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Analysis of the situation in the pumping market of Ukraine

Situation in the production and sale of pumps in Ukraine
The pumping market of Ukraine is going through difficult and not always clear stages of its formation, unfortunately, the domestic producer is increasingly being squeezed out of the main financial flows that dominate it. Outdated, often not of the best quality, pumping equipment cannot withstand competition with imported equipment even in those areas where domestic pumps have always been a priority.
Now the line dividing the household and construction segments of the pump market has almost disappeared. In connection with the ongoing cottage construction (previously pumping equipment for summer cottages belonged to the domestic segment), the need for pumps from the lower part of the construction segment increased. The tendency towards the use of pumping units equipped with the necessary fittings and control cabinet is growing.
A tendency has emerged to separate pumping equipment for fire fighting into a separate segment. The creation of modern hotel and office complexes, storage facilities, and the tightening of fire safety requirements for production facilities led to the fact that a separate section with pumps for use in fire fighting complexes was allocated on the pump market, and ready-made fire extinguishing installations equipped with everything necessary appeared.
The industrial segment of the market is also undergoing changes, increasing the cost of energy resources leads to the need to save and revise production needs in the direction of reduction, which in turn leads to the replacement of equipment with less energy-intensive, that is, less technical and production characteristics.
A serious factor to which attention should be paid is the constant increase in prices for domestic pumping equipment, with low quality and outdated models, and this against the background of relatively stable prices for imported ones.
Market saturation
The pumping market of Ukraine, as mentioned above, is undergoing significant changes. In industry, utilities and the private sector, there is a transition to modern, more economical types of pumping equipment.
In 2008, compared with 2007, the ratio in the sale of pumping products in Ukraine did not change significantly and amounted to approximately 60% and 40% in favor of imports. However, a significant rise in prices for domestic products, it seems to me, will greatly change the situation in the pumping market. Already, prices for the most consumed domestic products in Ukraine - pumps of the "K" type are comparable.
It should be noted and somewhat lower energy consumption of pumping units imported into Ukraine, their design and quality. Against this background, the domestic manufacturer is losing a lot, especially since the trend of increasing prices will continue. This is mainly due to an increase in energy prices, but government policy plays a significant role in taxation, an increase in the cost of labor, and the need to replace worn-out equipment.
The need for this type of pumping units will only increase, since they are the main component of the housing and communal services that we inherited. Currently, in housing and communal services, models of the USSR, pumping equipment is completely worn out and needs to be replaced. The replacement, most likely, will occur comprehensively and not in favor of our manufacturer.
The capital construction boom is also making its adjustments to the pumping equipment market. The construction of high-rise buildings, modern office centers and hotels requires a new class of pumping equipment with a comprehensive solution to the problems associated with water supply and sewage.
Here the market will be the most dynamic - high demands on pumping equipment, especially in high-end construction, will bring fierce competition and provide a fairly strong need. In this sector, the prevailing need for integrated installations for cold and hot water supply, heating and sewage.
Cottage (cottage) construction has also changed, now rarely has anyone left with pumps like "BTs" or "Trickle", even for irrigation they started using Italian pumps. The attitude towards living conditions has also changed; comfort cannot be created on the old base of pumping equipment.
Pumps from the past cannot compete with imported ones in any parameter, the attitude to living conditions has changed, comfort cannot be created on the old base of pumping equipment.
The main components of this sector are:
1) water supply - monoblock self-priming single and multistage centrifugal pumps and artesian (well) pumps;
2) sewer installations in conjunction with a solution for the disposal of effluents;
3) a complex of heating systems and hot water supply.
Items 2 and 3 will require special pumping equipment, which is not produced in Ukraine.
This sector of the pumping market is huge and its real saturation, in the near future, can not be expected, and the size range of the equipment used is so large that it is almost impossible to predict the need. This sector also includes individual agriculture, farming, which significantly increases the market for this pumping equipment.
The market for industrial pumping equipment is more static, but there have been changes. The increase in the cost of energy resources has left a seal on this market segment. Reducing energy costs is the main thesis, therefore, all equipment during replacement, reconstruction and design is considered from the point of view of energy conservation. In most modern industries, including water supply and sewage, there is a cyclical nature, it is here that the greatest opportunities for saving energy resources are hidden. A decrease in the productivity of pumping equipment by one standard size can bring tangible savings, this is especially noticeable in water utilities and utilities.
