North American Heat Exchangers Markets

Abstract

Key End-User Cap on Budgets Reins in Heat Exchanger Market Growth

The North American heat exchanger market is facing some tough times as key end users such as the chemical, petrochemical and power sectors severely cut down on capital expenditure. Till the economy picks up and end users are ready to invest again, manufacturers will have to increase production efficiency to offset price pressures. Equipment maintenance services and replacement sales will also provide revenues in the interim.

This Frost & Sullivan research service analyzes the North American heat exchanger market, divided under three main criteria: product, end user, and geographical. It provides detailed insights into recent developments, trends, and emerging applications. This service also provides market forecasts as well as competitive and opportunity analysis.

Increasing Focus on Operational Efficiency, Cost Reductions, and Core Competencies

Unable to hike product prices, manufacturers are forced to absorb increased costs of raw materials and engineering investments. The only solution is to improve efficiency of operations and reduce overall costs. "While smaller companies may file for bankruptcy, others are concentrating on core activities and efficiency until demand increases," says the analyst.

Additional revenues lie in service diversification. Increasingly traditional end users, in a bid to focus on key areas, outsource maintenance related services such as equipment repair and parts replacement to heat exchanger manufacturers. Market participants are also using this slow period to become more customer-centric in anticipation of future business relationships.

Fresh Opportunities Rising From Environment Concerns Offset Cutthroat Internal Competition

Public and government concern about the environment offer new market opportunities. Manufacturers of shell and tube heat exchangers have developed new leak proof exchangers to deal with fugitive emissions, and air cooled exchanger manufacturing companies are introducing new non-ozone depleting refrigerants. "Escalating costs of water and conservation efforts are providing air cooled equipment a platform to position themselves as the most environment-friendly heat exchanger solution," says the analyst.

There is intense rivalry even between different technology manufacturers as they are forced to pursue the same end-user dollars. In addition to plunging product prices, the dearth of new projects is adding to their woes. Even though shell and tube heat exchangers' technology and versatility are well established, the entry of plate heat technology exchangers is eating into its market share. An influx of low-cost imports is also threatening standard shell and tubes. "Future growth of expanded plate heat exchangers and scrapped surface heat exchangers, is likely to be driven more by their niche expertise, rather than the market maturity of more traditional applications," says the analyst.