Bi-weekly Webinars Continue with Semiconductor IIot Tomorrow
There is still time to register for our webinar tomorrow, July 19, 2017 at
Weekly IIoT Webinars.
Recorded webinars covering individual industries are part of a program to
forecast the market for IIoT and Remote O&M, but also to initiate a program to
pursue the 550 companies who buy the majority of the IIoT, combust, flow and
treat equipment and services. The webinar tomorrow will briefly cover the
broader IIoT initiative to monitor and control all the semiconductor equipment.
The majority of the time will be spent on the cleanrooms, HVAC, ultrapure water,
wastewater, and air pollution control operations. There will be special focus on
the pumps, valves, filters, scrubbers, treatment chemicals and sensors.
IIoT will be the catalyst of change in the route to market for component
suppliers. When every filter and valve is continuously monitored and its
performance compared to competitive components in operation in the system, a new
basis for purchasing decisions is created.
Most suppliers already have separate sales efforts for the large potential
purchasers. Since 60 percent of the products will be purchased by just 555
companies, suppliers can justify the prioritization of sales to this group.
McIlvaine has a program to identify the companies, projects, people, and the
ways not only to reach them, but to convince them.
N064 Air/Gas/Water/Fluid Treatment and Control: World Market analyses the market
for flow control and treatment at a high level. Since this market is now being
transformed by IIoT, this service is now available as part of N031 Industrial
IOT and Remote O&M.
Specific forecasts for purchases by the 555 companies of each product or service
are now included in the McIlvaine market report Markets.
The plants and projects for the 555 companies are reported in Databases
Contacts at those 550 plants are included in several ways including several
databases People
The systems to expand IIoW are shown in Decisions
A customized program can be provided which not only provides interconnection
between supplier and purchaser, but interconnection to other influencers and
interconnection among company employees.
View the recorded Webinars
The impact of IIoT and Remote O&M on each industry and each type of combust,
flow, and treat products is addressed in previous webinars which are posted on
youtube. Here are the links:
Gas Turbine, Reciprocating Engine IIoT and Remote O&M - https://youtu.be/1H_6Ak66rh0
Coal Fired Power IIoT and Remote O&M - https://youtu.be/9teajcQXsi4
Pump IIoT and Remote O&M - https://youtu.be/PVmyVBBLNOg
Industrial Valve IIoT & Remote O&M - https://youtu.be/Mi6-p88x9hc
Oil and Gas and Remote O&M - https://youtu.be/o7kJSXixFHs
Filtration and Separation IIoT and Remote O&M - https://youtu.be/-XqSwyQctos
Water & Wastewater IIoT and Remote O&M - https://youtu.be/AWB-vZIj5gk
Air Pollution Control - https://youtu.be/yTSatiu5oyY
Cleanroom - https://youtu.be/Xe_NYnLmmAA
Ultrapure Water - https://youtu.be/gRucY_BN47E
Treatment Chemicals - https://youtu.be/gRucY_BN47E
Mining - https://youtu.be/gRucY_BN47E
Chemical Manufacturing - https://youtu.be/gRucY_BN47E
Pharmaceutical Manufacturing - https://youtu.be/gRucY_BN47E
Identifying the Top Purchasers
Five hundred and fifty-five companies in 13 different industries will spend $240
billion or 60 percent of the total amount that will be spent in 2018 for flow
and treat products and services.
Industry No. Included
Total 555
Chemical 40
Electronics 15
Food 40
Metals 30
Mining 20
Oil and Gas 50
Pharmaceutical 30
Power 70
Pulp & Paper 50
Refinery 60
Stone 50
Wastewater 50
Water 50
Coal fired Power Plants - Pumps: Coal-fired plant operators will spend $1.5
billion for pumps each year for the next five years. The top five operators will
purchase over 36 percent of the total. The top 15 companies will spend $825
million/yr. This is the latest analysis from the McIlvaine Company in Pumps
World Market. The No. 4 purchaser, NTPC, and the No. 8 purchaser, Vietnam Power,
will be purchasing mostly for new facilities. Those utilities in China and
Africa will have a mix of purchases for new and existing facilities whereas the
operators in the U.S. and Europe will be spending mostly on repairs and
upgrades.
