Filtration Market Rankings Change with Two Acquisitions
Two significant mergers in the filtration industry have taken place in the last
month. Lydall has acquired Gutsche
and Parker Hannifin has acquired Clarcor. Lydall’s acquisition is relatively
small but their increase in market share is large.
Parker Hannifin’s acquisition is large but their increase in market share
is relatively small. One reason for
this is that Lydall is nearer the beginning of the supply chain where total
revenues are less. The second
reason is that Lydall has focused on a niche market, whereas the Parker
acquisition is much broader based.
Lydall, Inc. has entered an agreement to acquire MGF Gutsche GmbH & Co. KG (“Gutsche”)
for approximately $58 million in cash.
The business consists of operations in Germany and China. Gutsche’s
fiscal year ends on December 31, 2016 and revenue and EBITDA for these
operations are forecasted by Gutsche to be approximately $50 million and $6
million, respectively.
Lydall has recently acquired Texcel and they purchased Andrew several years ago.
These previous acquisitions plus Gutsche are providing Lydall with a market
share approaching 20 percent in high performance non-woven media for fabric
filters.
Fabric Filter Bag and Media
Revenues 2016
$ Millions |
|
Bags |
3,000 |
Media |
1,680 |
High Performance Non-Woven Media |
800 |
Lydall High Performance
Non-Woven Media |
90-120 |
Gutsche High Performance
Non-Woven Media |
45 |
Total High Performance Non-Woven
Media |
135-165 |
Lydall % of High Performance
Non-Woven Media |
17-20% |
Other competitors in the high performance non-woven area for fabric filters are
BWF, Xiamen Savings and Testori. An increasing number of Asian suppliers have
also entered the market.
Parker Hannifin will acquire Clarcor for $4.3 billion. Clarcor is a diversified
manufacturer of mobile, industrial and environmental filtration products with
annual sales of approximately $1.4 billion and 6000 employees worldwide. Clarcor
brands include Clarcor, Baldwin, Fuel Manager, PECOFacet, Airguard, Altair, BHA,
Clearcurrent, Clark Filter, Hastings, United Air Specialists, Keddeg and
Purolator. The acquisition of Clarcor adds a broad range of industrial air and
liquid filtration products and technologies to Parker Hannifin’s filtration
portfolio. With approximately 80 percent of Clarcor’s revenue generated through
aftermarket sales, the acquisition is expected to significantly increase
recurring revenue in Parker Hannifin’s Filtration Group.
Filtration Revenues 2016 $
millions |
|||
Segment |
Total Filtration |
Mobile, Hydraulic
Compressed Air |
Industrial/
Environmental |
Clarcor Revenue 2015 |
1400 |
590 |
810 |
Parker Filtration and Engineered
Materials |
2500 |
2300 |
200 |
Total Filtration |
3900 |
2890 |
1010 |
Market Share |
3% |
6% |
2% |
Gas Turbine Inlet Air |
100 |
|
100 |
Gas Turbine Market Share |
18% |
|
18% |
Process Liquid Filtration |
100 |
|
100 |
Market Share |
2% |
|
2% |
The combined company has full portfolios in some segments of filtration and
partial in others and is not a player in many segments.
Parker Clarcor Combination |
||
Filter Type |
Portfolio Coverage |
Market Ranking |
Fuel Filters - Mobile |
100% |
High |
Oil Filters - Mobile |
75% |
High |
Air Filters - Mobile |
75% |
High |
Hydraulic Filters - Industrial |
100% |
High |
Industrial HVAC |
100% |
High |
Compressed Air |
100% |
High |
Gas Turbine Inlet Air |
100% |
High |
Natural Gas Coalescer |
100% |
Medium |
Cartridge Filters for Process
Liquids and Water |
75% |
Low |
Dust Collector Bags |
100% |
High |
Catalytic Treatment |
10% |
Low |
Scrubbing and Acid Gas Removal |
0 |
Low |
Cross Flow Membranes |
0 |
Low |
Sedimentation and Centrifugation |
0 |
Low |
Liquid Macrofiltration |
0 |
Low |
The new Parker will be a leader in dust collector bags.
