Strong growth potential in the industrial hydraulics sector

Global revenues for the industrial hydraulics market are expected to exceed $10 billion by 2013, which is a growth of 30% from 2010's revenues.

12/02/2011


The industrial market for hydraulic components is generally perceived to be a small, low growth portion of the global hydraulics market. However, the study released last month showed that global revenues reached almost $8 billion in 2010 and that this is expected to grow to exceed $10 billion in 2013. This represents growth of over 30% in three years. This is not low growth, and the statistics suggest that these additional revenues are not necessarily earmarked for the three leading hydraulics suppliers.

The high growth expected in the market at first looks surprising considering that hydraulics is a traditional technology, and competition from more fashionable alternatives such as electronics is limiting growth to levels below that of general industry. However, sustained market recovery during 2011 alone resulted in almost 14% revenue growth. Then on top of this, there is a rapidly expanding market base in Asia Pacific, and high levels of investment expected globally in oil, gas and mining projects in 2012. Thus by 2013, global market revenues are expected to be $2.3 billion larger than 2010. This is a substantial amount of revenue, and analysis of global share shows that it isn’t necessarily going to fall into the hands of the leading 3 hydraulics suppliers. While it is generally perceived that Bosch Rexroth, Parker Hannifin, and Eaton dominate the global market for industrial hydraulics, the report shows that these companies collectively accounted for less than 50% of global revenues for pumps, motors, cylinders and valves in 2010. This left over $4 billion accounted for by companies that all had less than 3.5% share. This is good news in the sense that it shows this show’s that these companies do not dominate supply to an exclusive degree. However, also highlights the potential difficulty for companies targeting high growth in this area.

This fragmented share is thought to be a result of the large number of low volume, localized contracts that constitute the industrial market. In fact, this is why many hydraulics suppliers have deliberately chosen to avoid the industrial sector altogether, focusing predominantly on the mobile sector where high volume contracts are available. This highlights that growth in the industrial hydraulics market would be incremental and take significant investment of both time and resource to accrue the high number of new customers required to increase sales substantially.

Profile photo of Robert Carter, a principal analyst for IMS Research who specializes in the power transmission. Courtesy: IMS ResearchHowever, this also leads us onto the positive. In this period of economic uncertainty, manufacturers of all types of automation components are attempting to diversify the market sectors they address in order to limit dependency on any particular one. It is the strategic marketing equivalent of increasing the number of ‘baskets’ in which to carry ones ‘eggs’. Pursuing growth in the industrial sector of the hydraulics market would heavily encourage this type of growth model, effectively acting as its own insurance.

So considering this, it would appear that targeting growth in the global industrial hydraulics sector, is not just feasible, but also quite an attractive option for suppliers to consider, should they have the required time and resource available.



The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Doubling down on digital manufacturing; Data driving predictive maintenance; Electric motors and generators; Rewarding operational improvement
2017 Lubrication Guide; Software tools; Microgrids and energy strategies; Use robots effectively
Prescriptive maintenance; Hannover Messe 2017 recap; Reduce welding errors
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Research team developing Tesla coil designs; Implementing wireless process sensing
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems
Natural gas engines; New applications for fuel cells; Large engines become more efficient; Extending boiler life

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me