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Weekly selected highlights in flow control, treatment and combustion from the many McIlvaine publications.
• Market Program based on Reliable Forecasts of Purchases by Each Customer
• Forecasting your Sales Opportunity for Each Customer, Large or Small
• Forecast Purchases at Each Individual Power Plant Unit
• Pump Forecasts for Many Thousands of Customers
• Top Five Semiconductor Manufacturers Purchase 40 Percent of the Combust, Flow and Treat Products
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Market Program based on Reliable Forecasts of Purchases by Each Customer

Reliable forecasts can be obtained for each of 50,000 purchasers of combust, flow and treat (CFT) products and services. The Total Available Market (TAM) forecasts for specific products e.g. valves, pumps, cartridges, treatment chemicals, membranes, dust bags etc. can be purchased for as little as $1 per prospect. The average ROI will be 200 to 1. This is based on a yearly opportunity of $200,000 an increase in market share of 0.5% and a profit margin of 10%. The ROI for the very largest customers will be 20,000 to 1 whereas the ROI for the small customers will be just 5 to 1.

A program starting with the prospects with the highest ROI can be progressively expanded to eventually cover all customers.

The purchase forecasts for all customers is the first step in a complete business program to address the sea change in CFT market. There will be a high ROI achieved with direct sales programs for larger prospects. Custom websites can easily be justified for top prospects

Details on this program are explained at www.mcilvainecompany.com
A series of webinars relative to the opportunity for specific CFT products will include a Valve webinar on June 20. You can register at Free Market Webinars
McIlvaine can recommend a progressive program starting with the prospects with the highest ROI for a specific product. For more information on this program contact Bob McIlvaine at
rmcilvaine@mcilvainecompany.com 847-784-0012
Forecasting your Sales Opportunity for Each Customer, Large or Small
Thanks to digital technology it is now economically possible to forecast the market opportunity for each potential customer for each type of combust, flow and treat product. Traditionally the market program has been based on sales leads. If the customer is interested in a general performance product such as small valves for a fresh water line, the order may be placed by a contractor and the lead time from project inception to sale could be a matter of weeks. The purchasing agent or project manager may be the sole decision maker. Here is how marketing programs are set up around sales leads.

High performance products such as a severe service valve or a cross flow membrane filter are purchased as a result of initiatives which will span months or years. There is often a preferred bidders list. Decisions are made based on total cost of ownership more than on initial price. Most purchases are to replace existing products or by owners who have products of this type in operation.
Some general performance products are now being purchased as if they were high performance. For example if a supplier of small fresh water valves offers a package which includes remote monitoring and replacement of all the valves in the corporation, his offering will need the time and scrutiny that high performance products receive.
For high performance products, the most valuable estimate is the yearly purchase opportunity for a product at each plant and for the total corporation. Since there may be 100,000 plants who are potential customers this would have been an impossible quest before the digital age. Now it is economically attractive to make these determinations. With the Industrial Internet of Wisdom and a number of services available from McIlvaine product forecasts can be made for each plant

