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May 27, 2002

4 Min Read
Market Snapshot: Industrial


High-temperature engineered materials are often chosen for industrial applications, such as this front-opening unified pod from Entegris Inc. (Chaska, MN). The pod is designed to transport wafers between process tools during the manufacture of integrated circuits.

Like most other industry segments, the industrial markets have felt the slowing economy through lower demand for components. However, industrial is holding its own and seeing some comeback, and major players in the industrial marketplace are hopeful.

Kevin Jennings, gm at Victrex USA Inc. (West Chester, PA), confirms that the past year has been a challenge economically. "However, it differs from market to market," he adds. "Some markets have been very tough, mirroring the semiconductor industry, which is off significantly from 1999 and 2000. Applications related to aerospace and aircraft have been very tough as well."

Some markets that are positive and where Jennings sees continued growth include a broad array of industrial applications in areas of downhole drilling for oil and gas, chemical processing, and HVAC. "All of these to some degree move with energy prices, and those have been high," he adds. Victrex manufactures Peek, the trade name for a polyaryletherketone engineering thermoplastic used in highly specialized industrial applications.

Growth in Filtration
Vern Meurer of Con-Tech Plastics in Brea, CA says that like everything else, business has been depressed, but he says orders are picking up among customers in the water filtration, power transfer, and commercial refrigeration industries. Con-Tech operates 11 injection molding presses and has about $3 million in annual sales.

The industries Con-Tech serves are fairly stable. According to a report from the Freedonia Group (Cleveland, OH), world demand for commercial refrigeration equipment, an $18.6 billion industry, will grow more than 6 percent annually through 2004.

Also, water, especially purified and bottled water, is big business—and getting bigger. Today, bottled water is a $3.5 billion market. The industrial corollary here is in water filters. The consumer water filter segment of the fluid filter market is one that is expected to grow as concerns over water quality increase, notes a Freedonia Group report. In fact, the fluid filter market is expected to surpass motor vehicle filters as the largest segment for high-efficiency membranes. The filter market overall—a $7 billion industry—is expected to grow 4.8 percent annually through 2005, according to the Freedonia Group.

Also in this arena is Pall Corp., which recently announced the opening of a 75,000-sq-ft Life Sciences filter manufacturing facility in Hauppage (Long Island), NY to support demand for filters used in fluid filtration for medical equipment and other applications. Pall makes a variety of filters for contamination control for industrial fluid systems, pharmaceutical, semiconductor, separation products for the laboratory, and health care device applications.

Pumps and Connectors
A little further up the chain, industrial pumps are expected to grow by 4.1 percent annually through 2005. This includes pumps for chemical, food, and beverage applications. Currently the pump industry is valued at $6.2 billion.

Close to the pump industry is the market for industrial valves, which, according to a Freedonia report, is expected to be a $12 billion market by 2004. Growth here is supported by gains in the public utilities market, especially in electricity generation, safety and relief valves, control valves, and regulator valves.

The commercial connector market is coming back to some degree. Mastercraft Cos., based in Phoenix, AZ, molds more than 100 part numbers for a division of Tyco International. Jeff Davison, operations manager for Mastercraft, says that business is showing signs of life. "Slowly, but it is picking up," he says.

Victrex's Jennings adds that he's not seeing much growth in general connectors, but there is a growing demand in high-heat connector applications and connectors that require chemical resistance. "Business in this arena has been strong and looks to get stronger in the future," he says.

The good thing about molding for the industrial segment, says Con-Tech's Meurer, is that molders are not greatly threatened by offshore or Mexican competitors. "The parts we mold for industrial customers tend to be lower-volume, higher-quality types of parts that wouldn't see much benefit by moving offshore," he says.

Jennings concurs. Because many industrial applications tend to use higher-end materials such as PEEK and polyimides, there are fewer molders that can process these materials. "Many molders haven't developed the expertise in molding these high-temperature engineering resins," says Jennings. "The good news is you hang onto the business, because you can't be displaced very easily."

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