Opportunities and challenges coexist for suppliers in the global valve market

2019-05-29 18:25:44

The world's water treatment equipment giant Watts Industrial Group recently made a forecast that the current total annual demand in the Chinese valve market is no less than 10 billion yuan. According to the scientific development concept, in order to ensure the coordinated economic development and improve people's lives in the future, China will inevitably prioritize infrastructure construction, such as water, electricity, gas, and heat. This is precisely where the valve is used. In other words, as a Chinese valve market that is still a new type rather than a replacement type, its demand potential and explosive power will be amazing.

The first is China's South-to-North Water Diversion Project. The amount used for valve procurement is as high as tens of millions of yuan within the length of 70 kilometers from the suburbs of Beijing to the urban area. Then the demand for valves for the entire South-to-North Water Diversion Project can be imagined. Secondly, in order to solve the problem of electricity shortage, the large-scale implementation of hydropower projects in Malaysia is not only a top priority for the Chinese government, but also a long-term task. In addition, there are many projects such as the West-East Gas Pipeline, the transformation of old industrial bases, the construction of urban pipelines, residential projects, sewage treatment, and farmland water conservancy, which will detonate huge demand in the valve market.

However, in the face of such a huge future market, how many orders can Chinese valve manufacturers get from it? In contending with foreign investment, how big is the gap between them? These issues are probably the most concerned by Chinese valve manufacturers.

First, the gap in industrial structure. The scale of my country's valve manufacturing enterprises is too small and the industrial concentration is too low. According to the data held by Watts, there are currently more than 3,000 valve manufacturers in China, ranking first in the world. However, most of these are low-level, small-scale, family-run enterprises. Fewer than 500 companies have annual sales revenue of 5 million yuan. There are only a dozen companies with annual sales revenue of more than 100 million yuan, and the market share is among the top 10 companies. The total market share of enterprises is only 8%-9%. Due to the excessively low industrial concentration, many disadvantages such as backward technology, low price competition, lack of influential brands, etc., have made such a huge Chinese valve market still lacking a real brand name.

Second, the gap in the overall industrial chain. As a kind of mechanical equipment, valve production is at the downstream of the entire industrial chain. The development level of industries including steel, sealing materials, and mechanical processing will have an important impact on the technical parameters of the valve. The strength, ductility, and corrosion resistance of steel directly affect the high pressure resistance and corrosion resistance of the valve; the production level of the sealing material determines the applicable medium and the pressure that the valve can withstand; the precision of machining also affects the interface seal and valve An important factor in the sealing level of the head and the valve seat. In our country, there is a certain gap in these aspects of technology compared with foreign countries, which has also caused domestic valve manufacturers to be restricted by related technologies when producing high-end products.

Third, the gap in the degree of specialization. As a general-purpose pipeline equipment, valves are widely used in many fields, including water conservancy and hydropower, urban pipeline networks, petroleum and petrochemical, sewage treatment and many other industries. Due to the different conditions of different industries and different projects in terms of working conditions, media, sealing, etc., the technical requirements for valve equipment models, materials, pressure levels and other aspects are also different, which also results in further valve equipment for different industries. Market segmentation. Under this circumstance, various valve manufacturers have chosen a professional development path. They are no longer satisfied with only producing a single valve equipment, but through product line expansion or seeking cooperation, they are committed to providing an overall project for the entire project. solution. The American Watts mentioned earlier is a typical representative. Initially, they only produced valves dedicated to the field of water treatment, but now, they can even build a water plant independently.

Fourth, the gap in brand influence. According to the information held by China International Tendering Network, many foreign valve manufacturers have clearly surpassed domestic enterprises in brand effectiveness in various professional fields. In the water treatment industry, brands including VAG and Watts have established their leading positions in the market; in the field of electric power, Velan is the absolute leader among them; in petrochemicals In the industry, you can see the words Fisher in the United States and KTM in Japan everywhere; under high pressure conditions, engineers first think of Uhde and BASF in Germany.