World Nondestructive Test Inspection Services Market
Short Description
NDT Market...
Description
World Nondestructive Test Inspection Services Market
An Indestructible Future
N94C-30 June 2011
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Disclaimer •
Frost & Sullivan takes no responsibility for any incorrect information supplied to us by manufacturers or users
•
Quantitative Quantita tive market information is based primarily on interviews and therefore, is subject to fluctuati fluctuation. on.
•
Frost & Sullivan Research Services are limited publications containing valuable market information provided to a select group of customers in response to orders. Our customers acknowledge, when ordering, that Frost Fro st & Sul Sulliv livan an Rese Researc arch h Ser Servi vices ces are for cus custom tomers’ ers’ int intern ernal al use and not for gen genera erall pub public licat ation ion or disclosure to third parties.
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No part of this Research Service may be given, lent, resold or disclosed to non-customers without written permission.
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Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mea ns, ele electr ctroni onic, c, mec mecha hanic nical, al, pho photoc tocopy opying ing,, reco recordi rding ng or oth otherw erwise ise,, wit withou houtt th the e per permi missi ssion on of th the e publisher.
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For information regarding permission, write to: Fros Fr ostt & Su Sull lliv ivan an 7550 IH 10 West, Suite 400 San An Anto toni nio, o, TX 7822 229 9 – 561 616 6 USA © 2011 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
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Table of Contents Slide number Executive Summary •
Definitions and Scope of research
•
Growth Opportunities and Total Forecasts
•
Key Market Drivers Summary
•
Trends
•
Key Market Participants
Total World NDT Inspection Services Market •
Market Overview and Definitions
•
Market Engineering Measurements
•
Industry Challenges
•
Market Drivers and Restraints
•
Market Trends
•
Technology Trends
•
Revenue Forecasts
•
Trends by End User
•
Trends by Geography
•
Competitive Environment
•
Market Share Analysis
10 11 12 13 14 15
17 18 21 22 29 38 40 41 43 46 47 48
Table of Contents (Contd…) Slides number North American NDT Inspection Services Market
49
•
Market Engineering Measurements
50
•
Revenue Forecast
51
•
Trends by End User
53
•
Competitive Environment
55
European NDT Inspection Services Market
57
•
Market Engineering Measurements
58
•
Revenue Forecast
59
•
Trends by End User
61
•
Competitive Environment
63
Asia Pacific NDT Inspection Services Market
65
•
Market Engineering Measurements
66
•
Revenue Forecast
67
•
Trends by End User
69
•
Competitive Environment
71
Table of Contents (Contd…) Slides number Rest-of-World NDT Inspection Services Market
73
•
Market Engineering Measurements
74
•
Revenue Forecast
75
•
Trends by End User
77
•
Competitive Environment
79
Strategic Observations and Conclusion
81
Which Way is the NDT Inspection Services Market Headed?
82
About Frost & Sullivan
84
N94C-30
6
List of Figures
Total NDT Inspection Services Market: Impact of Top Five Industry Challenges (World), 2011-2017
23
NDT Inspection Services Market: Certification Requirements for Level I and Level II (World), 2010
26
Total NDT Inspection Services Market: Market Drivers Ranked in Order of Impact (World), 2011-2017
30
Total NDT Inspection Services Market: Market Restraints Ranked in Order of Impact (World), 2011-2017
35
NDT Inspection Services Market: Significant Mergers and Acquisitions (World), 2010
38
Total NDT Inspection Services Market: Revenue Forecast (World), 2007-2017
41
Total NDT Inspection Services Market: Revenue Forecast by End User (World), 2007-2017
44
Total NDT Inspection Services Market: Competitive Structure (World), 2010
47
NDT Inspection Services Market: R evenue Forecast (North America), 2007-2017
51
NDT Inspection Services Market: Revenue Forecast by End User (North America), 2007-2017
53
NDT Inspection Services Market: Competitive Structure (North America), 2010
55
NDT Inspection Services Market: Revenue Forecast (Europe), 2007-2017
59
NDT Inspection Services Market: Revenue Forecast by End User (Europe), 2007-2017
61
NDT Inspection Services Market: Competitive Structure (Europe), 2010
63
NDT Inspection Services Market: Revenue Forecast (Asia Pacific), 2007-2017
67
List of Figures (Contd…)
NDT Inspection Services Market: Revenue Forecast by End User (Asia Pacific), 2007-2017
69
NDT Inspection Services Market: Competitive Structure (Asia Pacific), 2010
71
NDT Inspection Services Market: R evenue Forecast (ROW), 2007-2017
75
NDT Inspection Services Market: Revenue Forecast by End User (ROW), 2007-2017
77
NDT Inspection Services Market: Competitive Structure (ROW), 2010
79
List of Charts Total NDT Inspection Services Market: Revenue Forecast by Geographic Region (World), 2007-2017
12
Total NDT Inspection Services Market: Key Market Drivers (World), 2011-2017
13
Total NDT Inspection Services Market: Market Engineering Measurements (World), 2010
21
Total NDT Inspection Services Market: Industry Challenges (World), 2011-2017
22
Total NDT Inspection Services Market: Market Drivers and Restraints (World), 2011-2017
29
NDT Inspection Services Market: GDP Growth Rate in Major Economies (World), Q1 2008-Q1 2011
33
Total NDT Inspection Services Market: Revenue Forecast (World), 2007-2017
42
Total NDT Inspection Services Market: Percent of Revenues by End user (World), 2010
43
Total NDT Inspection Services Market: Percent of Revenues by Geographic Region (World), 2010
46
Total NDT Inspection Services Market: Company Market Share by Revenues (World), 2010
48
NDT Inspection Services Market: Market Engineering Measurements (North America), 2010
50
NDT Inspection Services Market: Revenue Forecast (North America), 2007-2017
52
NDT Inspection Services Market: Market Engineering Measurements (Europe), 2010
58
NDT Inspection Services Market: Revenue Forecast (Europe), 2007-2017
60
NDT Inspection Services Market: Market Engineering Measurements (Asia Pacific), 2010
66
NDT Inspection Services Market: Revenue Forecast (Asia Pacific), 2007-2017
68
NDT Inspection Services Market: Market Engineering Measurements (ROW), 2010
74
NDT Inspection Services Market: Re venue Forecast (ROW), 2007-2017
76
N94C-30
9
Executive Summary
Definitions and Scope of Research Technology Segments
End User Segments
• Ultrasonic Inspection Services
• Oil and Gas
NDT Inspection Services Market
• Surface Inspection Services • Electromagnetic Inspection Services • Visual Inspection Services • Radiography Services
• Power Generation • Petrochemical and Chemical Industries • Manufacturing and Process Industries • Others(aerospace, military, and defence, automotive, and transportation)
Geographic Segments North America • The United States and Canada
Europe • Countries in western
Asia Pacific • Countries on the
Rest-of-World • Latin America (Brazil,
and eastern Europe,
western border of the
Mexico, Argentina, and
including Russia
Pacific ocean, including
Central and South
Indo-Chinese peninsula
America), Caribbean
and the Pacific islands,
Islands, the Middle
and central Asia
East, and Africa
The scope of this research only includes the third-party NDT inspection service providers. It does not encompass the NDT inspection performed in-house by the industries.
