Decision Guides Help to Increase Market Share
Emerson has signed an agreement to purchase the Valves & Controls business of
Pentair for $3.15 billion. The acquisition is expected to close in the next four
to six months, subject to various regulatory approvals.
“This acquisition delivers on our strategic plan of investing in Automation
Solutions and in markets where we have a global leadership position and see
significant long-term growth opportunities,” said Chairman and Chief Executive
Officer David N. Farr. “By adding Pentair’s Valves & Controls leading
technologies and services to our already broad portfolio, we have positioned our
businesses to grow while continuing to provide our customers around the world
with more complete solutions to their toughest challenges.”
“The Pentair Valves & Controls business is a strong fit for us as they share
many of the same management principles that have defined success for Emerson
over the years such as global customer support, service, best cost sourcing and
manufacturing,” said Mike Train, Executive Vice President and Business Leader
for Emerson Automation Solutions. “In addition to adding great people and brands
to our business, it will allow us to expand our market position and create new
opportunities for growth, while also being able to offer our customers the most
complete valve solutions portfolio and most extensive service network in the
world.”
McIlvaine updates more than 50,000 valve forecasts continually and also provides
market share rankings based on the latest 12-month performance. See N028
Industrial Valves: World Market
Company Valve and Actuator Sales
$ Millions
General Performance
$ Millions
High Performance
$ Millions
High Performance Market Share
%
Pentair $2,100 600 1,500 4
Emerson $1,980 600 1,360 3
New Emerson $4,080 1,200 1,880 7
Cameron $1,520 200 1,320 3
Flowserve $1,470 400 1,070 2
Other $78,850 47,000 32,870 81
Total $90,000 50,000 40,000 100
The new Emerson will hardly be a player in the general performance valve market
with just a 2 percent market share. However, with a 7 percent market share in
high performance valves and sales which are twice that of its nearest
competitor, it will be exercising its “right to win” position. This position
could be substantially enhanced by the Decision Guide program initiated by
McIlvaine.
High performance valves have been defined by McIlvaine to include both severe
and critical service. Each needs to be purchased based on lowest total cost of
ownership (LTCO) and not on initial price. These high performance valves are
important elements in the Automation Solutions cited by Emerson as the target
market for the expanded company.
Automation Solutions requires process knowledge far beyond what is easily
acquired and understood. The supplier needs the knowledge to offer the system
and the end user needs the knowledge to justify its LTCO. McIlvaine is offering
Decision Guides to address this need. The guides cover all aspects of
coal-fired, gas turbine and reciprocating engine operation. Narrow guides in
specific subjects in oil gas such as molecular sieve switching valves and choke
valves are also kept current.
This approach is radically different than current practice and can best be
explained by an example. Emerson is pursuing a large multi-plant automation
project for a major utility. The success of the optimization depends on the
quick and precise reaction of many valves. The degree of success in the boiler
impacts a number of valve related decisions in the back end portion of the
upgrade. The utility has been using the McIlvaine Power Plant Air Quality
Decisions Guide (PPAQD). A series of five webinars including three already
conducted and two to be held in early September are helping the utility,
consultants and the suppliers maximize the value of the material in PPAQD. At
this point it looks as if the PPAQD will result in an approach which will save
over $200 million in capital costs.
There have been discussions with the executives of the utility as to why the
Decision Guide would be critical in determining the best options. There is
agreement that the relevant information particularly about total solutions is
doubling every few years. Conventional approaches to take advantage of the
voluminous data are clearly inadequate. The consultants and the utility
personnel both can take advantage of the Decision Guide.
Emerson can take advantage of this new route to market to ensure that end users
around the world understand the lowest total cost of ownership benefits. For
more information on Decision Guides click on Decision Guides. The upcoming
webinars are described at Hot Topic Hour Schedule and Recordings
Yes, Landfill Gas Engines Will Produce More Poison Ivy but also More Tomatoes
A New York Times article warns of the impending growth of poison ivy. Yes, but
this fertilization effect of CO2 has been put to good use by thousands of
greenhouses around the world. GE, Cummins and other engine manufacturers are
actively pursuing CHP projects which provide greenhouses with electricity, heat,
light and CO2. Is it better to increase the production of tomatoes or retard the
growth of poison ivy?
The Southcoast Air Quality Management District (SCAQMD) struggled with this
question in the recent analysis of the 1110.2 biogas emission amendment. The
question is whether landfill gas engines would be a better choice than just
flaring. The Beverly Hills estate owner who can easily buy whatever tomatoes are
desired but is struggling to keep poison ivy under control will have a
completely different value judgment than a starving child in Sudan. Should
SCAQMD prioritize the desires of its residents above those of the starving
people in the world? The answer is “Yes.” But this does not mean that every
government in the world should reflect the values of SCAQMD residents.
There is a broader implication which greatly affects the market for
reciprocating engines. These engines contribute to the increase of CO2 in the
world. A recent study by a number of collaborating universities now supports the
long held theory that the earth is growing greener. Other studies have estimated
that the increase in crop value is in the $billions and possibly even the
$trillions. Many engines are being purchased by developing countries to provide
critical power and, in turn, save lives and increase the welfare of the
residents.
