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Articles by Robert McIlvaine
The Dynamic Data Center Valve Market
FEATURED STORY The Dynamic Data Center Market The demand for valves in data centers across the U.S. and around the world is expected to remain strong with robust growth and sufficient supply to 2040. By Robert McIlvaine – CEO – McIlvaine Company Over the next 15 years — under the most optimistic forecast — the market for valves required at data centers around the world could grow from less than $1 billion per year to nearly $4 billion per year by 2040.
Valve Demand for Gas Turbines Climb 6% Annually
Climbs 6% Annually FEATURED STORY Valve Demand for Gas Turbines As larger gas turbine plants purchase hundreds of thousands of dollars of valves and support annually, the valve market is showing positive signs of increased demand as well as positive, steady growth. By Robert McIlvaine, CEO – McIlvaine Company The valve market for gas turbines is expanding at 6% per year. Thanks to low-cost LNG, worldwide access to fuel for gas turbines will be easily available.
Africa and Asia Will Transform the Valve Market
FEATURED STORY Transform the Valve Market Africa and Asia Will Low-cost manufacturing countries of the world will be utilizing an increasing percentage of the world’s valves. Traditional manufacturers are challenged by the low selling prices and lack of access. This lack of access is mostly due to the inattention of the large valve suppliers.
The Impact of Automation and Remote O&M on Stainless Decisions
FEATURED STORY The Impact of Automation and Remote O&M on Stainless Decisions The air, water, energy (AWE) market is over US$ 2 trillion. Tens of billions of dollars of stainless sheets, castings, and other stainless forms are purchased by the companies making the products used to move and treat air and water and create energy. Stainless steel suppliers are discovering rapid changes in the market.
“Who Controls the Valve Performance Monitors Will Control the Valve Market”
Valve companies are designing valve performance software that is tailored to specific valve challenges. Automation suppliers also have generic valve performance software which has the advantage of being easily integrated into automation systems. It boils down to whether it is better to have a superior valve performance monitor and integrate it into the automation system or have a generic valve performance monitor that is more easily integrated.
Valve Market is Now High Profit and High Risk
Market Report: FEATURED STORY Valve Market is Now High Profit and High Risk A few valve companies are achieving EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of thirty percent. However, the average is less than fifteen percent. Profits are steady and predictable. Over the next ten years the industry will be transformed in ways which we can only predict.
“That Who Controls the Valve Performance Monitors Will Control the Valve Market”
“That Who Controls the Valve Performance Monitors FEATURED STORY Will Control the Valve Market” Valve companies are designing valve performance software that is tailored to specific valve challenges. Automation suppliers also have generic valve performance software which has the advantage of being easily integrated into automation systems.
Artificial Intelligence is Changing the Valve Industry
FEATURED STORY Artificial Intelligence is Changing the Valve Industry Artificial Intelligence (AI) is changing the valve industry much faster than at any time in history. Valve operators are able to find customized products that reduce cost of ownership significantly better than the standard versions. If the valve industry leads rather than follows, both suppliers and customers will achieve higher profits.
Artificial Intelligence Presents New Opportunities for Stainless Steel Suppliers
Artificial Intelligence Presents New Opportunities for Stainless Steel Suppliers FEATURED STORY Artificial Intelligence presents new opportunities for stainless steel suppliers to demonstrate the lower total cost of ownership of their materials in specific applications. The following example of stainless-steel opportunities in triple offset butterfly valves shows the level of detail relative to the performance of stainless which is now available.
Which Valve Manufacturers Should Focus on the LNG Market
FEATURED STORY Which Valve Manufacturers Should Focus on the LNG Market The liquefied natural gas (LNG) valve market is substantial and growing rapidly. But the question for the manufacturer is whether LNG is one of the most profitable opportunities to pursue.
Pursuing the Best Moons, Planets, and Stars in the Valve Galaxy
and Stars in the Valve Galaxy FEATURED STORY Pursuing the Best Moons, Planets, The Valve Market is a USD $100 billion galaxy in an air, water, energy universe which generates revenues of USD $1 trillion for treatment of gases, liquids, and powders. By Robert McIlvaine, Founder and CEO – The McIlvaine Company Many stars within the galaxy have revenues of more than USD $1 billion. Each star could have ten planets generating revenues in excess of USD $100 million.
Forecasting the Valve Market is Made Difficult by Politics
FEATURED STORY Forecasting the Valve Market is Made Difficult by Politics The McIlvaine Company has been making predictions about the valve markets for decades. The political winds have been of minor importance. The big variables have been in economics. The new reality is that political forces will shape the AWE market in the coming years in an unprecedented way. If the winds are favorable there will be 2 billion more people in 2050 and global GDP will be twice that of today.