Growth Opportunities and Total Forecasts Total NDT Inspection Services Market: Revenue Forecast by Geographic Region (World), 2007-2017 $5,590.4 Million
6,600.0
$3,050.2 Million
5,600.0 ) n o i l l i 4,600.0 M $ ( 3,600.0 s e u 2,600.0 n e v e R 1,600.0
CAGR: 9.0%
600.0
2010
2007
2008
2009
North America
2010
2011 Europe
2012
2013
2014
2015
Asia Pacif ic
2016
2017
2017
Rest-of -World
N o t e : A l l f ig u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : Fr o s t & S u l l i v a n A n a l y s i s
• The economic crisis of 2008-2009 had a significantly low impact on the world NDT inspection services market. The revenue growth rate decreased, but a negative dip in revenues was not witnessed. A key reason for this was an increase in the scrutiny of government regulations. The government compelled industries to perform inspections at specific intervals of time. The oil and gas segment witnessed the maximum scrutiny which drove the market forward, contributing over 50 percent of the revenues overall. • The recovery from the economic downturn was remarkable with the market recording a better-than-expected growth rate in 2010. This was mainly due to an increase in NDT inspection demand from the Asian economies, driven by high economic growth. • The power generation segment is likely to provide the maximum opportunity for growth in this market. With an increase in energy demand coupled with a drive toward healthier environment and drying up of non-renewable sources of energy, renewable energy sources such as wind, solar, and nuclear will witness a gradual increase in demand. A few companies have recognized this opportunity by introducing specialized NDT inspection services for the renewable power generation segment.
Key Market Drivers Summary Total NDT Inspection Services Market: Key Market Drivers (World), 2011-2017
Outsourcing of inspection increases demand for NDT inspection services Risk awareness and focus on prevention ignites demand for NDT inspection Emerging economies boost market revenues
Corrosion issues with aging infrastructure spurs demand for NDT inspection
Government safety regulations sustains demand for NDT inspection services
S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Trends
•
Asia Pacific is expected to play an important role in the growth and demand for NDT inspection services during the forecast period. In terms of revenue generation, this region accounted for approximately 16 percent of overall revenues in 2010 and is expected to grow further as demand from key end user industries, such as manufacturing, oil and gas, and power generation, continues to increase.
Regional Trends •
North America continues to play an important role in terms of revenues for this market. The presence of established end users such as oil and gas, and process industries is pivotal to the demand in this region. It is expected to remain the biggest contributor to revenues in this market.
•
The oil and gas industry remains the biggest end user for NDT inspection services market. The stringent government safety regulations for this industry creates high demand for inspection services.
•
The power generation industry is expected to drive the growth in this market for the forecast period. The shift to clean power generation with an increased emphasis on wind energy provides the NDT inspection market with
End User Trends
the opportunity to grow. •
Industries such as automotive, aerospace, military, and defence are the least significant end users for NDT inspection service providers as they carry out most of their inspection in-house.
•
There is a distinctive trend toward the use of phased array ultrasonics for weld inspection in the pipeline industry. Several companies are offering a combination of phased array and time of flight diffraction (TOFD) inspection techniques.
Technology Trends
•
In the radiography services segment, the transition from analog to digital X-ray inspection is a trend that is expected to continue. The ease-of-use, productivity, and overall annual cost advantages of implementing digital x-ray inspection systems outweighs the tried and tested benefits offered by the film-based X-ray inspection systems market.
Key Market Participants •
Acuren Group Inc
•
Intertek Group PLC
•
TEAM Inc
•
NDT Services Ltd
•
Bureau Veritas
•
NDT Systems and Services AG
•
Coastal Inspection Services, Inc
•
TWI Ltd
•
MISTRAS Group Inc
•
Bonded Inspections Inc.
•
TUV SUD
•
Russell NDE Systems Inc
•
RNDT, Inc.
•
GE measurement and control
•
Dacon Inspection Services Co.,
•
Alloyweld Inspection Company, Inc.
Ltd.
•
Magnachek, Inс.
solutions
•
Trinidad Inspection Services Limited
•
Vibrant NDT
•
SGS SA
•
Silverwing (UK) Ltd.
•
Intron Plus Ltd.
•
Dekra Industrial AB
•
ABEN Technical Services
•
TEI Analytical Services
•
NDTS India (P) Ltd.
•
Sinclair X-ray Inspection Services
•
Century Inspection, Inc
•
T.D.Williamson, Inc.
•
NDT EXPERT
•
Hi-Tech NDT Inspection
•
Cutech Group
•
HMT Inc
•
Hi-Tech Testing Service, Inc
•
IRISNDT
•
R.Brooks Associates, Inc
•
Westech Inspection, Inc.
•
International Inspection, Inc.
•
James Fisher Inspection and
•
West Penn Testing Group
•
Sievert India Pvt.Ltd
Services (S) Pte Ltd •
Sonovation B.V.
•
VOGT Ultrasonics GambH
•
Applus RTD
•
Techcorr USA, LLC
Measurement Services •
SENSE Engineering Services Ltd.
Key Market Participants (Contd…)
•
Focus NDT
•
Trinity NDT
•
Axiom NDT and Offshore Services
•
ANKO AS
•
DJA Inspection Services, Inc.
•
Wavelength NDT Ltd
•
Diversified NDT Inspection
•
Construction Technical
•
Advanced Quality Group, Inc.
•
Applied Inspection Ltd
•
Baker Testing Services, Inc.
Services Pty. Ltd •
Independent Integrity Inspection Limited
Services Arabia Ltd •
Centurion NDT
Total World NDT Inspection Services Market
Market Overview and Definitions Introduction Nondestructive testing (NDT) involves examination of an object without impacting its current or future usefulness. The ability of NDT to inspect an object without affecting its operating performance provides an excellent balance between quality control and cost effectiveness. The NDT equipment market is well researched with products and technologies well defined. As a result, often, the contribution of the inspection services industry and technicians gets overlooked. Although the advancement of NDT technologies provides an undeniable boost to the industry, the importance of actually implementing these technologies and analyzing data to provide actionable intelligence is of equal importance to the industrial world. S o u r c e : Ol y m p u s N D T
The NDT inspection services market is very fragmented as there are no significant barriers to entry. Also, the initial investment required is considerably low. In 2010, the estimated number of active competitors in the world NDT inspection services market was over 1,000, with several companies set up regionally, catering to the needs of industries in their respective regions. According to the United States Energy Information Administration (EIA), total world marketed energy consumption contracted by approximately 1.0 percent in 2008 and by an estimated 2.0 percent in 2009. Many new projects, especially for pipeline construction, were postponed or cancelled due to a lack of capital. Despite these short-term restraints, growth drivers such as ageing infrastructure, safety, and compliance have offset the decline with the market showing slow but positive growth during the economic downturn. Frost & Sullivan’s research indicates that the total world market for NDT inspection services in 2010 was $3,050.2 million with a positive growth rate of 7.0 percent. This market is expecte d to be valued at $5,590.4 million by 2017.
