UK process plant spending to grow
10 Mar 2008
Manchester, UK - UK process plant expenditure is set to grow in most industry sectors over the next five years, according to the latest Market Development Report from Manchester-based Market & Business Development Ltd. The market, it estimates, increased by around 8% in 2006/07 to £8180 million - continuing a positive market trend over the past few years.
The chemicals industry is projected to continue to account for the single largest share of total process plant expenditure, representing between 28% and 30% of total spending over MBD's five-year forecast period (2006/07 to 2011/12), . The food & beverage industry - the second largest sector - is meanwhile expected to account for 23%-24% of total process plant expenditure.
By 2011/12, process plant spending by the chemicals industry is projected to reach £2458 million, a real term increase of 7% compared with 2006/07, said MBD. A significant proportion of thesector's spending on process plant is generally on the basis of requirement, legislation and production efficiency. "The UK chemical industry is already a well regulated industry. The majority of capital investment in the sector is allocated towards R&D. Furthermore, the globalisation of the chemical industry has increased competition from low cost countries, which has led to a fall in overall capital investment in the UK," the report noted.
Process plant spending in food & beverage industry will increase by 4% in the five years to 2011/12. The main focus of the capital expenditure is likely to be in new product development, particularly on incremental changes to brand profiles, packaging and associated process changes and productivity improvements. By 2011/12, process plant spending is projected to reach £2030 million, a real term increase of 4% compared with 2006/07.
Process plant expenditure in the oil & gas industry is projected to increase by a cumulative 5% in real terms to £1424 million in 2011/12. Investment growth on process plant activities will be relatively moderate over the majority of the forecast period, reflecting the focus on exploration and appraisal of new wells and decommissioning of oil and gas platforms, said MBD.
For the Electricity generating sector, the main drivers will be environmental legislation, particularly given the government's commitment to reductions in sulphur emissions and renewable sources. By 2011/12, process plant expenditure is projected to reach £172 million, equivalent to a real term increase of 32% compared with 2006/07. Annual growth rates are projected to oscillate between 4% and 9%.
According to the report, process plant spending in the water & sewerage industry will reach £1379 million in 2011/12 amid efforts to improve the industry assets, maintain the supply and demand balance and enhance operation and performance. The Water Framework Directive should also have a significant effect on expenditure programmes, added MBD.
Meanwhile, spending in the petroleum refining industry is set to grow 36%, reaching a peak of £380 million in 2011/12, said the market research firm. New legislation, it predicted, will encourage refiners to invest in new hydrofining units enabling the production of low sulphur products from less expensive, high sulphur crude oils.