McIlvaine has many market reports each of which projects revenues for each type of product in each industry. The purchases for the top 100 customers are also included. Details on each report are shown at http://home.mcilvainecompany.com/index.php/markets.
Forecasts for all the plants are created based on McIlvaine databases. Plant databases and corporate profiles as well as tracking systems for individual projects are included in a number of services described at http://home.mcilvainecompany.com/index.php/databases.
The ability to accurately forecast the opportunities for specific products is contingent on understanding the processes and potential changes to those processes. This data is extracted from Decision Systems at http://home.mcilvainecompany.com/index.php/decisions
It is possible to purchase just product forecasts for each plant without purchasing the support services. So there is an economical option for each combust, flow and treat supplier. Details are contained in the 5 step business program described at www.mcilvainecompany.com.
Forecast Purchases at Each Individual Power Plant Unit
It is now possible to obtain product forecasts for each potential power plant customer. These forecasts can become the foundation of a sales program. McIlvaine can provide forecasts for more than 20,000 large units and another 30,000 smaller utility and industrial units.
The power industry represents a large market for combust flow and treat (CFT) products and services. Coal fired power plants will be the largest purchasers but the gap is shrinking as gas turbine capacity grows. Nuclear plants will continue to rank below coal and gas.
The amount of CFT purchases by solar and wind generators will remain small even though the share of generation by these plants will be growing robustly. Geothermal and biomass are big purchasers of CFT products but their share of total generation will be small. Hydropower will remain a big market for pumps and valves but not for most other CFT products.
Between 2018 and 2021 the capacity of coal plants worldwide will grow from 2440 GW to 2600 GW. The average boiler size is 0.2 GW. There are 12,200 existing boilers. The average size of new boilers is 500 MW. So the number of boilers will grow by 320 during the next three years Each existing unit and details on the new boilers are provided in 42EI Utility Tracking System.
Nuclear capacity will grow from 433 GW in 2018 to 453 GW in 2021. The average reactor is approaching 1 GW and many sites have multiple reactors. So the number of units is less than 500 and the number of sites less than 300. Weekly details on these plants are included in 41F Utility E-Alert.
Gas turbine capacity will rise from 1670 GW in 2018 to 1890 GW in 2021. The average unit size is 0.1 GW resulting in 18,900 units in place by 2021 Data on all existing plants as well as new projects is included in
59EI Gas Turbine and Reciprocating Engine Supplier Program.
There are thousands of geothermal, biomass, biogas and hydro plants. Most are small. Each is tracked in
31I Renewable Energy Update and Projects.
The projected CFT product revenues for each type of generator are included in the market reports http://home.mcilvainecompany.com/index.php/markets
Innovations and insights to future revenues are included in Decision Systems
44I Coal Fired Power Plant Decisions and 59D Gas Turbine and Reciprocating Engine Decisions
This aggregation of services allows McIlvaine to cost effectively predict product purchases at each plant.
Operators of simple cycle and combined cycle gas turbine plants will spend $180 billion per year for hardware, consumables, instrumentation and services on an annual basis over the next 10 years.
The top 15 power companies will spend more than $750 million for gas measurement devices in 2022. This includes analyzers to measure CO, CO2, O2, NOx, NH3, SO2, SO3, mercury and dust. The requirements for mass measurement of dust are boosting the market because their cost is considerably greater than the previously required opacity monitors.
Five Companies will be Responsible for 39 Percent of the Combust, Flow and Treat Purchases in the Nuclear Power segment in 2018.
Global nuclear power generation is now predicted to grow by 2.3 percent per annum out to 2035. Over 90 percent of the combust, flow and treat expenditures will be made by fewer than 50 companies. Thirty-nine percent will be made by just three operators and one supplier.

Nuclear Power Plant Combust, Flow and Treat Purchases
2018 - $ millions
World EDF Bechtel KEPCO Exelon
Percent 100 20 10 5 4
Guide 1400 280 140 70 56
Control 2200 440 220 110 88
Measure 1200 240 120 60 48
Valves 2000 400 200 100 80
Macrofiltration (Belt Presses, Sand Filters) 200 40 20 10 8
Pumps 1100 220 110 55 44
Treatment Chemicals 1400 280 140 70 56
Sedimentation and Centrifugation 300 60 30 15 12
Variable Speed Drives and Motors 600 120 60 30 24
RO/UF/MF Cross Flow Membrane Systems 200 40 20 10 8
Air Purification and Protection 400 80 40 20 16
Total 11,000 2200 1100 550 440

Nuclear plants will spend $200 million for cross flow membranes. This represents 20 percent of the total membrane purchases by the power industry.
Most new coal fired plants will incorporate flue gas desulfurization. Many existing plants have FGD systems or will install them. So this is a big market for pumps, valves, controls, chemicals, nozzles, fans, packing, seals and other CFT products. The purchases are concentrated among a few large operators. Guodian and Shenhua are merging and will make 12 percent of global purchases FGD purchases.


FGD System, Component, Consumables and Repair Purchases in 2018
Company Country Rank % of Total Coal-fired FGD Purchases in 2018 FGD Purchases
($ millions)
AEP U.S. 9 1.1 209
BWE U.S. 14 0.6 114
Datang China 3 7 1,330
Duke U.S. 10 1 190
Enel Italy 13 1 190
Eskom South Africa 5 6 1,140
Guodian China 2 7.5 1,425
Huaneng China 1 9 1,710
Huadian China 6 6 1,140
J-Power Japan 16 0.5 95
National Thermal Power Corporation (NTPC) India 4 7 1,330
NRG U.S. 11 1 190
Shenhua China 7 4.5 855
Southern U.S. 12 1 190
Uniper Germany 15 0.6 114
Vietnam Power (EVN) Vietnam 8 2 380
Sub Total 55.8 10,602
Other 44.2 8,398
TOTAL 19,000