Market Overview and Definitions (Contd…) Definitions For the purpose of this study, the global nondestructive test (NDT) inspection services market has been segmented as: •
Ultrasonic inspection services
•
Surface inspection services
•
Electromagnetic inspection services
•
Visual inspection services
•
Radiography services
Ultrasonic inspection Services - Ultrasonic nondestructive testing has been used for over 50 years for a wide range of end user applications ranging from evaluation of joints, weld inspection, and crack detection. For the purpose of this study, the scope of ultrasonic inspection methods encompasses ultrasonic testing and acoustic emission monitoring (AE). Surface Inspection Services - For the purpose of this study, the scope of surface inspection methods encompasses liquid penetrant inspection (LPI), dye penetrant inspection (DPI), and magnetic particle inspection (MPI). Electromagnetic Inspection Services – For the purpose of this study, the scope of electromagnetic inspection comprises of eddy current testing (ECT), remote field testing (RFT), magnetic flux leakage (MFL), and alternating current field measurement (ACFM). Visual Inspection Services - Visual inspection is by far the most common and simplest NDT technique. For the purpose of this study, visual inspection is defined as the examination of surfaces using direct viewing or low magnification techniques. Radiography Services - It is a method of inspecting materials for hidden flaws by using the ability of short X-rays and gamma rays to penetrate various materials. For the purpose of this study, radiography inspection market includes X-ray, gamma ray, real-time radiography, digital radiography, computed radiography (CR), and computed tomography (CT) inspection services.
Market Overview and Definitions (Contd…) This research service provides a global analysis of the NDT inspection services market. In addition, it also provides the total market as well as a breakdown of revenues by four major geographic segments, including: •
North America – The United States and Canada.
•
Europe – Countries in western and eastern Europe, including Russia.
•
Asia Pacific – Countries on the western border of the Pacific ocean, including those on the Indo-Chinese peninsula and the Pacific
•
islands, and central Asia.
Rest-of-World – Latin America (Brazil, Mexico, Argentina, and Central and South America) and regions not mentioned above, particularly the Caribbean Islands, the Middle East, and Africa.
This research service also analyzes the total market and each of the segments from an end user perspective. The major end users of NDT inspection services include: • Oil and Gas – Includes refineries, both on-shore ad off-shore, and pipelines, both oil and gas. • Power generation – Energy, utilities, co-generation, renewable and non-renewable power plants. • Petrochemical and Chemical Industries– Includes ammonium plants, sodium, and other chemical plants. • Manufacturing and Process Industries – Includes pulp and paper, pharmaceutical, rubber, cement, foundries, and other manufacturing plants. • Others – Aerospace, military and defence, automotive, civil construction and transportation including railways and roadways. Frost & Sullivan has not analyzed and broken down the world NDT inspection services market by technologies because in any inspection procedure there is a combination of technologies used for inspection. As a result, the NDT inspection services providers generally provide all the NDT inspection service technologies.
Market Engineering Measurements Total NDT Inspection Services Market: Market Engineering Measurements (World), 2010
Measurement Name
Measurement
Trend
Growth Stage
---
Revenues
$3,050.2 million
Increasing
Potential revenues (maximum future market size)
$5,590.4 million
Increasing
Base year market growth rate
7.0%
Increasing
Compound annual growth rate
9.0%
Increasing
More than 1,000
Decreasing
Degree of competition
High
Stable
Price Sensitivity
Low
Stable
Degree of technical change
Low
Increasing
4
Stable
34.3%
Increasing
Market age
Competitors (active market competitors in base year)
Customer Loyalty Market concentration (percent of base year market controlled by top four competitors)
N o t e : A l l f ig u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Industry Challenges Total NDT Inspection Services Market: Industry Challenges (World), 2011-2017
Need to improve quality of training Lack of certification for advanced NDT technologies
Lack of qualified technicians
Maintaining high quality of inspection
NDT Inspection Services Market
Constantly evolving customer needs
Industry Challenges
S o u r c e : Fr o s t & S u l l iv a n A n a l y s i s
Industry Challenges (Contd…)
Total NDT Inspection Services Market: Industry Challenges (World), 2011-2017
Challenge
1–2 Years
3–4 Years
5-7 Years
Maintaining high quality of inspection
High
High
Medium-High
Lack of qualified technicians
High
Medium-High
Medium-High
Need to improve quality of training
High
Medium-High
Medium-High
High
Medium-High
Medium-High
Medium-High
Medium-High
High
Lack of certification for advanced NDT technologies
Constantly evolving customer needs
S o u r c e : Fr o s t & S u l l iv a n A n a l y s i s
Industry Challenges (Contd…) Maintaining High Quality of Inspection
1-2 Years
3-4 Years
5-7 Years
High
High
Medium-High
• In the NDT inspection services industry, there is a need to maintain high quality of inspection. Low-quality inspection could lead to accidents causing not only monetary but also human loss. While the primary job of a technician is to know how to operate the NDT equipment and acquire data, he also has to interpret that data and make an informed decision on the integrity of the asset being tested. • This is a massive challenge in certain countries where a lack of government regulations limits enforcement of quality inspection. In addition, high price consciousness among end user industries result in NDT inspection being considered a mere formality. • With the reducing quality in training and a lack of NDT technicians, many manufacturers of NDT equipment have dedicated their resources in trying to simplify the operational complexity of the instrument used for inspection and increase the speed of inspection. As a result, the technician has additional time to perform a thorough analysis of the data collected. Hence, the impact of this challenge is expected to reduce over long term. BP Oil Spill
Date: May 2010 Impact: The oil spill that flowed for three months impacted the ecology and wildlife significantly with BP suffering severe economic consequences. This disaster helped shape up stringent regulations on off-shore oil rigs and the government stepping in with increased scrutiny of these regulations.
SF Pipeline Explosion
Date: September 2010 Impact: The natural gas pipeline explosion in California was one of several such accidents that have raised questions on the safety of natural gas pipelines in North America. As a result of this accident, more than 150 homes were destroyed with the government coming down heavily on the culprits.
Industry Challenges (Contd…) Lack of Qualified Technicians
1-2 Years
3-4 Years
5-7 Years
High
Medium-High
Medium-High
• The lack of availability of skilled technicians is a key challenge for the NDT inspection service industry. PQNDT's 2006 salary survey found the average age for an NDT technician to be 41.5 years. The same survey done in 2010 reveals that the average age for an NDT technician is 45 years. • Considering this trend, it is clear that the number of people taking up NDT inspection is very less. Stricter government regulations and increasing sophistication of NDT methods have led to an increase in demand for skilled inspectors. This demand for NDT technicians is outweighing the supply. • Another important trend in the NDT inspection services industry is; a significant number of technicians pursuing visual inspection certifications as compared to other NDT techniques. The main reason for such a trend is the work experience and limited number of hours for training required for a visual inspection certification. • For example, the minimum hours of work experience for Level II visual inspection certification is 140. In comparison the minimum hours of work experience for Level II ultrasonic inspection certification is 1600. A key impact of this trend is the shortage of technicians in other complex NDT techniques.
