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MESSAGE
MESSAGE
It is a matter of great pleasure and pride to write this message for “INDIA CHEM rdGUJARAT 2013” 3 International Exhibition and Conference on Specialty Chemicals,
Fine Chemicals, Agrochemicals, Dyes and Colorants scheduled from October 24-26,
2013 at Mahatma Mandir, Gandhinagar, Gujarat.
I am grateful to Department of Chemicals and Petrochemicals, Government of India,
Government of Gujarat and iNDEXTb for their involvement and support in bringing
this event to a stage where we have large participation from the Indian and Foreign
industry.
I am sure “INDIA CHEM Gujarat 2013” will provide an excellent platform for
business-to-business contacts and help exhibiting companies to network with their
prospective buyers. We are expecting Buyers from more than 40 countries and this
would lead to productive interactions with Indian Chemical manufacturers keen to
boost their exports.
I wish all the exhibitors and visitors of INDIA CHEM Gujarat 2013 a fruitful
participation.
Dr A.Didar Singh
Secretary General
FICCI
MESSAGE
It is a matter of great pleasure and pride to write this message for “INDIA CHEM rdGUJARAT 2013” 3 International Exhibition and Conference on Specialty Chemicals,
Fine Chemicals, Agrochemicals, Dyes and Colorants scheduled from October 24-26,
2013 at Mahatma Mandir, Gandhinagar, Gujarat.
I am grateful to Department of Chemicals and Petrochemicals, Government of India,
Government of Gujarat and iNDEXTb for their involvement and support in bringing
this event to a stage where we have large participation from the Indian and Foreign
industry.
I am sure “INDIA CHEM Gujarat 2013” will provide an excellent platform for
business-to-business contacts and help exhibiting companies to network with their
prospective buyers. We are expecting Buyers from more than 40 countries and this
would lead to productive interactions with Indian Chemical manufacturers keen to
boost their exports.
I wish all the exhibitors and visitors of INDIA CHEM Gujarat 2013 a fruitful
participation.
Dr A.Didar Singh
Secretary General
FICCI
MESSAGE
It is great pleasure for me to send this message for the international conference on
pumps, valves & process equipments i.e. "Pumps, Valves & Process Equipments
2013" on 24 October in Gandhinagar, Gujarat.
I am confident that this conference "Pumps, Valves & Process Equipments 2013" will
provide an excellent platform for business-to-business contacts, brainstorming,
knowledge update, understanding the market overview, knowing the requirements
of the end users, updating on the technological up gradation and help delegates to
network with their prospective buyers and will create the right atmosphere for
exchange of ideas. We have invited key professionals as the Speakers, and their
deliberations would lead to productive interactions with Indian pumps and valves
manufacturers keen to boost their market.
The research report and background paper "Strategic Report on Pumps, Valves &
Process Equipments" by FICCI and TSMG being released during the conference will
definitely add value to the industry.
I wish all the participants of "Pumps, Valves & Process Equipments 2013" a fruitful
participation.
Aseem Srivastav
Chairman-
Organsing Committee (PVPE Expo 2013)
MESSAGE
It is great pleasure for me to send this message for the international conference on
pumps, valves & process equipments i.e. "Pumps, Valves & Process Equipments
2013" on 24 October in Gandhinagar, Gujarat.
I am confident that this conference "Pumps, Valves & Process Equipments 2013" will
provide an excellent platform for business-to-business contacts, brainstorming,
knowledge update, understanding the market overview, knowing the requirements
of the end users, updating on the technological up gradation and help delegates to
network with their prospective buyers and will create the right atmosphere for
exchange of ideas. We have invited key professionals as the Speakers, and their
deliberations would lead to productive interactions with Indian pumps and valves
manufacturers keen to boost their market.
The research report and background paper "Strategic Report on Pumps, Valves &
Process Equipments" by FICCI and TSMG being released during the conference will
definitely add value to the industry.
I wish all the participants of "Pumps, Valves & Process Equipments 2013" a fruitful
participation.
Aseem Srivastav
Chairman-
Organsing Committee (PVPE Expo 2013)
MESSAGE
Table of Contents
Executive summary .............................................................................................1
1. Indian pumps market ................................................................................3
2. Indian industrial valves market ..............................................................13
3. Process plant equipment:..............................................................................21
About Tata Strategic: .........................................................................................25
1.1 Overview: ..........................................................................................4
1.2 Market assessment:..........................................................................4
1.3 Market segmentation: .........................................................................5
1.5 Market growth drivers: ......................................................................8
1.6 Market restraints: ..............................................................................9
1.7 Competitive environment: ...............................................................10
1.8 Likely scenario of Pumps market over next five years: ....................11
2.1 Overview: ........................................................................................14
2.2 Market assessment: ........................................................................14
2.3 Market segmentation: .....................................................................15
2.4 End-use sector analysis: ..................................................................16
2.5 Competitive environment: ...............................................................17
2.6 Market drivers:.................................................................................18
2.7 Market restraints: ............................................................................18
2.8 Likely scenario of industrial valves market in next five years:..........19
3.1 Overview: ........................................................................................22
3.2 Market assessment:........................................................................22
3.3 Market restraints: ............................................................................23
3.4 Likely scenario of process plant equipment market in ...................24next five years:
1.4 End-use sector analysis: ....................................................................7
Table of Contents
Executive summary .............................................................................................1
1. Indian pumps market ................................................................................3
2. Indian industrial valves market ..............................................................13
3. Process plant equipment:..............................................................................21
About Tata Strategic: .........................................................................................25
1.1 Overview: ..........................................................................................4
1.2 Market assessment:..........................................................................4
1.3 Market segmentation: .........................................................................5
1.5 Market growth drivers: ......................................................................8
1.6 Market restraints: ..............................................................................9
1.7 Competitive environment: ...............................................................10
1.8 Likely scenario of Pumps market over next five years: ....................11
2.1 Overview: ........................................................................................14
2.2 Market assessment: ........................................................................14
2.3 Market segmentation: .....................................................................15
2.4 End-use sector analysis: ..................................................................16
2.5 Competitive environment: ...............................................................17
2.6 Market drivers:.................................................................................18
2.7 Market restraints: ............................................................................18
2.8 Likely scenario of industrial valves market in next five years:..........19
3.1 Overview: ........................................................................................22
3.2 Market assessment:........................................................................22
3.3 Market restraints: ............................................................................23
3.4 Likely scenario of process plant equipment market in ...................24next five years:
1.4 End-use sector analysis: ....................................................................7
Executive summary
Table of Figures:
Figure 1: Break-up of Indian pumps market revenue by type (FY13) 4
Figure 2: Classification of pumps by type 5
Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13) 6
Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13) 7
Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user) 8
Figure 6: Total industrial valves market (FY13) 14
Figure 7: On-off Valves: Split of Revenue by Product Type (FY13) 15
Figure 8: On-off Valves: Split of Volume by Product Type (FY13) 15
Figure 9: Control Volves : Split of Volume by Product Type (FY13) 16
Figure 10: Control Volves : Split of Volume by Product Type (FY13) 16
Figure 11: Break-up of industrial valves demand by end-use segment 16
Figure 12: Market share of industrial valves manufacturers (FY13) 17
Figure 13: Projected production of process plant equipment in India 22
Figure 14: Segmentation of Pumps Industry 29
Figure 15 : Key Players (with focus sectors of operation) 29
Figure 16: Presence of pump manufacturing hubs 30
Figure 17: Forecasts for Domestic revenues and growth 30
Figure 18: Trends for exports-imports of pumps 31
Figure 19: Projections for growth in end-use sectors 31
Executive summary
Table of Figures:
Figure 1: Break-up of Indian pumps market revenue by type (FY13) 4
Figure 2: Classification of pumps by type 5
Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13) 6
Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13) 7
Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user) 8
Figure 6: Total industrial valves market (FY13) 14
Figure 7: On-off Valves: Split of Revenue by Product Type (FY13) 15
Figure 8: On-off Valves: Split of Volume by Product Type (FY13) 15
Figure 9: Control Volves : Split of Volume by Product Type (FY13) 16
Figure 10: Control Volves : Split of Volume by Product Type (FY13) 16
Figure 11: Break-up of industrial valves demand by end-use segment 16
Figure 12: Market share of industrial valves manufacturers (FY13) 17
Figure 13: Projected production of process plant equipment in India 22
Figure 14: Segmentation of Pumps Industry 29
Figure 15 : Key Players (with focus sectors of operation) 29
Figure 16: Presence of pump manufacturing hubs 30
Figure 17: Forecasts for Domestic revenues and growth 30
Figure 18: Trends for exports-imports of pumps 31
Figure 19: Projections for growth in end-use sectors 31
The Indian economy continued to remain sluggish in FY14, though it still
maintained a pace faster than most of the emerging and developing economies.
Real GDP growth contracted to 4.4% in Q1FY14 against 5.4% in Q1FY13 and
7.5% in Q1FY12. Fiscal deficit in Q1FY14 ~50% of budget estimates as against
37% in Q1FY13. These Key macroeconomic parameters do not inspire
confidence.
However, recent policy measures by the government in various segments,
especially in the infrastructure sector, are likely to help improve production
activity. Timely, normal and well-spread rainfall is expected to have a positive
impact on agriculture production, which, in turn, may improve rural demand for
industrial goods and services. The improvement in water storage levels in
reservoirs due to heavy rainfall would enable the hydro power sector to enhance
capacity utilisation. The targets set in 12th FYP are expected to boost the power
sector and natural gas segment. We are expecting both industry and agriculture
to rebound in H2FY14. This will essentially have a positive impact on the demand
of pumps, valves and process plant equipment in Indian market.
All these three markets are highly linked with the trends in key end-use sectors
like oil and gas, power generation, waste and water treatment, agriculture and
building services. At this juncture of the economy it is imperative to relook at the
market for the key manufacturing segments like pumps, valves and process
equipment from end-user's perspective as well as from manufacturer's
perspective.
