Strong growth in the pump industry for China

In a recent report issued by US company, McIlvaine, it was estimated that the world market for pumps would grow from just under $30 billion in 2006 to $49 billion per year by 2016. The report states that this is largely driven by the increasing demand for clean water.

The report titled Pumps:World Markets, indicated that while world gross domestic product will grow only 4% per year during the next 10 years, the pump market is expected to grow at 5% per year. This is despite growth of only 1-2% per year in some regions and sectors such as European basic industry (steel, chemicals, pulp and paper).

The report goes on to say that China's domestic pump industry will continue to grow at a rate of 11-12% in the next 3-5 years. This is, according to the report, driven by China's active policies for expanding domestic demands; strong demands for the pump from main sectors like power, steel and iron and petrochemistry; as well as the rapid growth of urban infrastructure construction.

China's pump industry will maintain a sustainable development at a rate of 2-3% higher than that of machinery industry. Among these, the wastewater treatment segment will likely offer the greatest scope for revenue growth.

Frost & Sullivan research analyst Vickertal Chen believes that the Chinese government is investing large amounts of funds into water treatment in order to achieve the goal that the average concentrated sewage treatment must go from 60 to 80% in 2010, in order to match the rate of urbanisation.

"The Chinese market for positive displacement and centrifugal pumps is also huge, though highly fragmented. Rapid infrastructure development in processing and other related industries largely drives this market," he says.

For international manufacturing companies like Grundfos it is becoming necessary to expand into China due to the demand of the rapidly growing municipal market.

Carsten Bjerg, group president and CEO of Grundfos, believes that the demand for efficient, large-scale wastewater pumps now prompts Grundfos to expand its existing facilities in Suzhou, China.

"We expect to triple our sales in the country within the next five years. Our production facilities in Suzhou will help us give our customers in this region the best possible service," he says.

The expanded activities also include a new research and development team which will be dedicated to wastewater solutions and finding new ways to improve wastewater management.

Kim Jensen, group senior vice president, who holds the responsibility for Grundfos's wastewater business area says that the company is fully committed to meeting the ever-growing demand for wastewater pumps in China.

"The products themselves are already much appreciated for their benefits to infrastructure and the environment, but the future proximity between market and production will add new benefits of customisations to the Asian markets."

"Construction of the new production facilities in Suzhou is already underway," he says, adding that it will be operated by more than 100 employees and the factory's full production capacity will be reached in 2008.

The new factory will manufacture well-known Grundfos designs for the local market. The main focus will be on the SuperVortex and channel-impeller pumps, initially on models with motors from 20 to 250 kW.

Grundfos will also be establishing a new customer service unit in China.

"The new set-up ensures that the total pool of Grundfos's experience is placed at the disposal of our East-Asian clients," said Mr Jensen.