Industry Challenges (Contd…) Lack of Qualified Technicians
1-2 Years
3-4 Years
5-7 Years
High
Medium-High
Medium-High
NDT Inspection Services Market: Certification Requirements for Level I and Level II (World), 2010
Required hours of NDT Training
Minimum
Permitted Time
For those with at least two
Hours of
Frame to Obtain
For those with high
years of engineering or
Work
Required Work
school diploma or
science study at a college or
Experience
Experience in a
Level
equivalent
technical school
in a Method
Method (Months)
I
40
24
400
1.5-9
II
80
40
1600
4.5-27
I
40
30
400
1.5-9
II
80
35
1600
4.5-27
I
40
30
400
1.5-9
II
80
40
1600
4.5-27
I
8
4
70
0.5-3
II
16
8
140
1-6
Examination Method Electromagnetic
Radiography
Ultrasonic
Visual S o u r c e : n d t - e d . o r g / F r o s t & S u l li v a n A n a l y s i s
Industry Challenges (Contd…) Need to Improve Quality of Training
1-2 Years
3-4 Years
5-7 Years
High
Medium-High
Medium-High
In the NDT industry, methods for inspection are complex and need well-trained technicians to operate the equipment and analyze data. Hence, training is of paramount importance. Over the years, this industry has witnessed a wave of new technologies such as phased array, time of flight diffraction (TOFD), and digital radiography develop. With this advancement in technology, many training institutes have not updated their training material and equipment to accommodate these new technologies. As a result, a technician even after spending 2 years at the college, undergoing training for NDT inspection, has to be retrained by the inspection service providers. This is a major challenge impacting the NDT inspection service providers as it requires huge investment on their part for retraining technicians. The impact of this challenge is expected to reduce over time with inspection service providers incorporating sister training institutes or carrying out training in-house. Lack of Certification for Advanced NDT Technologies
1-2 Years
3-4 Years
5-7 Years
High
Medium-High
Medium-High
• A major drawback in the NDT industry is reluctance to embrace new technologies. The advanced technologies fall into the category of new technologies, despite the fact that s ome of these technologies such as phased array and digital radiography have been around for more than a decade. Even though these advanced technologies offer significant benefits, there has traditionally been low demand for them. Consequently, there has been a lack of well-defined standards and certification for these technologies. • Although there has been a tremendous improvement on the standards’ side, with most advanced technologies covered under distinct standards, the certification has not witnessed any major improvement. This lack of certification for advanced technologies leads to suspicion from customers regarding the integrity of the technicians performing the inspection.
Industry Challenges (Contd…) Constantly Evolving Customer Needs
1-2 Years
3-4 Years
5-7 Years
Medium-High
Medium-High
High
• Around the world, there have been questions raised regarding the future of energy supplies. These questions arise especially due to the concerns surrounding impact of global warming. Global warming is caused by excessive greenhouse gas emission. The largest producers of these gases are thermal power plants. According to the EIA International Energy Outlook 2010, the world marketed energy consumption is likely to increase by 49.0 percent from 2007 to 2035. There needs to be a balance between addressing this demand for energy and trying to decrease the emission of greenhouse gases. As a result, there has been a major push towards power generation from renewable energy sources such as wind, solar, and hydroelectric. • Wind energy has witnessed rapid development in Europe, especially in Germany, Spain, and Denmark. Wind energy poses a lot of difficulties toward NDT inspection as there is a lack of standardized methods for testing turbine blades and turbine towers. On the solar side, photovoltaics have huge potential to generate power in sunnier countries. NDT on PV materials is carried out on a micro-scale. • With the advent of power generation from renewable sources of energy, technologies, methods and standards have also had to evolve, which poses a challenge for NDT inspection industry in trying to keep pace with ever-changing consumer needs.
Market Drivers and Restraints Total NDT Inspection Services Market: Market Drivers and Restraints (World), 2011-2017 Government safety regulations sustains demand for NDT inspection services
High
s r e v i r D t e k r a M
Corrosion issues with aging infrastructure spurs demand for NDT inspection
Emerging economies boost market revenues
Risk awareness and focus on prevention ignites demand for NDT inspection
Outsourcing of inspection increases demand for NDT inspection services
Lo w
s t n i a r t s e R t e k r a M
Lo w
High
Training technicians to advanced technologies impacts company revenues
Code compliance reduces profit margin S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Market Drivers
Total NDT Inspection Services Market: Market Drivers Ranked in Order of Impact (World), 2011-201 7
1–2 Years
3–4 Years
5-7 Years
High
High
Very High
Medium
MediumHigh
MediumHigh
Medium
Medium
MediumHigh
Rank
Driver
1
Government safety regulations sustains demand for NDT inspection services
2
Corrosion issues with aging infrastructure spurs demand for NDT inspection
3
Emerging economies boost market revenues
4
Risk awareness and focus on prevention ignites demand for NDT inspection
Medium
Medium
LowMedium
5
Outsourcing of inspection increases demand for NDT inspection services
LowMedium
Low
Low
S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Market Drivers (Contd…) Government Safety Regulations Sustains Demand for NDT Inspection Services
1-2 Years
3-4 Years
5-7 Years
High
High
Very High
• Compliance-driven inspection due to the strict government regulations is a key driver for the NDT inspection services industry. With accidents such as the British Petroleum (BP) oil spill in the Gulf of Mexico and the pipeline explosion in California coming under severe public and media scrutiny, there has been increased focus on inspection performed, especially in refineries, pipelines, and off shore oil rigs. • The existing regulations have become stringent to cover a wide net of industries and there has been an increase in the amount of inspection that needs to be done irrespective of financial viability. These stringent regulations aided in strong performance for the world NDT inspection services market, despite the economic downturn. Although there was less new construction and few projects were stalled. the need for compliance with government safety regulations negated any factors inhibiting growth.
Market Drivers (Contd…) Corrosion Issues with Aging Infrastructure Spurs Demand for NDT Inspection
1-2 Years
3-4 Years
5-7 Years
Medium
Medium-High
Medium-High
• The exorbitant cost and challenges involved in building new infrastructure has resulted in a desire to extend the useful life of existing infrastructure. This has resulted in aging of these existing assets, especially in North America. The average age for a refinery or a pipeline in the United States is more than 40 years, yet these assets are required to run at high capacities. The main predicament with ageing infrastructure is corrosion. These aging assets have to be inspected periodically to guard against corrosion and prevent catastrophic failures. • The high level of maintenance required to preserve these assets and run them at full capacities has created immense demand for NDT inspection services. This demand is driving growth in the market and is expected to have a continued positive impact for the foreseeable future. Damaged Infrastructure Due to Corrosion
Damaged Pipeline
Damaged Pipeline
Collapsed Bridge
Market Drivers (Contd…) Emerging Economies Boost Market Revenues
1-2 Years
3-4 Years
5-7 Years
Medium
Medium
Medium-High
The rapid rate of infrastructure development in emerging economies such as India, China, and Brazil are driving the demand for NDT inspection. Although the knowledge and awareness of NDT inspection methods is low in these countries, industries are beginning to understand the importance for it. Large-scale infrastructure constructions in the power generation segment, especially wind energy and nuclear power, provide opportunities for NDT inspection service providers to expand. NDT Inspection Services Market: GDP Growth Rate in Major Economies (World), Q1 2008-Q1 2011
S o u r c e : Tr a d i n g E co n o m i c s a n d F r o s t & S u l li v a n A n a l y s i s
Market Drivers (Contd…) Risk Awareness and Focus on Prevention Ignites Demand for NDT Inspection
1-2 Years
3-4 Years
5-7 Years
Medium
Medium
Low-Medium
• In the present highly competitive world, shutting down operations even for a few minutes has high cost implications. The economic downturn during 2008 and 2009 also emphasized the importance of maintaining asset integrity. These steps helped end users to guard against severe impacts that malfunctioning assets would have on the already low profitability. • In some of the more critical applications where failure of assets would result in not only monetary loss but also loss to the environment or people, prevention is of paramount importance. In addition, end users of NDT inspection services are rapidly realizing the importance of prevention as failures can incur severe financial penalties. • This is a key driver for the market in geographic regions such as Asia Pacific, the Middle East, and Africa where traditionally a lack of awareness has inhibited demand. But with a drive towards safety from end users and an improved understanding of the importance of NDT, demand for NDT inspection services has increased. Outsourcing of Inspection Increases Demand for NDT Inspection Services
1-2 Years
3-4 Years
5-7 Years
Low-Medium
Low
Low
• Traditionally, NDT inspection in industries such as oil and gas, power generation, and process industries were done inhouse. But with the increased sophistication of the methods for inspection, these end users are turning to NDT inspection service providers for all there inspection needs. • In addition, the amount of training required for certain advanced techniques and increased scrutiny of inspection and safety aspects, have made it financially viable for these industries to get their inspection outsourced. This trend has resulted in an increase in the availability of work for NDT inspection service providers and has hence helped drive this market.