Decisions about the environmental impacts of these initiatives are being made on
a simplistic basis. Engine manufacturers should support a more complex analysis
which better represents the true desires of citizens. The three key analysis
elements are (1) quality of life, (2) tribal values and (3) discounted future.
The evaluation should not be based on the standard life quantity guide but on
life quality. The highest honor gold medal goes to the soldiers who sacrificed
decades of life quantity for one heroic life quality moment.
The tribal value question is put to rest by the fact that no government provides
more than a tiny fraction of a percent of GDP for foreign aid. The SCAQMD biogas
analysis reflects the values of the district. It points out that the CO2 from
flaring and the biogas engine are the same but that organic emissions could be
higher with the engine option. Since the SCAQMD residents are the ones primarily
impacted by the organic emissions, there is a tribal consideration which is
contrasted to the CO2 which is global.
The analysis further points out that the potential lost electricity with the
flaring is not consequential because the electricity furnished in the district
is efficient and green. By contrast, the starving Sudanese child lives in a
district without any electricity. The potential to convert flared gas into
electricity has enormous benefits to the child and other residents of the
district.
The third element is the discount rate for future values. The parents of the
Sudanese child and the wealthy grandfather setting up trusts are discounting
future values at greatly different rates. The value of one more tomato today vs.
one 50 years from now to the wealthy grandchild and the Sudanese child is very
different. This discount rate is at the heart of the controversy between the
Chinese government and international environmentalists. China has a program
which will convert large amounts of coal to clean gas. Sinopec is building a $20
billion pipeline to distribute this gas throughout China. Many engines will be
required to drive the thousands of compressors in the pipeline. The gas will
replace solid fuels burned in many residences. China believes that this cheap
gas supply will result in eliminating the severe smog problem. The health of
Chinese citizens today is being prioritized over worldwide health consequences
fifty years from now.
There is no simplistic answer in choosing between poison ivy and tomatoes. The
world deserves the more complex analysis explained at Sustainability Universal
Rating System.
Details on the technical, commercial, and application information on the use of
engines for greenhouses, pipelines, compressors, data centers and wastewater
plants is available through a service described at GTRE Decisions.
The markets, regulations and competitive information is in a program described
at 59EI Gas Turbine and Combined Cycle Supplier Program
Utility E-Alert Tracks Billions of Dollars of New Coal-fired Power Plants on a
Weekly Basis
Here are some headlines from the Utility E-Alert.
UTILITY E-ALERT
#1287 – August 26, 2016
Table of Contents
COAL – US
• NIPSCO considering closing Coal-Fired Units
• NIPSCO to demolish Dean H. Mitchell Station in Gary, Indiana
• Montana City seeks to limit Water use to help Coal-fired Power Plant
• Four Coal Plants to stay Open and comply with EPA Regulations
• US DOE invests US$28 Million to advance Cleaner Fossil Fuel Power
• Mon Power and Potomac Edison invest in Environmental Controls at Harrison and
Fort Martin Power Stations
GASIFICATION
• Indiana Regulators approve Deal over Coal Gasification Power Plant
COAL – WORLD
• TaiPower's Linkou Ultrasupercritical Coal-fired Units under construction
• Walhi opposed to Bengkulu Coal-fired Thermal Power Plant
• Dubai invests in Clean Coal Project
• India asks Government-owned Power Plants to stop importing Coal
The 41F Utility E-Alert is issued weekly and covers the coal-fired projects,
regulations and other information important to the suppliers. It is $950/yr. but
is included in the $3020 42EI Utility Tracking System which has data on every
plant and project plus networking directories and many other features.
Upcoming Hot Topic Hours
DATE HOT TOPIC HOUR AND DECISION GUIDE SCHEDULE
The opportunity to interact on important issues
September 1, 2016
11:30am CDT PacifiCorp Webinar 4 on back end NOx removal - Review of options
from webinar 3 to determine suitability of catalytic filters, Sorbocal injection
for ABS control, H202 with SNCR, in duct catalyst, raising air heater
temperature and fan adjustments.
September 8, 2016
11:30am CDT PacifiCorp Webinar 5 on front end NOx reduction - Review of options
for NOx reduction including combustion modifications, reburn, SNCR, and
optimization with review of previous presentations of Emerson, Doosan, Siemens
and GE. A number of case histories, now being posted to PPAQD, will also be
reviewed. Summaries of phone calls to end users may also be included.
TBA
Markets Food - Analysis of 12 separate applications within food and beverage
with analysis of valve, pump, compressor, filter, analyzer and chemical options;
impact of new technologies such as forward osmosis.
TBA
Markets Municipal Wastewater - Quality of pumps, valves, filters, and analyzers
in Chinese and Asian plants; new pollutant challenges; water purification for
reuse.
TBA
Markets Mobile Emissions -Reduction in CO, VOCs, and particulate in fuels, oils,
and air used in on and off road vehicles; impact of RDE and failure of NOx traps
and the crisis in Europe created by the focus on clean diesel.
Click here to Register for the Webinars
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Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com