 December 22, 2008: Robust growth continued in 2007 for the High Power AC Drives market in China riding on the back of another year of double digit growth in GDP of the country. The China market for High Power AC Drives is expected to grow at a compounded annual growth rate (CAGR) of 12.9% over the next five years. The market was over $1.0 billion in 2007 and is forecasted to be nearly $1.9 billion in 2012, according to a new ARC Advisory Group study. China’s manufacturing industry, that has grown rapidly over the last few decades, will need to adjust to moderation in demand from the global economy. However, China’s favorable business environment will continue to provide investment opportunities for global manufacturers in setting up facilities for low cost production facilities and to serve the expanding domestic market of China. Labor arbitrage apart, more pronounced factors, such as infrastructure and long term fiscal incentives provided by the local authorities make feasible establishment of large-scale plants catering to global demand. The expanding economy that is China, in the long term together with other growing economies, such as Brazil, India, and Russia, will define global growth. “Energy conservation measures will continue to provide the impetus for growth of high power AC drives in China, even as process related advantages gain recognition by manufacturers,” according to Senior Analyst Himanshu Shah and Senior Analyst and principal author S.R. Venkatapathy of ARC’s “High Power AC Drive Outlook for China, Market Analysis & Forecast Through 2012.” Growing Industry Sector for AC Drive Market Growth China is the ‘de-facto’ global manufacturing hub that attracts massive FDI investments both in greenfield manufacturing plants and brownfield expansions. Catering to global and domestic demands are prime movers of the rapid growth in the manufacturing sector. The electric power industry is at the forefront of the infrastructure transformation happening in China. This is one industry which is not expected to see adverse impact of any possible slowdown in growth of the economy as China continues to bridge the demand-supply gap. Periodic and significant capacity additions continue to take place year on year to achieve a balance of supply and demand. AC drives in electric power utilities have a quantifiable impact on the reduction of auxiliary power consumption besides qualitative benefits emerging from process stabilization. Many applications in power plants, such as boiler feed water pumps, ID fans, FD fans, and utility area applications use AC drives ratings ranging from a few kW to MW. The need of the hour, for all industries and particularly the steel industry in China, will be to reduce production costs. Energy costs form a significant component of operations in large steel plants and the China steel industry has a huge potential for reduction of energy costs. As major steel consuming manufacturing industries, such as automotive, demand steel at lower costs the process optimization and energy savings requirements will boost the use of high power AC drives. The study also addresses other industries which provide excellent growth opportunities for the high power AC drives for suppliers who have product portfolios that address those applications. In addition to the quantitative assessment of the China high power AC drives market, the study provides an insightful analysis of the market and strategies of leading suppliers that will impact this business in the future. |
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