Market Restraints
Total NDT Inspection Services Market: Market Restraints Ranked in Order of Impact (World), 2011-2017
Rank
Restraint
1
Training Technicians to Advanced Technologies Impacts Company Revenues
2
Code Compliance Reduces Profit Margin
1–2 Years
3–4 Years
5-7 Years
High
High
Medium-High
Medium-High
Medium-High
Medium
S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Market Restraints (Contd…) Training Technicians to Advanced Technologies Impacts Company Revenues
1-2 Years
3-4 Years
5-7 Years
High
High
Medium-High
• The NDT technologies can be broadly classified as traditional and advanced. Traditional technologies are the ones that have been around for a long time such as ultrasonic, liquid penetrant, magnetic particle, and x-ray inspection. Advanced technologies, such as phased array ultrasonics, TOFD, and digital radiography, are those that have grown in prominence recently and are witnessing increased demand in the industry. •
The major point of difference between traditional and advanced technologies is that the traditional technologies only provide qualitative information, whereas advanced technologies provide qualitative and quantitative information. There is an increased level of sophistication in advanced NDT techniques. Hence, there is a need for specific training for technicians in advanced methods of inspection.
• Technicians can only be trained in advanced technologies once they have a certain level of experience in some of the traditional ones. By the time they gain this experience, the technicians are already employed by inspection companies and these companies need to take a decision on whether to train them on advanced inspection techniques. • The impact of training technicians with advanced technologies is significant. Inspection companies need to have technicians billable for maximum amount of time. When they undergo training, they are not billable and hence these companies loose out on valuable revenues. This is a key factor that is slowing down the growth of NDT inspection service providers.
Market Restraints (Contd…) Code Compliance Reduces Profit Margin
1-2 Years
3-4 Years
5-7 Years
Medium-High
Medium-High
Medium
• In the NDT industry compliance with with codes is necessary to ensure a certain standard for inspection. However, some of the codes are a hindrance to growth in this market. It so happens in many cases that a company needs to purchase calibration blocks in excess of $50,000 for one inspection job. As a result, there can be two major impacts, either there is a reduced quality of inspection if the inspection service providers decide not to calibrate the instruments or the company looses out on revenues due to decreased profit margins. • This may not be a major restraining restraining factor for bigger companies, companies, but for some of the smaller companies, companies, it definitely definitely hampers the growth. To reduce the impact of this restraint, the organization’s responsible for defining the codes and standa sta ndards rds nee need d to wor work k clo closel sely y wit with h com compan panies ies in the in indust dustry. ry. That bei being ng sai said, d, cod code e com compli plianc ance e wil willl con contin tinue ue to significantly impact this market in the forecast period.
Market Trends 1-2 Years
3-4 Years
5-7 Years
High
Medium-High
High
Mergers and Acquisitions
• Consolidation has been a key trend in the NDT industry, especially over the past few years. In the NDT inspection services market, there have been some important mergers and acquisitions. A major reason for this is the impact of economic downturn, which affected some of the smaller companies significantly. Companies struggled to survive in such a challenging and dam dampen pening ing eco econom nomic ic con condit dition ions s and, as a res result ult wer were e acq acquir uired ed by som some e of the big bigger ger ma marke rkett par partici ticipan pants. ts. Globalization Globalizati on was another factor, which fuelled mergers and acquisitions activity in this market. • Many companies recognize the importance of expanding geographically and and acquiring middle-market companies in regions where they have minimal presence, giving them greater global reach. It is also used as an effective strategy to accelerate growth in such a fragmented market. NDT Inspection Services Market: Significant Mergers and Acquisitions (World), 2010
Acquirer
Acquired*
Acuren
Extech, Bretech Inspection, Remote Access Technologies
Appl Ap plus us RT RTD D
Val alley ley Ind Indust ustria riall XX-ra ray y & Ins Inspec pectio tion, n, Sta Stave veley ley Ser Servi vices ces,, Quality Inspection Services, Technicio Technicio (2009), JanX (2008)
SGS
Yan Tai Hua Jian Inspection Engineering Ltd, FTS (2007)
TUV TU V SU SUD D
Mecha Mec hanic nical al Int Integr egrity ity,, Ra Rail il Sci Scienc ences, es, ND NDT T gro group up (20 (2008) 08),,
*Note: 2010 unless mentioned
Petrochem Inspection (2006)
S o u r c e : Fr F r o s t & S u l li li v a n A n a l y s i s
Market Trends (Contd…) Drive Towards Advanced Technologies
1-2 Years
3-4 Years
5-7 Years
High
Medium-High
Medium-High
• Trad Tradition itionally, ally, the NDT industry has been slow in accepting advanced advanced techn technologi ologies. es. Techn Techniques iques such as phase phased d arra array y ultrasonics, TOFD, and digital radiography have been around for decades but have not witnessed huge acceptance. This is due to the fact that there is reluctance from end users in shifting from traditional methods which have been around for more than 100 years. • The first industrial phased array array system was introduced in the 1980s, but it has only been in in the last few years that it has seen acceptance. There has been improved demand for these systems from end users as technology awareness has improved. Another factor that has aided this demand has been the increase in availability of equipment and training for advanced technologies. Some Advanced NDT Technologies
Phased Array Ultrasonics
TOFD
Digital Radiography
Technology Trends •
The NDT technologies can be broadly categorized as:1. Traditional NDT techniques 2. Advanced NDT techniques
•
Trad Tr adit itio iona nall ND NDT T Te Tech chni niqu ques es – These are basic techniques techniques that have been in use for a long time. The main techniques techniques under traditional NDT are ultrasonic, visual, surface, and radiography. These services are generally offered by all the NDT inspection service providers as they form the base of any inspection. As these techniques are around for a large period of time, they have well-defined standards and training certification courses.
•
Adva Ad vanc nced ed ND NDT T Te Tech chni niqu ques es – These are derived from traditional NDT techniques but are more complex in nature. They have been developed and improved quite recently and hence are not in demand heavily. As a result, all of these techniques are not offered by NDT inspection service providers. It depends on the availability of highly trained technicians and the demand from the customers. Some of the main techniques covered under this category are remote field testing, phased array arra y ultra ultrasonics sonics,, time of fligh flightt diffra diffraction ction (TOFD), alternating alternating curre current nt field measurement, measurement, guided wave ultrasonics, ultrasonics, and magnetic flux leakage. These are some of the more popular advanced techniques.
•
There are many niche technologies as well provided by specialized NDT inspection service providers. One such technology is pro process cess com compen pensat sated ed res resona onance nce tes testin ting. g. Thi This s tec techni hnique que is off offere ered d by Vi Vibra brant nt NDT NDT,, ma mainl inly y to the aer aerosp ospace ace and automotive segments.