Sales Campaign for Each Targeted Valve Prospect
FEATURED STORY Sales Campaign for Each Targeted Valve Prospect Many valve companies are pursuing the 20% of the market yielding 80% of the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). The most profitable market is an aggregation of $10 million niches. There are ten $1 million sub-niches each with up to ten sub-2-niches which provide the targets for the local salesmen. Each sub-niche is shaped by a value proposition which will achieve a 40% market share and 30% EBITDA.
Pursuing the Niche Markets in Air, Water, and Energy Where a Stainless Product Will Be Most Profitable
Where a Stainless Product Will Be Most Profitable Pursuing the Niche Markets in Air, Water, and Energy FEATURED STORY: The Air, Water, Energy (AWE) industry, defined broadly, is a market of nearly 1 trillion dollars. Stainless steel is used in the structure and parts in more than 15% of the applications. Stainless is selected to protect either the hardware or the product being manufactured. Various grades of stainless are selected based on corrosiveness, abrasion, pressure, and contamination.
Applying the 80-20 Rule to the Valve Market
FEATURED STORY Applying the 80-20 Rule to the Valve Market The 80-20 theory is based on 20% of markets generating 80% of the Earnings Before Tax, Interest, Depreciation, and Amortization (EBITDA). The main objective of applying the 80-20 rule is to identify the most productive or profitable segments, and prioritize them. By extending the 80-20 rule to the valve market, companies can use niche analysis to expand on which markets are generating the most EBITDA.
Chocolate Production and the Challenges for Pump Manufacturers
FEATURED STORY Chocolate Production and the Challenges for Pump Manufacturers A Midwest chocolate manufacturer was losing product due to overheating. The manufacturer found that the solution involved several interesting changes, including new pumps This article is about providing the best purchaser decision options for chocolate manufacturing. It starts with understanding each process. By Robert McIlvaine, President & Founder – The McIlvaine Company Making Chocolate Chocolate is made everywhere.
Taking a Niche-by-Niche Route
FEATURED STORY Taking a Niche-by-Niche Route Why is cost data used as a guide and a reference whereas market data is used only as a reference? The answer is the difference in detail and reliability. One can imagine the implications of a hose company cutting back on detailed cost analysis and relying just on total costs for guidance. This article will discuss the process of using a niche-by-niche route to achieve 30% earnings before interest, taxes, depreciation, and appreciation (EBITDA).
Pursuing the Niche Markets in Pumps
Selecting Niches A salient fact is that there is not a single giant pump market. Hundreds of thousands of niche markets can be aggregated to provide a total. Individual niches worth USD $94,000, can be combined like LEGO blocks into various niche combinations. For example, Flowserve purchased Velan to create the world’s 2nd largest pump and valve company with revenues of close to USD $1 billion and an EBITDA of 15%.
Latest Developments in the Hydrogen Pump Market
Discrete vs. Process The discrete classification is defined as a pump associated with a piece of equipment. These are small with a required flow as small as 1 lpm. Many automotive companies are moving forward with hydrogen fueled vehicles. Process is the classification of pumps used in the production and transport of hydrogen.
Latest Developments in the Hydrogen Hose and Coupling Market
Discrete vs. Process The discrete classification is defined as a hose and coupling associated with a piece of equipment. These are small with a required flow as small as 1 lpm. Many automotive companies are moving forward with hydrogen fueled vehicles. Process is the classification of hose and coupling used in the production and transport of hydrogen.
Factors Shaping the Pump Market
Small Modular Reactors Small modular reactors (SMR) promise to revive the nuclear industry. They can be installed at many sites which were formerly coal-fired generators. The concept of small generators also ties in with the advantages of heat recovery. Beneficial use is more likely at several small sites rather than a large one. Renewables Wind and solar will make steady inroads against technologies which use pumps. However, over the next 15 years, the impact will not be immense.
Latest Developments in the Hydrogen Stainless Steel Flow Control Market
Based on the analysis, much of the near-term stainless potential is in gray and blue hydrogen. Gray hydrogen includes the flow control for partial combustion as well as for purification processes. The potential for yellow hydrogen is also substantial. Environmentalists have recognized the need for carbon negative processes, and biomass combustion with carbon capture and sequestration (BECCS) is the only cost-effective carbon negative option.
Ammonia Hose and Coupling Game Plan: Considering the Factors
FEATURED STORY Ammonia Hose and Coupling Game Plan: Considering the Factors The market for hoses and couplings for ammonia applications is growing at double-digit rates due to various environmental drivers. This market is particularly susceptible to political developments, and there are more than 1,000 market niches where the facts and factors differ enough that the same value proposition cannot apply.
Power Plant Market: A Chess Game for Hose and Coupling Suppliers
For example, Andritz is generating nearly $1 billion USD in annual revenues for this technology. Hydropower is a limited resource with some environmental challenges, but an important option for reduced CO2. Ammonia can also be created with CO2 sequestration. Ammonia can be directly combusted or converted to hydrogen prior to combustion. An example is Yara, a major ammonia producer, that has been contracted to provide millions of tons of ammonia to Japanese power plants.
