Russia’s welding equipment market has been growing since early 2010 thanks to rising demand from oil-and-gas exploration and distribution projects, observes market analysis firm Frost & Sullivan in a new report. Russian efforts to develop its nuclear and wind-power industries also are improving the welding markets, though the wider availability of imported welding equipment is threatening to take market share from domestic suppliers.

Frost & Sullivan’s Strategic Analysis of Russian Welding Equipment Market reveals that the Russian domestic market represented a value of $445.4 million in 2010, and projects that will rise to $941.2 million in 2017.

The report covers arc, resistance, gas, and other (laser, friction stir and electron beam) welding process equipment.

"The majority of Russia's oil exports transit through Transneft-controlled pipelines, indicating a rise in the usage of welding equipment for the pipeline and energy exploration industries," stated Frost & Sullivan global program manager Archana Chauhan. "Several pipeline projects like the Yamal-Europe, Galsi, and Medgaz have aided in the growth of welding equipment in the past, while proposed projects like the South Stream pipeline route under the Black Sea to take Russian gas to Europe are expected to drive the total market for welding equipment over the long-term."

Investments in Russian oil-and-gas projects are anticipated to continue, the report indicates, which will drive demand for welding equipment. Such trends will have a positive impact on the demand for welding equipment, and a number of nuclear and wind-power projects that were idled as the global financial crisis set in, but the forecast predicts the “energy building machine industry is expected to witness a rebound.”

"These projects are poised to drive the volume and revenues for the total Russian welding equipment market," stated Chauhan. "The recovery of the Russian shipbuilding industry and surging steel production and consumption are also set to have a positive effect on welding over the long-term."

Oil-and-gas, construction, and energy industries are Russia’s largest consuming markets for welding equipment and consumables, and increasingly after-sales services and technical support. Both domestic and international suppliers are being forced to provide these services at a low cost to counter rising price sensitivity, which in turn is reducing their profit margins.

In addition, Frost & Sullivan finds that about 80% of the total Russian welding equipment market consists of equipment imported from international and other low-cost manufacturers. Greater market penetration by these companies through dealerships and strong distribution networks is eroding the domestic companies’ share of the market.