•
Most end users of NDT inspection services use a combination of technologies to meet their inspection needs. The structure or the unit under test is assessed and then a technology technology or a combination combination of technologies technologies is recommended recommended inspection.
for NDT
Revenue Forecast Total NDT Inspection Services Market: Revenue Forecast (World), 2007-2017 Revenue
• The global economic downturn that hit in late 2008 impacted the revenue growth rate of this market. Capital expenditure
cuts
and
review
of
inspection
budgets
adversely affected the growth of third-party NDT inspection
Revenue
Growth Rate
Year
($ Million)
(%)
2007
2,568.5
---
& Sullivan’s analysis shows that the market grew by 6.6
2008
2,738.4
6.6
percent in 2008.
2009
2,850.7
4.1
2010
3,050.2
7.0
2011
3,283.7
7.7
2012
3,555.4
8.3
2013
3,856.9
8.5
2014
4,208.2
9.1
2015
4,609.8
9.5
2016
5,067.4
9.9
2017
5,590.4
10.3
service providers. In 2008, the market witnessed a bad ending to a possibly good year in terms of revenues. Frost
• 2009 witnessed economic uncertainty affecting capital expenditure, and as a result, many new construction projects were postponed. This impacted the revenues to a certain extent but the operational expenditure was high due to compliance-driven inspection of refineries, pipelines
Compoun d An nual Growth Rate (2010-2017): 9.0% N o t e : A l l fi g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : F r o s t & Su l l i v a n A n a l y s i s
etc despite financial constraints. • This was one of the key reasons why the market did not decline in revenues but witnessed a slower revenue growth rate as compared to the previous year. • Another key reason for significantly low impact of the economic downturn in 2009 was increased scrutiny of inspection by safety regulatory bodies due to high-profile infrastructure failures and accidents such as the British Petroleum (BP) oil spill, California pipeline explosion, and Mississippi river bridge collapse.
Revenue Forecast (Contd…) Total NDT Inspection Services Market: Revenue Forecast (World), 2007-2017
6,000.0
14.0
) 12.0 % ( e 10.0 t a R 8.0 h t w r 6.0 o G e 4.0 u n e 2.0 v e R 0.0
5,500.0 ) 5,000.0 n o 4,500.0 i l l i M 4,000.0 $ ( 3,500.0 e u 3,000.0 n e 2,500.0 v e R 2,000.0 1,500.0 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Year Revenue ($ Million)
Revenue Growth Rate (%)
N o t e : A l l f i g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . So u r c e : F r o s t & S u l l iv a n A n a l y s i s
• Market experts and participants believe that this market is capable of bouncing back to pre-recession growth rates and this is reflected in Frost & Sullivan’s analysis and forecasting of revenues from 2011 to 2017. • The market recovered significantly in 2010 and is expected to achieve a high growth in 2011 due to the restart of construction projects which were shelved during the economic downturn. The Japan nuclear crisis, in addition to driving short-term precautionary inspection in existing nuclear plants worldwide, will trigger widespread increase in safety regulations for nuclear power plants.
Trends by End User • The oil and gas segment including refineries and oil pipelines contributed the highest revenues in 2010 with 53.0 percent globally. The majority of these revenues come from refineries, which perform compliance-based maintenance
inspection.
North America
is
the
main
Total NDT Inspection Services Market: Percent of Revenues by End User (World), 2010
contributor to revenues due to high government safety regulations
stipulating
inspection
to
be
carried
out
periodically. • The power generation industry in 2010 contributed 15.5 percent to the global NDT inspection services revenues.
Power Generation 15.5%
With an increase in the energy demand, there is an
Petrochemical and Chemical Manufacturing Industries and Process 12.3% Industries 9.2%
increase in the number of power plants worldwide. Hence, the demand for NDT inspection is expected to increase in this segment. This segment is expected to contribute 18.3 percent to revenues by 2017. • The manufacturing and process industries segment is strong mainly in North America and Asia Pacific. This is due to the presence of the pulp and paper industry in North
Oil and Gas 53.0%
Others 10.0%
America and large manufacturing units in Asia Pacific. • The others segment contributed 10.0 percent to the revenues in 2010. Some of the industries covered in this segment
include
aerospace,
military,
defence,
and
automotive. These end users generally perform NDT inspection in-house.
N o t e : A l l fi g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : F r o s t & Su l l i v a n A n a l y s i s
Trends by End User (Contd…) Total NDT Inspection Services Market: Revenue Forecast by End User (World), 20 07-2017
Petrochemical and Chemical Industries ($ Million)
Manufacturing and Process Industries ($ Million)
Others ($ Million)
Year
Oil and Gas ($ Million)
Power Generation ($ Million)
2007
1,370.1
392.2
317.6
235.0
253.6
2008
1,465.4
420.6
339.8
243.2
269.4
2009
1,524.1
439.3
351.6
252.8
282.9
2010
1,617.7
471.4
375.0
279.4
306.7
2011
1,741.6
519.2
400.4
297.8
324.7
2012
1,883.1
577.7
429.7
317.5
347.4
2013
2,038.5
647.0
461.6
339.4
370.4
2014
2,221.1
727.3
495.5
367.4
396.9
2015
2,426.4
817.6
536.7
400.4
428.7
2016
2,660.1
918.5
588.0
436.5
464.3
2017
2,929.6
1035.0
642.7
480.3
503.0
CAGR (20102017)
8.9%
11.9%
8.0%
8.0%
7.3%
N o t e : A l l f ig u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Trends by End User (Contd…) • In terms of revenue contribution, the oil and gas segment remains the highest and is expected to continue that way till 2017. In this segment, maintenance-driven inspection in refineries plays a pivotal role in driving revenues. • The other segment, oil pipelines, contributes in a small but significant way. With the recent pipeline explosions in North America, the inspection in this sector is at an all-time high. • The power generation industry is expected to witness the highest growth in the NDT inspection services market with CAGR of 11.7 percent. The catalyst for such high growth is the increased importance given to renewable energy. • The nuclear industry is one of the key users of NDT inspection due to the importance of safety in hazardous surroundings. With more than 60 nuclear power plants under construction worldwide and many more in the pipeline, power generation is expected to drive this market in the future. • Manufacturing and process industries are expected to witness slow growth with respect to NDT inspection. The main contributor in this segment, pulp and paper, has been on a steady decline over the past few years. This has impacted the investment in NDT inspection services. As a result, the demand for NDT inspection services has suffered and this trend is expected to continue over the forecast period. • That being said, the manufacturing industry is likely to shed its sluggish growth exhibited over the last 2 years due to economic downturn and bounce back in a significant way. Hence, demand for NDT inspection in the manufacturing industry is expected to grow.
Trends by Geography
Total NDT Inspection Services Market: Percent of Revenues by Geographic Region (World), 2010
Rest-ofWorld 11.4%
North America 40.8%
Asia Pacif ic 16.5%
Europe 31.3%
N o t e : A l l fi g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : Fr o s t & S u l l iv a n A n a l y s i s
• Despite the economic setbacks in North America, this region contributed the highest revenues in 2010 with 40.8 percent overall. Oil and gas segment was the key driver in this region and is expected to be stable over the long term. • A majority of demand for NDT inspection services in Europe was generated from the oil and gas segment, with power generation in second. The development of wind farms across western Europe, particularly in countries such as Spain and Germany is creating demand for NDT inspection services. The growth of NDT inspection services market is expected to be steady but fairly sluggish when compared with other regions. However, it is still expected to remain the second-largest contributor to revenues in this market. • The Asia Pacific market, with robust development across all industries, is expected to exhibit the highest growth rates. Despite this, it is not expected to overtake the wellestablished regions in this market, such as North America and Europe, in terms of revenues. • Latin America and the Middle East account for the majority of the 11.4 percent in the Rest-of-World segment. The demand for NDT inspection in the Middle East is mainly from refineries and oil pipelines. In Latin America, the demand is being driven by the metals and mining industries. A key country in Latin America providing significant demand and growth is Brazil.
