Mature sector is buoyant

Despite being a mature sector, the market for measurement and calibration services still offers major opportunities for those companies with the capability of supporting clients who operate in the more challenging areas of the process industries.

The National Physical Laboratory (NPL) which is based in Teddington, UK, reports a strong demand for its products and services in both the energy and oil and gas sectors – the two main process market sub-sectors served by the organisation.

Price is a key factor considered by end-users when choosing a service while there will be a steady growth of around 5.2% over the next few years

F&S study

Within these two sectors, many companies require access to accurate measurement and calibrations in order to give them confidence in the kit they are using, said Sam Gresham of the NPL communications team.

The emphasis, he says, is on ensuring the performance of products and services under specific operating conditions.

“With the move to exploration in activities in harsh environments, NPL is seeing a demand for its corrosion services to be able to provide confidence in materials selection and performance under these conditions,” says Gresham.

Services

NPL is also currently witnessing a greater emphasis on the “sustainability” agenda. This, said Gresham, is “being driven through increased R&D funds going into this area … a need to continuously strive for efficiencies or the need to substitute materials for more environmentally-friendly ones”.

“Another general theme identified by NPL is a tendency for companies to look to leverage their internal R&D budgets by collaborating with companies on research grants,” the spokesman continues.

Perhaps, though, the main overriding factor in today’s calibration market relates to investment from the government and from industry, and the impact that the pace of the global recovery is having upon this, Gresham concludes.

The European calibration services market is currently growing at around five per cent a year according to figures from Frost & Sullivan analyst Julia Nikishina.

This data shows the market to have been worth around $1.1 billion in sales terms in 2011.

Nikishina cites F&S research showing that competition in the European market for calibration services “is intense, among both the major players with significant market share and the small and medium-sized participants with region-specific expertise/presence.”

Across all industry sectors the F&S study found that the electrical calibration services sector was the highest sales segment with a 45% contribution followed by mechanical, thermodynamic and physical services with contributions of 31%, 12%, and 12% respectively.

“Price is a key factor considered by end-users when choosing a service, while there will be a steady growth of around 5.2% over the next few years,” says the report, which also identified a move in Europe towards OEMs offering multi-vendor services.

F&S notes how companies such as Aeroflex, Tektronix and Rohde & Schwarz provide calibration for products other than their own while the likes of Agilent, National Instruments and Anritsu either offer services only to their own brand or else they only service their own products.

Overall, though, the report concludes that: “Acquisitions hold the key for growth in mature markets and the calibration services market is no exception.”

Acquisitions

Trends observed by both NPL and F&S are reflected in the UK activities of French group Trescal which has made around 10 significant acquisitions since 2007 and is continuing to build up its presence across Europe.

In the UK, Trescal has acquired Antech Engineering Ltd to enhance the calibration services of the group in the oil and pharmaceutical industries.

Antech is a £2.5-million turnover operation that specialises in pressure, temperature and flow measurements and employs a total of 35 people across two laboratories.

This is the second acquisition for Trescal in the UK since it acquired Dowding & Mills in April 2010.

Trescal has now increased its position in the UK market with a total turnover of £29 million across nine laboratories and 18 customer satellites with a staff of 400.

As well as acquisitions, Trescal sees its expanded service offering as key to further penetration of the calibration market.

In addition to equipment verification and repairs of test and measurement instruments, Trescal reports an increasing demand for associated services from the process sector, particularly the chemical, oil and pharmaceutical industries.

These services include equipment installation at customer sites; asset management solutions; technical support services and training.