Increasing Hose and Coupling Investment for the Semiconductor Industry
AGRU Kunststofftechnik GmbH is a manufacturer of high-purity, thermo-plastic piping systems for transportation of pure liquids. The materials of PVDF, ECTFE, PP-Gray, PP-Natural are offered with a wide range of pipe sizes, fittings, valves, vortex flow meters and semi-finished products. Daikin’s Fluoropolymer NEOFLON PFA AP-Series has the chemical resistance of fluoro materials, along with excellent stress crack resistance and a high level of cleanliness.
Modest growth for subsea valves
The demand for subsea valves is increasing due to the elevated prices of oil and gas. Over the next few years prices are likely to remain high due to the world political situation. Increases in subsea production are underway but one constraint is the long period between project start and completion. There are also uncertainties about the quality and accessibility of the reserves. Ukrainian forces recently attacked offshore oil and gas drilling platforms in the Black Sea.
Acquisitions Shape the Hose & Coupling Market
An analysis of thousands of acquisitions over the last 30 years shows that the hose market is built on the niche achievements of several small companies who were acquired by publicly traded companies or private equity firms. The many benefits of mergers have recently increased due to the advent of IIoT and remote O&M which allow suppliers to provide solutions and not just products.
The severe service valve market
FEATURED STORY The severe service valve market The market for severe service valves is growing faster than for general performance valves. This article is an overview of severe service valve categories and reflects on areas where the use of severe service valves is growing particularly strongly. First of all, let’s classify the types of valves that fall under the severe service heading and indicate the percentage of severe service valves to general valves.
Evidence Based, Forecast Driven Strategy for Hose and Coupling Suppliers
Using an evidence based, forecast driven sales approach to selling product can maximize profits for hose and coupling companies. There are two variations of this approach based on whether the hose and coupling is in general or high performance service. By Robert McIlvaine, President and Founder, the McIlvaine Company Evidence-Based Strategy The capital investment and sales decisions differ greatly depending on whether the hose falls under the general or high-performance classification.
Hose and Coupling Selection for Hydrogen Production
By 2030 there will be over 200 million tons of hydrogen produced under the Net Zero climate change program. Hydrogen sales will generate revenues of over USD $400 billion, and will also generate hose sales for hydrogen production. By Robert McIlvaine, President and Founder, the McIlvaine Company The International Energy Agency (IEA) forecast for 2030 projects electrolysis as the largest production mode for hydrogen. This would be followed by fossil fuels, mostly natural gas, without carbon capture.
Featured Story - The silver lining of carbon neutrality
The silver lining of carbon neutrality FEATURED STORY By Robert McIlvaine The Biden Administration has pledged to cut U.S. greenhouse gas emissions by 50 to 52 per cent from 2005 levels by 2030 and to zero by 2050. This is net CO2 emissions and not eliminating all sources. Consider that humans exhale CO2 and the goal is benefit to and not extinction of the human race.. China is planning on carbon neutrality by 2060. This may appear to be bad news for the valve industry.
Most Profitable Sectors of the Food Industry for Hoses & Couplings
The world GDP is over $80 trillion, and more than $15 trillion of that is spent on food. Sugar purchases alone account for over $1 trillion of this GDP. The percentage of food revenues spent on hoses and couplings is very small compared to that spent on municipal water treatment. It is even less than what is spent on mining, refining, and most other industrial sectors related to food production.1 It is however, still quite large.
The Power Hose & Couplings Market Will Grow Under a Net Zero CO2 Program
The market for hoses and couplings in the power industry will grow at a Compound Annual Growth Rate (CAGR) of 2% over the next 30 years. It is predicted that this already massive market will increase further as the innovation needed to reach the net zero CO2 initiative occurs. This in turn will require coal and nuclear plants to allocate more spending to hose technologies.
The Use of Pumps in Pharma Flow and Treat Products will be Shaped by Innovation
By Robert McIlvaine, President & Founder, The McIlvaine Company A Growing Industry The pharmaceutical industry has grown faster than other industry sectors; it currently spends approximately USD $10 billion on flow and treat products, see Figure 1. For many years the various pumps have been used for pharmaceutical applications. Now, the research and development of new medication has led to an increased push to determine which pumps are best suited to the pharmaceutical industry.
Options Will be Shaped by Innovation
With the recent growth of the pharmaceutical sector, the medicinal industry require innovations from industrial hose manufacturers. The route to better products and higher profits will ultimately come from the Innovation-TCO-Profitability Causation Loop.
The Silver Lining in Carbon Neutrality for the Hose & Coupling Industry
At first glance, the carbon neutrality initiative could be considered harmful to the hose & coupling industry, but there is actually a silver lining to this cloud. By Robert McIlvaine, President & Founder, The McIlvaine Company Reducing CO2 Emissions The Biden administration has pledged to cut greenhouse gas emissions in the United States by 50% to 52% (based on levels recorded in 2005) by 2030. The administration has also pledged to reduce emissions to zero by 2050.
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