In a recently published study titled Distributed Control Systems Worldwide Outlook, industry analyst ARC Advisory Group ranked ABB as the worldwide market leader in this core automation market. The study reports that the total worldwide market for DCS (distributed control systems) increased by 14 per cent between 2005 and 2006, with total revenues of $13.4billion, and forecasts that the compound annual growth rate (CAGR) for this market through to 2011 will be 9.9 per cent.
ARC's report states that the DCS market is a leading indicator of the overall health of the process automation business; growth in 2006 exceeded ARC's expectations. Factors contributing to this upward trend include high energy prices and the growing worldwide demand for energy, as well as the continued need by manufacturers to improve their plant operations, meet increasing regulatory requirements, and modernise the ageing installed base. ARC estimates the total installed base of DCS systems worldwide to be worth over $65billion.
Larry O'Brien, Research Director for Process Industries at ARC, states: "The rapid growth of the DCS market, and the battle for the installed base, make it no easy task for the market leader, but ABB still retains its leading position in the worldwide market for 2006. The company continues to enjoy the largest installed base of any supplier, and is making key strides in evolving its installed base forward to its System 800xA platform. ABB is also the market share leader in key global verticals including oil and gas, electric power, cement and glass, and pulp and paper, and the regional leader for Europe/Mid East/Asia (EMEA)."
The oil and gas, refining and power industries superseded the pharmaceutical and food and beverage industries as the fastest growing DCS markets in 2006, providing new areas of opportunity across all geographies. ARC forecasts that oil and gas will see more growth in the DCS market than any other industry area over the next five years; this growth will be driven by increasing investments in oil exploration and production.
Veli-Matti Reinikkala, head of ABB's Process Automation division, comments: "ABB's strong presence in the oil and gas market, and vast portfolio of technology and expertise, will help us to serve our current and future customers in this growing market space with the solutions they need to be successful. Overall, we are well positioned to deliver the DCS products and services, as well as the complementary automation technology and project expertise needed to help all of the process industries meet their critical business needs in the areas of operational profitability, capital productivity, risk management and global responsibility."
According to ARC, Asia is still a powerhouse and opportunities continue to abound in the Middle East, Eastern Europe, and Latin America, but the developed markets such as North America and Western Europe are beginning to show signs of sluggishness. ARC expects the current growth phase of the global market for automation to last through the next several years. While the overall market remains strong and will continue to grow, odds are that there will not be the stellar growth in the automation marketplace that was present between 2005 and 2006.
From a macroeconomic perspective, both China and India are poised for significant long-term growth. Both countries are increasing their focus on manufacturing for export, in addition to developing infrastructure, investing in basic industries, and in training personnel to operate automation plants. China is still the primary catalyst for global growth in the automation industry. As a result, ARC expects that China will be the single biggest geographical market for automation products and services in 20 years.
Additional information on the Distributed Control Systems Worldwide Outlook, as well as other studies on the global automation market, is available at www.arcweb.com.
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