MBD charts UK process plant investment outlook
20 Jul 2007
Process plant investment in the chemicals industry is on track to reach £2052 million by 2011, representing projected real term growth of 1% compared with 2006. Much of the spending in the sector tends to be “on the basis of requirement, legislation and production efficiency,” the report noted.
According to MBD, the UK chemical industry is already a well regulated industry, with the majority of capital investment going towards R&D. Globalisation of the chemical industry, meanwhile, has increased competition from low cost countries and a fall in overall capital investment in the UK.
In the food & drink industry, MBD projects that process plant expenditure will increase by 7% to £1666 million between 2006 and 2011. The focus of this spending is likely to be in new product development, particularly changes to brand profiles, packaging and associated process changes and productivity improvements.
Process plant expenditure within the oil & gas industry is set to increase by 3% to £1189 million by 2011. The modest growth prospects reflect the focus on exploration and appraisal of new wells and decommissioning of oil and gas platforms, the report stated.
MBD expects process plant investment in the water and sewerage industry to increase in each year between 2006 and 2011 culminating in an anticipated overall increase of 13% in real terms.
Capital funding will be centred on improving the industry assets to maintain the supply and demand balance but also to enhance operation and performance. The impact of the European Directive is also expected to have an effect on process plant expenditure over the next few years, the report added.
By contrast, process plant investment in the petroleum refining industry is set to decline to £182 million by 2011, reflecting projected annual declines between 2002 and 2011. A large proportion of company capital investment will be directed towards such environmental issues and new product development, said MBD.
