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Weekly selected highlights in flow control, treatment and combustion from the many McIlvaine publications.
• Briefs
• Largest Market for Liquid Measurement Instruments is at Existing Plants
• Coal Fired Boiler Repair and Replace Market Greatly Exceeds Repair and Replace Market for Other Generation Sources
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 Turkey 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