China valve industry analysis-1
I. Industry Overview
The global industrial valve industry has a market size of approximately $50 billion - $55 billion. In 2016, the overall size of industrial valves worldwide is estimated at US$53.4 billion, with demand mainly coming from the Asia Pacific region, accounting for approximately 37%.
As one of the main transportation carriers of crude oil, refined oil and natural gas, oil and gas long-distance pipeline plays an important role in national infrastructure construction, and its advantages include low leakage, low pollution and high efficiency. According to Valve World, approximately 37.40% of global valve demand is concentrated in the oil and gas sector. Since the international crude oil price plummeted in the second half of 2014, the oil price center has moved down sharply. M&A in the oil and gas industry industry chain has become frequent. M&A integration can streamline the industry chain and help the company cut costs. In the case of low international crude oil prices, valve companies have also opened a wave of mergers and acquisitions.
II. China's major valve industry companies
In 2016, China's valve production was 9,092,919 tons, down 2.01% year-on-year. According to the statistics of "International Control Valve Magazine", there are currently 30 valve companies in the country trading in Shenzhen, Shanghai, Hong Kong and New Third Board markets. In 2016, there were 18 enterprises with a revenue of over 100 million, accounting for 60% of the total; 10 enterprises with positive sales growth year-on-year, accounting for 33% of the total; 20 enterprises with negative growth year-on-year, accounting for 67% of the total . In terms of net profit growth, 11 companies' net profit was positive growth, accounting for 37% of the total; another 19 companies were negative growth, accounting for 63% of the total.
III, industry barriers
(1) Pre-production license
Due to the important role of valves in the safe production and operation of special industries, China has established a pre-production license system in the field of pressure pipeline valves and nuclear power equipment valves. For companies that do not have the corresponding production license, production and sales activities of related products are not allowed.
In terms of pressure pipeline valves, the State Administration of Quality Supervision, Inspection and Quarantine has formulated special equipment administrative licensing rules and related technologies according to professional categories, because the pressure pipelines are special equipments used in production and life that may cause explosion or poisoning. The specification stipulates that the metal valve and safety valve manufacturing enterprises belonging to the pressure pipe components must obtain the manufacturing license before they can engage in the corresponding production and sales activities.
In terms of nuclear power equipment valves, in accordance with the provisions of the “Implementation Rules for the Design, Manufacture and Installation of Civil Nuclear Pressure Equipment”, the design and manufacture of valves for the implementation of nuclear safety functions shall be subject to the design/manufacturing permit for civil nuclear safety equipment. Accordingly, the nuclear safety supervision department of the State Council has imposed higher application conditions on the applicants and conducted strict examinations.
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