Sinking oil prices is having a high negative impact on capital equipment vendors including pump and compressor makers. Fluid flow control industry, where KP-LOK oil and gas businesses are cannot do without pumps and compressors due to needing to pump commodities (gas and petroleum products) to distance places to meet market demands. Achieving efficient product supply demands in oil and gas industries require heavy use of valve powered compressors and pumps which come at a very high cost. In the event of deep in oil prices, how will it meet the rising costs of valves the industry needs?
Reports on the world marketing for centrifugal pumps and industrial air and gas compressors, released by HIS, end users spending on pumps and compressors is projected to decline as oil prices sink in the world market. This means anytime there is instability in world oil market, a direct deep in demands form pumps and compressors is expected in the fluid flow services which inadvertently will affect the valves industry. As a result of the reality of the impact of reduced oil price fall, pumps and compressors manufacturers may need to do more to make marginal improvement in profitability and prepare for more struggles to secure new orders. Therefore, to remain solvent and competitive, fluid flow equipment manufacturers will need to put on their thinking caps to change focus and product more even if it requires venturing into other lines of fluid control systems.
However, notwithstanding the deep in oil prices activities, competition is intense among pumps and compressors manufacturers. Manufacturers of pumps and compressors are now focusing on new markets and producing new products. Competition is getting tougher among industry players leading to the acquisition of competing businesses within the industry. In like manner, mergers are happening among similar or complementary industry players such as OEMs merging, acquiring and collaborating with industries needing pumps and compressors such as automobile and automation industries. It is evident that sinking oil prices is forcing innovation among valve manufacturers to look both inward and otherwise to make themselves relevant in the scheme of things.
The energy sector is also opening up new opportunities for valve manufacturers for supply of relevant valve component s to meet immediate local and international demand. Areas of valves component needs are in the analytics and connectivity services. This mostly requires design and manufacturing of high efficiency and custom designed compressors and pumps for the energy sector. The service demands apart from supplying quality valves to power the industry; it needs to think of rendering maintenance, equipment optimization services for the improved sector-wide industry.
All hope is not lost for pumps, and compressors suppliers as new opportunities for growth are visible. Although it is expected the downturn in the sector will last till 2018, rising demand for pumps and compressors in the power sectors offer compensatory relieve to survive the crashing pumps and compressor economy.
However, consequent upon dwindling income and rising of other opportunities, not all suppliers and manufacturers of pumps and compressors will rise to the occasion of new opportunities. Many suppliers will still find it difficult enough to take advantage of available opportunities; failing to do this will no doubt exacerbate the effect of the low demands in the pump and compressor market.