has been employed.

To help fill the gap, businesses are utilizing so-called smart flowmeters, which not only are easier to use and maintain but also provide online diagnostics if required. Still, these smart flowmeters come at a price premium—something that businesses are not always able or willing to pay. Instead, companies resort to using mechanical flowmeters—among the easiest to duplicate, with an increasing number of Asian manufacturers making the machines at low cost, often compromising quality.

And while local end-user industries with limited regional reach are most likely to invest in such products, typical process facilities tend to be managed by global players whose corporate image is paramount. Here reputations are at stake and large corporations cannot be seen to be using low-quality products that could affect production and efficiency or pose a safety risk to operators.

In such applications or scenarios, it is to the long-term advantage of manufacturers to use highly accurate flowmeter types, such as Coriolis, thermal mass and ultrasonic. IHS believes that these markets will experience growth rates of 16.0%, 14.8%, and 12.3%, respectively, from 2011 through 2017.

Asia presents rich opportunities

Emerging Asian economies present an attractive destination for established flowmeter suppliers to set up manufacturing and sales bases.

Here they will come across companies with varying attitudes to pricing, with some happily settling for low-cost products from local suppliers, ultimately sacrificing quality. Because flowmeter products are generally viewed as commodity items by these types of end-users, it is unlikely that major flowmeter and instrumentation suppliers will gain an advantage by selling to this market, which would entail a loss of profit margin for their more sophisticated product offerings.

But as China and India begin to realize the benefits of investing in more efficient flowmeters, these more advanced products are sure to drive growth of the flowmeter market in the region.

Source: IHS, Inc.

- Edited by Control Engineering, Consulting-Specifying Engineer, and Plant Engineering, part of CFE Media.

See more from IMS Research.

 



No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
Control Engineering Leaders Under 40 identifies and gives recognition to young engineers who...
Learn more about methods used to ensure that the integration between the safety system and the process control...
Adding industrial toughness and reliability to Ethernet eGuide
Technological advances like multiple-in-multiple-out (MIMO) transmitting and receiving
Big plans for small nuclear reactors: Simpler, safer control designs; Smarter manufacturing; Industrial cloud; Mobile HMI; Controls convergence
Virtualization advice: 4 ways splitting servers can help manufacturing; Efficient motion controls; Fill the brain drain; Learn from the HART Plant of the Year
Two sides to process safety: Combining human and technical factors in your program; Preparing HMI graphics for migrations; Mechatronics and safety; Engineers' Choice Awards
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
News and comments from Control Engineering process industries editor, Peter Welander.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
Anthony Baker is a fictitious aggregation of experts from Callisto Integration, providing manufacturing consulting and systems integration.
Integrator Guide

Integrator Guide

Search the online Automation Integrator Guide
 

Create New Listing

Visit the System Integrators page to view past winners of Control Engineering's System Integrator of the Year Award and learn how to enter the competition. You will also find more information on system integrators and Control System Integrators Association.

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.