Solid momentum continues for the global pump industry The current business environment has been characterised by high uncertainty, driven primarily by Covid-19 and its economic fallout.
PUMPS
Demand for pumps has remained relatively high and the industry expects to see an uptake as markets start to recover. Pipes, Pumps & Valves Africa finds out more. Having initiated ambitious cost measures to mitigate the impacts of the pandemic, global leader in fluid engineering Sulzer has remained relatively optimistic amidst high levels of uncertainty. Thanks to a high order backlog the company managed to perform well in the first half of the year with an increase of 1.7% in its order intake compared with the same period last year. Order intake in Rotating Equipment Services grew by 10.2%, while orders in the Pumps Equipment division were up 6.0%. The Municipal and Wastewater activities showed continued momentum and grew by 2.5% organically. Energy-related orders were boosted by the Middle East, China and Brazil, which more than offset a steep decline in the US. Orders for Industry were down 6.3% on a COVID-19-related softening of the market. The Chemtech orders were 3.2% lower than in the first half of 2019, on customer postponements of larger projects, while Applicator Systems saw an abrupt drop in order intake of 27.3% as beauty outlets and dental practices were forced to temporarily close around the world. Dealing with lockdowns There is no denying that 2020 has been a year unlike any other with market disruptions and restricted access to customer sites due to lockdown and quarantine policies experienced everywhere in the world. Lockdowns impacted negatively on sales, according to Greg Poux-Guillaume, Sulzer CEO. Speaking recently about the company performance he said Sulzer saw an overall decrease of 3.9% in its sales. “Customer confinement measures such as limited site access and temporary closures of factories and front-end outlets impacted sales. While our sales in Rotating Equipment Services grew by 1.3%, Pumps Equipment’s sales declined by 4.4%. Higher sales in the Water segment could not offset the decrease in Energy and Industry, for example. In Chemtech, sales remained stable, despite a significant Covid-19 impact including the six-week lockdown of our Indian factory from the end of March until the beginning of May. In Applicator Systems, sales declined by 21.0%, caused by the abrupt closure of retail stores and dental clinics globally.” Stable outlook His outlook, however, remains positive and expectations are that operational profitability will be around 8.5–9.0% for the full year 2020 and that it will return to around prepandemic levels for the full year 2021. Heat pump manufacturer Nibe also reported stable growth having fended the effects of Covid-19 relatively well. 26
Pipes, Pumps and Valves Africa - Sep/Oct 2020
Managing Director Gerteric Lindquist said sales rose by 6% by the third quarter of the year. “The outbreak of Covid-19 is another uncertainty that has caused widespread change for most of the world’s communities and companies, including our own. While we were affected by the outbreak to a relatively modest degree in quarter 1, we were affected to a greater extent in the second quarter, but the situation remained manageable nevertheless. We also assume that most countries will try to return to a slightly more normal situation in the second half of the year. This, and the fact that our products are largely both necessary and sustainable, permits us to be cautiously positive about our performance in the second half of the year, despite all the uncertainties.” Both Poux-Guillaume and Lindquist say demand has varied between different market segments. Locally pump companies have felt a relatively hard-knock following the outbreak of Covid-19 considering the impact of the pandemic on the mining industry, one of the largest markets for pumps. The closure of mines and the overall slowdown in operations impacted negatively on especially pumping maintenance and refurbishment work. Furthermore, the sector has also had to deal with an increasing number of projects being put on hold.
