WELCOME
Weekly selected highlights in flow control, treatment and combustion from the
many McIlvaine publications.
Briefs
Coal Fired Market Webinar:
On April 25, we will discuss the market potential in coal fired power including
the big retrofit and replacement potential but also new construction. Countries
such as Vietnam and Turkey with substantial coal reserves will continue to build
new coal plants as the fastest route to low cost energy. The close ties between
China and Tukey and the extensive involvement of contractors such as Shanghai
Electric in Turkey will be probed. Turkey is committed to fully utilizing its
lignite reserves. This is
creating a big market for CFB boilers and dry scrubber systems.
To register for this webinar, click on
Free Market Webinars.
Fabric Filters:
Fabric filters are being used in many of the CFB boiler/dry scrubber
installations as per the Turkey example above.
Longking is the world leader in supply of dry scrubber baghouses.
This is a growing and increasingly significant market for suppliers of
bags and media. We are including this trend in our forecasts in
World
Fabric Filter & Elements Market.
We are also probing ways to tap into all the resources to make sure that
we keep up with all the international R&D and innovations. The Dry Scrubber
Users Group is one of these resources.
The 2017 conference was a great example of "Wise Crowd Decisions" and the
utilization of subject matter ultra-experts (SMUE's) and IIoT to provide
continuous reduction in the total cost of ownership of dry scrubber systems.
The 2018 meeting will be in Milwaukee from September 18-20.
You can register at
http://www.cvent.com/events/dsua-2018/event-summary-553ad88a648f4f48875e6c12748d8f15.aspx
Advanced Forecasting:
the next two articles are examples of
the McIlvaine Advanced Forecasting activities. The analysis of the liquid
measurement device market for BASF based on the annual production of each of 22
different chemicals is an initiative which is also applied to valves, pumps,
filters, scrubbers and all the combust, flow and treat markets.
The largest markets for all these products are with companies who already
utilize the products. This opens the door for a completely different approach to
marketing. Rather than functioning
around sales leads, suppliers can function around continuous campaigns with each
of the large purchasers. This is
accomplished with a 5-step business program explained at
www.mcilvainecompany.com
Largest Market for Liquid Measurement Instruments is at Existing Plants
The market for liquid measurement devices for new plants in industrial flow and
treat applications is less than 20 percent of the total when compared to
replacement, repair and instruments for upgrade projects due to expanded
utilization of IIoT at existing plants.
Since most new plants are built by companies with existing plants and
since there is increasing centralization and corporate decision making on
measurement devices nearly all purchases are determined by personnel at existing
plants.
Accurately predicting purchases at existing plants is much easier than
predicting purchases for new plants. It can be accomplished by determining the
flow rates per process, the number of instruments per process, instrument life
and annual repair opportunity.
McIlvaine has identified 1000 major corporations who will buy more than 75
percent of all the liquid measurement instrumentation.
The analysis is fairly simple for water and wastewater utilities, power
plants, pulp mills, steel mills and other industries with very similar
processes. Mining is somewhat more
difficult as each ore has to be analyzed separately.
Food and pharmaceutical plants provide a greater challenge. However,
accurate forecasts can be provided if additional segmentation is achieved.
The chemical industry is the most challenging.
BASF, for example produces 22 different chemicals with annual production
per chemical ranging from 200,000 tons per year to 2.6 million tons per year.
The following example shows the world market for industrial liquid measurement
and the predicted annual purchases by BASF.
This is segmented by process and then sub process.
Forecasts for Liquid Measurement
Devices in the Chemical Industry |
|
||||||||
Scope
|
Area
|
Process
|
|
Revenues $ millions |
|
||||
Annual
Produc-tion
1000 tons |
2019 |
2020 |
2021 |
2022 |
|||||
Total |
World |
All |
|
2154 |
2321 |
2502. |
2679. |
||
BASF |
Total |
All |
|
107 |
116 |
125 |
134 |
||
BASF |
Intake Water |
All |
|
6 |
7 |
8 |
8 |
||
BASF |
Cooling water |
All |
|
13 |
14 |
15 |
16 |
||
BASF |
Ultrapure water |
All |
|
22 |
23 |
25 |
27 |
||
BASF |
Wastewater |
All |
|
21 |
22 |
24 |
26 |
||
BASF |
Process Fluids-PF |
All |
|
45 |
49 |
53 |
56 |
||
BASF |
PF |
Acrylic Acid |
1510 |
Forecasts in
$ millions of replacement
liquid measurement
devices based on life of
instruments, # of instruments
per ton of product processed and
the annual tonnage
|
|
||||
BASF |
PF |
Ammonia |
1525 |
|
|||||
BASF |
PF |
Ethylene |
3480 |
|
|||||
BASF |
PF |
Isocyanates |
2610 |
|
|||||
BASF |
PF |
Alcohols |
1625 |
|
|||||
BASF |
PF |
Polyamide
Precursors |
910 |
|
|||||
BASF |
PF |
Propylene |
2610 |
|
|||||
BASF |
PF |
Sulfuric Acid |
900 |
|
|||||
Next year the chemical industry will spend $2.1 billion for liquid measurement
devices. BASF purchases are
projected at over $100 million.