The report covers a brief overview of all the three markets, their growth drivers
and restraints. Considering the current trends and expected economic outlook,
likely scenario of these markets in next five years is also built up.
Executive summary
2
Indian pumps market 1
The Indian economy continued to remain sluggish in FY14, though it still
maintained a pace faster than most of the emerging and developing economies.
Real GDP growth contracted to 4.4% in Q1FY14 against 5.4% in Q1FY13 and
7.5% in Q1FY12. Fiscal deficit in Q1FY14 ~50% of budget estimates as against
37% in Q1FY13. These Key macroeconomic parameters do not inspire
confidence.
However, recent policy measures by the government in various segments,
especially in the infrastructure sector, are likely to help improve production
activity. Timely, normal and well-spread rainfall is expected to have a positive
impact on agriculture production, which, in turn, may improve rural demand for
industrial goods and services. The improvement in water storage levels in
reservoirs due to heavy rainfall would enable the hydro power sector to enhance
capacity utilisation. The targets set in 12th FYP are expected to boost the power
sector and natural gas segment. We are expecting both industry and agriculture
to rebound in H2FY14. This will essentially have a positive impact on the demand
of pumps, valves and process plant equipment in Indian market.
All these three markets are highly linked with the trends in key end-use sectors
like oil and gas, power generation, waste and water treatment, agriculture and
building services. At this juncture of the economy it is imperative to relook at the
market for the key manufacturing segments like pumps, valves and process
equipment from end-user's perspective as well as from manufacturer's
perspective.
The report covers a brief overview of all the three markets, their growth drivers
and restraints. Considering the current trends and expected economic outlook,
likely scenario of these markets in next five years is also built up.
Executive summary
2
Indian pumps market 1
1.1 Overview:
1.2 Market assessment:
The Indian pumps market is fairly mature, with domestic sales expected to
increase at a rate of 16 to18 per cent per year, and exports projected to grow at
around 10 to 12 per cent over the next few years. The industry estimates annual
production of around 2 million units, with nearly 95 per cent of domestic
consumption being met through local production facilities.
In FY13, the total Indian pumps' market amounted to Rs.8,375 Cr grew by 19%
over FY12 demand. Banking on the ongoing infrastructure projects in the power
generation, building services, water and wastewater, as well as oil and gas
sectors, the total Indian pumps market is expected to continue growing at a
much faster pace than that of the world pumps market.
Indian pumps market1
5%
Centrifugal Pumps PD Pumps
95%
Figure 1: Break-up of Indian pumps market revenue by type (FY13)
4
The pumps market is broadly classified into two categories: industrial pumps,
which cater to infrastructure sectors; and agriculture and domestic pumps. Going
by the type of the pumps, the market is segmented into centrifugal pumps and
positive displacement pumps. Indian pumps market is dominated by centrifugal
pumps, accounting for over 95% of the market.
India produces more than 2.0 million units of pumps per annum for end user
sectors ranging from agriculture to nuclear power. Almost 95.0 percent of the
demand is met by domestic manufacturers, with imports accounting for the
remaining 5.0 percent.
With Indian pumps being exported to more than 70 countries, exports are
growing at an average rate of 10.0 percent annually. The total Indian pumps
market is highly fragmented with more than 800 large-, medium-, and small-
scale units catering to a wide range of end- user sectors. Most of the large-scale
domestic manufacturers and multinationals cater to a wide array of end-user
industries, while small- scale units in the unorganized sector predominantly
address the agriculture and domestic sectors. More than 50.0 percent of pumps'
demand in the agriculture and domestic sectors is met by these small- scale
units in the unorganized sector.
1.3 Market segmentation:
Figure 2: Classification of pumps by type
Centrifugal pumps Positive displacement pumps
•
•
•
•
Single-stage radial-flow pumps
Multi-stage radial-flow pumps
Axial- and mixed-flow pumps
Submersible pumps
•
•
•
Rotary pumps
Reciprocating pumps
Peristaltic pumps
Pumps
5
1.1 Overview:
1.2 Market assessment:
The Indian pumps market is fairly mature, with domestic sales expected to
increase at a rate of 16 to18 per cent per year, and exports projected to grow at
around 10 to 12 per cent over the next few years. The industry estimates annual
production of around 2 million units, with nearly 95 per cent of domestic
consumption being met through local production facilities.
In FY13, the total Indian pumps' market amounted to Rs.8,375 Cr grew by 19%
over FY12 demand. Banking on the ongoing infrastructure projects in the power
generation, building services, water and wastewater, as well as oil and gas
sectors, the total Indian pumps market is expected to continue growing at a
much faster pace than that of the world pumps market.
Indian pumps market1
5%
Centrifugal Pumps PD Pumps
95%
Figure 1: Break-up of Indian pumps market revenue by type (FY13)
4
The pumps market is broadly classified into two categories: industrial pumps,
which cater to infrastructure sectors; and agriculture and domestic pumps. Going
by the type of the pumps, the market is segmented into centrifugal pumps and
positive displacement pumps. Indian pumps market is dominated by centrifugal
pumps, accounting for over 95% of the market.
India produces more than 2.0 million units of pumps per annum for end user
sectors ranging from agriculture to nuclear power. Almost 95.0 percent of the
demand is met by domestic manufacturers, with imports accounting for the
remaining 5.0 percent.
With Indian pumps being exported to more than 70 countries, exports are
growing at an average rate of 10.0 percent annually. The total Indian pumps
market is highly fragmented with more than 800 large-, medium-, and small-
scale units catering to a wide range of end- user sectors. Most of the large-scale
domestic manufacturers and multinationals cater to a wide array of end-user
industries, while small- scale units in the unorganized sector predominantly
address the agriculture and domestic sectors. More than 50.0 percent of pumps'
demand in the agriculture and domestic sectors is met by these small- scale
units in the unorganized sector.
1.3 Market segmentation:
Figure 2: Classification of pumps by type
Centrifugal pumps Positive displacement pumps
•
•
•
•
Single-stage radial-flow pumps
Multi-stage radial-flow pumps
Axial- and mixed-flow pumps
Submersible pumps
•
•
•
Rotary pumps
Reciprocating pumps
Peristaltic pumps
Pumps
5
In FY 13, centrifugal pumps dominated the total Indian pumps market accounting
for 95 percent of revenues. The ongoing/ upcoming large infrastructure projects
as planned in 12th FYP are ensuring the growth prospects of the centrifugal
pumps from various end use sectors. Some of the major end users such as
power generation, water and wastewater, building services, as well as oil and
gas are expected to account for majority of revenues for the centrifugal pumps
market in next 4-5 years. In FY 13, single-stage radial-flow pumps accounted for
35 percent of the centrifugal pumps market revenues, followed by submersible
pumps with 32 percent. The multi stage pumps, the axial- and mixed-flow
pumps, which are predominantly used for specific industrial applications,
accounted for the rest of the market revenues.
73%
24%
3%
Rotary Reciprocating Peristaltic
Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13)
Investments in oil and gas, power generation, and water and wastewater are
expected to drive the positive displacement (PD) pumps market in India.The
presence of a large number of unorganized suppliers and the duplication of the
design and the spare parts of pumps by small-scale suppliers are expected to
restrain market growth.Rotary pump is the dominant product type among PD
pumps, which accounted for about three-fourth of revenues. Revenues from
reciprocating pumps are expected to witness growth during the forecast period
due to the increased demand for these pumps.
6
1.4 End-use sector analysis:
In FY 13, the agriculture sector was the largest source of demand for pumps in
India. It accounted for approximately 27 percent of the total revenues. The sector
is expected to grow at a compound annual growth rate (CAGR) of 16 percent
over next 3-4 years.
Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13)
Agriculture
Building Services
Water & Wastewater
Power Generation
Oil & gas
Metals & Mining
Others
39%
31%
18%
12%Single-Stage Radial
Submersible
Multi-Stage Radial
Axial & Mixed
27%
17%
17%
12%
8%
4%
12%
Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user)
7
In FY 13, centrifugal pumps dominated the total Indian pumps market accounting
for 95 percent of revenues. The ongoing/ upcoming large infrastructure projects
as planned in 12th FYP are ensuring the growth prospects of the centrifugal
pumps from various end use sectors. Some of the major end users such as
power generation, water and wastewater, building services, as well as oil and
gas are expected to account for majority of revenues for the centrifugal pumps
market in next 4-5 years. In FY 13, single-stage radial-flow pumps accounted for
35 percent of the centrifugal pumps market revenues, followed by submersible
pumps with 32 percent. The multi stage pumps, the axial- and mixed-flow
pumps, which are predominantly used for specific industrial applications,
accounted for the rest of the market revenues.
73%
24%
3%
Rotary Reciprocating Peristaltic
Figure 3 : Segmentation of Positive Displacement Pumps by revenues (FY13)
Investments in oil and gas, power generation, and water and wastewater are
expected to drive the positive displacement (PD) pumps market in India.The
presence of a large number of unorganized suppliers and the duplication of the
design and the spare parts of pumps by small-scale suppliers are expected to
restrain market growth.Rotary pump is the dominant product type among PD
pumps, which accounted for about three-fourth of revenues. Revenues from
reciprocating pumps are expected to witness growth during the forecast period
due to the increased demand for these pumps.
6
1.4 End-use sector analysis:
In FY 13, the agriculture sector was the largest source of demand for pumps in
India. It accounted for approximately 27 percent of the total revenues. The sector
is expected to grow at a compound annual growth rate (CAGR) of 16 percent
over next 3-4 years.
Figure 4 : Segmentation of Centrifugal Pumps by revenues (FY13)
Agriculture
Building Services
Water & Wastewater
Power Generation
Oil & gas
Metals & Mining
Others
39%
31%
18%
12%Single-Stage Radial
Submersible
Multi-Stage Radial
Axial & Mixed
27%
17%
17%
12%
8%
4%
12%
Figure 5: Split of Revenues of Indian pumps market (FY13) (by end-user)
7
The building services sector, with 17 percent revenue share, ranked second in FY
13. Expected recovery in the real estate segment would yield annual growth rate
of 20 percent in pumps demand for next 4 years.