The market for chemical pumps has remained unchanged and belongs to the Russian and Kazakhstani manufacturers. This is due to the peculiarity of chemical production and the still remaining competitiveness of Russian chemical pumps.
However, in the subsidiary structures of chemical enterprises today, the same trend can be traced as elsewhere - the replacement of obsolete equipment with new ones, taking into account energy savings.
In mining and energy sectors, as well as water utilities, domestic pumping equipment still prevails, but the situation is critical. Pumps of average capacity from 200 ÷ 1000 m³ / h manufactured in Ukraine, because of their price and quality, have become uncompetitive and are gradually being replaced by import.
It should be noted and the reluctance of most manufacturers to look forward, invest in promising development, and try to compete with imported equipment. Today there is not a single Ukrainian manufacturer of pumping equipment that could successfully compete with a European manufacturer, with the possible exception of Nasosenergomash. The expansion of importers will only increase, and if the situation in pumping does not change dramatically, then in 7-10 years it will not be in Ukraine.
Ukraine continues to live on the abandoned pumping "heritage" and does nothing to improve or develop something new in this industry
Development prospects
The growth rate of imports may be misleading due to the cyclical nature of the pump market, in order to avoid mistakes in planning, it is necessary to correlate the directions of development of pump engineering with the general development in the country and the world.
In addition, you must make a discount on the national characteristics of the production base. In contrast to world practice, enterprises with a full production cycle that is not an efficient and obviously deadlock model of production relations still prevail in Ukraine. Outdated equipment of the 70s, poorly developed design and technological base and many others related to the economic and political events of recent years do not give optimism about the development prospects.
Nevertheless, the outlined growth in production indicates that there are opportunities for consolidating on the still not completely lost positions of the Ukrainian pumping equipment market.
Large pumping equipment for water supply, energy and nuclear energy is too complex and specific equipment, there can be no quick breakthroughs, but most of the needs for this equipment are covered by the domestic manufacturer (Nasosenergomash) and this inspires hope.
The lower part of the market (pumps up to 20 m³ / h) is tightly packed by a foreign manufacturer, mainly European. It is very difficult to compete with them, high-tech and equipment supplied to the flow is already in great demand, and it will be out of competition to saturate the market when prices fall.
A niche remained for the Ukrainian manufacturer of water pumps - pumps with a capacity of 50 to 1000 m³ / h. This is a fairly large segment of the market, using equipment inherited from the USSR. Partly the demand for it is covered by imports from Russia, partly by domestic equipment (nomenclature "Sakhgidromasha", "Ukrnasosservice").
The world experience in pump engineering indicates a high level of division of labor and broad cooperation. From 70 to 80% of enterprises are assembly plants. If large companies have all the redistribution of production, then these redistributions, as a rule, are turned into independent legal entities and, working for the parent company, at the same time work for the whole market, which dramatically increases their efficiency.
At the same time, the global pumping market is characterized by a wide network of intermediary commercial and dealer companies.
In addition, a new variety of companies appeared - trading and intermediary companies that took over the functions of refining pumping equipment (outsourcing) from the manufacturing plants and, above all, aggregating with a non-standard drive, cutting impellers, installing other types of seals, etc. . There are dozens of companies that conduct this activity in various regions of both Russia and other CIS countries.
Another major feature of the modern world pumping industry is the increased concentration of capital and the creation of large holdings, transcontinental corporations that can independently solve the whole range of issues "science - production - sale - service", being the leaders of technological progress in this industry. These companies include Weir and Sulzer (Great Britain), KSB (Germany), ITT Industries (USA), Ebara (Japan), etc.
For residents of Europe, energy saving has long become a recognized need and has become the norm.
Pumps and pumping stations are traditionally energy-intensive equipment: the proportion of electricity consumed by pumps reaches 30% of the total energy consumed by all engineering systems of the building and production lines in the industry. Market requirements have forced manufacturers of household appliances to develop common standards and labels for energy efficiency and produce more and more equipment with energy-saving properties.
A pump is a durable product. Therefore, consumers increasingly prefer high-quality imported products, even if they are more expensive than their domestic counterparts.
Almost all major traders offer both domestic and industrial pumps. Successful sales of industrial pumps and, ultimately, sales growth depends not only on the availability of qualified personnel, the high level of work of repair and service departments, but also on the proper organization of sales work. It is convenient for large intermediaries and customers to work with a company that is able to offer the optimal water supply solution for any customers - from a simple summer resident to a large industrial enterprise.