Competitive Environment Total NDT Inspection Services Market: Competitive Structure (World), 2010
Number of Companies in the Market
More than 1,000 competitors
Competitive Factors
Quality of service, reputation, execution, price
Key End User Groups
Oil and Gas, power generation, chemical/petrochemical industries, and manufacturing and other process industries Applus RTD, Acuren Group Inc, TEAM Inc, MISTRAS Group Inc, SGS
Major Market Participants
SA, TUV SUD, Intertek PLC, Bureau Veritas, Cutech Group, Russell NDE Systems Inc.
Market Share of Top 4 Competitors Other Notable Market Participants Distribution Structure
34.3% Vibrant NDT, TEI Analytical Services, NDT Services Ltd., TWI Ltd, Dekra Industrial AB, NDT EXPERT, NDTS India (P) Ltd, Direct Applus RTD acquired JANX (2008), Stavely Services Canada (2010), Quality Inspection Services (2010), Valley Industrial X-Ray &
Notable Acquisitions and Mergers
Inspection (2010), Acuren acquired Bretech Inspection (2010), Remote Access Technology (2010), Extech (2010) Bureau Veritas acquired Inspectorate (2010), Intertek acquired Aptech Engineering Services (2009), WISco (2009) S o u r c e : Fr o s t & S u l l iv a n A n a l y s i s
Market Share Analysis • The world
NDT inspection services market is highly
fragmented with a number of small companies offering a
Total NDT Inspection Services Market: Company Market Share by Revenues (World), 2010
wide variety of inspection services t o regional industries. Others 60.8%
• In such a competitive environment, Applus RTD stands out with a market share of 13.4%. Although Applus RTD is headquartered in Europe, they are a truly global company with operations in all geographic regions. Majority of their revenues come from Europe but they have penetrated the North American and Asia Pacific markets with several key
SGS SA 4.9%
acquisitions. • Acuren Group Inc occupies second place with 9.8 percent market share. This is highly impressive as they operate mainly in the North American region with a majority of its revenues coming from Canada and the United States. It caters to all end user segments with a vast majority of its revenues derived from the oil and gas segment. • TEAM Inc is a publicly traded company that provides high quality NDT inspection services in North America and South America with emphasis on safety. The economic downturn significantly impacted the revenues of Team Inc in 2009. Still the company accounts for 5.9 percent market share in the base year, 2010, with an impressive recovery from the slump of 2009. The company is expected to grow steadily and increase its market share over the forecast period.
Mistras Group 5.2%
Team Industrial Services 5.9%
Acuren 9.8%
App lus RTD 13.4%
Note: Others include Bureau Veritas, TWI Ltd, TUV SUD, GE measurement and control solutions, Vibrant NDT, Russell NDE Systems Inc, Dacon Inspection Services Co., Ltd., Intron Plus Ltd., TEI Analytical Services, Century Inspection, Inc, Hi-Tech NDT Inspection Services (S) Pte Ltd, Sonovation B.V., VOGT Ultrasonics GambH, Techcorr USA, LLC, NDT Services Ltd, NDT Systems & Services AG, Dekra Industrial AB, NDTS India (P) Ltd., T.D.Williamson, Inc., Cutech Group, Hi-Tech Testing Service, Inc, R.Brooks Associates, Inc, International Inspection, Inc., West Penn Testing Group, Sievert India Pvt.Ltd, Trinidad Inspection Services Limited, Coastal Inspection Services, Inc, Bonded Inspections Inc., RNDT, Inc., Alloyweld Inspection Company, Inc., Magnachek, Inс., Silverwing (UK) Ltd., ABEN Technical Services, Sinclair X-ray Inspection Services, NDT EXPERT, HMT Inc, IRISNDT, Westech Inspection, Inc., James Fisher Inspection and Measurement Services, and SENSE Engineering Services Ltd. N o t e : A l l fi g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : F r o s t & Su l l i v a n A n a l y s i s
North American NDT Inspection Services Market
Market Engineering Measurements NDT Inspection Services Market: Market Engineering Measurements (North America), 2010
Measurement Name
Measurement
Trend
Growth Stage
---
Revenues
$1,247.2 million
Increasing
Potential revenues (maximum future market size)
$2,275.8 million
Increasing
Base year market growth rate
7.8%
Increasing
Compound annual growth rate
9.0%
Increasing
More than 400
Decreasing
Degree of competition
High
Decreasing
Price Sensitivity
Low
Stable
Degree of technical change
Low
Increasing
7
Decreasing
Market age
Competitors (active market competitors in base year)
Customer loyalty
N o t e : A l l f ig u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Revenue Forecast NDT Inspection Services Market: Revenue Forecast (North America), 2007-2017 Revenue
• The North American market for NDT inspection services is the backbone of the world market and accounted for 40.8 percent of revenues in 2010. This was mainly due to awareness of the importance of NDT inspection in this
Revenue
Growth Rate
Year
($ Million)
(%)
2007
1,034.3
---
2008
1,104.3
6.8
2009
1,156.7
4.7
2010
1,247.2
7.8
witness a decline but the revenue growth rate took a hit,
2011
1,347.4
8.0
growing at a mere 4.7 percent in 2009.
2012
1,459.5
8.3
region. North America has been the biggest user of NDT inspection services over the past decade and is expected to continue to occupy that place for the foreseeable future. • The
economic downturn hit
industries in the
American region heavily, but, its
North
impact on market
revenues were considerably low. The market did not
• Despite the economic downturn, major end users such as oil and gas, and power generation were key growth drivers
2013
1,583.3
8.5
for NDT inspection services in 2009 and 2010. As a result
2014
1,725.3
9.0
of compliance requirements with government regulations,
2015
1,886.9
9.4
2016
2,068.3
9.6
2017
2,275.8
10.0
these industries were required to perform inspections at specific intervals of time. • Frost & Sullivan’s analysis shows a steady increase in revenues in the North American NDT inspection services market with a CAGR of 9.0 percent. The recovery from the Compoun d Ann ual Growth Rate (2010-2017): 9.0% N o t e : A l l fi g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : F r o s t & Su l l i v a n A n a l y s i s
economic downturn has been robust and the market grew at 7.8 percent in 2010.
Revenue Forecast (Contd…) NDT Inspection Services Market: Revenue Forecast (North America), 2007-2017
2,500.0
14.0
2,300.0 ) n o i l l i M $ ( e u n e v e R
12.0 ) % ( e 10.0 t a R 8.0 h t w o r 6.0 G e u n 4.0 e v e R 2.0
2,100.0 1,900.0 1,700.0 1,500.0 1,300.0 1,100.0 900.0 700.0 500.0
0.0 2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Year Revenue ($ Million)
Revenue Growth Rate (%)
N o t e : A l l f i g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . So u r c e : F r o s t & S u l l iv a n A n a l y s i s
Although the North American market for NDT inspection services has matured to a large extent, the influx of revenues is expected to remain high. The market is likely to reach a growth rate of 10.0 percent by 2017, with the oil and gas segment driving growth in this region.
