Moving to newer pastures
As the oil & gas industry continues to face the worst downturn experienced in the last three decades, affecting inventory tank gauge suppliers dependent on this vertical. In the past, most leading suppliers persistently focused on the oil & gas vertical to obtain a significant portion of their revenue. However, the recent slowdown of the oil & gas industry hampered revenue goals for leading tank gauge suppliers, forcing them to explore new opportunities within other verticals. Chemical, food & beverages, pharmaceutical, life sciences, minerals and non- metallic manufacturing involves numerous production processes providing abundant bulk liquid storage opportunities requiring inventory tank gauges. Suppliers should shift their focus on catering to upcoming demand brought about by manufacturers adopting ‘Industrial Internet of Things’ (IIoT) initiatives and requiring wireless solutions or assets within these industries. Since inventory tank gauges have longer replacement cycles, we expect the next upgrade/replacement cycle will be driven by the ‘connected infrastructure’ initiative. At the moment, the demand remains relatively low-key among manufacturing and industrial fraternity, which will change going forward.
Suppliers of inventory tank gauges should also shift their focus to desalination plants, as the next untapped market providing opportunities. Desalination techniques have undergone significant improvements such as enhanced reverse osmosis process, reduced carbon foot print, lower energy consumption and improved durability of equipment which helps supply potable water. For example, in July 2015, the Santa Barbara city council in California, United States decided to reactivate its desalination plant to relieve the aftereffects of the extreme drought and meet the critical water needs. Worldwide desalination projects are being implemented specially in the Middle East, Asia Pacific and Africa to cope with limited water resources. As custody transfer, water treatment and water storage activities increase, we expect inventory suppliers to witness a higher demand from these projects. The desalination process still required tremendous modifications and overall improvements to reduce the impact on environmental hazards. Limited water supply will continue to drive the need for new desalination plant capacity addition in the Asia Pacific, Africa and Middle East regions. ITG suppliers must keep a watch out for developments within this space over the next few years.
For more information on this topic, watch out for our upcoming report on Global Electronic & Mechanical Inventory Tank Gauge 2016 Report in July 2016. Please contact VDC Research for more information, subscription to our Industrial Automation & Sensor Practice.