This includes $45 million just for instrumentation for liquid processes. The
Mcilvaine Company has quantified the production of each of 22 chemicals. It also
has the regional production and production by plant.
However, since purchasing is becoming centralized the world totals are
most useful.
The process fluids measurement segment for BASF is calculated based on the
annual tonnage for each chemical.
This segmentation is useful due to the fact that many instruments for process
measurement are unique to the specific product being measured.
The IIoT and Remote O&M report has
the liquid measurement forecasts for each industry and each country.
It also includes guide, control and measurement purchases for each of the
largest 500 companies. More specific data can be delivered with additional
consulting.
For more information on IIoT & Remote O&M click on
N031 Industrial IOT and Remote O&M
For details on consulting contact Bob McIlvaine at
rmcilvaine@mcilvainecompany.com
847-784-0012 ext. 112.
Coal Fired Boiler Repair and Replace Market Greatly Exceeds Repair and Replace
Market for Other Generation Sources
Coal fired power capacity in the world will only be growing at one percent but
there is a huge replace and repair market which will continue to exceed that of
other generation sources.
Manufacturers of consumables will find that 99 percent of their market is at
existing plants while suppliers of valves, pumps and compressors will find that
the market at existing plants is ten times larger than for new plants.
This is based on a product life of 10 years.
So, 10 percent of the products will be replaced each year compared to an
equivalent of only one percent which will be sold for new plants.
World Coal Fired
Capacity MW |
||
Region |
CAGR % |
Replace/New |
Total |
1 |
10 |
Africa |
4 |
2.5 |
CIS |
2 |
5 |
East Asia |
3 |
3.3 |
Eastern Europe |
2 |
5 |
Middle East |
2 |
5 |
NAFTA |
(5) |
Replace |
South & Central America |
0 |
3.3 |
West Asia |
7 |
1.4 |
Western Europe |
(2) |
Replace |
This high ratio of replace to new requires an adjustment in sales strategy.
Most suppliers rely on sales leads rather than targeted efforts.
The replace market is predictable and needs to be addressed by targeted
efforts months in advance of any order. Most large coal fired boiler operators
are embracing IIoT and data analytics. This
gives them the ability to make purchases based on lowest total cost of
ownership. Fewer than 200 coal
fired utilities will buy most of the replacement equipment.
Profiles and plans for each of these utilities are included in the
42EI Utility Tracking System.
Utilities replace entire boiler systems rarely if ever. By contrast new dust
collector bags are purchased every two years and treatment chemicals are
purchased continuously. So, the
treatment chemicals market is 99 percent base on
existing plants and only one percent for new plants.
Replacement Opportunity Each
Year/First Year Sales Revenue |
|
Product |
|
Air Pollution Systems, Coal
Fired Boilers |
0.02 |
Valves, Pumps, Compressors |
10 |
Seals, Filter Bags, Nozzles |
50 |
Cartridges, Instruments |
99 |
Filter Cloths |
99 |
Chemicals |
99 |
The replacement market is much more predictable.
The market for air pollution control systems can vary by 1000 percent
from one year to the next whereas the market for consumables only fluctuates by
a few percent a year.
Order Volatility in % Year to
Year |
|
Product |
% |
Air Pollution Control Systems
|
1000 |
Coal Fired Boilers |
300 |
Valves, Pumps, Compressors |
7 |
Seals, Filter Bags, Nozzles |
3 |
Cartridges, Instruments |
3 |
Filter Cloths |
3 |
Chemicals |
3 |
The advent of IIoT and the power of the Industrial Internet of Wisdom to help
utilities make better choices along with the concentration of purchasing among
200 utilities is causing a sea change in the market.
The projects and profiles relative to the 200 top utilities is found in the
42EI Utility Tracking System
A 5-step business program to navigate the sea change is discussed at
www.mcilvainecompany.com
Market reports on valves, pumps, filters, chemicals, and instrumentation are
found at
http://home.mcilvainecompany.com/index.php/markets