The construction of onshore and offshore oil and gas pipelines is
driving growth in the global welding equipment and consumables
market, Frost & Sullivan has said.
"Growth is largely due to high demand from major pipeline construction
companies requiring welding equipment, consumables, manufacturing
automation, steel pipes, cables and wiring, technology
expertise and training, system design and integration, as well as testing
and optimisation services," the company noted. Several regions in
Asia Pacific, North America and Latin America offer a plethora of
opportunities for both new and established welding companies.
A strategic analysis of the welding equipment and consumables
market in the global pipeline industry found that the market earned
revenues of $377 million in 2009 and estimated it to reach nearly
$548 million in 2016. The
markets covered were
onshore pipelines, offshore
pipelines and cross-country
pipelines.
"Pipeline transportation is
far more advantageous than
road and railway transportation.
Some of the key benefits
that give pipeline transportation
of oil and gas a
competitive edge are lower transportation costs, reduced transit losses,
less energy intensity, economies-of-scale, fewer disruptions of
safety and reliability, and environmental amicability," said Frost & Sullivan
Programme Manager Abhishek Gokhale.
It is expected that the construction of new pipelines will remain
stable over the next few years, sustained by both continual projects
and those commencing in 2010. Additionally, the greenfield crosscountry
pipeline projects are anticipated to drive long-term growth
in this market.
However, despite high demand, the prices of welding equipment and
consumables are steadily being reduced to suit the budgets of EPC
contractors. Highly competitive markets, such as Europe and the US,
are particularly encouraged to reduce product prices.
"Major participants are constantly providing goods at lower prices to
seek more contracts, as EPC contractors are decreasing the budget
allocation for welding applications," Gokhale explained.
Manufacturers should use resources efficiently, formulate cost-cutting
strategies and attempt to expand to low-cost manufacturing locations.
Additionally, they should target projects in developing regions.