Expansion of EU Facilitates Greater Market Opportunities for Positive Displacement Pumps


The European positive displacement pumps market is being increasingly influenced by the growth of east European economies and the imminent accession of eastern European countries into the European Union (EU) is expected to reinforce confidence and bolster demand.

Key end user segments such as the food and beverage, pharmaceutical and water and wastewater industries are also undergoing significant expansions, thereby ensuring healthy growth across most product segments.

In the wake of the promising market outlook, the European positive displacement pumps market is emerging as a lucrative target for overseas manufacturers. With the market moving towards a competitive mix of high value technology and low prices, there has been a surge of imported pumps from China, South America and other low-cost manufacturing regions.

“The import of cheaper pumps could intensify competition and slim down the price margins for pump manufacturers,” notes Frost & Sullivan (http://industrialautomation.frost.com) Analyst Sebastian Raja Ignatius M. “ With the influx of these low-cost pumps, established participants are being forced to rework their manufacturing processes to reduce production costs and to develop products for niche markets and form strategic alliances in order to remain competitive.”

While the changing complexity of pump technologies limits the scope for any further price reductions, manufacturers will need to start adding value to their products to attract more customers. In addition to improving their product technology, providing a high quality of customer service and support and employing greater branding could help manufacturers differentiate themselves within the market.

As modern pumps face far more stringent application processes in comparison to those used earlier, there has been a consistent advance in demand for better-quality products. Also, stricter health and environmental legislations across end user segments have been fuelling the demand for high-end, sophisticated pumps that ensure regulatory compliancy. This, in turn, is enabling suppliers to gain premium prices in contrast to standard designs and greater unit prices are raising overall revenues in the market.

However, in this fiercely competitive and mature market, manufacturers face many critical challenges in enhancing their overall standing. In addressing these challenges corporate growth strategies are increasingly being tailored around continuous improvements to distribution channels and expansion through the establishment of subsidiaries and quality agents in various countries to provide 24-hour end user support.

The European positive displacement pumps market is set to register continued growth and revenues are forecast to increase from $1.45 billion in 2004 to $1.76 billion by 2011. Although there are a relatively large number of manufacturers, only a few have managed to build a commanding market share, with the top three manufacturers together accounting for an estimated 12.1 per cent of the market.

Diaphragm pumps constituted the largest product segment in 2004, accounting for an estimated 27.2 per cent of the overall revenues. However, the lobe and peristaltic pump segments are also anticipated to enjoy steady revenue growth in future years, benefiting from growth in key application segments, notably food and beverages, pharmaceuticals and water and waste water treatment.

While eastern Europe is projected to be the strongest performing regional market, the German positive displacement pumps market could see its revenues decline over the coming years. Nevertheless, with its strong and well-established industrial base, it remains the single most important region in terms of revenue share.

“The key to success in the mature European positive displacement pumps market is to have a strong focus on end user needs,” says Sebastian. ”Manufacturers that anticipate and develop innovative solutions to satisfy these needs and build long-lasting relationships with end users stand to gain market presence.”

Summary of the Market Analysis "European Positive Displacement Pumps Markets"

Pricing Pressure Forces Manufacturers to Cut Costs

The increasing availability of low-cost products from non-European countries is having a profound impact on the European positive displacement pumps market. Weak demand and standardised technology coupled with immense pressure from end users have made price the key competitive differentiator in the market.

However, the scope for further price pressure is limited as, in many cases, the technology is highly competitive and manufacturers are trying to raise quality and production efficiency in order to produce more effectively priced products. Further, despite the increasing competition and declining price levels, investment in more specialised and sophisticated technologies has helped maintain overall revenues and a slow recovery of the market is expected in the future.

This Frost & Sullivan research service analyses the European markets for positive displacement pumps, providing a comprehensive market analysis with unit shipment and revenue forecasts across products, applications and regions. While highlighting the key drivers and restraints for the market, it also analyses the market share of companies in the various market segments and provides strategic recommendations to help enhance growth.

Expansion of EU into Eastern Europe Likely to Drive Revenue Growth

The expansion of the European Union (EU) into eastern Europe has proved a positive development for the participants in the market. With their relatively lower labour costs, cost-effective land prices and proximal geographic location, investment in these countries is expected to see a continuous rise. With the EU looking to bring the municipal and industrial infrastructure of the region to western European standards, industrial growth rate in eastern Europe is expected to accelerate. In turn, the development of an industrial base is expected to help increase demand for positive displacement pumps in the short and medium term.

End users are demanding pumps of better quality to drive their application processes. "Manufacturers are seeking to differentiate their products by incorporating advances and improvements in them, which is also enabling suppliers to command premium prices in contrast to standard designs," says the analyst of this research. "While this should help improve growth rates in the positive displacement pumps market, it is also likely to ensure better revenues for manufacturers that incorporate changes to satisfy end-user demands."

Increased Demand from Food and Beverage, Pharmaceutical and Water and Wastewater Treatment Sectors

The food and beverage, pharmaceutical and water and wastewater industries are emerging as key markets for positive displacement pumps since they are bound to witness considerable expansion in the coming years. Furthermore, as most industries are under renewed pressure to comply with new and likely regulations in respect to health and safety, hygiene, waste management, emissions, quality and more, demand for positive displacement pumps that make compliance effective is likely to increase.

While Germany remains the largest geographic market, diaphragm pumps account for a major slice of the total revenues among product segments. However, lobe and peristaltic pumps are also expected to show high growth rates due to the expected expansion in sectors such as food and beverage and pharmaceuticals. "Increased demand for positive displacement pumps that are physically larger in size and that use expensive materials and state-of-the-art production methods is expected to boost revenue growth," says the analyst. "In order to differentiate themselves within the market, manufacturers will need to add value to their products through better technology and ensure high-quality service and support and greater branding."

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Title: Strategic Analysis of European Positive Displacement Pumps Market

Code: B394-10

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