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Strategic Analysis of Russian Welding Equipment Market
Frost & Sullivan, May 2011, Pages: 74
This is a market analysis for the welding equipment used in the different end user sectors in Russia. The study analyses the trends in the welding equipment market across the major end user industries like automotive and transportation, construction, oil and Gas/energy, process, shipbuilding and other industries. Product trends across arc, gas, resistance and other technologies like laser and friction stir have been presented in this research service. Key issues and trends have been identified in Russia. The research service also highlights the issues and challenges faced across the different end user industries and provides a forecast until 2017.
Research Overview
This research service analyses trends in total Russian welding equipment in major end-user industries such as automotive and transportation, shipbuilding, oil and gas, power/energy building machine, process, heavy machinery and fabrication, construction and process and others. The research offers a comprehensive overall view of the market including key challenges, drivers and restraints. In this research expert analysts thoroughly examine the following products: arc, resistance, gas and other (laser, friction stir and electron beam) welding equipment.
Market Overview
Oil and Gas Exploration, Together with Energy Projects, to Boost Use of Welding Equipment
The Russian welding equipment market has been recovering since early 2010. Increasing oil and gas exploration and distribution projects, coupled with the Russian Federation’s initiatives to develop the nuclear and wind power industries, will boost market prospects. However, growing imports will affect the market share of domestic participants. “The majority of Russia’s oil exports transit through Transneft controlled pipelines, indicating a rise in the usage of welding equipment for the pipeline and energy exploration industries,” notes the analyst of this research. “Several pipeline projects like the Yamal-Europe, Galsi and Medgaz have aided in the growth of welding equipment in the past, while proposed projects like the South Stream pipeline route under the Black Sea to take Russian gas to Europe are expected to drive the total market for welding equipment over the long-term.” Investments in
Russian oil and gas projects are anticipated to continue. Such trends will have a positive impact on the demand for welding equipment.
Several nuclear and wind power projects in Russia which were delayed during the recent economic crisis, affected welding equipment revenues in 2009. However, in a positive sign, the energy building machine industry is expected to witness a rebound. “These energy projects are poised to drive the volume and revenues for the total Russian welding equipment market,” adds the analyst. “The recovery of the Russian shipbuilding industry and surging steel production and consumption are also set to have a positive effect on welding over the long-term.”
Domestic Companies Face Tough Challenge from Low-Cost Imports
Oil and gas, construction and energy industries are the largest end users for welding equipment. These are critical industries that need high-end welding technologies and have increasingly demanded after-sales services and technical support. Domestic and global participants are being forced to provide these services at a low cost to counter rising price sensitivity. This, in turn, is reducing their profit margins.
Another challenge relates to the high level of imports; about 80 per cent of the total Russian welding equipment market consists of equipment imported from global majors and other low-cost manufacturers. The intensifying penetration of low-cost manufacturers and that of international companies through dealerships and strong distribution networks is resulting in the share of domestic companies continually declining. “This challenge is set to become more acute as competition intensifies with more participants establishing themselves in Russia to take advantage of the growth opportunities in the oil and gas and other end-user industries,” explains the analyst. “The market share of established domestic participants will decline unless they are able to counter the challenge of low-cost companies by offering competitive pricing or high-end technologies and product offerings like the global leaders.”
Market Sectors
Expert analysts thoroughly examine the following products in this research:
- Arc welding equipment
- Resistance welding equipment
- Gas welding equipment
- Other welding equipment (laser, friction stir and electron beam)
By End User:
- Automotive and transportation
- Shipbuilding
- Oil and gas
- Power/energy building machine
- Heavy machinery and fabrication
- Construction
- Process and others
Product samples
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