Frost & Sullivan cites improvements in wind power, automotive, and construction
A new study of activity in Europe’s welding consumables market concludes that a recovery is in store for 2010, driven by three large industrial sectors: wind turbines, automotive manufacturing, and construction. The analysis, Strategic Analysis of European Welding Consumables Market, was conducted by Frost & Sullivan.
The research finds that Europe’s welding consumables market earned revenues of $983.4 million in 2009, and estimates it will reach $1,139.5 million by 2016. Welding products covered in the study are stick electrodes, solid wires, flux-cored wires, and submerged arc welding (SAW) wires and fluxes.
Frost & Sullivan points to an increasing number of wind turbine installations in Spain, Germany, France, Italy, and the United Kingdom in the near term, as well as planned new investments in automotive and construction programs in the long term.
“Consumption of steel is expected to rise due to the restocking of depleted inventories along with the new demand spurred by the energy and automotive sectors,” stated Frost & Sullivan senior research analyst Archana Chauhan. “This increase indicates a spurt in welding activities, and thereby a rise in the demand for the welding consumables.”
Frost & Sullivan observes that competition in the welding consumables market ranges from sectors that are highly competitive (numerous suppliers, with little or no pricing power), while some niches are fairly less competitive. As a result, there is a lack of product differentiation.
Also, increasing requirements for customer service represent a significant challenge for European welding manufacturers.
“With escalating raw material prices, competition from Asian manufacturers, and low profit margins, several manufacturers are unable to provide effective customer services such as efficient packaging, after-sales service, and expert guidance to their customers,” Chauhan explains.
She said welding consumables manufacturers can differentiate themselves and increase their profit margins by providing rapid and on-time delivery, higher alloys of consumables that present higher productivity, better packaging and marketing, and a reduced average production cost.
“A one-stop-shop for all the welding needs can be one of the key strategies to drive the growth and penetration of welding companies,” Chauhan said.