Forecasts can also be supplied for power plants at industrial sites.
Boilers at BASF Freeport Texas
Boiler # Fuel Size mm btu/hr Operating Hours Date Installed
B 20C Natural gas 325 8500 1991`
B2500 Natural gas 178 8592 2001
BX 5470 Natural gas 210 4350 1996
*H1 Reformer Natural gas/
Process gas 404 8000 1998
* SCR included on this reformer
There are nearly 30,000 industrial boilers in the U.S. However, there are only 350 plants with coal fired boilers and 2000 plants with large gas fired boilers. In the case of a chemical plant such as BASF Freeport, the total market for valves and pumps is large. The boilers just become one of a number of relevant processes within the plant. In Asia there are a large number of independent coal fired power plants operated in conjunction with mining, steel, and chemical products.
Setting up a program built around individual power plants.
The program can be structured to place larger effort on the plants with the greatest potential.


Maximum effort with custom websites can be set up for 2000 individual units at the top 20 purchasers with 50 percent of the potential. So this would be just 20 custom websites. There would be 200 direct sales programs covering corporations with 10,000 units representing 80 percent of the potential. Forecasts for 45,000 units would account for 95 percent of the potential and would be an evaluation tool for the general sales effort.
The forecasts for each individual plant will allow the sales team to effectively deploy resources and maximize sales.
Steps to a Program Based on Forecasts for Each Plant
Segment products in to two categories: High performance and general performance
Determine product revenue for each potential purchaser at each plant
Post the forecasts in the CRM System
Prioritize customers based on size of Serviceable Obtainable Market (SOM) and product category
Where the product is in the general performance category use the forecasts as an evaluation tool on a retrospective basis and to replace sales leads on a proactive basis.
Where the SOM is below a revenue size warranting direct sales the existing sales approach can be used.
For high performance products and for prospects with sizable SOM revenue potential initiate a 5 step program as explained at www.mcilvainecompany.com
Revise specific forecasts based on feedback from the sales personnel

This program can be initiated in a progressive cost effective manner. For more information on the utilization of individual boiler forecasts contact Bob McIlvaine at 847-784-0012 ext. 112 or rmcilvaine@mcilvainecompany.com
Pump Forecasts for Many Thousands of Customers
It is now economically beneficial to forecast pump purchases at many thousands of plants. Since the average industrial pump is replaced every 10 years and since repairs and service generate costs equal to 75 percent of the initial price over the 10 year period, the market for replacement pumps and repairs/service is seven times higher than the market for new pumps for new systems. Since most of the new systems are purchased by companies which already own pumps, the purchases by existing known companies represent 99 percent of the market.
The takeaway from these statistics is that 99 percent of the purchasers are already known and can be pursued based on detailed forecasts of their annual purchases. McIlvaine identifies each plant, the processes within that plant, the flow rates, and the annual purchases of new and replacement pumps as well as the potential for repairs and services.
The conventional way to pursue the market is through sales leads. However, there is a new approach. The Industrial Internet of Wisdom empowers IIoT and IIoT in turn enriches IIoW. The result is that an increasing percentage of pumps will be purchased based on a continuing lowest total cost of ownership evaluation. The sea change in the route to market will occur first for high performance pumps and for higher quantities. The recommendation is to set up parallel sales programs: one for high performance pumps and high volume sales, and one for general performance pumps and for small volumes of high performance pumps.
Both programs should take advantage of Advanced Forecasting. It is now possible to identify all the purchasers and predict 99 percent of the orders. The municipal wastewater industry can be used as an example.
BEWG owns a number of wastewater treatment plants, operates others and supplies waste treatment systems which include pumps. They are active in Singapore, Portugal and other countries. However, the bulk of their plants are in China. They will spend just under $20 million for pumps this year.
BEWG Pump Purchases - 2018 - $ millions
Total Centrifugal Diaphragm Reciprocating Rotary
New Pumps 1.8 1.3 0.2 0.1 0.2
Replacement Pumps 10.3 7.2 1.0 0.8 1.2
Repairs 7.7 5.4 0.8 0.6 0.9
Total 19.8 13.9 2.0 1.5 2.3

There are more than 90,000 municipal wastewater treatment plants worldwide including 16,000 in the U.S. There are 3500 wastewater treatment plants in the U.S. which spend more than $100,000 per year for pumps. Another 3500 spend more than $50,000 per year. The largest plants spend over $30 million per year each. California has a number of large wastewater treatment plants whose purchases range from $7 million per year to over $35 million.

