MRO Magazine

China high power AC drives market crosses $1 billion

Dedham, MA -- Robust growth continued in 2007 for the High Power AC Drives market in China, riding on the back of a...


Industry

December 19, 2008
By MRO Magazine
MRO Magazine

Dedham, MA — Robust growth continued in 2007 for the High Power AC Drives market in China, riding on the back of another year of double digit growth in GDP of the country.

 

The China market for High Power AC Drives is expected to grow at a compounded annual growth rate (CAGR) of 12.9% over the next five years. The market was over $1.0 billion in 2007 and is forecasted to be nearly $1.9 billion in 2012, according to a new ARC Advisory Group study released Dec. 18, 2008.

 

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China’s manufacturing industry, which has grown rapidly over the last few decades, will need to adjust to moderation in demand from the global economy. However, China’s favourable business environment will continue to provide investment opportunities for global manufacturers in setting up facilities for low-cost production facilities and to serve the expanding domestic market of China.

 

Labour arbitrage apart, more pronounced factors, such as infrastructure and long-term fiscal incentives provided by the local authorities make feasible the establishment of large-scale plants catering to global demand.

 

The expanding economy that is China, in the long term together with other growing economies, such as Brazil, India and Russia, will define global growth. “Energy conservation measures will continue to provide the impetus for growth of high power AC drives in China, even as process-related advantages gain recognition by manufacturers,” according to senior analyst Himanshu Shah (hshah@arcweb.com) and senior analyst and principal author S.R. Venkatapathy (venkat@arcweb.com) of ARC’s High Power AC Drive Outlook for China, Market Analysis & Forecast Through 2012.

 

Growing industry sector for AC drive market growth

 

The electric power industry is at the forefront of the infrastructure transformation happening in China. This is one industry which is not expected to see adverse impact of any possible slowdown in growth of the economy as China continues to bridge the demand-supply gap. Periodic and significant capacity additions continue to take place year on year to achieve a balance of supply and demand.

 

AC drives in electric power utilities have a quantifiable impact on the reduction of auxiliary power consumption besides qualitative benefits emerging from process stabilization. Many applications in power plants, such as boiler feed water pumps, ID fans, FD fans, and utility area applications use AC drive ratings ranging from a few kW to MW.

 

The need of the hour, for all industries and particularly the steel industry in China, will be to reduce production costs. Energy costs form a significant component of operations in large steel plants and the China steel industry has a huge potential for reduction of energy costs. As major steel-consuming manufacturing industries, such as automotive, demand steel at lower costs, the process optimization and energy savings requirements will boost the use of high-power AC drives.

 

In addition to the quantitative assessment of the China high power AC drives market, the study provides an insightful analysis of the market and strategies of leading suppliers that will have an impact on this business in the future. For more information on this study, go to www.arcweb.com/res/achi-chi.