The water and wastewater sector was the third-highest revenue generator, with
a revenue share of 17 percent in FY 13. Rising demand for drinking water supply
and high level of food production has led to a slew of water and wastewater
treatment plants and large-scale irrigation projects. This sector is expected to
witness a persistent demand for pumps and is expected to grow at a CAGR of 17
percent over next 4 years
Power generation is another key end-user sector, which accounted for 12 percent
of revenue share. Going by the planned power additions in the 12th FYP, this
sector is likely to drive the growth of the total pumps market.
Other key end-user sectors include oil and gas, metals and mining, chemical
process, food and beverage, as well as few others.
1. Growth of infrastructure sector due to focused government initiatives
• XIIth Plan's focus on infrastructure sector and proposed investments to the tune of $1Tn would provide a strong boost to the growth of pumps manufacturers
2. Projected high growth in key end-user sectors like metals and mining, cement, power, water supply and wastewater
3. Increased investments in large-scale irrigation and the oil & gas sector
• Refining capacity is expected to rise by 22% in next 3 years
• Newer irrigation models like “Lift irrigation” projects are expected to boost the growth of the pumps industry
4. Growing dependence on groundwater, particularly in urban settlements and industrial zones
• India is one of the largest consumers of groundwater in the world (~ 230 cub km on an annual basis)
• Falling groundwater levels will boost the growth of deep well submersible pumps as a replacement for the current pumps
• Growing urbanization will necessitate the need of pumps in water supply and wastewater transport
1.5 Market growth drivers:
8
5. Setting up of manufacturing facilities of foreign players
• India has emerged as an attractive destination for manufacturing of
pumps with the entry of foreign players E.g. Grundfos, Flowserve,
etc.
• Besides catering to domestic market, these manufacturing units
meet the growing export demand emanating from neighbouring
markets
6. Increased demand for energy efficient pumps
• Large usage of energy inefficient pumps in agricultural sector has
created a potential replacement market for improved technology
offerings. The replacement market is expected to be supported by
proposed government initiatives driven by Ministry of Power
• The energy efficient pumps are finding favor in new residential and
commercial projects
1. High degree of price sensitivity of the market
• High level of fragmentation in the Indian market, with a large
presence of unorganized, small-scale units has created a price
sensitive market, as these players are able to offer substantial
differences in price in comparison to large manufacturers
2. Inefficient allocation of subsidies obstructing introduction of newer
technologies
• Subsidies in the power supply offered to the agriculture sector (that
accounts for 30% power supply) is hindering the faster growth of
energy efficient pumps, as the farmers do not see any value in
purchasing costlier, energy-efficient pumps and rely on the cheap,
inefficient pumps
3. Availability of low-cost manufacturers / suppliers
• Revenues of foreign players are lowered by the presence of
domestic manufacturers, that provide low cost solutions while
replicating the desig of these large players. A number of
unorganized units provide cheap spare parts reducing replacement
market revenues for the large players
1.6 Market restraints:
9
The building services sector, with 17 percent revenue share, ranked second in FY
13. Expected recovery in the real estate segment would yield annual growth rate
of 20 percent in pumps demand for next 4 years.
The water and wastewater sector was the third-highest revenue generator, with
a revenue share of 17 percent in FY 13. Rising demand for drinking water supply
and high level of food production has led to a slew of water and wastewater
treatment plants and large-scale irrigation projects. This sector is expected to
witness a persistent demand for pumps and is expected to grow at a CAGR of 17
percent over next 4 years
Power generation is another key end-user sector, which accounted for 12 percent
of revenue share. Going by the planned power additions in the 12th FYP, this
sector is likely to drive the growth of the total pumps market.
Other key end-user sectors include oil and gas, metals and mining, chemical
process, food and beverage, as well as few others.
1. Growth of infrastructure sector due to focused government initiatives
• XIIth Plan's focus on infrastructure sector and proposed investments to the tune of $1Tn would provide a strong boost to the growth of pumps manufacturers
2. Projected high growth in key end-user sectors like metals and mining, cement, power, water supply and wastewater
3. Increased investments in large-scale irrigation and the oil & gas sector
• Refining capacity is expected to rise by 22% in next 3 years
• Newer irrigation models like “Lift irrigation” projects are expected to boost the growth of the pumps industry
4. Growing dependence on groundwater, particularly in urban settlements and industrial zones
• India is one of the largest consumers of groundwater in the world (~ 230 cub km on an annual basis)
• Falling groundwater levels will boost the growth of deep well submersible pumps as a replacement for the current pumps
• Growing urbanization will necessitate the need of pumps in water supply and wastewater transport
1.5 Market growth drivers:
8
5. Setting up of manufacturing facilities of foreign players
• India has emerged as an attractive destination for manufacturing of
pumps with the entry of foreign players E.g. Grundfos, Flowserve,
etc.
• Besides catering to domestic market, these manufacturing units
meet the growing export demand emanating from neighbouring
markets
6. Increased demand for energy efficient pumps
• Large usage of energy inefficient pumps in agricultural sector has
created a potential replacement market for improved technology
offerings. The replacement market is expected to be supported by
proposed government initiatives driven by Ministry of Power
• The energy efficient pumps are finding favor in new residential and
commercial projects
1. High degree of price sensitivity of the market
• High level of fragmentation in the Indian market, with a large
presence of unorganized, small-scale units has created a price
sensitive market, as these players are able to offer substantial
differences in price in comparison to large manufacturers
2. Inefficient allocation of subsidies obstructing introduction of newer
technologies
• Subsidies in the power supply offered to the agriculture sector (that
accounts for 30% power supply) is hindering the faster growth of
energy efficient pumps, as the farmers do not see any value in
purchasing costlier, energy-efficient pumps and rely on the cheap,
inefficient pumps
3. Availability of low-cost manufacturers / suppliers
• Revenues of foreign players are lowered by the presence of
domestic manufacturers, that provide low cost solutions while
replicating the desig of these large players. A number of
unorganized units provide cheap spare parts reducing replacement
market revenues for the large players
1.6 Market restraints:
9
1.7 Competitive environment:
Key suppliers of centrifugal pumps are - Kirloskar Brothers Ltd (KBL), KSB,
Crompton Greaves(CG), AquaSub Engineering, CRI, Grundfos, Flowmore,
Mather&Platt, Sulzer, Sharp pumps, Flowserve, ITT,Suguna, and Jyoti
Company End-use sector presence
Kirloskar Brothers Ltd (KBL) Water and wastewater, power generation, buildingservices, as well as oil and gas
CRI Pumps Agriculture and building services
Crompton Greaves Agriculture and building services
KSB Power generation, water and wastewater, buildingservices, and chemical process
AquaSub Engineering Building services and agriculture
Sharp Group Building services and agriculture(includes brands such as Ventura, Fisher, and Point)
Grundfos Building services, municipal water supply, and process industries
Mather & Platt (M&P) Power generation, municipal water supply, irrigation, (part of WILO Group) and chemical process
Flowmore Irrigation, water supply boards, wastewater treatmentplants, power generation, chemical process
Flowserve Oil and gas, chemical process, power generation, and pharmaceuticals
WPIL Power plants, irrigation, water and wastewater, as well as metals and mining
Sulzer Oil and gas, petrochemicals, chemical process, power generation, as well as pulp and paper
Jyoti Ltd Power generation, irrigation, municipal water supply, as well as navy and marine
Shakti Pumps Agriculture and building services
Key players of positive displacement pumps are: Colfax Corporation, SPX
Corporation, Seepex India Pvt Ltd, Alfa Laval Corporation, Dover Corporation,
Ingersoll Rand Corporation, NETZSCH, and Roto Pumps
10
1.8 Likely scenario of Pumps market over next five years:
11
Minimal technological advancements; low R&D investment
Reduction in profit margins due to increasing raw material prices and operation in a price sensitive market
Competition from low-cost Chinese Imports
Growing customer demand for cost-effective lifecycle solutions necessitates integrated solutions (motors, seals, valves, drives, after-sales services, technical support) from pump manufacturers
Some degree of consolidation of the market
1
2
3
4
5
1.7 Competitive environment:
Key suppliers of centrifugal pumps are - Kirloskar Brothers Ltd (KBL), KSB,
Crompton Greaves(CG), AquaSub Engineering, CRI, Grundfos, Flowmore,
Mather&Platt, Sulzer, Sharp pumps, Flowserve, ITT,Suguna, and Jyoti
Company End-use sector presence
Kirloskar Brothers Ltd (KBL) Water and wastewater, power generation, buildingservices, as well as oil and gas
CRI Pumps Agriculture and building services
Crompton Greaves Agriculture and building services
KSB Power generation, water and wastewater, buildingservices, and chemical process
AquaSub Engineering Building services and agriculture
Sharp Group Building services and agriculture(includes brands such as Ventura, Fisher, and Point)
Grundfos Building services, municipal water supply, and process industries
Mather & Platt (M&P) Power generation, municipal water supply, irrigation, (part of WILO Group) and chemical process
Flowmore Irrigation, water supply boards, wastewater treatmentplants, power generation, chemical process
Flowserve Oil and gas, chemical process, power generation, and pharmaceuticals
WPIL Power plants, irrigation, water and wastewater, as well as metals and mining
Sulzer Oil and gas, petrochemicals, chemical process, power generation, as well as pulp and paper
Jyoti Ltd Power generation, irrigation, municipal water supply, as well as navy and marine
Shakti Pumps Agriculture and building services
Key players of positive displacement pumps are: Colfax Corporation, SPX
Corporation, Seepex India Pvt Ltd, Alfa Laval Corporation, Dover Corporation,
Ingersoll Rand Corporation, NETZSCH, and Roto Pumps
10
1.8 Likely scenario of Pumps market over next five years:
11
Minimal technological advancements; low R&D investment
Reduction in profit margins due to increasing raw material prices and operation in a price sensitive market
Competition from low-cost Chinese Imports
Growing customer demand for cost-effective lifecycle solutions necessitates integrated solutions (motors, seals, valves, drives, after-sales services, technical support) from pump manufacturers
Some degree of consolidation of the market
1
2
3
4
5
Indian industrial valves market 2
Indian industrial valves market 2
2.1 Overview:
2.2 Market assessment:
The Indian Industrial Valve market is highly fragmented and is continuing to be an
unorganized sector with about 40.0 percent of Tier III companies not part of the
tax net, thus decreasing the profit margin and valuation of the market. In FY13
the Industrial valves market was approximately 2.5 million units which amounted
to Rs.4,460Crs. End-user companies in India prefer importing large size valves
for critical applications.Both domestic and multinational industrial valve
manufacturers are currently focusing on expanding their manufacturing
capacities in India to gain market share.