Company Country Rank Average Annual % of Total Coal-fired Pump Purchases Next 5
Years Average Annual Pump Purchases Next 5 Years
($ millions)
AEP U.S. 9 1.1 16.5
BWE U.S. 14 0.6 9
Datang China 3 7 105
Duke U.S. 10 1 15
Enel Italy 13 1 15
Eskom South Africa 5 6 90
Guodian China 2 7.5 112.5
Huaneng China 1 9 135
Huadian China 6 6 90
J-Power Japan 16 0.5 7.5
National Thermal Power Corporation (NTPC)
India 4 7 105
NRG U.S. 11 1 15
Shenhua China 7 4.5 67.5
Southern U.S. 12 1 15
Uniper Germany 15 0.6 9
Vietnam Power (EVN) Vietnam 8 2 30
Sub Total 55.8 837
Other 44.2 663
TOTAL 1500
The biggest expenditures will be made for boiler feedwater, cooling, FGD, and
wastewater. Chinese operators are investing in zero liquid discharge. This
process requires pumps in the stages preliminary to evaporation. Due to the lack
of water in arid Chinese areas, the plants are selecting dry cooling which does
not require pumps. Most new plants use ultra-supercritical technology. This
requires more expensive pumps to develop the high pressures.
Power plants are accelerating the IIoT transformation. Remote monitoring and
control will be common. Some pump companies are packaging pumps with software to
optimize operation. This promises to substantially increase the revenue
opportunity.
For more information on Pumps click on: N019 Pumps World Market
The sales of valves to the chemical industry in 2016 totaled $7 billion. The top
four chemical companies valve purchases totaled $386 million.
Number 1, BASF is the largest chemical producing company in the world with 2016
valve purchases of $126 million. The German company, headquartered in
Ludwigshafen, Germany is focused on industry grade chemicals used in the
automotive, construction, and pharmaceutical industries. The company is
investing heavily in Industry 4.0. As a result, it will be able to monitor the
valve performance at all its plants around the world. This will facilitate
determination of the valves and systems which provide the lowest total cost of
ownership. It has a system for vendor interaction and strategic procurement
powered by SAP Ariba. It is creating a center for expertise in Ludwigshafen
which guides the component choice at their plants around the world. The
magnitude of this effort was chronicled in three articles in Valve World last
year.
Number 2, Dow - When the merger is final Dow/Dupont will be the largest chemical
company in the world with valve purchases of close to $140 million. Dow Chemical
and DuPont said their merger's end date was being pushed back but added it was
still on track as DuPont moved forward with plans to divest assets, a condition
of European Union approval for the deal.
The companies now expect the deal to close in August 2017, after being delayed
by intense regulatory scrutiny. When the deal was first announced in December
2015, it was expected to close in the first half of 2016.
Number 3, Sinopec has total yearly valve purchases of close to $540 million.
However less than $91 million is generated in the chemical industry. The most
downstream of China's big three energy companies (alongside CNPC and CNOOC)
Sinopec is more a producer of petrochemicals, fuels, and lubricants than an
exploration and production company. It is the world's largest purchaser of flow
and treat equipment services.
In March 2017 Sinopec paid almost $1 billion for a 75 percent stake in Chevron
Corp's South African assets and its subsidiary in Botswana to secure its first
major refinery in Africa. Sinopec is Asia's largest oil refiner. The new assets
include a 100,000 barrel-per-day oil refinery in Cape Town, a lubricants plant
in Durban as well as 820 petrol stations and other oil storage facilities.
Sinopec Group's key business activities include: industrial investment and
investment management; the exploration, production, storage and transportation
(including pipeline transportation), marketing and comprehensive utilization of
oil and natural gas; the production, marketing, storage and transportation of
coal; oil refining; the storage, transportation, wholesale and retail of oil
products; the production, marketing, storage, transportation of petrochemicals,
natural gas chemicals, coal chemicals and other chemical products; the
exploration, design, consulting, construction and installation of petroleum and
petrochemical engineering projects.
Number 4, SABIC (also known as the Saudi Arabia Basic Industries Corporation) is
a chemical producing company in Saudi Arabia and is the largest company in the
Middle East. Valve purchases in 2016 were $70 million.
