To add another perspective to our State of the Industry analysis, we spoke to Ivan Fernandez, the Industry Director at Frost & Sullivan’s Industry practice in Sydney.
Like our industry respondents, Mr Fernandez notes that it has been a challenging 12 months for the pump industry – however, he does see light at the end of the tunnel, particularly for businesses established to assist with aftermarket services.
“The single biggest positive trend for the industry in 2016 will be in the area of aftermarket servicing,” said Mr Fernandez.
“Continued weak macroeconomic conditions will prompt pump users to service rather than replace their equipment. This, combined with the fact that businesses will be able to realise substantial energy savings through regular servicing, will provide the aftermarket with a steady stream of work in 2016.”
Budgetary constraints will however continue to be an issue in 2016, but according to Mr Fernandez, even more challenging is the lack of insight the industry will continue to face from end users.
“There is a lack of awareness amongst a number of pump end users in relation to optimal pump service frequency, and the benefits that can be realised as a result,” he noted.
Continuing to educate end users about their pumps and their optimum operating conditions will a key area for pump professionals to focus on.
For companies supplying and manufacturing equipment, there will be challenges in two key areas: a greater need for fixed pricing; combined with a desire for increasingly sophisticated technologies.
“In the current climate, there is a need for longer term spare parts pricing and fixed price repair arrangements to improve accuracy of operations and maintenance budget forecasts,” noted Mr Fernandez.
“The industry will also face increased demand for advanced control technology for easier operational control, monitoring and remote management; especially for condition monitoring systems and other related diagnostic tools.
“These trends will put pump service providers under increased pressure in relation to price and delivery of value-added services.”
Like the respondents in our own survey, Mr Fernandez believes that growth for the pump industry will come from sectors such as water, wastewater and construction (both residential and commercial). He also forecasts some improvement for the mining sector in 2016 which is good news for the pump industry.
For companies seeking out new opportunities, Mr Fernandez has clear advice.
“Opportunities for the pump industry exist in the area of value-added services, such as condition monitoring, asset management, advanced diagnostics, smart pumping and optimisation.
“Over the next 12 months, educating customers will be critical. There will be an increase in the number of end users encouraged to develop their own in-house service teams, thus impacting outsourced revenue opportunities; and their will be indirect competition from engineer, procure, construct contractors, niche engineering support companies and service providers for related equipment.”
The smart companies will act now to figure out how they will mitigate these challenges and position themselves as ‘need to have’ rather than ‘nice to have’ provider in the current marketplace.