Indian industrial valvles market is in the growth phase and the revenue growth is
fueled by the demand from power and oil & gas sector. The market witnessed
the growth of 7.5 percent in FY13. The overall market is expected to grow at 8.5
percent over next five years by value and 6.5 percent by volume. Increasing
recognition of Indian valve manufacturers in the international markets has
opened doors for the export market. Demand from power and oil and gas
industries drives the Industrial valves market in India throughout the forecast
period. Significantly higher investments lined up in power generation sector, city
gas distribution (CGD) projects, pipeline projects and refining projects are some
of the growth drivers.
Indian industrial valves market2
Figure 6: Total industrial valves market (FY13)
0
1
2
3
4
0
2000
4000
6000
8000
FY13 FY14 FY15 FY16 FY17
Un
its
(mil
lio
n)
Rs.
Cr
Value Volume
14
Ball, 37.5%
Butterfly, 16.5%
Plug, 4.8%
Gate, 29.4%
Diaphragm, 4.7%
Knige Gate, 3.3%
Globe, 3.8%
2.3 Market segmentation:
Industrial valves market is divided into two segments - On-Off valves and control
valves.
On-Off valves accounts for 98 percent of the valves market by volume and 80
percent by. On-off valves market is further segmented into seven types of
valves. About 90.0 percent of on-off valve revenue is from project, while 10.0
percent of revenue is from replacement, similarly 88.0 percent of the volume is
from project, while 12.0 percent is from replacement.
Butterfly, 30.9%
Plug, 5.9%
Gate, 30.9%
Ball, 24.4%
Globe, 4.4%
Knige Gate,1.4%
Diaphragm, 2.1%
Figure 8: On-off Valves: Split of Volume
by Product Type (FY13)
Figure 7: On-off Valves: Split of Revenue
by Product Type (FY13)
Control valves contribute around 20 percent of the total industrial valves revenue
and 2 percent of the total volume throughout the forecast period. In FY13,
control valves generated a revenue of about Rs. 899Cr with a YoY growth rate of
7percent and is forecast to reach INR 1,332crore by FY17 with a CAGR of 8.0
percent. Control valves with sizes up to 6 inches contribute about 60.0 percent
of the total volume in the Indian Control vales market.About 87.0 percent of
control valves revenue is from projects and 13.0 percent from replacements,
while 85.0 percent of the volume is contributed by projects and 15.0 percent
through replacements.
15
2.1 Overview:
2.2 Market assessment:
The Indian Industrial Valve market is highly fragmented and is continuing to be an
unorganized sector with about 40.0 percent of Tier III companies not part of the
tax net, thus decreasing the profit margin and valuation of the market. In FY13
the Industrial valves market was approximately 2.5 million units which amounted
to Rs.4,460Crs. End-user companies in India prefer importing large size valves
for critical applications.Both domestic and multinational industrial valve
manufacturers are currently focusing on expanding their manufacturing
capacities in India to gain market share.
Indian industrial valvles market is in the growth phase and the revenue growth is
fueled by the demand from power and oil & gas sector. The market witnessed
the growth of 7.5 percent in FY13. The overall market is expected to grow at 8.5
percent over next five years by value and 6.5 percent by volume. Increasing
recognition of Indian valve manufacturers in the international markets has
opened doors for the export market. Demand from power and oil and gas
industries drives the Industrial valves market in India throughout the forecast
period. Significantly higher investments lined up in power generation sector, city
gas distribution (CGD) projects, pipeline projects and refining projects are some
of the growth drivers.
Indian industrial valves market2
Figure 6: Total industrial valves market (FY13)
0
1
2
3
4
0
2000
4000
6000
8000
FY13 FY14 FY15 FY16 FY17
Un
its
(mil
lio
n)
Rs.
Cr
Value Volume
14
Ball, 37.5%
Butterfly, 16.5%
Plug, 4.8%
Gate, 29.4%
Diaphragm, 4.7%
Knige Gate, 3.3%
Globe, 3.8%
2.3 Market segmentation:
Industrial valves market is divided into two segments - On-Off valves and control
valves.
On-Off valves accounts for 98 percent of the valves market by volume and 80
percent by. On-off valves market is further segmented into seven types of
valves. About 90.0 percent of on-off valve revenue is from project, while 10.0
percent of revenue is from replacement, similarly 88.0 percent of the volume is
from project, while 12.0 percent is from replacement.
Butterfly, 30.9%
Plug, 5.9%
Gate, 30.9%
Ball, 24.4%
Globe, 4.4%
Knige Gate,1.4%
Diaphragm, 2.1%
Figure 8: On-off Valves: Split of Volume
by Product Type (FY13)
Figure 7: On-off Valves: Split of Revenue
by Product Type (FY13)
Control valves contribute around 20 percent of the total industrial valves revenue
and 2 percent of the total volume throughout the forecast period. In FY13,
control valves generated a revenue of about Rs. 899Cr with a YoY growth rate of
7percent and is forecast to reach INR 1,332crore by FY17 with a CAGR of 8.0
percent. Control valves with sizes up to 6 inches contribute about 60.0 percent
of the total volume in the Indian Control vales market.About 87.0 percent of
control valves revenue is from projects and 13.0 percent from replacements,
while 85.0 percent of the volume is contributed by projects and 15.0 percent
through replacements.
15
2.4 End-use sector analysis:
Oil and gas followed by power, petrochemicals, chemicals, and fertilizers (PCF)
contributed to around 55.0 percent of the total Industrial valves revenue in FY13.
These segments are expected to sustain their high growth rates. Exploration and
Production (E&P) investments in the next ten years will drive the market for oil
and gas equipment and services.Twelfth five year plan projects and completion
of spill over projects from eleventh five year plan by FY14 is a significant
contributor.India's emergence as a refining hub of Asia and the geographic
advantage are key factors driving growth in the refining sector, which would drive
the growth of Industrial valves market.With the adherence to EURO norms and
with several cities mandating EURO 4 or 3, there is a still a potential for
investments focused on refinery up-gradation.
O&G midstream,
10.8%
O&G upstream,
10.5%Others, 23.8%
PCF, 14.3%
O&G downstream,
26.1%
Power, 14.6%
Figure 11: Break-up of industrial valves demand by end-use segment
16
Another key factor that is expected to drive the valves market in India is the need
to improve the refining margins by enhancing the ability to process various low
cost crude more efficiently.The power sector's contribution to Industrial valves
revenue is expected to grow at a CAGR of 10 percent from FY13 to FY17 due to
the introduction of 100 percent FDI in all power projects.
There are more than 350 companies operating in Indian industrial valves market.
Audco India Limited, Tyco, Virgo Engineers Limited, BDK Weir, Emerson Process
Management, MIL, NSSL, Microfinish are amongst the key players in the
market. Top 10 players contribute to approximately 45.0percent of the market. As
far as the distribution structure is concerned, 30.0 percentis by direct sales; 65.0
percent are sold by OEMs/LSTKs while remaining 5.0 percentare sold through by
distributors/agents. On-off valves are the major revenue contributor in the Indian
industrial valves market; companies with a strong foothold in this segment
generate more revenue than control valve manufacturers.
2.5 Competitive environment:
Figure 12: Market share of industrial valves manufacturers (FY13)
AIL with its strong distributor/dealer network caters to OTS/commodity valve
demand and has the backing of Larsen &Tubro Limited (L&T) while bidding for
projects. Tyco with its portfolio of trusted brands manages to serve the needs of
end users in flow management and gains the second-largest market share. Virgo
Engineers Limited has always been a reliable supplier of valves for critical
applications in the oil and gas industry with the third-largest market share.
17
Choke, 0.9%
Butterfly, 14.2%
Ball, 5.5%
Diaphragm, 0.9%
Angle 3.0%
Globe 75.6%
Figure 9: Control Volves : Split of Volume by Product Type (FY13)
Choke, 5.6%
Butterfly, 14.5%
Ball, 6.1%Diaphrag
m, 0.8%Angle 7.5% Globe
65.5%
Figure 10: Control Volves : Split of Volume by Product Type (FY13)
Audco India Ltd.
Tyco
Virgo engineers
BDK weir
Emerson process management
NSSL
Microfinish
MIL
IL
Others
12.5%
7.0%
6.4%
3.7%
3.0%
2.9%
2.6%
2.8%
3.3%
55.8%
2.4 End-use sector analysis:
Oil and gas followed by power, petrochemicals, chemicals, and fertilizers (PCF)
contributed to around 55.0 percent of the total Industrial valves revenue in FY13.
These segments are expected to sustain their high growth rates. Exploration and
Production (E&P) investments in the next ten years will drive the market for oil
and gas equipment and services.Twelfth five year plan projects and completion
of spill over projects from eleventh five year plan by FY14 is a significant
contributor.India's emergence as a refining hub of Asia and the geographic
advantage are key factors driving growth in the refining sector, which would drive
the growth of Industrial valves market.With the adherence to EURO norms and
with several cities mandating EURO 4 or 3, there is a still a potential for
investments focused on refinery up-gradation.
