Control valve, actuator and positioner market in China expected to grow: study

In recent years, over-capacity in the major process industries has become a big issue in China.  

After the economic recession, investment in mega projects for traditional heavy process industries has seen a marginal slowdown, and this trend is likely to continue for a few more years.  This is likely to be the main constraint for the control valve market in the next five years.  Besides over-capacity, the softening global market and domestic demand also adds to the market uncertainty during the forecast period.

Although 2011 was a volatile year, the market for control valves in China is still growing due to some favourable factors, according to a new study by ARC Advisory Group.  A key factor is that manufacturers in various process industries increased their capital investments for plant upgrades, retrofit, and even expansion to optimize their existing facilities and achieve higher returns on assets (ROA).  

Viewed from suppliers’ behavior and dynamics, ARC saw that most control valve suppliers continue to invest in China.  China retains the title of being the world’s manufacturing hub for control valves, serving the domestic and global markets.

According to ARC Advisory Group’s research, the total control valve, actuator, and positioner market in China is expected to register a compound annual growth rate (CAGR) of 7.6 per cent by 2016.  ARC’s latest study, “Control Valves for China Market Research Study,” provides an in-depth analysis of the control valve, actuator, and positioner (CVAP) business in China, including quantitative assessment of market size, segmentations, and forecast trends.

According to David Cao, country manager, ARC Advisory Group, and peer author of this study, “As the biggest CVAP served market, the chemical market will grow at a moderate pace, although over-capacity is a challenge in some sub-verticals.  Main growth drivers are from coal, specialty chemical, and such other segments.  Overseas market opportunities through China’s EPC (Engineering, Procurement & Construction) companies is another major driver.”

Oil & gas is likely to be one of the best verticals for the control valve market in the next five years.  Almost all sub-verticals are expected to grow, including onshore and offshore production, transmission, LNG value chain, and distribution.

The scenario in China’s power generation market is mixed; firstly, the Capex spending in the thermal power generation segment has declined in recent years, but we believe that the nuclear power, gas fired power, and the overseas thermal power generation market can offset it.  Additionally, a huge installed base in thousands of existing power plants will generate good business for aftermarket services.