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Key Areas

Executive Summary

Table of Contents

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KEY AREAS

THE MARKET

• Overall UK market size, by value for pumps, 1995-2004.
• Market trends from 1995-1999. Trends for the future, including growth prospects and major factors influencing market development up to 2004.
• Assessment of key sectors and key factors influencing end-use demand - industrial, water and sewage, power generation, oil and gas, marine, domestic and leisure.
• Review of import/export levels - 1997 and 1998 - key sources of imports, and exports.

PRODUCT SEGMENTATION

• Analysis of market by major product sector - centrifugal and positive displacement - mix by sector.
• Centrifugal - Market size and share, mix by product type (process, high pressure, surface and submersible, sludge, circulators, shower/garden/booster pumps), trends within sector, areas of application, application mix.
• Positive Displacement - Market size and share, mix by product type (rotary and reciprocating, and sub-sectors), trends within sector, areas of application.
• End-Use Applications - Mix by key end use sector, trends within each sector - industrial process, manufacturing/OEM, Oil & Gas, Water & Sewage, Power Generation, Marine, Domestic & Leisure. Influences on the development of the pump market.

SUPPLY AND DISTRIBUTION

• Key distribution channels - Direct/OEM, National/Regional/Local Distributors, Hire and Sale, Marine, Agricultural, Merchants, Wholesalers/Garden Centres, Electrical Wholesalers, share by channel. Review of major companies within the distribution channels.
• Supply Structure - major pump manufacturers market shares, changing supply structure, growing concentration through acquisition. Key suppliers within the key product sectors.
• Review of key suppliers in the positive displacement and centrifugal sectors, and the major pump suppliers.

FUTURE PROSPECTS/GENERAL

• Positive trends in niche sector application areas, eg pump requirement for combined heat and power installations
• Review of market influences - engineering sales output changes by sector, engineering sector output 1996-2000 (electrical, automotive, other transport, etc.), construction activity. automotive production, interest rates and inflation, PDI/saving ratio.
• Analysis of future prospects - forecast of market size up to 2004. Key factors influencing forecasts within products and end-use markets.

The Report contains over 100 pages and 34 tables and charts of ORIGINAL research on the UK Pump Market and provides incisive and thought provoking views on its future development.

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EXECUTIVE SUMMARY

The UK pump market is extremely diffuse in terms of end-use sectors but is in the process of gaining a higher degree of concentration in the manufacturing supply sector. Although a large number of companies build pumps, ownership of some of these companies has passed to multi-national concerns resulting in a wide global spread and specialisation of manufacturing facilities.

The total market in 1999 is estimated to be £650m at manufacturers’ prices, which represents an increase of around 1 percent over the previous year.

The chart below shows the development of the market for pumps between 1995 and 1999, with forecast sales up to 2004:

UK Pumps Market 1995-2004 at £m MSP

Source: AMA Research/Trade Estimates/ONS

Projected growth for pumps has been conservatively forecast at around 1-2 percent per annum, taking into account forecasts for the Engineering Manufacturing Industry and Construction, etc. The pumps market is influenced by a very wide range of factors, both at the macro level and at the micro level. Macro factors include the influence of the major end-use sectors such as water and sewage, oil and gas, power generation, marine and industrial, including construction and chemical/petro-chemical. Whilst a few sectors are growing, others are stable or declining in overall terms. Macro factors also include the influences of various external agencies and environmental requirements.

Micro factors are favourable in so far as:

• Pumps are unlikely to be replaced by another type of product - no technology substitution.
• The media handled by pumps is unlikely to change significantly.

In fact, the market is unlikely to be eroded by "competitive" technology, and will remain relatively stable. Micro factors tend to focus more on matters such as materials technology (e.g. lined pumps or pumps made of special materials), sealing technology, pump design and drive technology, rather than the substitution of a pump by another product.

The UK pump market will be motivated by "a number of niche" opportunities, which are likely to generate a modest market growth level.

• Anticipated increase in the capital expenditure programme in the water and sewage industry, to avoid leaks, pollution, environmental Infringements and to improve water quality.
• Gradual Expansion of combined heat and power installations entailing growth of Pumps for systems.
• Growth of domestic circulators and shower pumps.
• Growth in the Hire Industry encouraging transportable and mobile pump sets.
• Environment-driven requirements stimulating the increasing application of flue gas desulphurisation pumps.
• Increasing demand for light bulbs and tubes motivating demand for pumps to pull vacuum in the manufacturing process. General growth in the vacuum pumping sector.
• Dependent upon the continuing upward trend in oil and gas prices, the anticipated resumption of capital investment programmes in the oil and gas industry stimulating pump demand during 2000.

During 1999, consumer spending is forecasted to grow by 1.2 percent despite the relatively low levels of economic growth. This is likely to stimulate consumer demand for finished goods, in the short to medium term.

The two key sectors of the UK pumps market, under our definition, are "centrifugal" and "positive displacement". It is estimated that these sectors represent around 60 percent and 40 percent of the market respectively.

There are several major suppliers to both sectors, including Weir pumps, Ingersoll-Dresser and Sulzer.

The trend towards greater concentration in the UK pumps industry continues, for example during 1999 Textron acquired David Brown Union Pumps. More recently Weir acquired Warman. There is also a move towards "globalisation", whereby manufacturing is specialised using subsidiaries established in different countries. One of the advantages of globalisation is that the varying strength of the Pound Sterling (or other local currency) does not affect overall pump business to the same extent as a fully UK-supplied operation. Globalisation can also be interpreted as the location of a manufacturing plant at an economically - attractive point for material sourcing, productivity, and distribution, etc.

Distribution of pumps is served by Electrical Wholesalers, Plumbers and Builders Merchants, Independent/Local Pump Distributors, Regional Depots and National Distributors, Multi-Depot Regional Distributors, Tool and Plant Hire outlets, Direct/OEM, and Agriculture and Marine.

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TABLE OF CONTENTS

Text © 1999 AMA Research

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Last updated by Jacob van Eldik 27th January 2000