Industrial services revenue to hit $818m
Dubai, 29 days ago
The industrial services market has earned revenues of $549.3 million in 2013 and is estimated to reach $818.5 million in 2018, at a growth rate of 8.3 per cent per annum, according to a recent analysis.
The new analysis from Frost & Sullivan, titled ‘Strategic Analysis of the Middle East Industrial Services Market,’ covered the Middle East market for industrial service of pumps, motors, compressors, automation, instrumentation and electric drives.
Industrial plant owners’ eagerness to ensure maximum asset utilisation, plant productivity and profitability coupled with stipulations by external agents such as process licensors have stoked the adoption of modern maintenance practices, it said.
The demand for service from the growing installed base and subsequent maintenance requirements will continue to be crucial to the overall market growth, said the report.
“The tangible benefits of improved operational efficiency, lower life cycle costs and overall plant safety encourage end users to invest continuously on services,” said a Frost & Sullivan industrial automation and process control research analyst.
“Additionally, the rising population and strong economic growth will stimulate investments, contributing to the growth of industrial services market in the Middle East.”
The end-users also notice substantial revenue opportunities in services, that they have begun to accept project (equipment installation) orders at lower margins, with expectations of gains from after-sales services. Several original equipment manufacturers (OEMs) are utilising service offerings as a differentiator in an increasingly homogeneous market.
Although services are playing an increasing role in the business strategies of end users, it is possible that the reduced global demand for crude from the Middle East will affect the investments planned in the region.
The geo-political instability in the Middle East may further dampen investor sentiments and impede greenfield and brownfield investments.
While the lack of investments hampers the industrial services market, it also encourages end users to resort to maintenance services to make the optimum use of their aging infrastructure.
The escalating popularity of integrated solutions is another important trend, said the report. The higher degree of automation in pumps, compressors, and motors have prompted end users to buy integrated solutions that comprise frequency drives, valves, logic controllers, and automation software.
“The maintenance and repair of technically advanced automated systems are often beyond the capabilities of in-house workshops,” noted the analyst.
“This ensures that the systems’ commissioning and servicing is OEM or third-party-centric. Evidently, the adoption of integrated solutions makes services for systems indispensable and enhances the revenue generated through services.” - TradeArabia News Service