With infrastructure development and agriculture sectors recording increasing optimism, the Indian pumps and valves industry is set for steady times ahead

Assurance about growth is like music to the ears. So is the case with the Indian pumps and valves industry. According to Frost and Sullivan, the compounded annual growth rate (CAGR) for the pumps and valves industry would be between 15-17% for the next five years. The pump industry is growing at the rate of 15% per year. The organised sector size is around Rs 2,500 crore and the unorganised is around Rs 2,500 crore.

On similar lines, market research analysts at Technavio have predicted that the pumps market in India will grow steadily during the forthcoming years and will post a CAGR of almost 10% by 2020. “Owing to increased consumption, pump manufacturers have been concentrating only on the needs of the domestic market, mainly to the agriculture and building services industries. The influence of linearisation, privatisation, and globalisation of the Indian pump market have compelled manufacturers to export their products to foreign countries where the demand for pumps in high in industries such as oil and gas, steel, and mining,” the report states.

Currently, the US and Germany are the revenue contributors to the market. Factors such as the rising demand for oil and the increased investments in water and wastewater treatment activities will have a huge impact on pump exports in India, which will drive the demand for the market during the coming period. “The pumps market in India will witness the emergence of intelligent pump systems and micro disc pump technology in the next few years. Intelligent pump systems can control and regulate the flow or pressure of the fluid, can adjust to process changes, and also have a fault tolerant design, which will induce several manufacturers to adopt these pumps as they reduce the total cost of ownership without compromising performance parameters. Also, the micro disc pump technology will help manufacturers develop small-size and energy-efficient disc pumps that can be used in medical applications such as wound therapy and blood pressure measurement,” the report adds.

The pumps market in India is characterised by the presence of several international vendors, large regional vendors, and small and mid-sized regional vendors. The market appears to be highly competitive. The large Indian vendors compete directly with global players, and since they have a wide distribution channel, the global vendors find it difficult to penetrate the market. Moreover, products from the large regional vendors are much cheaper when compared to global vendors, which also makes it difficult for global players to establish their presence in the market. In terms of product pricing, the small regional vendors pose a threat to both the large Indian vendors and global vendors as their prices are comparatively lower than large vendors, as per the report.

During 2015, the centrifugal pumps segment accounted for more than 93% of the total share of the market and dominated the industry. This mainly attributes to the growing infrastructure development. Also, the rise in urbanisation increases the need for water and other utilities such as oil and gas, water, and power, in turn, creating the demand for centrifugal pumps. The market study estimates that the agriculture segment will account for about 35% of the total share of the pumps market in India by 2020 and will also dominate this market throughout the forecast period. The increase in consumption rate, rise in agriculture exports, the growth in the food processing industry, and growth in organic farming will result in the growth of the agriculture sector, which will subsequently increase the demand for pumps in the coming years.

Additionally, the expected investments from the government toward irrigation projects will also drive the demand for the market. Further, oil & gas, water & wastewater treatment plants, fertilisers, power generation and heavy industries like cement & metal will be the key growth drivers. A number of upstream projects by ONGC, Cairn Energy, Essar Oil, HOEC and Reliance Industries Limited will boost the demand for pumps and valves.

Infrastructure development driving the demand

According to India Brand Equity Foundation (IBEF), the pumps and valves segment contributes significantly to the growth of Indian economy. “They have proved highly critical in productivity of the core sectors of the economy. The pumps and valves sector has a net value addition ratio in manufacturing of over 20%. India already exports pumps and valves worth over USD 1.55 billion, serving various engineering segments, to over 100 countries. The exports in this segment are growing at a healthy rate of around 10-12% annually. Additionally, the Indian market is already worth over Rs 5,000 crore (USD 780 million) in pumps and Rs 4,500 crore (USD 700 million) in valves. India is already selling and supporting niche scientific and engineering technologies to developed economies in areas such as in aerospace engineering, automotive components, biotechnology, etc,” the report states.

More importantly, India has attained near self-sufficiency in pumps for nuclear power, complete self-sufficiency in captive power generation, pulp and papers, energy efficient pumps in utilities and in the agriculture sector. A considerable percentage of the manufacturing segment of this sector is now focusing on catering to latest applications in the bio-pharmaceutical field, such as of infusion pumps. Given the fact that among ‘machineries’, pumps are said to be produced and used in largest numbers, second only to electric motors, the overall scenario in Indian economy also favours growth and development in the Indian pumps and valves industry, thereby opening up huge potential for international collaborations.

In terms of growth drivers, investment demands from infrastructure, energy, manufacturing and real estate is expected to sustain in the medium to long term. The government support to boost economic development is also expected to provide an attractive avenue for the pumps and valves industry. Urbanisation is expected to cater to 70% of India’s USD 15 trillion projected GDP by 2030. This entails pumps and valves for urban construction such as residential and commercial utilities and buildings will witness sustained demand over considerable period of time. Investments in infrastructure that includes electricity, roads, ports, irrigation, water supply and sanitation is alone targeted with USD 1 trillion investments by 2018. The private sector is encouraged to execute large projects on a public-private-partnership (PPP) basis. The government is encouraging technology development and transfer to enable the small-scale sector enter into high-tech areas such as aerospace, defense and manufacturing, etc. with a view to enhance competitiveness and offer advanced technology solutions. This will, in addition, contribute to the growth curve.

A further dose of encouragement for the pump and valves industry is international recognition. There are several globally well-accepted products from India such as vertical execution multi-stage multi-outlet (MSMO) pumps, lowest life cycle cost (LLC) pumps and concrete volute (CV) pumps. Lowest life cycle pumps are in high international demand especially due to sustained energy efficiency over longer period and lowest pump maintenance cost.