The company is currently the largest producer of polycarbonate and granular urea
and is the second largest producer of ethylene glycol in the world.
SABIC was founded by the Saudi royal family in 1976 as an oil refinery. The
creation of the company spurred the growth of the neighboring area transforming
Yanbu from a fishing village to what is now one of the biggest industrial cities
in the world.
The top 20 valve companies purchased 14.5 percent of the world's chemical valves
in 2016.
Top Ten Chemical Companies
Rank Company Valve Purchases
2016 - $ millions Percent of
Total
Valve Purchases
Cumulative
Total
1 BASF 126.2 1.8 1.8
2 Dow Chemical 98.2 1.4 3.2
3 Sinopec 91.2 1.3 4.5
4 SABIC 70.1 1.0 5.5
5 Formosa Plastics 56.1 0.8 6.3
6 Ineos 56.1 0.8 7.1
7 ExxonMobil 56.1 0.8 7.9
8 LyondellBasell Industries 56.1 0.8 8.7
9 Mitsubishi Chemical 49.1 0.7 9.4
10 DuPont 42.1 0.6 10
Chemical Companies - Ranking 11-20
Rank Company Valve Purchases
2016 - $ millions Percent of
Total
Valve Purchases
Cumulative
Total
11 LG Chem 35.1 0.5 0.5
12 Air Liquide 35.1 0.5 1.0
13 Linde 35.1 0.5 1.5
14 AkzoNobel 35.1 0.5 2.0
15 Toray Industries 35.1 0.5 2.5
16 Evonik Industries 28.0 0.4 2.9
17 PPG Industries 28.0 0.4 3.3
18 Braskem 28.0 0.4 3.7
19 Yara 28.0 0.4 4.1
20 Covestro 28.0 0.4 4.5
The top 200 companies purchased 39 percent of the world's chemical valves in
2016.
Rank Valve Purchases
2015 - $ millions Percent of
Total
Valve Purchases
Cumulative
Total
1-10 701 10 10
11-20 315 4.5 14.5
21-30 280 4.0 18.5
31-40 210 3.0 21.5
41-50 140 2.0 23.5
51-100 491 7.1 30.6
101-200 603 8.6 39.2
For the large international valve suppliers these 200 companies represent a big
market and one less likely to be made unattractive by local competition. The
number of decision makers at these companies is small enough that most sales
activity can be with direct employees and not agents.
Valve companies can address the new marketing environment with the following
initiatives:
• Meet global sourcing with global sales. For a particular project the plant
which will use the valves may be in one location. The decision makers in the
operating company may be in a different location. The architect engineer and EPC
may also be located elsewhere. The valve supplier can interconnect all the sales
and application engineering people in a manner to insure the maximum sales
opportunity.
• The availability of lowest total cost of ownership data will challenge both
end user and supplier to take advantage of it. In a large chemical plant with
many processes and thousands of valves the challenge to understand the
implications will be substantial despite the best analytics.
• There will be too much available information for generalization. There will be
an evolution toward niche experts within both the supplier company and chemical
manufacturer.
• Some of this niche expertise will be provided by both large consulting
companies and independent experts who will work with both suppliers and owners.
• Valve companies will need to determine the right mix between in-house
expertise and paid outside expertise. Large valve companies may be pleasantly
surprised regarding the in-house expertise which is available or can be
developed.
• This understanding of processes and the lowest total cost of ownership product
for each requirement within the process is what McIlvaine calls the Industrial
Internet of Wisdom (IIoW). Those valve companies which can best leverage IIoW
will be the most successful.
• Unique collaboration strategies will be available to valve suppliers. Smart
valves can incorporate sensors and controls designed by the valve supplier or
they can be supplied in collaboration with a controls supplier.
• To address global sourcing for all the valves for a plant from one source, the
valve supplier can either be the main supplier and include valves from his
competitors or he can be just one of the suppliers.
The new marketing environment for valves in the chemical industry offers big
opportunities for those valve companies who best anticipate the rapid changes
taking place.
Bob McIlvaine
President
847-784-0012 ext. 112
www.mcilvainecompany.com