VDMA: Process Technology Providers Hold Their Own in a Difficult Environment

10.06.2024
The decarbonisation of industry is one of the biggest challenges facing Germany as a business location in the coming years. The mechanical and plant engineering sector will play a key role as an important solution provider. This is because applications in process technology are particularly in demand to produce the required green hydrogen. Many related suppliers are gathering this week at the world's leading trade fair for the process industry, ACHEMA 2024, in Frankfurt am Main.
VDMA: Process Technology Providers Hold Their Own in a Difficult Environment

Dr Laura Dorfer, Managing Director of the VDMA Valves Association (Image source: VDMA e. V.)

‘If hydrogen is to find its way into industry and gas networks on a large scale, the right components and expertise in suitable materials and media are essential,’ explains Dr Laura Dorfer, Managing Director of the VDMA Valves Association. ‘German process technology manufacturers are familiar with the subject matter and have established themselves as experienced partners in H2 processes, from the production and storage to the conversion and utilisation of hydrogen.’

In addition to the topic of hydrogen (from production to storage), the trade fair will also focus on process innovation, pharmaceutical technology, sustainability, research and digitalisation.

‘The diversity of ACHEMA 2024 reflects exactly the topics that companies in Germany and the EU have to deal with,’ says Richard Clemens, Managing Director of the VDMA Food Processing and Packaging Machinery and Process Plant and Equipment Associations. In particular, he emphasises the high level of regulations that companies of all sizes are now confronted with: ‘Bureaucracy must not be allowed to slow down the innovative strength of the German mechanical and plant engineering industry.’

Industrial valves: On course even in a difficult environment
At the start of 2024, the valves business was developing well, especially abroad. Foreign sales climbed by an impressive 13 per cent in real terms in the period from January to April 2024. In the eurozone, sales rose by 1 per cent, in non-euro countries by a strong 18 per cent. However, domestic sales fell by 9 per cent at the same time. Overall, sales were therefore 3 per cent higher than in the same period of the previous year after adjusting for price. In contrast, incoming orders in the German industrial valves sector fell by 4 per cent on a price-adjusted basis.

Exports by German industrial valve manufacturers rose by 5.2 per cent to EUR 5.1 billion in 2023. They remained stable at this high level in the first quarter of 2024. In total, goods worth around 1.4 billion euros were exported abroad. Exports to China, the most important customer country, rose by 1.0 per cent to 166.6 million euros. The export business with the second most important trading partner, the USA, fell by 3.6 per cent to 137.0 million euros. At the same time, deliveries to France, the third most important export country, fell by 3.0 per cent to 82.9 million euros.

Liquid pumps: Increase in exports in 2023
Exports of liquid pumps (excluding hydro pumps) increased by 2.9 per cent year-on-year to 6.3 billion euros in 2023. In the first quarter of 2024, exports fell by 6.8 per cent year-on-year to €1.6 billion. The EU was the most important customer market with 57 per cent.

The most important customer countries are the USA (682 million euros), followed by China (654 million euros) and the Czech Republic (441 million euros).

Imports fell by 2.8 per cent year-on-year to €3.2 billion in 2023. The most important import countries were Italy (338 million euros), the USA (334 million euros) and China (325 million euros). Real sales in the first quarter of 2024 were down 11 per cent on the previous year.

Compressors, compressed air and vacuum technology: Level maintained
Exports of compressors, compressed air and vacuum technology increased by 4.4 per cent year-on-year to €5.7 billion in 2023. In the first quarter of 2024, exports fell by 0.2 per cent year-on-year to €1.5 billion. The EU was the most important customer market with 49 per cent.

The most important customer countries were China (676 million euros), the USA (650 million euros) and France (296 million euros). Imports fell slightly by 0.5 per cent to €2.9 billion in 2023. The most important import countries were Poland (316 million euros), China (278 million euros) and France (210 million euros).

Real (price-adjusted) incoming orders in 2023 were 12 per cent down on the previous year, but an increase of 9 per cent was recorded in the first quarter of 2024 compared to the previous year. Real sales in the first quarter of 2024 were up 2 per cent on the previous year.

Christoph Singrün, VDMA Executive Director for both sectors, expects a challenging year for Pumps + Systems and Compressors, Compressed Air and Vacuum Technology: ‘Despite the political crises, supply chains proved to be resilient last year. We therefore assume that we will be able to reach the previous year's sales level for compressors, compressed air and vacuum technology and that pumps may even see a small increase."

Process Engineering: Rising sales with falling order intake
In the first quarter of 2024, German process engineering lost 6.7 per cent in exports compared to the previous year and is currently at a cumulative value of around 1.8 billion euros. The USA remains the most important market with a share of 13.5 per cent, followed by China (7.6 per cent) and France (5.6 per cent).

There was also a slight decline in imports in the first quarter of 2024. At around 677 million euros, the value of process plant and equipment imported into Germany is down 7.5 per cent on the same period last year.

The USA remains the most important partner for trade flows with a share of 11.7 per cent (around 80 million euros), followed by France (11.3 per cent, around 77 million euros) and China (around 75 million euros), in third place for the first time with 11 per cent. Compared to the first quarter of 2023, China recorded a significant cumulative increase of 33.9 per cent, while the USA and France lost between three and five per cent.

Real incoming orders in 2023 were 12 per cent down on the previous year. In the first four months of 2024, a year-on-year decline of 13 per cent was once again recorded.

In April 2024, the price-adjusted order intake in process engineering fell by 18 per cent compared to the same month last year. The decline in orders was mainly due to foreign demand, which fell by 24 per cent, with orders from euro countries dropping by 32 per cent and from non-euro countries by 20 per cent. Overall, process engineering recorded a 29 per cent drop in orders in the first four months of the year.

In contrast, price-adjusted turnover in the process engineering sector rose by 6 per cent year-on-year in April 2024. A 9 per cent decline in domestic sales was offset by a 10 per cent increase in sales abroad. At plus 22 per cent, the figure for the first four months of 2024 is significantly higher than for the mechanical engineering sector (minus 5 per cent). Domestic business (up 7 per cent) and sales from non-euro countries (up 88 per cent) contributed to this.

Source: VDMA e. V.

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