They buy the roll goods from companies such as Lydall.
Clarcor has moved vertically to manufacture media for HVAC but is a small
player in roll goods manufacturing.
Parker has expanded and is a major player in filter elements. It is not
competing in system work except in some narrow areas such as gas turbine inlet
filtration. However, because of the
fractured nature of the filtration industry, it is a market leader in an
expanded number of segments thanks to this acquisition.
The market shares of suppliers are continually tracked in:
2ABC
Scrubber/Adsorber/Biofilter Knowledge Systems
3ABC FGD and
DeNOx Knowledge Systems
4ABC
Electrostatic Precipitator Knowledge Systems
N007 Thermal
Catalytic World Air Pollution Markets
N024
Cartridge Filters: World Market
N006 Liquid
Filtration and Media World Markets
N005
Sedimentation and Centrifugation World Markets
N022 Air
Filtration and Purification World Market
N064
Air/Gas/Water/Fluid Treatment and Control: World Market
Coalescer Supplier Program
http://home.mcilvainecompany.com/index.php/markets/28-energy/1124-n065.
Connecting Things, People, Intelligence, Niche Experts and Wise Crowds for Power
Industry Decisions
GE, Emerson, Siemens and many other companies are creating software to connect
things. There is a large potential
for this in power generation. This
potential was reflected in a number of papers and displays at the recent
PowerGen Asia exhibition.
“We believe the success of our power generation customers will be more and more
supported by the intelligent use of data generated by ever increasing
connectivity of devices. The integration of those data with people expertise and
knowledge will create additional services in a cycle delivering unprecedented
knowledge of the behavior and potential of their assets,” said Marco Sanguineti,
Head of Technology for ABB’s Power Generation business unit.
McIlvaine recently conducted nine hours of webinars focused on a problem for one
utility. Presentations by Siemens,
GE and Emerson addressed the optimization route to a lowest total cost of
ownership (TCO) solution but the participants (wise crowd) concluded that
incorporating innovative new technologies and components would be equally
important in a system which would provide the lowest TCO.
Companies such as ABB are integrating the data from many thousands of sensors
which are monitoring thousands of pumps, valves, mixers, fans, compressors,
burners, conveyors, filters, etc.
In a large utility with multiple plants, there are hundreds of individuals with
specialized knowledge that may be valuable in a specific lowest TCO
determination. As a result, there are likely to be many thousands of people who
can contribute to the decision-making process. How do you take advantage of all
this niche expertise?
Jeff Immelt of GE observed that the power industry needs to adopt the “hurry up”
attitude of Silicon Valley in developing new technology.
McIlvaine believes that this “hurry up” mode can best be achieved by
decision systems which interconnect machines with people, intelligent databases
and systems, niche experts and wise crowds.
Systems have been created which provide the four knowledge needs:
Alerts, Answers, Analysis and Advancement. The newest addition has been
to supplement periodic webinars with very focused LinkedIn discussion groups.
These groups facilitate “wise crowd” decisions by addressing all the
criteria needed for a “wise crowd” to function properly.
Wise Crowd Criteria and LinkedIn Role
Criteria |
Description |
LinkedIn role |
|
Diversity of Opinion |
Each person should have private
information. |
Small LinkedIn discussion groups
lend themselves to extracting
the niche expertise and unique
ideas. |
|
Independence |
People's opinions aren't
determined by the opinions of
those around them. |
The small LinkedIn discussion
groups are not subject to the
peer pressure of the large
webinars.
