Pumps & Systems, January 2008

Critical Issues

SERO PumpSystems GmbH is a well recognized manufacturer of side channel pumps that has been in operation for more than 100 years, but SERO PumpSystems, Inc. (a Texas based subsidiary of SERO GmbH) just opened for business in January 2007. Different histories, different markets, but similar views on the current issues facing the pump industry.

Key factors that could  impact activity in 2008 are:

Continued weakening of the U.S. dollar
Tightening of the credit markets
High oil & natural gas prices
Limited manufacturing capacity
Upcoming U.S. Presidential election

These factors are by no means completely negative. As we all know, high oil prices have both negative and positive aspects. The positive is that vertically integrated oil and gas companies will increase their capital spending. For the first time in many years, a number of U.S. refineries have announced major expansions. Exploration and production activities are robust. Refineries and chemical facilities throughout the world are being built to meet rising demand, but at what point do high oil prices  start to constrict the U.S. & world economies?

The EURO/USD exchange rate will continue to be a hurdle for European-based companies, so it is incumbent upon us and others to bring a strong value proposition and real solutions to our business partners and end users      

These are just a few of the many challenges and opportunities that lie ahead in 2008, but we remain bullish on the North American market, represented best by SERO's  commitment to open operations here in 2007.  I am cautiously optimistic that in 2008, the ever-resilient U.S. market will experience GDP growth in the 2 to 3 percent range and demand for industrial pump products will remain strong.

Current Trends

GREEN. GREEN. GREEN. Need I say more? We can discuss the current and projected market segment trends (power generation expansion plans, new refinery capacity, the rising rig count, etc.), but in each case, there is going to be a green component. There's even a green market unto itself: renewable biofuels like ethanol, biodiesel and others. Face it, green is everywhere, so how do we react and participate?

Industry sources have estimated that pumping systems consume somewhere between 15 to 20 percent of the world's energy. Pump equipment is also second only to valves in allowing fugitive emissions to enter into the environment. At first blush, not very green, but over the past 15 years, our industry has made numerous technological advancements to meet the environmental challenges. Innovative companies providing innovative products and solutions will be in great demand as the rising tide for green continues.

Technologies Offering the Most Competitive Impact

To dovetail on the previous comments, sealless pump designs, "intelligent" pumps, predictive maintenance programs and higher efficiency motors have all been green advancements. However, simple actions such as selecting the proper pump design for the service can also provide significant benefits. 

Until I was introduced to side channel pumps, I never realized that there was a pump  capable of handling low flow, high head applications with large amounts of entrained gas and also had low NPSH requirements. A design that has existed for over 80 years and is well accepted in Europe and other regions around the world. Who knew? At least in the North American market, as I've discovered, not many people! Typically, other pump designs were "stretched" to meet these service parameters resulting in oversized pumps with oversized motors running very inefficiently. Not very green!  

This is just one example of a niche product that provides an efficient solution for unique applications and I am sure there are many others. Our market, however, needs to be open to ideas or products that do not readily fit the "standards" that are typically applied. As any craftsman knows, it's always best to have the right tool, even if it's a special tool, to do the job properly.