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High Growth Markets Speech by Bob McIlvaine Valve World ExpoJune 25 2013 McIlvaine Company Northfield, IL.

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Presentation on theme: "High Growth Markets Speech by Bob McIlvaine Valve World ExpoJune 25 2013 McIlvaine Company Northfield, IL."— Presentation transcript:

1 High Growth Markets Speech by Bob McIlvaine Valve World ExpoJune 25 2013 McIlvaine Company Northfield, IL

2 Largest regional valve markets The total world valve revenues last year were over $53 billion. Asia accounted for 42 percent of the market. Valve Revenues ($ Millions) *

3 Progress With Smart Valves Will Lead to accelerated growth McIlvaine Company has revised its forecast for growth in the industrial valve industry to 5.5 percent CAGR for the 2013-2017 period. The basis is the increased anticipated revenues from the sales of smart valves. The valve forecasts are defined to match the individual valve supplier revenues, so they include smart valve technology where it is sold by the valve supplier but not by an independent automation supplier. The oil and gas sector is leading the way toward smart valves. For sub-sea oil and gas, the use of intelligent control systems for valve trees is becoming a defining factor of intelligent well development. All electric subsea production control systems are replacing industry standard electro-hydraulic control systems, with the aim of making them more reliable, more responsive and more cost effective

4 The oil and gas industry is moving toward valve technology with embedded processor and networking capability to work alongside sophisticated monitoring technology coordinated through a central control station. The goal has been to link control valves to an extended data network, coordinating control valve operation with the increasingly detailed data available on flow rates and operating conditions. Connecting valves to a network allows distributed control, which can enable operators to reconfigure piping and networking systems so that a field can continue producing even if there is a blockage in, or damage to, the pipeline network

5 Emerson Process Fisher digital valves enable the implementation of customized valve designs to cope with the pressure, flow capacity and temperature demands of the world's first twin-mega-train LNG plant. The Yokogawa Exaquantum/SSP provides continuously updated subsea valve information from FMC Technologies SSH (Subsea Historian). This timely information enables users to take appropriate action if problems are detected, avoiding lost production.

6 Plant Unit Cost 6 The highest “unit” cost plants (TIV) are GTL, LNG, and nuclear power.

7 Valve Spend per Application 7 The highest valve spend per plant is for GTL. This is because a GTL plant is four plants in one: gas processing, syngas, syncrude, and refinery.

8 Mergers Create New Leaders Pentair has emerged as the new leader in the market that treats and controls liquids and gases (including air). Ecolab/Nalco has moved into second place. With the addition of Tyco valve revenues, Pentair pump and filtration revenues generated a combined $7 billion in sales in 2012. The corporation anticipates a 3.5 percent increase in 2013. This will create revenues of $7.2 billion in the treatment and control sector. Ecolab has acquired Nalco. With an expected revenue increase of 5 percent in 2013, the company will move into second place with treatment and control revenues of over $5.2 billion. The former leader, Flowserve, will drop to third place. RankingCompany2012 Sales $ Millions 2013 % Increase 2013 Projected Sales $ Millions 1Pentair7,000 3.5%7,240 2Ecolab/Nalco5,0005.00%5,250 3Flowserve4,4007.19%4,654 4Xylem4,0005.79%4,230 5GE3,8004.83%3,983 10Colfax2,0002.00%2,040

9 Valve Market Shares The top three valve companies are U.S. based. Their penetration of the Asian market has been only half what it has been in other markets. Asian sales range from 20 to 22 percent of total sales for the individual companies. The international valve companies see this lack of Asian penetration as a growth opportunity. Suppliers both Asian and non-Asian have the opportunity to build a base in Asia which will allow them to compete more effectively in the rest of the world.

10 Shares by Valve Type Globe valves will be the leader by valve type. Ball valves will be second on the leader list.

11 Valve Spend per Energy Segment 11 The largest opportunity for valve sales by industry is in coal-fired power. This relates not so much to the highest concentration (or highest cost) of valves per plant, but to the larger number of new-plant builds relative to other industries. Major opportunities are in Asia.

12 Pfizer is largest UPW user Pfizer is the largest purchaser of UPW for pharmaceutical applications. It is also is the largest company judged by sales revenue. It is has close to 7% of the world market

13 Generics lower revenues not UPW The lower price per $ of revenue (and gallon of UPW) is reflected in lower expected revenues by the major companies

14 Generic share growing Generics are making significant penetration worldwide. In the U.S. generics captured 25% of the market in 2012

15 Big pharma revenues down There was a 7% negative impact on sales of the top 3 brand name companies in the U.S. in 2012

16 Merck largest in U.S. Merck was the largest brand name supplier in the U.S. in 2012 US Brand Name Pharmaceutical Industry Market Share

17 Teva is top U.S. Generic Teva and Watson were the largest suppliers of generics in the U.S. each had a 5% market share in 2012

18 BRIC-MT is fastest growing The fastest growing pharmaceutical segment is BRIC-MT. This includes Brazil, Russia, India, China, Mexico and Turkey. Pfizer experienced a 16% growth in these countries last year

19 Double digit growth in Russia The pharmaceutical industry in Russia has been witnessing double-digit growth rate recently. According to the new regulations that will be enforced in Russia from 2014, it will be imperative for the pharmaceutical companies to pursue GM-compliant production procedures. The Russian pharmaceutical market is expected to reach $10.7 billion value by 2014. In December 2010, Novartis announced a five-year, $500 million investment program in Russia, including construction of a state-of-the-art manufacturing plant in St. Petersburg.