McIlvaine editors then
integrate the conclusions
reached in the discussion
groups. |
|
Decentralization |
People can specialize and draw
on local knowledge. |
The small LinkedIn discussion
group is the ideal way to
extract the local knowledge and
benefit from niche expert
participation. |
|
Aggregation |
Some mechanism exists for
turning private judgments into a
collective decision. |
The LinkedIn discussion groups
are a bridge between analyses
and webinars which result in the
collective decisions. |
|
The LinkedIn discussion groups are an important part of the entire
interconnection system between:
·
Separate individuals and divisions within a supplier conglomerate
·
Separate individuals and divisions within a utility conglomerate
·
Separate individuals and divisions within a consulting company
·
The final interconnection between all the many individuals in each of the above
Supplier knowledge can be transmitted through individuals who are encouraged by
management to focus on becoming more expert.
These individuals will be “rainmakers.”
If they demonstrate that their company has the knowledge and the products
to provide the lowest TCO, they can be very effective in boosting sales.
The same is true of consulting companies. However, the challenge will be to
offer just enough expertise to achieve the rainmaking without reducing the
potential actual consulting revenues.
The LinkedIn discussion groups are incorporated in three Decision Guides:
4S01 Berkshire Hathaway Energy Supplier and Utility Connect
44I
Coal fired Power Plant Decisions (formerly
PPAQD)
59D Gas
Turbine and Reciprocating Engine Decisions
Who Should Purchase GE Water?
Hundreds of companies in the water business as well as private investors will be
considering the purchase of GE Water. The first conclusion in a cursory review
will be that this is a group of individual companies which operate independently
and are not necessarily in the same markets.
There are companies selling systems and major components, small
components, instruments and consumables such as treatment chemicals.
The management of these businesses is challenging because of their diversity.
The way you manage an effort to supply $50 cartridges is totally
different than the way you manage an effort to sell knowledge which is bundled
into the price of formulated chemicals. The management of a company which sells
complete zero liquid discharge (ZLD) systems requires skills not required in
some of the other businesses.
Danaher has been mentioned in the media as a potential purchaser.
Their recent Pall acquisition has made Danaher a major player in
pharmaceutical and chemical industry filtration.
GE Water is focused more on power, oil and gas, refining and to a lesser
degree on various water-related purification.
So, the industry alignment is complimentary.
Xylem has grown the test segment of its transport, treat and test efforts. Its
instrumentation or test business is mostly in municipal water and wastewater and
compliments the GE instrumentation applications.
Other water chemical formulators such as Ecolab and Solenis and basic water
chemical suppliers such BASF and Kemira are also potential purchasers.
Any of the large companies in the air, water, liquid, gas flow and treat
businesses with an industry total revenue of $323 billion are potential
purchasers.
Air/Water/Gas, Liquid Flow and Treat Revenues
$ Millions |
||||||
Product |
Power |
Fluid |
Municipal |
Industrial and Other |
Residential/ |
Total |
Flow (Water) |
||||||
Pumps |
3 |
8 |
14 |
20 |
8 |
53 |
Valves |
7 |
13 |
7 |
39 |
20 |
86 |
Subtotal |
10 |
21 |
21 |
59 |
28 |
139 |
Liquid Treatment |
||||||
Cartridge |
0 |
7 |
1 |
6 |
7 |
21 |
Sedimentation/ Centrifugation |
1 |
0 |
2 |
5 |
0 |
8 |
Cross Flow Membranes |
2 |
0 |
4 |
3 |
1 |
10 |
Macrofiltration |
1 |
0 |
2 |
4 |
0 |
7 |
Subtotal |
4 |
7 |
9 |
18 |
8 |
46 |
Oxidation and Destruction (Water) |
||||||
Biological/Oxidation/Destruction |
1 |
0 |
8 |
4 |
2 |
15 |
Water/Wastewater Chemicals |
5 |
0 |
9 |
10 |
0 |
24 |
Subtotal |
6 |
0 |
17 |
14 |
2 |
39 |
Indoor Air Treatment |
||||||
Filtration/Purification |
1 |
2 |
0 |
3 |
5* |
11 |
Stack Gas Treatment and Flow |
||||||
Fabric Filter |
1 |
0 |
0 |
5 |
0 |
6 |
Scrubber |
0 |
0 |
1 |
5 |
0 |
6 |
Precipitator |
7 |
0 |
0 |
1 |
0 |
8 |
FGD |
7 |
0 |
0 |
0 |
0 |
7 |
DeNOx |
6 |
2 |
0 |
1 |
0 |
9 |
Thermal/Catalytic |
0 |
10 |
0 |
2 |
0 |
12 |
Fans and Compressors |
4 |
2 |
2 |
12 |
5 |
25 |
Subtotal |
25 |
14 |
3 |
26 |
5 |
73 |
Monitoring |
||||||
Air |
1 |
1 |
1 |
1 |
3 |
7 |
Water |
1 |
1 |
3 |
2 |
1 |
8 |
Subtotal |
2 |
2 |
4 |
3 |
4 |
15 |
Total |
|
|
|
|
|
323 |
* includes vacuum bags and face masks as well as HVAC
GE Water Coverage |
|
The GE water treatment chemicals business is of greater value as the percentage
reduction of end user knowledge to total knowledge continues to shrink.