Trends by End User NDT Inspection Services Market: Revenue Forecast by End User (N orth America), 2007-2017
Petrochemical and Chemical Industries ($ Million)
Manufacturing and Process Industries ($ Million)
Others ($ Million)
Year
Oil and Gas ($ Million)
Power Generation ($ Million)
2007
582.3
130.3
129.3
104.5
87.9
2008
622.8
141.4
138.0
109.3
92.8
2009
652.4
150.4
143.4
113.4
97.1
2010
695.9
164.6
154.7
126.0
106.0
2011
751.8
181.9
165.7
134.7
113.3
2012
812.9
201.4
179.5
143.0
122.7
2013
878.7
226.4
193.2
152.0
133.0
2014
954.1
257.1
208.8
163.9
141.4
2015
1,037.8
292.5
226.4
177.4
152.8
2016
1,131.4
333.0
248.2
192.4
163.3
2017
1,240.3
380.1
270.8
209.4
175.2
CAGR (20102017)
8.6%
12.7%
8.3%
7.5%
7.4%
N o t e : A l l f ig u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Trends by End User (Contd…)
The major end user for NDT inspection services in the North American market is oil and gas, which contributed 55.8 percent to revenues in 2010. One of the main reasons for oil and gas being a key end user is the number of government regulations, which stipulate heavy inspection in this segment.
The oil and gas segment is expected to grow at a CAGR of 8.6 percent, which makes it a focal point of revenues. In the United States, even though a new refinery has not been constructed for over 30 years, the oil and gas segment is the largest contributor to revenues. Hence, a significant percentage of revenues in this segment is derived from maintenancebased inspection.
With a CAGR of 12.7 percent, power generation is expected to become a prominent end user for NDT inspection services. The main reason for this is the development being witnessed in the renewable energy sector. A large number of wind farms, and nuclear power plants are being constructed in North America to meet the growing energy demand. This is expected to contribute significantly to the growth in power generation segment.
The process industry in North America is noteworthy, with pulp and paper being one of the major segments. With a CAGR of 7.5 percent, growth in this segment is likely to be the slowest. A key reason for this is the maturity of the pulp and paper market in the United States.
Competitive Environment NDT Inspection Services Market: Competitive Stru cture (North America), 2010
Number of Companies in the Market
More than 400 competitors
Competitive Factors
Quality of service, reputation, execution, price
Key End User Groups
Major Market Participants
Market Share of Top 3 Competitors
Oil and Gas, power generation, chemical/petrochemical industries, and manufacturing and other process industries Acuren Group Inc, TEAM Inc, MISTRAS Group Inc, Applus RTD, Russell NDE Systems Inc, T.D.Williamson Inc, Techcorr USA, LLC. 51.3% Vibrant NDT, R.Brooks Associates, Inc, International Inspection, Inc.,
Other Notable Market Participants
West Penn Testing Group, TUV SUD, TEI Analytical Services, Century Inspection, Inc
Distribution Structure
Direct TUV SUD acquired Ptrochem Inspection Services (2006), Applus RTD acquired JANX (2008), Stavely Services Canada (2010), Quality
Notable Acquisitions and Mergers
Inspection Services (2010), Valley Industrial X-Ray & Inspection (2010), Acuren acquired Bretech Inspection (2010), Remote Access Technology (2010), Extech (2010) S o u r c e : Fr o s t & S u l li v a n A n a l y s i s
Competitive Environment (Contd…) •
The North American NDT inspection services market is highly fragmented with more than 400 competitors active in the base year, 2010. A major reason for such high competition is the low barriers to entry in this market. This challenges the top market participants to constantly review their growth strategies for maintaining their position in the market.
•
Despite the large number of competitors, ACUREN, Team Inc, and MISTRAS Group Inc have emerged as the top three competitors occupying 51.3 percent market share by revenues in 2010. Of these three market participants, ACUREN leads the way with 24.1 percent market share, followed by Team Inc with 14.4 percent and MISTRAS Group Inc with 12.8 percent market share in 2010.
•
The economic downturn impacted these companies differently, TEAM Inc recorded a negative growth rate in FY 2010 with lower revenues. However, ACUREN and MISTRAS Group Inc recorded positive growth.
•
Market share for the major participants is expected to increase over the short term. MISTRAS Group is expected to grow significantly with a continued focus on expansion through mergers and acquisitions. Over the last two years, the company has acquired more than 10 NDT inspection businesses in a bid to boost revenues and enhance its market position.
•
TEAM Inc. endured a torrid time through the economic downturn and is expected to bounce back with improved results in FY 2011. The company is expected to continue growing as it revises growth strategies and targets newer markets.
•
Some of the key competitive factors in this market are quality of service, reputation, execution, and price. In the North American NDT inspection services market, quality of service is most important and price is the least important factor. This is evident from the fact that ACUREN is the top market participant as it differentiates itself by providing highest quality inspection services.
•
TEAM Inc is also recognized as one of the more reputable NDT inspection services company providing high standards for quality and safety.
•
Some of the other market participants in this market are Applus RTD, Russell NDE Systems, and TUV SUD – Petrochem, T.D.Williamson, Inc.
European NDT Inspection Services Market
Market Engineering Measurements NDT Inspection Services Market: Market Engineering Measurements (Europe), 2010
Measurement Name
Measurement
Trend
Market age
Growth Stage
---
Revenues
$954.6 million
Increasing
$1,637.6 million
Increasing
Base year market growth rate
5.1%
Increasing
Compound annual growth rate
8.0%
Increasing
More than 300
Decreasing
Degree of competition
High
Stable
Price Sensitivity
Low
Stable
Degree of technical change
Low
Increasing
5
Stable
Potential revenues (maximum future market size)
Competitors (active market competitors in base year)
Customer loyalty
N o t e : A l l f ig u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : Fr o s t & S u l l i v a n A n a l y s i s
Revenue Forecast NDT Inspection Services Market: Revenue Forecast (Europe), 2007-2017 Revenue
• The European market for NDT inspection services is the second largest, with a revenue contribution of 31.3 percent in 2010. The market in this region has grown steadily over the past decade, but its revenue contribution percentage is
Revenue
Growth Rate
Year
($ Million)
(%)
2007
835.6
---
2008
887.7
6.2
• Europe was affected drastically by the economic downturn.
2009
908.3
2.3
Although the market did not decline, it witnessed a very
2010
954.6
5.1
2011
1,017.3
6.6
construction projects in the power generation industry,
2012
1,091.9
7.3
which was expected to drive growth in this region. With the
expected to decline by 2.0 percent during the forecast period. It is expected to contribute 29.3 percent overall by 2017.
modest growth rate of 2.3 percent in 2009. • A key reason for this was the impact on the new
postponement of these projects and a decline in the 2013
1,173.5
7.5
number of turnarounds in the refineries, the market for
2014
1,268.8
8.1
NDT inspection services took a huge hit.
2015
1,376.5
8.5
2016
1,498.8
8.9
the sovereign debt crisis. According to the European
2017
1,637.6
9.3
Commission – economic and financial affairs department,
• The rebound from the economic downturn has not been immense with fears of a double dip recession arising from
the GDP growth for Europe was less than 1 percent for Compoun d Annual Growth Rate (2010-2017): 8.0% N o t e : A l l fi g u r e s a r e r o u n d e d ; t h e b a s e y e a r i s 2 0 1 0 . S o u r c e : F r o s t & Su l l i v a n A n a l y s i s
2010. This has impacted the revenues of this market and the growth rate was sluggish at 5.1 percent in 2010.
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