O&G midstream,
10.8%
O&G upstream,
10.5%Others, 23.8%
PCF, 14.3%
O&G downstream,
26.1%
Power, 14.6%
Figure 11: Break-up of industrial valves demand by end-use segment
16
Another key factor that is expected to drive the valves market in India is the need
to improve the refining margins by enhancing the ability to process various low
cost crude more efficiently.The power sector's contribution to Industrial valves
revenue is expected to grow at a CAGR of 10 percent from FY13 to FY17 due to
the introduction of 100 percent FDI in all power projects.
There are more than 350 companies operating in Indian industrial valves market.
Audco India Limited, Tyco, Virgo Engineers Limited, BDK Weir, Emerson Process
Management, MIL, NSSL, Microfinish are amongst the key players in the
market. Top 10 players contribute to approximately 45.0percent of the market. As
far as the distribution structure is concerned, 30.0 percentis by direct sales; 65.0
percent are sold by OEMs/LSTKs while remaining 5.0 percentare sold through by
distributors/agents. On-off valves are the major revenue contributor in the Indian
industrial valves market; companies with a strong foothold in this segment
generate more revenue than control valve manufacturers.
2.5 Competitive environment:
Figure 12: Market share of industrial valves manufacturers (FY13)
AIL with its strong distributor/dealer network caters to OTS/commodity valve
demand and has the backing of Larsen &Tubro Limited (L&T) while bidding for
projects. Tyco with its portfolio of trusted brands manages to serve the needs of
end users in flow management and gains the second-largest market share. Virgo
Engineers Limited has always been a reliable supplier of valves for critical
applications in the oil and gas industry with the third-largest market share.
17
Choke, 0.9%
Butterfly, 14.2%
Ball, 5.5%
Diaphragm, 0.9%
Angle 3.0%
Globe 75.6%
Figure 9: Control Volves : Split of Volume by Product Type (FY13)
Choke, 5.6%
Butterfly, 14.5%
Ball, 6.1%Diaphrag
m, 0.8%Angle 7.5% Globe
65.5%
Figure 10: Control Volves : Split of Volume by Product Type (FY13)
Audco India Ltd.
Tyco
Virgo engineers
BDK weir
Emerson process management
NSSL
Microfinish
MIL
IL
Others
12.5%
7.0%
6.4%
3.7%
3.0%
2.9%
2.6%
2.8%
3.3%
55.8%
2.6 Market drivers:
2.7 Market restraints:
1. High growth in the Pipelines Sector, especially in Gas Pipelines: As a
thumb of rule, valves are regularly placed at a less than 10% of pipeline
distance for easy and efficient control of gas.IOCL is planning to increase its
natural gas pipeline network from 10,900 km to 15,000 km by 2015 with an
investment of $1.5 bn.Various incentives linked with investments made by
companies operating across natural gas or petroleum lines are expected to
boost the growth of Industrial valves.
2. Widening Demand Supply Gap: The spillovers from the 11th plan and the
expected new capacity addition will drive opportunities for valves in the short
term. The Restructured Accelerated Power Development and Reforms
Programme (R-APDRP) and the Rajiv Gandhi GrameenVidyutikaranYojana
(RGGVY) along with the twelfth 5-year plan will impact key investments.
3. Process Plant Modernization Focused on Efficiency Improvements: In the
process industry, industrial valve is one of the critical components which
determines the plant efficiency. The strive for efficiency improvements Is
expected to drive the demand for actuated valves in new installations as well
as demand for retrofitting manual valves with actuation in the brownfield
installations
4. Private Sector Participation Provides Impetus for Growth: Favourable
policy towards private sector and foreign direct investments has been a major
boost to the sectors such as power and oil and gas. This will have direct impact
on demand of industrial valves.
5. Increasing Investment in City Gas Distribution (CGD) Projects in India:
CGD is expected to grow at a rate of 28.8 percent during 12th FYP and is
expected to reach 45-46 MMSCMD by 2017. The impact of this driver would be
maximum on the growth rate of industrial valves
1. Increasing Competition: Due to increased competition, the profit marginsare
getting reduced and market share is diluted. Presence of a large number of
unorganized manufacturers hinders the entry of national and international valve
suppliers.
2. Increasing raw material cost and lack of innovation: Raw material
constitutes as 60% of the product cost. R&D spends in Indian valves industry
stands to be mere 2% of the revenue. These issues restrain the ability of valve
manufacturers to meet the market demand at the right time.
18
3. Large sized complex valves are mostly imported: low research and
development spend, lack of sophisticated manufacturing set-up and
success stories demonstrating the credibility of local organizations in
catering to such critical applications has led to import of complex and
large sized valves.
4. Choke Valves or Christmas Tree Valves Continue to be Difficult to
Address: Upstream O&G sector is dependent on exploration and
production (E&P) equipment suppliers such as National Oil well Varco
(NOV), and BHEL to address their need for choke valves or Christmas tree
valves. The ability of other Indian valve manufacturers to supply API choke
valves of larger size is limited because of the stringent norms, frequency
of procurement and procurement procedures followed by oil and gas
upstream sector. The substantial time and effort required for addressing
these requirements are considered as deterrents by several valve
suppliers.
2.8 Likely scenario of industrial valves market in next five years:
19
O&G sector demand: Players with ability to manufacture customized valves would be in demand Ball valves demand in this sector will increase
Indian customers are increasingly looking for best suitable products to control process efficiency This will push the manufactures to cater to demand of both on-off and control valves
On-off valve will witness heavy competition with many smal valve manufacturers entering the market, thus reducing profit margin and decreasing market valuation.
1
2
3
2.6 Market drivers:
2.7 Market restraints:
1. High growth in the Pipelines Sector, especially in Gas Pipelines: As a
thumb of rule, valves are regularly placed at a less than 10% of pipeline
distance for easy and efficient control of gas.IOCL is planning to increase its
natural gas pipeline network from 10,900 km to 15,000 km by 2015 with an
investment of $1.5 bn.Various incentives linked with investments made by
companies operating across natural gas or petroleum lines are expected to
boost the growth of Industrial valves.
2. Widening Demand Supply Gap: The spillovers from the 11th plan and the
expected new capacity addition will drive opportunities for valves in the short
term. The Restructured Accelerated Power Development and Reforms
Programme (R-APDRP) and the Rajiv Gandhi GrameenVidyutikaranYojana
(RGGVY) along with the twelfth 5-year plan will impact key investments.
3. Process Plant Modernization Focused on Efficiency Improvements: In the
process industry, industrial valve is one of the critical components which
determines the plant efficiency. The strive for efficiency improvements Is
expected to drive the demand for actuated valves in new installations as well
as demand for retrofitting manual valves with actuation in the brownfield
installations
4. Private Sector Participation Provides Impetus for Growth: Favourable
policy towards private sector and foreign direct investments has been a major
boost to the sectors such as power and oil and gas. This will have direct impact
on demand of industrial valves.
5. Increasing Investment in City Gas Distribution (CGD) Projects in India:
CGD is expected to grow at a rate of 28.8 percent during 12th FYP and is
expected to reach 45-46 MMSCMD by 2017. The impact of this driver would be
maximum on the growth rate of industrial valves
1. Increasing Competition: Due to increased competition, the profit marginsare
getting reduced and market share is diluted. Presence of a large number of
unorganized manufacturers hinders the entry of national and international valve
suppliers.
2. Increasing raw material cost and lack of innovation: Raw material
constitutes as 60% of the product cost. R&D spends in Indian valves industry
stands to be mere 2% of the revenue. These issues restrain the ability of valve
manufacturers to meet the market demand at the right time.
18
3. Large sized complex valves are mostly imported: low research and
development spend, lack of sophisticated manufacturing set-up and
success stories demonstrating the credibility of local organizations in
catering to such critical applications has led to import of complex and
large sized valves.
4. Choke Valves or Christmas Tree Valves Continue to be Difficult to
Address: Upstream O&G sector is dependent on exploration and
production (E&P) equipment suppliers such as National Oil well Varco
(NOV), and BHEL to address their need for choke valves or Christmas tree
valves. The ability of other Indian valve manufacturers to supply API choke
valves of larger size is limited because of the stringent norms, frequency
of procurement and procurement procedures followed by oil and gas
upstream sector. The substantial time and effort required for addressing
these requirements are considered as deterrents by several valve
suppliers.
2.8 Likely scenario of industrial valves market in next five years:
19
O&G sector demand: Players with ability to manufacture customized valves would be in demand Ball valves demand in this sector will increase
Indian customers are increasingly looking for best suitable products to control process efficiency This will push the manufactures to cater to demand of both on-off and control valves
On-off valve will witness heavy competition with many smal valve manufacturers entering the market, thus reducing profit margin and decreasing market valuation.
1
2
3
Process plant equipment: 3
Process plant equipment: 3
3.1 Overview:
3.2 Market assessment:
Major process plant machineries which include tanks, pressure vessels,
evaporators, stirrers, heat exchangers, towers & columns, crystallizer, furnace,
etc. are used in energy sector, gas, oil, refinery, chemical & petrochemical,
fertilizer, paper & pulp, sugar, cement, dairy industry, etc. There are over 200
units engaged in the manufacturer of process plant machinery in the country out
of which 65% are small & medium manufacturers.This sector provides
employment to 128,000 persons directly and 240,000 persons indirectly.
Estimated size of Process Plant Machinery sector in India is Rs. 22,244 Cr in
FY13. Process Plant machinery sector has grown with a CAGR of 12.5 % in last
five years. Exports to the tune of Rs.4,510Cr have been realized for major
equipment covering Fertilizers, Refinery, Petrochemicals, Oil and gas sectors etc.
and growing at a CAGR of 18.3%. Imports stood at Rs.2,100Cr during FY13 and
growing at a CAGR of 16.5%.
Process plant equipment:3
Figure 13: Projected production of process plant equipment in India
22
The Process plants have gone up in sizes. Large facilities have been developed
along our coastal areas. Technology infusion from sectors like Defence,
Aerospace and Nuclear, into the Process Plant equipment industry, has helped
our industry leapfrog in technology utilization and quality control. The industry
today is equipped with state of the art processes to engineer and fabricate
complexprocess equipment across different materials of construction. The plant
sizes of these companies have also increased and at times are comparable or
even larger than global plant companies.