20 Developing Country projects A-C Despite the growth in the developing countries, the production of Ultrapure Water is still concentrated in the developed countries. Local production of pharmaceuticals is falling behind demand. LOCATIONCITYPROJECT TITLESIC DESCRIPTIONPRODUCT AlgeriaSaidalSanofi AventisPharmaceuticals BelarusMinsk National Academy of Sciences of Belarus (NASB) BiotechnologyGenetics and R&D Cameroon Sandoz/Cinpharm/1A Pharma P harmaceuticals Pharmaceutical Ingredients ChinaBeijingRNLBiotechnologyAdult Stem Cell R&D ChinaChengduChengdu Wagott Biotanical Extractions China China Medical City (CMC), Taizhou, Jiangsu Province AstraZeneca-11Pharmaceuticals Pharmaceuticals, Biopharmaceuticals & Generics China Conghua City, Guangdong Province AstraZeneca/Guangdong BeiKang Pharma PharmaceuticalsGeneric Pharmaceuticals China Dunhau, Jilin Province Asymchem Laboratories/Jilin Asymchem Laboratories Pharmaceuticals Active Pharmaceuticals Ingredients ChinaHangzhou and Beijing Sanofi-Aventis/BMP SunstonePharmaceuticalsPharmaceuticals and Consumer Health Products

21 Developing Country Projects C-G LOCATIONCITYPROJECT TITLESIC DESCRIPTIONPRODUCT China Hangzhou Binjiang New Development Zone Sanofi-Aventis/Minsheng Pharmaceutical Pharmaceuticals ChinaHunan ProvinceMicrobix BiosystemsPharmaceuticalsVaccines ChinaShanghai Bristrol-Myers Squibb/WuXi Pharma Tech PharmaceuticalsPharmaceuticals Testing ChinaShanghaiLundbeckPharmaceuticalsNeuro Drugs ChinaShanghaiNewsummitPharmaceuticalsDrug Development ChinaShanghaiPromegaBiotechnologyBiological Products ChinaShenzhenSanofi Pasteur-1PharmaceuticalsVaccines ChinaYizhuang, BeijingSanofi-3Pharmaceuticals Insulin Cartridge Production, Assembly and Packaging GeorgiaTbilisiCentral Public Health Reference Library (CPHRL) Research on Human Health

22 Developing Country Projects I-M LOCATIONCITYPROJECT TITLESIC DESCRIPTIONPRODUCT India Akorn-2PharmaceuticalsInjectable Pharmaceuticals India Hikal Pharmaceuticals India Sanofi Pasteur/Shantha BiotechnicsPharmaceuticalsVaccines India Maharashtra Omkar Specialty Chemicals (OSCL)Pharmaceuticals Active Pharmaceutical Ingredients India Pharmacity Sp. Econ. Zone (SEZ) Vishakhapatnam, Andhra Pradesh and Gagillapur Granules/OmniChem Pharmaceuticals Pharmaceuticals Advanced Pharmaceutical Ingredients IndiaPunjabNectar LifesciencesPharmaceuticalsPharmaceutical Ingredients IndiaSanand, GujaratTeva/Procter & GamblePharmaceuticals Consumer Health and Over-the- Counter Products IndiaState in Western IndiaHelvoet Pharma-2PackagingPharmaceutical Packaging Malaysia Glycos Biotechnologies/Bio-XCellBiotechnologyBiochemical & Biotechnology R&D

23 Developing Country Projects M-U LOCATIONCITYPROJECT TITLESIC DESCRIPTIONPRODUCT Malaysia Bio-Xcell Biotechnology Park Biocon Pharmaceuticals Biopharmaceuticals and Biosimilars Malaysia Nusajaya, Wilayah Iskandar Malaysian BiotechnologyBiotechnology Russia Pfizer/ChemRar High Tech Center Pharmaceuticals Russia Moscow, Podolsk District Aurobindo/OJSC Diod/AurospharmaPharmaceuticals Generic and Over-the-Counter Drugs Russia Novoorlovskaya Special Economic Zone Novartis-14Pharmaceuticals RussiaObninsk, Kaluga OblastRuswnano and Nearmedic PlusPharmaceuticals Russia Vorsino, Kaluga and St. Petersburg AstraZeneca-12 Pharmaceuticals RussiaYaroslavlTakedaPharmaceuticals RussiaYaroslavlNycomedPharmaceuticals Uganda Quality Chemicals Industries (QCI)-1Pharmaceuticals


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