Pump Manufacturers In The Oil And Gas Industry Strike A Rich Vein With Their Solutions-Based Approach
Pump manufacturers in the oil and gas industry will likely garner substantially higher sales revenue by offering complete services and solutions with their products. These manufacturers seek to improve their competitive edge by providing convenient access to additional service and solution requirements such as on-site assistance, maintenance and spare parts.
New analysis from Frost & Sullivan (http://www.industrialautomation.frost.com), World Pumps Market in the Oil and Gas Industry reveals that the market earned revenues of $5.23B in 2005 and estimates this to reach $8.01B in 2012.
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The increasingly popular trend of pump manufacturers offering services appeals to manufacturers, as it enables them to differentiate their company in an intensely competitive market. Essentially, the uniqueness of the service generates greater revenue potential. Services offered as incentives or even at a premium include installation, general service agreements, maintenance contracts and technical support.
Market participants utilize this service model to entice end users that consider outsourcing the skills required for optimal application as well as equipment maintenance. Moreover, this arrangement requires minimal risk.
Apart from providing convenient solutions, manufacturers will also have to acknowledge the increasing need to improve energy costs and pump efficiency. The significance of this challenge will likely escalate as regulations regarding energy consumption become more stringent from 2006 to 2008.
”Smaller firms, in particular, are facing increasing difficulties in complying with various standards for a wide range of equipment and components,” says Frost & Sullivan Research Analyst Dushyant Mehra. ”They will have to keep tabs on their equipment’s noise and emission levels, hygiene standards, quality, and reliability.”
The major competitive factors for pump manufacturers catering to the oil and gas industry include energy costs, life cycle costs and improving efficiency of the equipment. The competition in the market also compels manufacturers to create innovative solutions that keep prices in check. For instance, increasing price pressures led to the introduction of the life cycle cost (LCC) savings solution. Additionally, the gradual shift of manufacturers to low-cost regions and green field projects in emerging economies will enhance their profitability.
”The rapid economic growth in the last few years, greater industrialization, and burgeoning population are likely to boost the pumps market in Asia Pacific and Latin America,” observes Mehra. ”The Asia Pacific is likely to remain the fastest-growing market and an attractive manufacturing destination, given its lower labor costs, economical real estate, and convenient geographical location.”
SOURCE: Frost & Sullivan