Shift from 'Capex' to 'Opex' drives near-term opportunities in Australia's Pump Services Market, says Frost & Sullivan

~ Budgetary pressures main reason for the shift ~

SYDNEY, Oct. 28, 2015 /PRNewswire/ -- The Australian market for pump services is mature and well-established; driven by both local and global players offering pump services across product types and end-use sectors.

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Frost & Sullivan's new report, Analysis of the Australian Pump Services Market (http://www.frost.com/q296090311), cited budgetary pressures as prompting end users to shift from capital expenditure to operation expenditure. "Mechanical wear and tear and constant wear out of bearings and seals calls for regular servicing, to keep pumps running smoothly. However, not all end users are aware of the need for regular pump servicing, which leads them to continue operating pumps till they break down. In-house service personnel may fail to diagnose and rectify basic problems. Additionally, end users tend to spend a major portion of their budget on buying higher-end pumps which may be oversized for their application. Subsequently, they are left with limited financial resources for ongoing service and maintenance," said Divya Sampat, Analyst, Industrial Automation & Process Control, Asia Pacific, Frost & Sullivan.

Accounting for the largest market share by end-use, the water and wastewater industry has emerged as a growing opportunity for pumps services in Australia. Increasing population in different regions across Australia has boosted the demand for expanding existing water infrastructure projects and new developments. Moreover, treated water or desalinated water facilities, which are more complex than conventional facilities, have furthered the demand for pump services. Population growth has also driven pump service demand in the residential, commercial and institutional building sectors. The mining and oil & gas industries have seen sluggish growth during 2013 and 2014; however, these industries are expected to remain significant end users of pump services.

The service opportunities for Maintenance, Repair and Overhaul (MRO) services have helped to stabilise the market for service providers. Pump service providers are seeing continuous demand for regular service of the installed pump base. However, due to fewer greenfield projects, the prospects for installation & commissioning services are not as strong. Understandably, customers are more focused on maintaining existing pump systems. Nonetheless, the opportunities for Value Added Services have begun to emerge with the rise in smart pumping and monitoring services.

Sampat said, "In some instances, fewer upcoming projects have encouraged customers to shift their focus towards building their in-house teams and service facilities. In these cases, customers are finding it more convenient to train their own service teams who can then take care of their facilities. This way, these customers believe they are able to reduce operational costs of outsourcing services. This approach is more evident in the case of large pumping stations which are difficult and expensive to transport to a pump manufacturer's service facilities."

"This has increased competitive intensity amongst pump service providers in Australia. Service providers are now concentrating on maintaining strong customer relationships by providing round the clock assistance. In addition, prolonged market presence, a wide product range and short turn-around time are also helping leading service providers to find additional opportunities," he added.

Pump manufacturers dominate the Australian market for pump services; however, specialist service providers and distributors are steadily increasing their contribution in the market by developing a skilled workforce and well-equipped service centres.

The Analysis of the Australian Pump Services Market (http://www.frost.com/q296090311) is part of the Industrial Automation & Process Control (http://www.industrialautomation.frost.com) Growth Partnership Service program. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

If you are interested in more information on these studies, please send an e-mail with your contact details to Donna Jeremiah, Corporate Communications, at djeremiah@frost.com.

Analysis of the Australian Pump Services Market
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