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Demand for maintenance and operational improvement services to emerge from brownfield projects, Frost & Sullivan

August 14, 2014 – The implementation of greenfield projects in the oil and gas industry, expansion projects in the chemical industry, and integration projects in the hygienic industry are lending momentum to the global automation services market for process industries. Declining availability of a skilled workforce encourages outsourcing of operation and maintenance services to automation companies. Increasing competitive pressures further compel process industries to engage automation solution providers for operational improvement services in order to avoid costly downtimes, optimize production, improve energy efficiency, and mitigate risks.


New analysis from Frost & Sullivan, Global Automation Services Market for Process Industries, finds that the market earned revenues of $16.04 billion in 2013 and estimates this to reach $24.29 billion in 2020. Consulting services, project engineering, and installation services will have high growth opportunities in greenfield projects during the forecast period; whereas demand for maintenance, support and operational improvement services will emerge from brownfield projects.
 
For complimentary access to more information on this research, please visit: http://bit.ly/1kBZ6qW.
 
“The automation services market is primarily driven by engineering, procurement and construction (EPC) firms, tier I automation providers, and system integrators,” said Frost & Sullivan Industrial Automation and Process Control Senior Industry Analyst Naveen Kumar Ramasamy. “End users will accept automation solution providers, in particular, as reliable service partners in the long term as they seek more comprehensive single-window services.”
 
However, increasing bench strength and capabilities have allowed system integrators to become value-added resellers and move up the service value chain, garnering a greater share of automation services and affecting profitability for established solution providers. Further, demand for end-to-end life-cycle services from automation solution providers has taken a hit in price-sensitive emerging markets such as India, China, Brazil and Vietnam.
 
The escalating number of cyber threats is also curbing use of remote monitoring and diagnostics services in developed countries. Additionally, aging workforces in many matured markets will force adoption of remote services with cross-industry expertise. Ultimately, these services will enable process industries to focus on core competencies.
 
“To address opportunities in a specific end-user vertical in a specific region, global automation market participants must concentrate on building service-based organization capabilities in the short-term and consolidate the resources in the ecosystem during the medium-term,” observed Ramasamy. “They will reap the benefit of this sustained revenue stream during the long term of the forecast period, that is, in five to seven years.”
 
Automation vendors which offer “glocal” services” – with a global presence and local availability – will find ready customers in the chemical, oil and gas, food and beverage sectors in North America; pharmaceuticals and power in Asia-Pacific; water and wastewater in Europe; pulp and paper in Latin America; and metals and mining in Africa and South America.
 
For more information, visit www.frost.com.