The globalization wave, outsourcing surge and the sizzling economies in Asia-Pacific - particularly India and China - create an attractive picture for investments in the pumps market. With its seemingly limitless supply of low manufacturing cost benefits and the favorable investment climate, the Asia-Pacific region has an immeasurable amount of potential.
Indeed, the perception is that every factory closing in America or Europe is destined to reopen in India or China. However, Vietnam is expected to be one of the fastest-growing economies in Asia and is now considered the next low-cost alternative for manufacturers.
The pumps market in Asia-Pacific is currently witnessing a positive trend that is being driven by huge investments in related processing industries - especially in the water, wastewater and oil and gas industries. Increasing investments in water treatment, and the development of the chemical and oil and gas industries, are expected to provide potential revenue growth for this market over the next seven years.
Propelling Growth: Key Market Drivers
Growing Demand for Energy Stimulates Market Growth Rate:The growing demand for energy, especially in the oil and gas, chemical and power industry, presents new business opportunities for manufacturers. Customers expect their equipment to have a longer life and higher reliability in industrial applications. This factor is driving this market to produce higher-performance pumps and optimum utilization of resources.
Improving Economic Scenario Boosting Development:The overall pumps market is being greatly influenced by recent developments in Vietnam, Indonesia, India and China. The Asia-Pacific region is projected to remain the fastest-growing market and is most likely to remain an attractive economic region, given its lower labor costs, cost-effective land, and good geographical location.
Industrial Expansion and New Construction Activity:The globalization of the pumps market and the need for all manufacturers to work more closely with their customers has resulted in the expansion of production facilities. Industrial and residential construction in these regions will continue to witness a strong growth in sales revenues. Demographic forces have also contributed to strengthening the housing demand, which is mainly driven by population growth.
End-user Demands for Increased Quality and Reliability Increases Revenue:In most end-user industries, pumpapplications are highly price sensitive and as a result, manufacturers now focus increasingly on product quality and energy costs. This is most obvious in the cases of national key projects or foreign-invested mega projects. Hence, pump manufacturers must make considerable efforts to improve their quality and reliability by applying new materials, such as super stainless steel, zirconium and graphite.
Table 1 highlights some of the key trends and investments by major participants in the Asia-Pacific pumps market during 2006-2007.
Flowserve set up a new pumps manufacturing facility in Tamil Nadu, India and Suzhou, China in April 2007. The new facility will support their existing operations in Asia-Pacific and provide pumps products for oil and gas, power and chemical industries.