MRO Magazine

Price pressures compel pump manufacturers to seek profits on distant shores

Toronto, ON -- Due to increasingly slim profit margins, North American manufacturers of positive displacement pumps...


Industry

January 5, 2004
By MRO Magazine
MRO Magazine

Toronto, ON — Due to increasingly slim profit margins, North American manufacturers of positive displacement pumps for process industries are finding it difficult to channel funds towards R&D, impeding the speed of technological development.

According to a recent report by research firm Frost & Sullivan, which has offices in New York and Toronto, prices in the pump market have reduced or remained static, and have not kept in pace with recent inflation rates. To counter pricing pressures, companies will have to improve their manufacturing practices and try to outsource components or shift manufacturing to China and Latin America, the report contends.

Moving manufacturing to China and Latin America allows participants to capitalize on lower manufacturing overheads and relaxed environment laws. Established companies with worldwide distribution networks stand to gain in Asian and South American markets because these regions are the focal point of growth in industrial activity and infrastructure.

To survive competition, smaller companies need to ramp up their distribution networks to make inroads into new overseas markets.

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Flood of imports to North America

On the flip side, in the domestic market manufacturers have to fight off a flood of low-priced imports. “To maintain profitability and differentiate their products from the plethora of cheaper and imported products, manufacturers can adopt ‘life cycle costing’ as a strategy,” says Frost & Sullivan.

Highlighting the economical benefits of assessing a product based on life cycle costing — accumulation of costs over the entire product life cycle — to end users could improve adoption rates, the firm reports.

Dwindling world water resources are prompting increased conservation efforts and better water management practices. Heightened concerns for safe drinking water, industrial water and pollution prevention and control issues ensure a sustained demand in the water industry for positive displacement pumps.

The municipal wastewater treatment sector has also been witnessing tremendous growth. “New plants are being constructed, existing plants and processes are being upgraded and novel concepts such as sewer mining are finding increased acceptance,” says the company.

Rapidly developing industries such as water and wastewater treatment, pharmaceutical processing, biotech, and food and beverages are expected to drive future growth, especially of peristaltic, rotary progressive cavity, and reciprocating piston pumps.

The Frost & Sullivan research service’s analysis of the North American Positive Displacement Pumps Market is divided into three main pump segments: rotary, reciprocating, and peristaltic. It provides detailed insights into recent developments, trends, and emerging applications. The service also provides market forecasts as well as competitive and opportunity analysis. The service is priced at US$4,500. For details, call 877-463-7876 or visit www.frost.com.