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.



No comments
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.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2016 Product of the Year; Diagnose bearing failures; Asset performance management; Testing dust collector performance measures
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

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.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me