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The Middle East Industrial Valves and Actuators Market
Frost & Sullivan, Oct 2010
This Frost & Sullivan research service titled The Middle East Industrial Valves and Actuators Market provides an overview of market dynamics, landscape, and future growth potential. In this research, Frost & Sullivan's expert analysts thoroughly examine the following market sectors: actuated industrial valves - actuated on-off and control valves and pneumatic, electric, and hydraulic actuators.
This research service presents a comprehensive analysis of the Middle East Industrial Valves & Actuators market. Revenue Analysis of this market within the broad categories of actuated valves and actuators are provided, which includes analysis of the market segmentation by product types, geography and end user industry, among other attributes of the market. Market Dynamics, Competitive structure and forecasts (until 2016) have also been provided.
Market Overview
After-sales Demand and Spike in the Number of Projects Boosts the Middle East Industrial Valves and Actuators Market
The proliferation of new projects and after-sales demand continue to spur the overall growth in the Middle East industrial valves and actuators market, even as new geographic and end user segments are poised to effect a paradigm change. Growth in this market will continue to depend largely on the oil and gas industry. However, other industrial sectors such as power and water desalination are expected to play a vital role in market development, as population in the Middle East grows and diversified industrialization is undertaken on a large scale. The realization of the immense potential from hitherto languishing geographic segments such as Iraq presents immense opportunity for market growth in the future. These changes, along with changing commercial dynamics, could affect the competitive structure of the market, as companies from South Korea, India, and China increase their local presence. “Large scale infrastructure development and rapid industrialization provide immense opportunity in the non - oil and gas valves and actuators market,” notes the analyst of this research service. “Numerous modern city projects are currently under construction across various Middle East countries, as part of efforts to diversify the economy from oil and gas dependence, as well as to provide jobs to burgeoning populations.”
Although the prospects for the market look upbeat, there are some challenges that need to be addressed. One major constraint in this market is the consolidated customer base and the continued efforts to reduce costs, which affect the companies’ profit margins. This challenge can be attributed to the extremely price driven nature of the industrial valves and actuators market. Although this is a common feature across countries and end-user industries, the Middle East oil and gas industry specifically, given that it is largely consolidated among a few National Oil Companies (NOCs), is able to exert a significant amount of pricing pressure. Thus, the industry is able to demand highly competitive pricing, simultaneously requiring equipment suppliers to meet exacting quality standards. Many of the major international market participants that are able to meet these stringent quality requirements end up significantly reducing their margins while supplying to these customers. Increase in raw material and labor cost, among other rising costs, further affects profitability. The recent economic downturn has intensified end users’ sensitivity to cost, thereby facilitating an increase in the foothold of low-price valve participants from China, India, and other countries. “Another major challenge in the near term is the prevailing tight-credit situation which is delaying various projects,” says the analyst. “However, this is not expected to be of major significance in the foreseeable future, as in the coming years, growing competition from low cost companies, the low impetus on oil exploration in Saudi Arabia, moratorium on gas exploration in Qatar and the politico-economic instability in Iran and Iraq will be among the major factors impacting market dynamics.”
Observations reveal that the locally addressable market accounted for a relatively smaller share of the total valve demand, as a majority of the new project orders are placed from international locations of the valve and actuator supplier. This trend is expected to change, as indicated by the increase in local valve supplier representation in the past one to two years. This trend is likely to become more prominent when the market witnesses growth, as end users insist on better regional presence and capabilities, and companies attempt to gain a competitive advantage.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Actuated industrial valves - actuated on-off and control valves
- Actuators - pneumatic, electric, and hydraulic
By End-user Vertical:
- Oil and gas
- Petrochemicals and chemicals
- Power and water
- Water and wastewater
- Metals and mining
- Others
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