Large California Wastewater Treatment Plant Pump Purchases - $ millions - 2018
All Pumps Centrifugal Diaphragm Reciprocating Rotary
Hyperion 35.2 24.7 3.5 2.8 4.2
L.A County 21.4 15.0 2.1 1.7 2.6
Fountain Valley 16.8 11.8 1.7 1.3 2.0
San Vincente 11.7 8.2 1.2 0.9 1.4
Sacramento 11.1 7.8 1.1 0.9 1.3
Northpoint 10.1 7.1 1.0 0.8 1.2
East Bay 8.6 6.0 0.9 0.7 1.0
San Diego 8.0 5.6 0.8 0.6 1.0
San Jose /Santa Clara 7.4 5.2 0.7 0.6 0.9
San Francisco 6.7
4.7 0.7 0.5 0.8
San Jose Creek West 6.7
4.7 0.7 0.5 0.8


There are 69,000 industrial plants in the U.S which are treating wastewater and then discharging it to lakes and streams. There are 400,000 plants treating wastewater worldwide. Some of these plants also treat municipal wastewater. ConAgra treats municipal wastewater in the small towns where it has food processing plants.
BASF has more than 100 plants worldwide. At the Ludwigshafen site it also treats industrial hazardous waste from nearby industries. It is a sizable purchaser of wastewater pumps at its U.S. plants.

BASF Wastewater Pump Purchases in the U.S. - 2018
City State Discharge Rate MGD Pump Expenditures
$
Geismar LA 9.3 623,000
Hannibal MO 1.9 127,000
Joliet IL 0.1 6,700
Freeport TX 5.4 361,800
Portsmouth VA 0.7 46,900
Wilmington NC 1.0 67,000
Beaumont TX 1.2 80,400
Wyandotte MI 24.1 1,614,000

Wastewater represents a small percentage of the total pump applications at BASF plants. Pump purchases for other processes can be determined based on the production and use of various fluids. For example acids are produced at some plants and then used in downstream processes. BASF Antwerp, Belgium is highly integrated with 50 individual production operations within the plant confines. BASF is a relatively small producer of chlorine. The Ludwigshafen plant produces 385,000 tons per year of chlorine. Dow, Germany produces 1.5 million tpy of chlorine. Its other chlorine operations were merged with Olin. This makes Olin the largest producer (5.6 million tpy). World production is now 70 million tpy.
Chlorine producers use 70 percent of the amount produced for chemical processes within the plant boundaries. The requirements for lined and exotic metal pumps can be determined from primary and secondary use of a specific acid at a specific plant. Wacker Chemie produces chlorine and then reuses each chlorine atom 15 times in downstream processes.
BASF has one professional interface for all global suppliers and has a suite of strategic procurement processes for all plants worldwide. This centralization of decision making is one of the factors in the sea change in the route to market.
Program for general performance pumps and for small volumes of high performance pumps
The conventional market program can continue to be used for this category of pumps. Advanced forecasting of purchases by individual customers can be used as an evaluation tool for the sales network and for the marketing program. In the past sales leads served this purpose. Since replacement pumps and repairs dominate the market the forecasts for individual plants and for individual sales territories are reliable and less expensive than sales leads.
Program for high performance pumps and high volume sales of general performance pumps.
High performance pumps by definition are purchased because of their lower total cost of ownership rather than initial price. The process to obtain Lowest Total Cost of Ownership Validation (LTCOV) or to be a most preferred supplier, or even a accepted supplier is lengthy and needs to be pursued with a continuous effort. It is therefore critical to apply Advanced Forecasting and assess the opportunity with each customer and then formulate a program which may include direct sales to the largest customers and use of representatives for the smaller opportunities. In either case the knowledge of the likely opportunity at each plant is important.
The forecasts including pump purchases by the largest customers are provided in N019 Pumps World Market
A 5 step business program including Advanced Forecasting for tens of thousands of purchasers is explained at www.mcilvainecompany.com.
Bob McIlvaine can answer your questions at 847-784-0012 ext 112 rmcilvaine@mcilvainecompany.com
Top Five Semiconductor Manufacturers Purchase 40 Percent of the Combust, Flow and Treat Products
The semiconductor industry is a large and growing market for combust, flow and treat (CFT) products. In 2019 the industry will spend $15.4 billion for these products. The top five purchasers will account for 40 percent of the total.

