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Electric drives threaten future of industrial hydraulics

27 June, 2011

Sales of industrial hydraulic equipment are still growing in Europe, despite challenges from other technologies. But, according to a new report, much of this growth is coming from upgrades and repairs to existing equipment, and the long-term trend is for alternative technologies such as electric drives to replace hydraulics in industrial applications, because they are more efficient, cheaper and available on shorter lead times.

In the new study, European Hydraulic Equipment Markets for Industrial Applications, the  analyst Frost & Sullivan describes the market for industrial hydraulic equipment market as “mature” and says that its future is “bleak”. But it predicts that revenues will climb from $1,415m in 2010 to $2,016m by 2017.

Hydraulic equipment has a large installed base which has to be replaced or repaired within a specific time frame. The replacement market has been sustained by leakage-related issues caused by ageing and corrosion in cylinders and accessories.

During the economic slowdown, many end-users postponed new installations and invested instead in repairs and replacements. According to the report, the recession had a severe impact on the market, with revenues falling by 31.8% in 2009, to $1,319m.

Although hydraulics manufacturers have invested heavily to improve the reliability and performance of their equipment, much of their 2010 revenues came from retrofits rather than new installations.

“Manufacturers have been integrating electronic controls with hydraulic equipment for increased accuracy and efficiency,” says Frost & Sullivan programme manager, Sivakumar Narayanaswamy. “These improvements have played a significant role in sustaining the demand for hydraulic equipment.”

However, rapid technological developments in other motion control technologies mean that many hydraulic equipment applications will be replaced in future by alternative technologies.

“The use of hydraulic systems in mechanised processes is being threatened by the increased use of electrically-operated drives and motors that offer accurate performance and reprogrammable digital control and settings – except in high-pressure applications,” Narayanaswamy says. “Electrically-operated equipment is able to meet customer demands for greater levels of accuracy and efficiency from automation apparatus.”

F&S predicts that the European hydraulics market will experience increasing consolidation as a result of pricing pressures and competition from low-cost imports. It suggests that small- and medium-sized organisations are unlikely to be able to withstand the competition from low-cost Asian manufacturers and decreased profit margins.

“Large multinationals are continuously looking to expand in terms of products and geographies,” Narayanaswamy comments. “This could compel small- and medium-sized organisations to collaborate or merge with their bigger counterparts.”




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