Change in Asian attitudes to process safety systems
There is a well-known phrase, ‘If you think safety is expensive, try an accident!’
Attitudes towards safety in Asia Pacific (particularly in the fast-growing emerging economies such as China and India) have traditionally been of some concern. Low labor costs and a fast growing population mean that there’s always a replacement worker on hand if necessary!
In the process industries of these emerging regions the focus has usually been simply on raising output, with safety being a low priority and often an afterthought. In the past, process safety systems were seen as an unnecessary expense, requiring significant capital investment. Since they didn’t contribute directly to raising production volume, they were not given much thought.
In the past few years, however, a number of developments have raised awareness of process safety systems:
China’s 12th Five-Year Plan – This encourages industries to adjust to place greater emphasis on added value and not just on production. To address an ever-growing population as well as growing energy requirements, there will be considerable investment in traditional process industries.
Several major incidents – Incidents such as the Buncefield disaster, Deepwater Horizon and the Fukushima earthquake has increased public concern about process hazards. Although investments are still likely to be unaffected, fundamental safety concepts in plants are likely to need re-addressing to ease public concerns.
Corporate image – with increased pressure from safety agencies and activists, businesses are keen to promote an image of being ‘safety-conscious’. After all, nobody wants to be accused of being complacent about safety!
The factors described above have all contributed towards the growth in the market for process safety systems.
Undisputedly, the most important driver for this growth has been the revision of the International Standards (IEC 61508 and IEC 61511) in 2010. These standards are now seen as the benchmark of safety instrumented systems around the globe. The standards have been amended to have the following impact on end-users:
Re-evaluation of current systems: End users are now being pressurized into evaluating their process plants to establish whether or not they are compliant.
Determination of Safety Integrity Level (SIL): Within the latest set of standards there are clear guidelines as to the various levels of safety levels within a plant. This methodology encourages end users to evaluate safety more systematically.
Functional Safety Management (FSM): A clear safety lifecycle was defined within the latest revision to provide clarity on the key milestones when a safety system is commissioned.
Certification of Personnel: The IEC standards now stipulate that all staff involved with safety systems must be certified.
Since the revision of the international standards, there was a 15.1% growth in the Asia-Pacific market for safety systems in 2011, with China and India accounting for most of this. Process safety system hardware is generating the most revenues at the moment; this is likely to continue over the next five years as new greenfield plants are being installed. However, the process safety system services market is seeing the fastest growth; consultancy, design and installation services are all set to experience above-average growth over the next five years. These are all services which fall in line with the purchase and implementation of hardware.
In the future, it is expected that as end-users become more familiar with the installed hardware, other services such as training and maintenance, repair and overhaul (MRO) will be sought as customers try to optimize their usage and gain maximum performance from their system. End-users do not want to become overly reliant upon their system suppliers!
IMS Research, recently acquired by IHS Inc., believes that there has been a fundamental shift in how process safety systems are perceived in the emerging economies of Asia. The revision of the international standards, coupled with the drive to address energy requirements and everything that goes along with providing for an ever increasing population, has driven the growth of the market. While it is important to note that these standards are not mandatory, they are globally viewed as the benchmark. Users of process safety systems are keen to protect their corporate image in the midst of widely reported safety incidents by making significant investments to protect their assets, human capital and the environment. For these reasons, by 2016, the process safety systems market in Asia, some $1 billion, larger than that of EMEA and the largest regional market in the world.