Industrial Modernization Bolsters the Electric Variable Speed Drives Market in the Andean Region, Finds Frost & Sullivan Product prices and after-sales services are key purchase factors
BUENOS AIRES, Argentina, Nov. 5, 2012 /PRNewswire/ -- Industrial plants are investing heavily in automation equipment to become more efficient and competitive, presenting the Andean electric variable speed drives market with huge potential and a high growth rate. Mounting concern for energy efficiency in new and existing buildings further prompts adoption of electric variable speed drives.
New analysis from Frost & Sullivan (http://www.industrialautomation.frost.com), Andean Region Electric Variable Speed Drives Market, finds that the market earned revenues of over $48.2 million in 2011 and estimates this to reach $101.2 million in 2016.
The metal and mining, as well as oil and gas industries, which support the Andean economy, are expected to grow at an annual rate of 13-15 percent until 2016. This creates a positive atmosphere for investments in the electric variable speed drives market.
"The alternating current (AC) drives segment is expected to increase its dominance and continue to replace direct current (DC) drives," said Frost & Sullivan Research Analyst Alejandro Diaz Lopez. "Since AC drives do not require coal replacement, have higher power delivery, are more efficient in energy consumption and are easier to maintain, market demand will be prompt by AC drives demand."
While the growth rate of AC drives over the next five years is projected to be 12.5 percent; DC units will grow at 0.9 percent and servo drives at 12.1 percent. As prices decrease, the total unit shipment is likely to double, reaching 158.4 million units.
However, economic growth in Andean countries is highly dependent on commodity exports and, hence, vulnerable to international price fluctuations. Domestic markets are small and the overall industrial sector is not well diversified. This limits demand and strains market revenues. Deficient energy and transportation infrastructure further hold back industrial development, affecting sale volumes of electric variable speed drives.
"In this current scenario, automation companies are developing integrated solutions that cover a variety of needs," noted Diaz Lopez. "Enhancing customer value by offering well-designed installations, certified products, on-time processes, suitable after-sales services, training and assistance will encourage adoption of automation solutions."
Acknowledging customer needs to develop customized products will enable manufacturers to stay competitive in this growing market.
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SOURCE Frost & Sullivan