EC rules, efficiency needs fuel flowmeter adoption
San Antonio, TX—Growing conformance with new European Commission (EC) rules and increasing demand for improved efficiency in the process industries are increasing adoption of flowmeters, according to recent research by Frost & Sullivan.
San Antonio, TX— Growing conformance with new European Commission (EC) rules and increasing demand for improved efficiency in the process industries are increasing adoption of flowmeters, according to recent research by Frost & Sullivan . The research firm adds that, aided by greater demand for more advanced and higher-priced flowmeter technology, this relatively mature $940.7 million market is projected to experience steady revenue growth for the next several years.
Frost & Sullivan add that various EC directives related to environmental issues and processes in the food and beverage and pharmaceuticals sectors are compelling companies to regulate production practices. Monitoring fluid flows not only ensures improved, more streamlined processes, but also reduces costs.
Savings have become even more important during the recent economic slowdown, and this has fueled demand for devices that reduce operating/installation costs. Consequently, demand for improved productivity through optimization of manufacturing processes is likely to push the flow sensing market to reach $1.13 billion by 2009.
'Supporting this growth potential are technological innovation and continuous product development in the flowmeter market,' says Mik Sabiers, Frost & Sullivan's research manager.
In addition, technological advances are underpinning a growing preference for intelligent instruments, which apart from measuring flow rate, can provide data on instrument performance. These devices use in-built microprocessors to decode the information and enable interpretation of many other variables. For example, smart multiphase flowmeters are being increasingly accepted in the oil and gas, food, and water industries.
'Customers are becoming more aware of these potentially significant cost savings, which could compensate for higher investments in more advanced instruments,' adds Sabiers. 'This should have a positive effect on future demand.'
Advanced technologies, including ultrasonic and Coriolis mass flowmeters, are gradually dislodging conventional flowmeters, such as electromagnetic, turbine and positive displacement. Features, such as accuracy, reliability and low maintenance of more advanced technologies, are driving adoption and are making these products the two fastest growing segments.
In 2002, ultrasonic held 7.7% of total market revenues and Coriolis mass held 15.5%. The strongest growth is expected for ultrasonic, which is expected to increase at a 7.2% compound annual growth rate during 2002-09, which is significantly above the market's 2.6% average rate.
Suppliers are also seeking to penetrate narrower markets or niche areas. This changing focus on applications is likely to provide participants with renewed growth prospects as they build replacements and upgrade programs. 'Specialist suppliers in a range of niche market sectors have managed to build strong customer bases,' adds Sabiers. 'These small suppliers are often focused on targeted applications in chosen industries, which tend to continue to invest in the technology.'
The flow sensors market is also finding important sources of demand in the replacement market. The large installed base of flow sensors in Europe provides continuous sales prospects because devices need periodic repair or upgrade. This is especially true in the chemicals, oil and gas, and power generation sectors, where failure to renew sensors may have serious safety implications.
However, the high potential for unit sales is not likely to drive profits. Intense competition in a market with more than 60 participants has sparked price wars, which is driving down profit margins. Competitive pressures are expected to continue to remain high as the leading suppliers look to enhance their overall positions.
In total, the top five market participants account for more than half of all revenues, a proportion that is increasing. Nevertheless, the scope for greater growth for these larger suppliers is expected to be more limited, unless they investigate alternative avenues, such as penetrating more specialized niches.
Overall, while there is expected to be a positive advance in many product sectors of the market, all suppliers will have to place greater attention to identifying and building on the opportunities available to remain effective competitors.
Control Engineering Daily News Desk
Jim Montague, news editor