DUBAI, UAE (Aug. 19, 2014)—Industrial plant owners in the Middle East are increasingly recognizing the value of industrial services as privatization is encouraging the implementation of global best practices. This rising end-user awareness about the gamut of industrial services, along with the influx of global know-how, is expected to spur the growth of the industrial services market.
New analysis from Frost & Sullivan, “Strategic Analysis of the Middle East Industrial Services Market,” finds that the market earned revenues of 549.3 million U.S. dollars in 2013 and estimates this amount to reach US$818.5 million in 2018 at a compound annual growth rate of 8.3 percent. The study covers the Middle East market for industrial service of pumps, motors, compressors, automation, instrumentation and electric drives.
Plant owners’ eagerness to ensure maximum asset utilization, plant productivity and profitability coupled with stipulations by external agents such as process licensors have stoked the adoption of modern maintenance practices. The demand for service from the growing installed base and subsequent maintenance requirements will continue to be crucial to the overall market growth.
“The tangible benefits of improved operational efficiency, lower life-cycle costs and overall plant safety encourage end users to invest continuously on services,” said a Frost & Sullivan Industrial Automation & Process Control research analyst. “Additionally, the rising population and strong economic growth will stimulate investments, contributing to the growth of industrial services market in the Middle East.”
End users also notice substantial revenue opportunities in services; so much that they have begun to accept project (equipment installation) orders at lower margins, with expectations of gains from after-sales services. Several original equipment manufacturers (OEMs) are utilizing service offerings as a differentiator in an increasingly homogeneous market.
Although services are playing an increasingly important role in the business strategies of end users, it is possible that the reduced global demand for crude oil from the Middle East will affect the investments planned in the Middle East. While on one hand the lack of investments hampers the industrial services market, on the other, it encourages end users to resort to maintenance services to make the optimum use of their aging infrastructure. In a competitive market, offering timely and high-quality services is crucial, so service providers will be looking to have an efficient local setup for services and sales.
Another important trend is the escalating popularity of integrated solutions. The higher degree of automation in pumps, compressors and motors have prompted end users to buy integrated solutions that comprise frequency drives, valves, logic controllers and automation software.
“The maintenance and repair of technically advanced automated systems are often beyond the capabilities of in-house workshops,” noted the analyst. “This ensures that the systems’ commissioning and servicing is OEM or third-party-centric. Evidently, the adoption of integrated solutions makes services for systems indispensable and enhances the revenue generated through services.”
Strategic Analysis of the Middle East Industrial Services Market is part of the Industrial Automation & Process Control Growth Partnership Service program. Frost & Sullivan’s related studies include: Southeast Asia Automation Services Market, The Main Automation Contractor (MAC) Model in the Automation and Controls Market, European Smart Pumps Market for the Water and Wastewater Industry and ANZ Automation Services Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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