MSMO pumps are well suited for high-rise urban development projects for saving valuable space. Concrete volute products are very good and cost-effective in handling large volumes of water. Other important products offered are latest solar centrifugal pumps and solar power conditioning units that have proved their potential in saving millions of units of electricity annually. Specialised valves for handling powders and abrasive fluids and highly energy efficient actuators find an international market too.

As per the IBEF study, energy-efficient systems and intelligent process equipment systems are being integrated in such a manner so as to meet international demands and retain cost-effectiveness for domestic industrial and infrastructural goals. For instance, Kirloskar Brothers Ltd, a global renowned brand, created a world record in assembling pumps in 17.25 seconds on the shop floor.

For valves, in particular, Research and Markets has announced that the industrial valves market in India is anticipated to grow at a CAGR of over 9% during 2017-2022. The widening demand-supply gap in the Indian power industry has been driving the need for power capacity additions, which, in turn, is providing a boost to the industrial valves market in the country. On/off industrial valve segment occupied the largest share in India industrial valves market in 2016. Industrial valves are mechanical/electromechanical devices used for controlling, regulating and diverting flow and pressure in fluids (liquids, gases and slurries) by closing, opening or blocking the passage of fluid. Industrial valves are widely being used in diverse sectors including oil and gas, petrochemicals, chemicals and fertilisers, power, etc.

“Over the years, the Indian government has been continuously focusing on the expansion of pipeline network for the distribution of natural gas across the country. As of September 2016, the total length of gas pipeline network in India stood at 16,121.21 kilometres. Moreover, the demand for natural gas in India is projected to increase from 446 MMSCMD in 2016 to 523 MMSCMD by 2019. Hence, with increasing demand for natural gas coupled with continuous expansion of natural gas distribution network, the country’s industrial valves market is expected to grow at a robust pace over the next five years,” the report states. From operational, safety and reliability point of view, industrial valve is one of the crucial components used in oil and gas industry. Oil and gas is expected to remain the largest source of fuel in India in the next five years as well, consequently aiding India’s industrial valves market.

Industry updates

Flowserve has officially opened its expanded state-of-the-art pump manufacturing plant in Coimbatore. The new expansion comprises a state-of-the-art pump production facility and administrative space including a static and dynamic test laboratory. Flowserve opened its first production facility at Coimbatore in 2007 to manufacture process pumps for chemical and oil and gas markets up to a rating of 1.1 MW. Block II was inaugurated in 2008 to cover the medium range vertical and multistage barrel pumps for the power and oil and gas markets up to a rating of 3 MW. Flowserve also established a Pump Quick Response Centre in Vadadora last year to carry out after market support for the local installation base in the western part of the country. The new Coimbatore facility will enhance the engineered manufacturing pump capability including single and multistage high energy API pumps, engineered boiler feed water pumps, concrete volute pumps, which will help to serve the demands in the infrastructure sectors of power, oil and gas, and water.

KSB Pumps India has won a substantial order to supply six boiler feed pumps for the new, ultra-modern fossil-fuelled power station in Tanda in the Indian state of Uttar Pradesh. In addition to the high-pressure boiler feed pumps, the KSB scope of supply includes six booster pumps, base plates, electric motors, hydraulic couplings, oil coolers, gearboxes as well as noise enclosures and related instrumentation. In terms of new product launches, the KSB Group, to round off its existing range of butterfly valves, has launched the new Aporis double-offset butterfly valve with elastomer sealing element. This product is used for applications where huge volumes of water need to be transported and shut off reliably. Applications include systems for water transport, water treatment or in large industrial cooling circuits.

Grundfos Pumps India announced that its assembly plant at Ahmedabad, its third facility in India, started operations from June 1 to help it expedite supplies to north and west parts of the country. The company, which is a wholly-owned subsidiary of Denmark-based Grundfos Holdings, has its main assembly facility in Chennai and another unit in a special economic zone near Kalpakkam, Tamil Nadu. Grundfos India Managing Director N K Ranganath said the company wants to replicate what they have been doing in Chennai. He further said the company is also looking to increase localisation for its products from the current 24-25%. Grundfos sources steel castings for pumps from Gujarat. The company will supply 12,000-14,000 pumps annually from the facility at Ahmedabad. The company has also launched Smart Solarz, a solar pump for domestic use. The pump is targeted at semi-urban, urban and hinterland population. The pump, which uses only solar energy, costs Rs 30,000 without a solar panel and can pump 400 litres per hour on average. It is ideal for use in houses and buildings up to two floors, small schools, dispensaries, health centres, dairy farms, house gardens and terrace gardening.

Pump manufacturer EKKI is all set to enter the international market. The company launched its international product range at the 40th MCE (Mostra Convegno Expocomfort) at Milan, Italy. The privately held family-owned group under the Deccan brand has been a market leader in the open-well submersible segment since 1981 but the product was restricted to the Indian market only. The company has been growing consistently since 2013 and has recently invested heavily in strengthening its manufacturing facilities. The company aims to generate close to 7-10% of its revenues from international operations by 2020.

CRI Pumps, a leading pumps manufacturer, is expected to strengthen its focus on the international business. The global business of the company currently accounts for around one-fifth or Rs 300 crore out of a total turnover of around Rs 1,500 crore. The company believes that with a total market of around USD 35 billion and India’s share at Rs 1,200 crore, there is enormous potential for growth in international market in this sector. It is believed that the company is growing by around 20% each year in international business. It is already present in markets like Italy and Spain and claims to be the only exporter of pumps to China from the country. The company acquired an Italian company – Fabbrica Italiana Pompe Sommergibili Srl (FIPS) last fiscal. The company is targeting a turnover of Rs 2,000 crore in FY 2016-17, inclusive of Rs 150 crore from sale of pipes.

-HUNED CONTRACTOR