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Strategic Analysis of the South African Heat Exchangers Market
Frost & Sullivan, June 2011, Pages: 104
The aim of this research is to analyse the heat exchanger market in South Africa with a view of providing strategic insight into growth opportunities and the shape and development of the industry. The research service begins with the identification and evaluation of the impact of key industry challenges, market drivers and restraints on the South African heat exchangers market for the period 2009 to 2015. The second part of the research service analyses market sizes for the various heat exchanger product types and associated end-user sector demand trends. The research service concludes with the provision of a strategic overview of key expansion projects that will affect the South African heat exchanger market over the forecast period.
Research Overview
This research service titled Strategic Analysis of the South African Heat Exchangers Market provides a comprehensive analysis of the South African heat exchangers market from 2007 to 2015. It offers strategic insights into growth opportunities and development of the market. In this research, expert analysts thoroughly examine the following markets: cooling towers, shell and tube heat exchangers, plate and frame heat exchangers and air-cooled condensers.
Market Overview
New Build Programs Stoke the South African Heat Exchangers Market
Planned Capital Expansion Activities in Various End-user Industries Revive the Market
The South African heat exchangers market is enjoying a period of success, with Eskom’s New Build Programme fuelling a rise in product demand and ultimately, a compound annual growth rate of 16.2 per cent from 2011 to 2015. This programme is designed to address South Africa’s critical power shortage and has been allocated a budget of $49.36 billion from its inception in 2007 until 2013. The spending on new power plant construction will continue to rise, reaching approximately an estimated $100.00 billion by 2026. These substantial capital spends are likely to trigger demand for larger, high-value heat transfer equipment such as air-cooled condensers, bulk air coolers and cooling towers. The plethora of opportunities to be tapped is evidenced by the $10.27 billion expenditure on the construction of air-cooled condensers at Medupi power station. Eskom has also awarded contracts for $4.03 billion for the construction of air-cooled condensers in Kusile, which is projected to be completed in 2018.
“Eskom’s refurbishment of mothballed stations such as the Matla, Komati, Kriel and Duvha power stations is also expected to raise the demand for heat exchanger maintenance and repair services,” says the analyst of this research. “The main product types that are likely to raise the power generation industry’s maintenance and repair service demands include shell and tube heat exchangers, plate heat exchangers and cooling towers.” Planned capital expansion activity in the chemicals and petrochemicals sector will also considerably enhance the demand for locally supplied heat exchanger products and services. This is especially significant, as the global economic downturn of 2008-2009 had stalled capital investments within the key end-user segments of petrochemicals, power generation and manufacturing. The cancellation of projects such as the Coal IV project in the power generation industry and implementation delays in the Mthombo and Mafutha Projects were a further indication of the limited credit availability.
These deferments and cancellations have taken a toll on all equipment suppliers. However, Eskom’s move to increase electricity tariffs between 2010 and 2012 will help power utilities to plug the funding gap and execute some of their planned expansion projects. “Apart from the tariff hike, the bottoming out of the prices of raw materials is also providing some relief to local heat exchanger manufacturers,” notes the analyst. “This decrease in raw materials costs, as well as an increase in availability, will permit South African heat exchanger manufacturers to compete more effectively against their European and Asian counterparts.” Investments in improving process efficiency, increasing production output and reducing energy costs within the food and beverages, pulp and paper and mining and metals industries are among the other factors expected to raise the demand for heat exchanger products and maintenance and repair services.
Market Sectors
Expert analysts thoroughly examine the following market sectors in this research:
- Cooling towers
- Shell and tube heat exchangers
- Plate and frame heat exchangers
- Air cooled condensers
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