North American Valves and Actuators Markets for Process Industries

Abstract

Renewed Investments in Fresh Projects Buoy the North American Valves and Actuators Markets for Process Industries

Both the U.S. Government and private enterprises are showing renewed interest in the valves and actuators market, helping it gradually recover from the depletion of proven oil and gas reserves and reduced returns from newer ones. The U.S. crude oil production is at a 50-year low and the onshore production in the lower states has fallen significantly. Nevertheless, there has been considerable investment in the generation and transportation of liquefied natural gas (LNG), which, in turn, generates demand for valves and actuators. New power generation projects are also receiving increased funding, further creating a strong market for valves and actuators. The federal governments focus on cleaner and healthier operations has also opened up the food & beverages and pharmaceuticals sectors. Due to this demand, valves and actuator companies are launching products that comply with regulations and offer enhanced efficiency.

The Frost & Sullivan research service examines the North American valves and actuators markets for process industries. It segments the valves based on operation into quarter-turn valves, multi-turn valves, control valves, self-actuated valves, and other valves and actuators. The study also discusses the major industry challenges, market drivers and restraints, and potential threats faced by these companies along with a comprehensive analysis of the market.

Demand for Valves Intensifies Following the Liberalization of the Power Generation Industry

The North American power generation sector has overcome several odds and has bounced back with the liberalization of the power generation industry. With greater investments in an increasing number of new projects, electric power generation has risen by 2.2 percent in 2004 from 2003.

"The federal energy authorities of the United States, Canada, and Mexico have already initiated talks about a common energy strategy," says the analyst of this research. "These talks include integration of the power grids of the three countries and focus on promoting electricity trade across the U.S.-Mexico borders." The construction and higher generation capacity of plants is expected to significantly hike the installation and replacement of valves and actuators.

Manufacturers Ease Price Pressure by Outsourcing Production to Low-cost Countries

Participants in the fragmented and extremely competitive North American valves and actuators market have to innovate strategies and product features to set themselves apart. The highly populated market has also led to increasing price pressure. To counter this price war, manufacturers have been outsourcing the production of key components of valves and actuators to low-cost countries such as China, India, and Malaysia. This trend is likely to intensify in the future, with some companies even establishing research and development (R&D) units in some of these countries.

"Globalization of manufacturing and localization of inventory has helped market participants better address customer issues at short notice, which helps customers avoid production losses," notes the analyst. "This not only helps reduce the downtime of the process system but also increases the efficiency and throughput for the customers, thereby driving demand for the products."