A report from analysts at research firm GlobalData states that China will show the greatest need for power boilers between now and 2020, with its market value expected to grow from $10bn last year to $21.51bn.
GlobalData adds that “since the power boiler industry in North America and Europe is maturing, manufacturers are increasingly looking to the Asia-Pacific, Middle East and African regions to expand their businesses”.
Swati Singh, GlobalData’s power analyst, said: “China’s rapid industrialisation has created more space for electricity demand in the country, which has resulted in many new power plant developments. The low cost of power boilers in China is another reason for the high sales across the country.”
According to the report, a further driver of the boiler boom is the liberalisation and privatisation of the electricity industry.
“Privatisation is regarded by governments as a method for developing national infrastructure,” adds Singh. “Governments are also seeking strategic partnerships and investments from foreign OEMs in order to develop their domestic power markets.”
However, Singh warned that increasing price competition could restrain future growth for the boiler industry.
“In the utility sector, price is the major factor in the decision to award contracts for boiler installations. This is forcing manufacturers to compete based on price, which in turn has a negative effect on market growth and innovation.
“Another major trend is the installation of multiple boilers, whereby utility companies install several smaller and more economical boiler units as opposed to fewer, larger and more powerful units. This subsequently forces large boiler manufacturers to sell at constant prices due to the level of competition.”