Indian manufacturers are no longer confined to fabrication alone and have a
strong presence, across the entire value chain. They are catering to the needs of
the customers, from design and engineering at the back-end to erection and
commissioning at the front end and are competing with global majors for
Engineering, Procurement and Commissioning (EPC) contracts.
However what domestic industry is lacking is the know-how on process
technology, owing to which, we are dependent on Overseas process Licensors.
However China, on the other hand has attempted to get the knowhow on
process technology, by setting up research institutes and labs, and acquiring such
expertise from other regions.
• Large projects funded on limited recourse basis /Indian Export Credit
Agency is not mature to take up large projects.
• Lack of focused/ mass manufacturing mainly due to taxation related
paperwork which affects the manufacture of components in the value
chain
• Lack of network development
• Lack of Mass manufacturing
• Lack of Know-how on Process technology; Dependant on overseas
process licensors
• Import of second hand machinery: As per the present policy, old
machinery can be imported without any restriction of age, resulting into
huge import of second hand machinery into India. Old machinery is also
being imported to various SEZs without payment of tax and duties. This
machinery is refurbished later for use. This is adversely affecting the
domestic capital goods industry
3.3 Market restraints:
23
2224424913
27902
31250
35000
FY13 FY14 FY15 FY16 FY17
12%
3.1 Overview:
3.2 Market assessment:
Major process plant machineries which include tanks, pressure vessels,
evaporators, stirrers, heat exchangers, towers & columns, crystallizer, furnace,
etc. are used in energy sector, gas, oil, refinery, chemical & petrochemical,
fertilizer, paper & pulp, sugar, cement, dairy industry, etc. There are over 200
units engaged in the manufacturer of process plant machinery in the country out
of which 65% are small & medium manufacturers.This sector provides
employment to 128,000 persons directly and 240,000 persons indirectly.
Estimated size of Process Plant Machinery sector in India is Rs. 22,244 Cr in
FY13. Process Plant machinery sector has grown with a CAGR of 12.5 % in last
five years. Exports to the tune of Rs.4,510Cr have been realized for major
equipment covering Fertilizers, Refinery, Petrochemicals, Oil and gas sectors etc.
and growing at a CAGR of 18.3%. Imports stood at Rs.2,100Cr during FY13 and
growing at a CAGR of 16.5%.
Process plant equipment:3
Figure 13: Projected production of process plant equipment in India
22
The Process plants have gone up in sizes. Large facilities have been developed
along our coastal areas. Technology infusion from sectors like Defence,
Aerospace and Nuclear, into the Process Plant equipment industry, has helped
our industry leapfrog in technology utilization and quality control. The industry
today is equipped with state of the art processes to engineer and fabricate
complexprocess equipment across different materials of construction. The plant
sizes of these companies have also increased and at times are comparable or
even larger than global plant companies.
Indian manufacturers are no longer confined to fabrication alone and have a
strong presence, across the entire value chain. They are catering to the needs of
the customers, from design and engineering at the back-end to erection and
commissioning at the front end and are competing with global majors for
Engineering, Procurement and Commissioning (EPC) contracts.
However what domestic industry is lacking is the know-how on process
technology, owing to which, we are dependent on Overseas process Licensors.
However China, on the other hand has attempted to get the knowhow on
process technology, by setting up research institutes and labs, and acquiring such
expertise from other regions.
• Large projects funded on limited recourse basis /Indian Export Credit
Agency is not mature to take up large projects.
• Lack of focused/ mass manufacturing mainly due to taxation related
paperwork which affects the manufacture of components in the value
chain
• Lack of network development
• Lack of Mass manufacturing
• Lack of Know-how on Process technology; Dependant on overseas
process licensors
• Import of second hand machinery: As per the present policy, old
machinery can be imported without any restriction of age, resulting into
huge import of second hand machinery into India. Old machinery is also
being imported to various SEZs without payment of tax and duties. This
machinery is refurbished later for use. This is adversely affecting the
domestic capital goods industry
3.3 Market restraints:
23
2224424913
27902
31250
35000
FY13 FY14 FY15 FY16 FY17
12%
• Export Credit Agency (ECA) funding: There is a tendency for mega
projects to be funded on limited re-course basis, supported by funding
from ECAs.
• Logistics: Infrastructure constraints make it risky to move large size
equipment. Need for global competitiveness demands setting up of
process plant of large capacity. This necessitates large size equipment.
Unfortunately it takes far less time to import goods from Middle East &
Europe than to move the equipment over 200 km on Indian roads.
3.4 Likely scenario of process plant equipment market in next five years:
24
About Tata Strategic
The growth in the chemical, food, pharmaceutical and power sectors in India is bound to put a good spin into the process equipment industry
The major thrust of research and development in the agri-food sector has been on the primary processing of food rather on developing equipment. This would lead to increase in imports
The multinational consumer products' manufacturers are increasing their investments in emerging markets like India. This is expected to drive demand for manufacturing of packaging equipment in India.
1
2
3
• Export Credit Agency (ECA) funding: There is a tendency for mega
projects to be funded on limited re-course basis, supported by funding
from ECAs.
• Logistics: Infrastructure constraints make it risky to move large size
equipment. Need for global competitiveness demands setting up of
process plant of large capacity. This necessitates large size equipment.
Unfortunately it takes far less time to import goods from Middle East &
Europe than to move the equipment over 200 km on Indian roads.
3.4 Likely scenario of process plant equipment market in next five years:
24
About Tata Strategic
The growth in the chemical, food, pharmaceutical and power sectors in India is bound to put a good spin into the process equipment industry
The major thrust of research and development in the agri-food sector has been on the primary processing of food rather on developing equipment. This would lead to increase in imports
The multinational consumer products' manufacturers are increasing their investments in emerging markets like India. This is expected to drive demand for manufacturing of packaging equipment in India.
1
2
3
Founded in 1991 as a division of Tata Industries Ltd, Tata Strategic Management
Group is the largest Indian own management consulting firm. It has a 70
member strong consulting team supported by a panel of domain experts. Tata
Strategic has undertaken 500+ engagements, with over 100 clients, across
countries and sectors.
It has a growing client base outside India with increasing presence outside the
Tata Group. A majority of revenues now come from outside the group and more
than 20% revenues from clients outside India.
Tata Strategic offers a comprehensive range of solutions covering Direction
Setting, Driving Strategic Initiatives and Implementation Support
About Tata Strategic:
26
Our Offerings
Report co-authored by Manish Panchal, ShripadRanade and Vijay Khairnar
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Market insights
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Scenario Planning
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Corporate Center Design
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Operations Marketing & SalesOrganization Effcetiveness
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Group is the largest Indian own management consulting firm. It has a 70
member strong consulting team supported by a panel of domain experts. Tata
Strategic has undertaken 500+ engagements, with over 100 clients, across
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Setting, Driving Strategic Initiatives and Implementation Support
About Tata Strategic:
26
Our Offerings
Report co-authored by Manish Panchal, ShripadRanade and Vijay Khairnar
27
•
•
•
•
•
Vision
Market insights
Growth Strategy/Business
Rural Strategy
Digital Strategy
•
•
•
•
•
India Entry
Alliance & Acquisition Planning
Strategic due dilligence
Scenario Planning
Manufacturing Strtegy
•
•
•
•
•
•
•
Organization Structure
Corporate Center Design
Roles & Decision rules
Performance Management
Capability Assessment
Talent Management
Delegation & MIS
•
•
•
•
•
Revenue Enhancement
Product Innovation
Market Share-Rural/Urban
Go to Market
Dealer Effectiveness
•
•
•
•
•
•
•
Supply Chain Optimization
Throughput enhancement
Superior Fulfillment
Project Excellence
Procurement Transformation
Strategic Cost Reduction
Vendor Compliance
Strategy
Set Direction
Drive Strategic Initiatives
Support Implementation
Operations Marketing & SalesOrganization Effcetiveness
•
•
•
Implementation Plan
Program Management
Refinements/Course Corrections
Implementation Support
(This article was published in Manufacturing Today May 2012 issue)
Pumping up the DemandOverview of the Indian Pumps Industry
The Indian pumps industry, is the throes of an uncertain present but the key to
grow, despite the tough times, is to provide integrated solutions that help
enhance efficiencies, promote innovation and optimize lifecycle ownership
costs of customers, say - Atish Mukhopadhyaya (Principal – Delivery
Excellence) & Anirudh Reddy (Consultant – Infrastructure & EPC Practice)
of Tata Strategic Management Group.
Introduction
State of Market
India has a strong base of pump manufacturing with both Indian and international
players. The planned investments in sectors like power, water, oil & gas augur
well for high growth for this sector. Domestic sales are expected to grow at 16-
18% pa while exports are projected to grow at ~10-12% pa in the next few
years.
Indian pumps market is fairly mature with an estimated annual production of ~2
million units (of various types) with nearly 95% of domestic consumption being
met through local production facilities.
The pumps market is broadly classified into two categories:
1) Industrial Pumps – catering to the infrastructure sectors
2) Agriculture / Domestic Pumps
There are a number of international players like KSB Pumps, Flowserve, Aquasub
etc. which have manufacturing bases in India. Moreover the ability of low cost
manufacturing and domestic demand has created an attractive environment for
most international players. These companies have also introduced latest
technologies in energy efficiency and high performance in the Indian market.
28
Segmentation
Centrifugal pumps dominate the Indian market with ~ 95% of total sales. Within
centrifugal pumps, single-stage radial flow pumps and submersible pumps are
market leaders. Positive displacement pumps account for the remaining 5% of
market revenues.
Figure 14: Segmentation of Pumps Industry
Competitive Landscape
In India, there are over 800 pump manufacturers. There are a few large players
(Indian and MNCs with revenues above INR 100 Cr), and plenty of Small &
Medium Enterprise (SME) players. Some of the large players, like Kirloskar and
FlowMore have expanded into the EPC space and are providing turnkey
solutions.