Four of the top five purchasers are integrated suppliers with both chip fabrication and proprietary designs. TSMC is not an integrated supplier but has a 56 percent share of the independent foundry market.
The processes used by these manufacturers include ultrapure water to wash chips, acids to etch them, cleanrooms with sophisticated HVAC systems to prevent particulate damage, wastewater treatment and air pollution control. There are many individual steps as a chip moves from tool to tool.
The top 100 purchasers represent over 80 percent of the market. These companies are centralizing decision making and purchasing. They are also remotely monitoring operations and utilizing total cost of ownership evaluations to make decisions.
Consolidation is continuing and it is likely that the top 100 purchasers will account for 90 percent of the market within a decade. These purchasers have plants throughout the world. Therefore market research based on the market size in China or the U.S. is not nearly as relevant as the market size for each of the top 100 purchasers.

Semiconductor Purchases - $ millions - 2019 - World
Company Total
Intel Samsung TSMC SK Hynix Micron
Cleanroom
Hardware 5500 935 715 605 330 275
Cleanroom
Consumables 2800 476 364 308 168 140
Ultrapure Water Systems 900 153 117 99 54 45
Scrubbers,
Oxidizers 240 41 31 26 14 12
Pumps 240 41 31 26 14 12
Valves 400 68 52 44 24 20
Cartridges 475 81 62 52 29 24
Other Filters,
Separators 380 65 49 42 23 19
Cross Flow
Membranes 250 43 33 28 15 13
Fans, Compressors 290 49 38 32 17 15
Treatment Chemicals 420 71 55 46 25 21
Guide 700 119 91 77 42 35
Control 600 102 78 66 36 30
Measure-
Liquids 140 24 18 15 8 7
Measure-
Gases 70 12 9 8 4 4
Measure -
Powders 40 7 5 4 2 2
Other 2,000 340 260 220 120 100
Total 15445 2627 2008 1698 925 774

The challenges to improve performance increase as line size decreases. Chips with 7nm line sizes are now in production and 5nm production is slated for 2020. This progression needs to be accompanied by similar advancement of CFT products. This means that suppliers must understand the processes generally but also the unique variations applied by individual purchasers.
This focus on individual purchasers and their unique processes dictates collaboration among disparate supplier divisions. ABB makes cleanroom robots as well as a range of guide, control and measurement products. Danaher has acquired Pall and Chemtreat to supplement its Hach operations and now can supply a range of filters, treatment chemicals and measurement equipment.
Company Total
Danaher Eaton Emerson ITW ABB Crane IDEX CECO
Cleanroom
Hardware 5500 x xx
Cleanroom
Consumables 2800 xxx
Ultrapure Water Systems 900 xxx
Scrubbers,
Oxidizers 240 xx
Pumps 240 x x xx xx x
Valves 400 x xxx x xx xx
Cartridges 475 xx xx x x
Other Filters,
Separators 380 xx xxx x x
Cross Flow
Membranes 250 xxx xx
Fans, Compressors 290 x
Treatment Chemicals 420 xx
Guide 700 x 0 xxx 0 xxx 0 0 xxx 0 0 0 0
Control 600 x xxx xxx xxx x x
Measure-
Liquids 140 xxx xxx x xx x
Measure-
Gases 70 xxx xxx x xx
Measure -
Powders 40 xx xxx x xx
Other 2,000 x x x xxx xxx x

x= some market share, xx= significant market share, xxx= market leader, 0 = Edge computer package opportunity
Danaher can use its strong position in cross flow membranes and measurement to increase penetration for its other products. The right treatment chemical in an accurately measured amount is necessary to keep the cross-flow membrane clean. Danaher how has all the products to provide the operational synergy to maximize membrane performance.
Emerson purchased Tyco Valves from Pentair. This expands its synergy between valves, controls and instrumentation.
Now with low cost sensors, wireless technology and capable partners, CFT suppliers can add remote monitoring and edge computer packages to their offerings and substantially increase revenues.
Multi product suppliers would be well served to determine the opportunity at each of the top semiconductor purchasers and then devise a strategy to encourage collaboration among divisions to pursue each. This represents a sea change in the route to market caused by international consolidation, IIoT and the Industrial Internet of Wisdom (IIoW) to empower IIoT.
The opportunity for controls and instrumentation for each large purchaser is included in N031 Industrial IOT and Remote O&M.
The potential for purchases of specific products such as valves, pumps, scrubbers, filters, etc. by each large semiconductor purchaser as well as purchasers in other industries is included in the individual market reports shown at http://home.mcilvainecompany.com/index.php/markets.
A step by step program to pursue large purchasers one at a time is outlined at www.mcilvainecompany.com
For more information contact Bob McIlvaine at rmcilvaine@mcilvainecompany.com 847-784-0012 ext. 112.