Eastern European Metallic Welding Equipment and Consumables Markets

Abstract

Establishing a Presence in Eastern Europe Can Help Capitalize on Future Growth

With the continued migration of production operations to eastern Europe, metallic welding equipment manufacturers that fail to build a presence there soon could miss significant growth opportunities. The number of manufacturers entering the market is rapidly growing, raising entry barriers and intensifying competition. Failure to react quickly to the trend could trap welding equipment and consumables' manufacturers in a stagnating market. However, participants need to ensure that the move to the eastern European market is economically viable for them. Setting up production facilities incurs fixed costs that can be crippling during economic downturns as seen in Poland. Employing an approach that best meets equipment manufacturers' resources or exploring less costly options such as setting up sales offices and building relations with agents/distributors is more likely to result in growth and profitability than capital-intensive strategies.

This Frost & Sullivan research service analyses the eastern European markets for several different technologies and processes used in the welding and cutting of metals. The analysis segments the market by product type into arc welding equipment, welding consumables, resistance welding equipment, laser cutting and welding equipment, gas cutting and welding equipment, and welding robots.

EU Accession and More Foreign Direct Investment Spur Industrial Activity

As the European Union expands with more eastern European countries joining it, industrial activity is expected to rapidly increase, creating demand for welding equipment and consumables. "EU membership should abolish trade barriers and provide development funds for investment in infrastructure," says the author of the study.

The increase in foreign direct investment is expected to stimulate demand for welding equipment both directly and indirectly as new production facilities are built and existing ones improved. The significantly lower cost of materials, energy, land and especially skilled labour in eastern Europe when compared to that in western Europe is further attracting capital investments.

Advanced Technologies and the Rising Need for Automation Presents Strong Growth Opportunities

There is a strong trend towards laser welding as the technology continues to advance rapidly, enabling improvement in performance and expansion in the application range. Welding technologies such as resistance welding are losing out to laser welding and other mature technologies too are expected to see very limited growth opportunities.

"Companies that do not innovate, or do not have the capacity to produce advanced instruments will remain at the lower end of the market with lower revenue shares," notes the author. The segments for high specification instruments and newer technologies - mechanised equipment, weld sensors, software integration, welding simulation programmes, and improved power sources - are rapidly expanding. New materials, such as aluminium, also present new applications and market opportunities for metal welding equipment.