Figure 15 : Key Players (with focus sectors of operation)
29
Types of Centrifugal Pumps
Key Sector - Imigation, Domestic, Power generatio, Water & Wastewater
Type of Positive Displacement Pumps
Key Sector - Oil & gas, Power generation, Food & beverages
Market Share by Domestic Revenues (FY10)
Single-Stage Radial
Submersible
Multi-stage Radial
Axial & Mixed
39%
31%
18%
12%
Market Share by Domestic Revenues (FY10)
Rotary
Reciprocating
Peristaltic
73%
24%
3%
Water and wastewater, Power Generation, oil & gas
Irrigation & Domestic
Power generation, building services
SME players predominantly focus on agriculture sector
Oil & gas, Power Generation Food & beverages
Colfax India
KSB Pumps
CRI Pumps
Kirloskar
Centrifugal Pumps
Positive Displacement
Pumps
(This article was published in Manufacturing Today May 2012 issue)
Pumping up the DemandOverview of the Indian Pumps Industry
The Indian pumps industry, is the throes of an uncertain present but the key to
grow, despite the tough times, is to provide integrated solutions that help
enhance efficiencies, promote innovation and optimize lifecycle ownership
costs of customers, say - Atish Mukhopadhyaya (Principal – Delivery
Excellence) & Anirudh Reddy (Consultant – Infrastructure & EPC Practice)
of Tata Strategic Management Group.
Introduction
State of Market
India has a strong base of pump manufacturing with both Indian and international
players. The planned investments in sectors like power, water, oil & gas augur
well for high growth for this sector. Domestic sales are expected to grow at 16-
18% pa while exports are projected to grow at ~10-12% pa in the next few
years.
Indian pumps market is fairly mature with an estimated annual production of ~2
million units (of various types) with nearly 95% of domestic consumption being
met through local production facilities.
The pumps market is broadly classified into two categories:
1) Industrial Pumps – catering to the infrastructure sectors
2) Agriculture / Domestic Pumps
There are a number of international players like KSB Pumps, Flowserve, Aquasub
etc. which have manufacturing bases in India. Moreover the ability of low cost
manufacturing and domestic demand has created an attractive environment for
most international players. These companies have also introduced latest
technologies in energy efficiency and high performance in the Indian market.
28
Segmentation
Centrifugal pumps dominate the Indian market with ~ 95% of total sales. Within
centrifugal pumps, single-stage radial flow pumps and submersible pumps are
market leaders. Positive displacement pumps account for the remaining 5% of
market revenues.
Figure 14: Segmentation of Pumps Industry
Competitive Landscape
In India, there are over 800 pump manufacturers. There are a few large players
(Indian and MNCs with revenues above INR 100 Cr), and plenty of Small &
Medium Enterprise (SME) players. Some of the large players, like Kirloskar and
FlowMore have expanded into the EPC space and are providing turnkey
solutions.
Figure 15 : Key Players (with focus sectors of operation)
29
Types of Centrifugal Pumps
Key Sector - Imigation, Domestic, Power generatio, Water & Wastewater
Type of Positive Displacement Pumps
Key Sector - Oil & gas, Power generation, Food & beverages
Market Share by Domestic Revenues (FY10)
Single-Stage Radial
Submersible
Multi-stage Radial
Axial & Mixed
39%
31%
18%
12%
Market Share by Domestic Revenues (FY10)
Rotary
Reciprocating
Peristaltic
73%
24%
3%
Water and wastewater, Power Generation, oil & gas
Irrigation & Domestic
Power generation, building services
SME players predominantly focus on agriculture sector
Oil & gas, Power Generation Food & beverages
Colfax India
KSB Pumps
CRI Pumps
Kirloskar
Centrifugal Pumps
Positive Displacement
Pumps
The unorganized sector accounts for 60% of sales in agriculture where large
players have a particular disadvantage in targeting the price sensitive market.
Some levels of consolidation could occur among these deeply fragmented
players. It is interesting to note that Coimbatore houses the largest number of
pump manufacturers (Figure 16).
Figure 16: Presence of pump
manufacturing hubs
Figure 17: Forecasts for Domestic revenues
and growth
The pumps market had an estimated 16% pa growth over FY07-11 (for domestic
sales). If the investments in infrastructure sector move as per plan in the coming
years, the market could witness an optimistic growth of ~ 20% pa, while a
slowdown in economy would still result in a reduced y-o-y growth of ~12%
(Figure 17).
Pump manufacturers employ different channels in catering to the end-user
categories.
Industrial Segment (B2B Sales): Key influencing decisions for this segment are
the life-cycle costs and the sales service network (availability of spares and after-
sales service). Sales of these pumps are done either from manufacturers (or
dedicated dealers) or are clubbed with EPC packages. In this market, integrated
service, of providing the entire gamut of products / service offerings has a
distinct competitive advantage.
Agriculture / Domestic Segment (B2C Sales): Small pumps used in agriculture
and low-rise tenements are typically sold through a distributor network. Lowest
Sales Channel
30
price is the single most important factor influencing purchaser decision. The Star
BEE rating (for energy efficiency) also impact customer preferences increasingly.
So despite large players facing fierce price competition in this segment from
local SMEs, energy efficient products delivered through an optimized supply
chain is the key to success.
India exports pumps to nearly 90-100 countries, with countries like USA (~13%)
and Germany (~12%) being the largest destinations. International players, with
Indian presence, have buyback arrangements, i.e. pumps manufactured in their
Indian facilities are sold abroad. The total share of Indian pumps in global exports
is less than 3%. Exports registered a drop in FY10 (YoY drop by 8%) (Fig 18) due
to the recessionary pressures but have since picked up and are estimated to
grow ~10% pa in coming years.
Middle East has emerged as an attractive export destination as low priced Indian
pumpsets have an advantage over their European and American counterparts.
Middle East lacks a domestic manufacturing base ensuring dependence on
imports. Most of the sales occur as part of package of products meant for large
EPC projects. The entry of Indian EPC players in these markets could act as a
catalyst for future exports. Imports account for ~ 5% of the total domestic
consumption in India; USA, China and France are the largest sources. Low-cost
model of the local manufacturers has limited the scale of Chinese imports in
agriculture sector while the lack of an established after-sales service has limited
their expansion in industrial sectors.
Exports / Imports
Figure 18: Trends for exports-imports of
pumps
Figure 19: Projections for growth in
end-use sectors
31
16%
12%
16%
20%
5.835
3.250
10,280
12,250
14,520
FY07 FY11E FY16E
Scenario Analysis for revenue forecast for pumps market in india (FY11-FY16) INR Cr
Source : Industry Reports, Analysis by Tata Strategic
Conservative Current Scenario Optimistic
Export-Import Trends for Pumps (In INR Cr)
2,400
3,2302,850
3,450
1,2751,740 1,590
1,900
FY08 FY09 FY10 FY11
Exports Imports
SOURCE : EXIM DATABASE
1.140
85%
2,110
11th Plan 12th Plan
Water & Supply
Oil & Gas
Power
Irrigation
Source : Planning Commission, Analysis by Tata Strategic
Growth in projected investments in end-use sectors (INR '000Cr)
110125
245
660
1290
390
260170
The unorganized sector accounts for 60% of sales in agriculture where large
players have a particular disadvantage in targeting the price sensitive market.
Some levels of consolidation could occur among these deeply fragmented
players. It is interesting to note that Coimbatore houses the largest number of
pump manufacturers (Figure 16).
Figure 16: Presence of pump
manufacturing hubs
Figure 17: Forecasts for Domestic revenues
and growth
The pumps market had an estimated 16% pa growth over FY07-11 (for domestic
sales). If the investments in infrastructure sector move as per plan in the coming
years, the market could witness an optimistic growth of ~ 20% pa, while a
slowdown in economy would still result in a reduced y-o-y growth of ~12%
(Figure 17).
Pump manufacturers employ different channels in catering to the end-user
categories.
Industrial Segment (B2B Sales): Key influencing decisions for this segment are
the life-cycle costs and the sales service network (availability of spares and after-
sales service). Sales of these pumps are done either from manufacturers (or
dedicated dealers) or are clubbed with EPC packages. In this market, integrated
service, of providing the entire gamut of products / service offerings has a
distinct competitive advantage.
Agriculture / Domestic Segment (B2C Sales): Small pumps used in agriculture
and low-rise tenements are typically sold through a distributor network. Lowest
Sales Channel
30
price is the single most important factor influencing purchaser decision. The Star
BEE rating (for energy efficiency) also impact customer preferences increasingly.
So despite large players facing fierce price competition in this segment from
local SMEs, energy efficient products delivered through an optimized supply
chain is the key to success.
India exports pumps to nearly 90-100 countries, with countries like USA (~13%)
and Germany (~12%) being the largest destinations. International players, with
Indian presence, have buyback arrangements, i.e. pumps manufactured in their
Indian facilities are sold abroad. The total share of Indian pumps in global exports
is less than 3%. Exports registered a drop in FY10 (YoY drop by 8%) (Fig 18) due
to the recessionary pressures but have since picked up and are estimated to
grow ~10% pa in coming years.
Middle East has emerged as an attractive export destination as low priced Indian
pumpsets have an advantage over their European and American counterparts.
Middle East lacks a domestic manufacturing base ensuring dependence on
imports. Most of the sales occur as part of package of products meant for large
EPC projects. The entry of Indian EPC players in these markets could act as a
catalyst for future exports. Imports account for ~ 5% of the total domestic
consumption in India; USA, China and France are the largest sources. Low-cost
model of the local manufacturers has limited the scale of Chinese imports in
agriculture sector while the lack of an established after-sales service has limited
their expansion in industrial sectors.
