China’s control valve market expected to grow nearly 11% annually

Dedham, MA—China’s control valve market is expected to grow at an almost 11% compound annual growth rate (CAGR) during the next five years from $212 million in 2003 to more than $350 million in 2008 according to a new study, “Control Valve Outlook for China,” by ARC Advisory Group.

By Control Engineering Staff October 5, 2004

Dedham, MA— For control valve suppliers, China is presently the only nation delivering double-digit growth. China’s control valve market is expected to grow at an almost 11% compound annual growth rate (CAGR) during the next five years from $212 million in 2003 to more than $350 million in 2008 according to a new study, “Control Valve Outlook for China,” by ARC Advisory Group .

As new investments continue pouring into China’s core process industry sectors, the market offers excellent short- and long-term growth potential. Local and global manufacturers are building production facilities in all of China’s vertical industries. “These facilities provide cheap labor for export requirements and a local facility to take advantage of exploding local demand for a wide range of products, created by growing disposable incomes in China’s large population. Both global and homegrown suppliers see tremendous opportunities in China, making the market intensely competitive,” says David Clayton, ARC senior analyst and the study’s principal author.

ARC adds that, as China continues to become a global market economy synonymous with low-cost manufacturing, control valve suppliers world are increasing efforts to gain access to the country’s huge potential. Most control valve suppliers investing in China also are thinking beyond the short-term opportunity of obtaining low-cost labor. Despite concerns about intellectual property protection, fair business practices, and regulatory mechanisms, some suppliers are pushing to set up technology transfer alliances, joint ventures, and wholly owned subsidiaries in China.

For instance, many new power plants, coupled with an up-grade/modernization of older plants, are accelerating demand for control valves in China. Demand for electric power continues to grow as the country’s economy and manufacturing industries prosper. These investments will continue to take place in infrastructure development, while growing environmental concerns will drive investments in plant upgrades and life-extension projects.

In addition, China’s power industry reforms of 2002 and the recommendations of the 2000-2010 Strategy Plan of the State Council to invest in electricity generation to meet the country’s economic development requirements are pushing growth in the nation’s electric power industry. Based on its strategy plan, the Chinese government has approved 30 new electric power projects that will add 22 Giga Watts to the country’s generating capacity. China’s industries consume nearly 3/4 of electric power presently generated.

Also, China’s electric power industry has many thermal power plants, accounting for roughly 3/4 of the country’s power capacity. Many of the country’s thermal power plants use outdated technology and require improvement. ARC adds there’s a growing realization in China that adopting new technologies and improving plant efficiency is an efficient way to reduce capital expenditures, and this also is creating opportunities for control valve suppliers.

For more information, visit www.arcweb.com/res/cvc .

Control Engineering Daily News DeskJim Montague, news editorjmontague@reedbusiness.com