Total Automation Business in the Process Industries to Exceed $58 Billion

Nov. 1, 2003
Dedham, Massachusetts; Sept -- The process automation market, whose resilience is directly related to prosperity of the industry and the health of the

Dedham, Massachusetts; Sept -- The process automation market, whose resilience is directly related to prosperity of the industry and the health of the economy, experienced less than mediocre growth. However, the total automation business to process industries worldwide is projected to grow at a Compounded Annual Growth Rate (CAGR) of 4.7 percent over the next five years. The market is forecasted to be over $58 billion in 2007, according to a new ARC Advisory Group study.

With excess capacity globally across many industries, few manufacturers are building new plants now. However, with expected economic growth, this will be absorbed. "Although users will remain very conservative in their spending decisions for capital equipment, global competition will compel most manufacturers to improve their plant machinery and process to stay competitive," according to ARC Senior Analyst Himanshu Shah ([email protected]), the principal author of ARC's "Total Automation Business for the Process Industries Worldwide Outlook."

Process Industries Will Recover from Recent Slowdown

There are still many pockets of reliable growth in the process automation business. A myriad of process companies use legacy automation systems that do not measure up to the present day automation requirements of process plants, particularly in the era of collaborative manufacturing. Process industries such as chemical, drug & pharmaceuticals, pulp & paper, and power have aging plants and systems that are obsolete by today's standards. Process companies are severely challenged to improve their ROA and must utilize plant equipment effectively with modern controls for automation. As suppliers offer migration strategies and provide better interoperability through open standards, many users will embrace newer solutions with current technologies to help them compete in the global marketplace.

Suppliers Exhibit High Degree of Agility

To help manufacturers overcome their risk-aversion, suppliers are offering more services and broader solutions. These services offer growth opportunities in revenues. Suppliers are augmenting their deliverables, enhancing product functionalities, and offering fieldbus and wireless technologies to meet the expanding needs of users. They are also focusing on growth industries such as pharmaceuticals and food & beverage. Growth prospects in some industry segments such as refining and water & wastewater also remain better than average.

Asia and Latin America Will Grow Briskly

The economic slowdown in the US is having a negative impact on world-wide markets. In Europe, manufacturers are continuing to be cautious as their economic strength declines. Japan continues to face the same weak economic conditions it has struggled with for several years. However, there is opportunity. Latin America represents the highest growth area for total process automation, followed by the developing region of Asia. The North American and EMA (Europe, the Middle East, and Africa) regions will grow at about the same average annual rate, while Japan will see the least growth during the next five years. Additional information on this study can be found at:

Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax 781-471-1100, E-mail [email protected], Web