Exports / Imports
Figure 18: Trends for exports-imports of
pumps
Figure 19: Projections for growth in
end-use sectors
31
16%
12%
16%
20%
5.835
3.250
10,280
12,250
14,520
FY07 FY11E FY16E
Scenario Analysis for revenue forecast for pumps market in india (FY11-FY16) INR Cr
Source : Industry Reports, Analysis by Tata Strategic
Conservative Current Scenario Optimistic
Export-Import Trends for Pumps (In INR Cr)
2,400
3,2302,850
3,450
1,2751,740 1,590
1,900
FY08 FY09 FY10 FY11
Exports Imports
SOURCE : EXIM DATABASE
1.140
85%
2,110
11th Plan 12th Plan
Water & Supply
Oil & Gas
Power
Irrigation
Source : Planning Commission, Analysis by Tata Strategic
Growth in projected investments in end-use sectors (INR '000Cr)
110125
245
660
1290
390
260170
Key Drivers for Growth
Challenges
The pumps industry is projected to record high sales growth on the strength of
the following key drivers:
1) Growth in Infrastructure: Announced investments of $ 1 Tn in
infrastructure sector in 12th Five Year Plan, will boost the demand for
pumps in key end-use sectors (Fig 19)
2) New sources of water: Need for newer water sources (deep water
tables / desalination) will create demand for pumps offering increased
capacity and efficiency
3) Increase in urban density : Growth in (residential /commercial market,
expected at ~ 9-10%pa over next 5-6 years, will increase demand for
pumps
4) Energy Efficient Solutions : Rising costs of power and increasing
awareness about environment will create a demand for energy efficient
pumps
The pumps industry faces several challenges as outlined below:
1) Global Slowdown : Macroeconomic turbulence could negatively impact
infrastructure investments leading to a reduction in demand for pumps
and a pressure to reduce prices for manufacturers
2) Subsidies: Free power to farmers, act as a deterrent to adoption of
energy efficient solutions
3) Margin Pressures: Increases in prices of raw materials like steel have
increased input costs for manufacturers
4) Price Sensitivity: Presence of large number of SMEs offering low-priced
solutions puts pressure on market share growth of large players in the
agriculture sector
5) Low spending on R&D : Ability of SME units to replicate designs offered
by Indian / multi-national firms dampens introduction of new designs
6) Rising / Fluctuating Input Costs: Increase in steel prices has hiked the
input costs for manufacturers, who are unable to pass it on to end-
customers
32
Strategies for the Future
Leading pump players must clearly identify their priority segments, rather than
expend their energies across the entire industry. Large companies face the
critical challenge of having to compete on price while targeting the agriculture
segment. These companies must look at hedging their risks with focus on
growth opportunities in the industrial segment. The pumps sector must
collaborate with infrastructure players to cushion the overall impact of reduced
margins from the end-application points.
Enhancing of market share in the industrial sector will require pump
manufacturers to focus on strengthening all aspects of the value chain, from
customer-centric solutions to service offerings. Some of the strategies that could
be employed are:
1) Becoming a “One stop solution provider” - capable of providing
integrated offerings through diverse range of products and after-sales
service network to quality conscious customers
2) Emphasize on Lifecycle Costs - provide energy efficient solutions,
capable of reducing operating costs
3) Long-term Tie-ups with EPC players – This would allow greater leverage in
guarding against pricing pressures and also provide an entry vehicle into
export markets (as part of EPC packages)
• “Opportunities in
irrigation are limited due
to pricing constraints and
low margins”
• “Long-term tieups with
EPC players could ensure
greater spread of pumps
in select markets”
33
Enhance
Market Share
Industrial Segment
Integrated
Offerings
Lifecycle
Cost
Approach
Tie-ups
with EPC
players
Key Drivers for Growth
Challenges
The pumps industry is projected to record high sales growth on the strength of
the following key drivers:
1) Growth in Infrastructure: Announced investments of $ 1 Tn in
infrastructure sector in 12th Five Year Plan, will boost the demand for
pumps in key end-use sectors (Fig 19)
2) New sources of water: Need for newer water sources (deep water
tables / desalination) will create demand for pumps offering increased
capacity and efficiency
3) Increase in urban density : Growth in (residential /commercial market,
expected at ~ 9-10%pa over next 5-6 years, will increase demand for
pumps
4) Energy Efficient Solutions : Rising costs of power and increasing
awareness about environment will create a demand for energy efficient
pumps
The pumps industry faces several challenges as outlined below:
1) Global Slowdown : Macroeconomic turbulence could negatively impact
infrastructure investments leading to a reduction in demand for pumps
and a pressure to reduce prices for manufacturers
2) Subsidies: Free power to farmers, act as a deterrent to adoption of
energy efficient solutions
3) Margin Pressures: Increases in prices of raw materials like steel have
increased input costs for manufacturers
4) Price Sensitivity: Presence of large number of SMEs offering low-priced
solutions puts pressure on market share growth of large players in the
agriculture sector
5) Low spending on R&D : Ability of SME units to replicate designs offered
by Indian / multi-national firms dampens introduction of new designs
6) Rising / Fluctuating Input Costs: Increase in steel prices has hiked the
input costs for manufacturers, who are unable to pass it on to end-
customers
32
Strategies for the Future
Leading pump players must clearly identify their priority segments, rather than
expend their energies across the entire industry. Large companies face the
critical challenge of having to compete on price while targeting the agriculture
segment. These companies must look at hedging their risks with focus on
growth opportunities in the industrial segment. The pumps sector must
collaborate with infrastructure players to cushion the overall impact of reduced
margins from the end-application points.
Enhancing of market share in the industrial sector will require pump
manufacturers to focus on strengthening all aspects of the value chain, from
customer-centric solutions to service offerings. Some of the strategies that could
be employed are:
1) Becoming a “One stop solution provider” - capable of providing
integrated offerings through diverse range of products and after-sales
service network to quality conscious customers
2) Emphasize on Lifecycle Costs - provide energy efficient solutions,
capable of reducing operating costs
3) Long-term Tie-ups with EPC players – This would allow greater leverage in
guarding against pricing pressures and also provide an entry vehicle into
export markets (as part of EPC packages)
• “Opportunities in
irrigation are limited due
to pricing constraints and
low margins”
• “Long-term tieups with
EPC players could ensure
greater spread of pumps
in select markets”
33
Enhance
Market Share
Industrial Segment
Integrated
Offerings
Lifecycle
Cost
Approach
Tie-ups
with EPC
players
Expansion into rural markets is a difficult proposition. Therefore innovative sales
strategies like creating a sales channel in conjunction with Self-Help Groups or
micro-finance institutions is key to optimizing costs. Rationalizing distribution
channel structure and re-aligning channel incentives is the way forward to
increase access in these difficult markets.
The current mood in the industry alternates between restlessness and optimism
for growth. But the need of the hour is to create partnerships with priority
customers for an integrated sales & service play, while re-aligning the
distribution network for optimizing costs, enhancing service and understanding
customer needs better. The focus should also be on energy efficient products
and innovative route-to-market strategies. These measures will help increase the
latent demand for one-stop-shop services for both institutional and retail
customers, and enable companies to reap the India growth story.
Conclusion
© Tata Strategic Management Group, 2012. No part of it may be circulated or reproduced
for distribution without prior written approval from Tata Strategic Management Group.
34
Expansion into rural markets is a difficult proposition. Therefore innovative sales
strategies like creating a sales channel in conjunction with Self-Help Groups or
micro-finance institutions is key to optimizing costs. Rationalizing distribution
channel structure and re-aligning channel incentives is the way forward to
increase access in these difficult markets.
The current mood in the industry alternates between restlessness and optimism
for growth. But the need of the hour is to create partnerships with priority
customers for an integrated sales & service play, while re-aligning the
distribution network for optimizing costs, enhancing service and understanding
customer needs better. The focus should also be on energy efficient products
and innovative route-to-market strategies. These measures will help increase the
latent demand for one-stop-shop services for both institutional and retail
customers, and enable companies to reap the India growth story.
Conclusion
© Tata Strategic Management Group, 2012. No part of it may be circulated or reproduced
for distribution without prior written approval from Tata Strategic Management Group.
34
Manish Panchal – Practice Head
Chemicals, Logistics and Energy
Mobile : +91 98205 20303
E-mail : [email protected]
Phone : +91 22 6637 6713
Shripad Ranade – Senior Principal Auto and Engineering Mobile : +91 98203 05663E-mail : [email protected] : +91 22 6637 6731
Federation of Indian Chambers of Commerce & Industry
Federation House, Tansen Marg, New Delhi - 110001 (India)
T: +91 11 2348 7315 F: +91 11 2335 9734
W: www.ficci.com
Established in 1927, FICCI is the largest and oldest apex business organisation in India. Its history is closely interwoven with India’s struggle for independence, its industrialization, and its emergence as one of the most rapidly growing global economies. FICCI has contributed to this historical process by encouraging debate, articulating the private sector’s views and influencing policy.
A non-government, not-for-profit organisation, FICCI is the voice of India’s business and industry.
FICCI draws its membership from the corporate sector, both private and public, including SMEs and MNCs; FICCI enjoys an indirect membership of over 2,50,000 companies from various regional chambers of commerce.
FICCI provides a platform for sector specific consensus building and networking and as the first port of call for Indian industry and the international business community.
Our Vision : To be the thought leader for industry, its voice for policy change and its guardian for effective implementation.
Our Mission: To carry forward our initiatives in support of rapid, inclusive and sustainable growth that encompass health, education, livelihood, governance and skill development.
To enhance efficiency and global competitiveness of Indian industry and to expand business opportunities both in domestic and foreign markets through a range of specialised services and global linkages.
TATA Strategic Management Group is the largest Indian-owned management consulting firm. With over twenty years of management consulting experience, we operate in SAARC and West Asian countries. As an India based consulting firm, we help clients gain a perspective on India entry strategy, rural markets and other India insights.
We have helped clients across multiple industry sectors create competitive advantage and sustain superior performance. We weave together innovative advice, workable solutions and provide implementation support to enable our clients reach the pinnacle and stay there.
Manoj Mehta – Deputy Director
M: +91 9891098772
Mohit Ganglani – Sr. Asst. Director
M: +91 9999221199