The formulated chemicals business is more problem solving with the right
combination rather than sale of a product.
Knowledge of the applications is critical.
With the development of the smart sensors, the formulators can become
remote operators or continuous advisors rather than just offering periodic
advice as part of the chemical sale. Will potential investors fully recognize
this opportunity? If they do,
the potential buyer will be one who can best leverage this very large potential.
The expertise in the use of chemicals along with filtration, valves,
pumps, etc. will all create a very large remote advice, operations and
preventive maintenance revenue opportunity.
The various relevant market reports for an evaluation of this opportunity are
shown at:
Markets
Here are some Headlines from the Utility E-Alert – January 13, 2017
UTILITY E-ALERT
#1305 – January 13, 2017
COAL – US
·
The Environmental Protection Agency (EPA) is proposing to approve a State
Implementation Plan (SIP) revision submitted by the State of Maryland
·
Basin Electric will be required to install NOx Controls on Three
Plants in Wyoming
·
Court of Appeals reaffirms Clean Air Act Requirements in DTE Case
COAL – WORLD
·
NLC India may acquire Ind-Barath Coal-fired Power Plant in Odisha
·
India will produce One Billion Tons of Coal per Year by 2020
·
Bataan Coal-fired Power Plant’s operation stopped amid complaints of Ash Fall
·
Pushing for Coal-fired Power Plant in Mackay, Whitsunday, Isaac Region,
Australia
·
ABB supplies Balance-of-Plant Electricals for large Indian Coal-fired Power
Plants
·
Anjana Portland Cement commissions Coal-fired Power Plant
·
Fortum to supply Low-NOx Combustion Technology for Krakow Coal-fired
Power Plant
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.
44I: Coal Fired Power Plant Decisions
$1600.00/year (Additional Users $120.00/year)
This service provides a connection for suppliers and coal-fired power plant
operators around the world. It is
free of charge to any coal-fired utility employee.
It is designed to help owners make lowest cost of ownership decisions.
The service covers combustion systems and components, flow control and treatment
and air, water and solid waste pollution control.
It addresses the four knowledge needs:
Alerts, Answers, Analysis, Advancement.
Alerts: Six alerts and newsletters
are included. The latest entries in
the intelligence system are easily accessed.
Daily entries in LinkedIn discussion groups are also available.
Answers: The intelligence system
includes case histories, product information, regulatory analyses and all the
past newsletters dating back to 1999 (over 1000 newsletters).
Hundreds of hours of recorded webinars provide graphic as well as text
answers.
Analysis: Upcoming webinars, the
newsletters, white papers in the intelligence systems and detailed discussions
in the LinkedIn groups provide analytical data.
Focus on seeking the lowest total cost of ownership is one of the most
valuable aspects of the service.
Advancement: The extensive webinar
library and intelligence system provide the material for tailored training
programs. If fills the needs of the
trainee but also senior people who just want to keep up with the latest
developments.
Click Here
for more information.
Bob McIlvaine
President
847-784-0012 ext. 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com