Escalating inflation rates and price pressures are hitting the profit margins of positive displacement pump manufacturers and holding back R&D for new product technology development, says a newly-published report.
However, an increase in demand from the pharmaceutical, food and water industries will provide an outlet for growth and should help the market for these pumps rise to $2.08 billion (€1.79bn) in 2009, from a level of $1.60 billion last year, according to Frost & Sullivan.
Sustained demand for positive displacement pumps is likely to stem from the biotech and pharmaceutical segments as they continually search for improved and advanced drugs, according to the report.
"Market share leaders are competing more aggressively as they encounter undercutting from lower priced but inferior quality imported products flooding the market," says F&S research analyst Achyuta Ghosh. Meanwhile, large OEM (original equipment manufacturer) customers are driving prices further downward through selective bidding for projects.
Participants are working to address these challenges by improving manufacturing practices, outsourcing components and shifting their production base overseas to China and Latin American countries.
"Moving production offshore allows participants to capitalise on lower manufacturing overheads and relaxed regional environment laws," said Ghosh. Established companies with worldwide distribution networks stand to gain greatly from this trend, but, to hold their own against the heavyweights, smaller companies need to ramp up global distribution as well, she noted.
The report, called North American Positive Displacement Pumps Market, is published as part of F&S' Sensors and Process Controls Subscription. For more information, contact the publisher.