The impact of the pandemic is affecting various segments differently. This includes:
- Countries: the impact on India and the U.S. will be negative while China is moving forward as planned.
- Fuel type: Nuclear projects are not affected, whereas renewable projects have been delayed in some countries.
- Project type: There is a progressively decreasing impact on the following categories.
- New companies will be the most impacted. Very few valves are sold to new power companies who have never purchased a valve.
- The market for valves for new power plants owned by existing operators is relatively small but impacted.
- The market for replacement valves is larger and less impacted.
- The market for repairs and service is large and the least impacted.
- Valve type: with high-performance valves, the decision can be made to delay replacement and instead repair them. When general performance valves fail, they usually are replaced rather than repaired. So there is a more significant impact on the high-performance valves.
Focus on profit
The wildfires in Australia, California and elsewhere are being blamed on climate change and specifically fossil-fired power generation. This publicity has the effect of delaying gas turbine and coal-fired plant projects. Valve companies are, therefore facing several years where revenues from the power industry will not be increasing. However, profits can be improved.
Valve companies which adapt to the new ways to target prospects and communicate with them will have an advantage which can be converted to greater markets shares, margins, and profits.
Market research has been used as a peripheral tool by valve suppliers. Now it can be the foundation of a program to pursue the Most Profitable Market (MPM) successfully. There is already enough information available through media, associations, conferences and internet resources to determine the best prospects and then convince them that the supplier has a better product. Here is an approach based on customer knowledge and not sales leads.
| Activity | Present Approach | MPM |
| Sales Initiation | Sales Leads and Reps | Predicted Prospects |
| Market research | Peripheral | Foundation of approach |
| Sales promotion | Unstructured and Reactive | Structured and Proactive |
Less than 1000 companies purchase ninety per cent of the power industry valves. Valve suppliers can quickly identify the prospects and even the processes used in each plant.
Here is an example of coal-fired plant operators with planned additions between 6000-7000 MW
| Company | planned MW | installed MW |
| NLC India | 6,700 | 3,990 |
| TANGEDCO | 6,640 | 4,320 |
| J-POWER | 6,356 | 8,482 |
| Eskom | 6,352 | 41,129 |
| UPRVUNL | 6,270 | 5,474 |
| GCM Resources | 6,000 | 0 |
With knowledge of the existing capacity at any point in time, the expenditures for new valves, replacements and repairs can be made. Here are some tabulations for East European countries.
|
Coal-fired capacity – MW |
|||||||
|
Country |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
|
Romania |
5,305 |
5,305 |
5,305 |
5,305 |
5,305 |
5,305 |
6,000 |
|
Slovakia |
881 |
881 |
881 |
881 |
881 |
881 |
881 |
|
Bosnia & Herzegovina |
2,073 |
2,073 |
2,073 |
2,073 |
2,073 |
3,000 |
4,000 |
|
Serbia |
4,405 |
4,405 |
4,405 |
4,405 |
4,405 |
5,000 |
5,000 |
|
North Macedonia |
800 |
800 |
800 |
800 |
800 |
800 |
1,200 |
|
Slovenia |
1,069 |
1,069 |
1,069 |
1,069 |
1,069 |
1,069 |
1,069 |
|
Croatia |
210 |
210 |
210 |
210 |
210 |
210 |
210 |
COVID-19 and climate change present challenges to valve companies. Those that best meet these challenges can increase market shares, gross margins, and profits.
(1) Valves: World Markets published by the McIlvaine Company
