Companies must capitalise on huge growth potential of flow products

Posted on 7 Nov 2013 by Tim Brown

Valued at an estimated $70bn per year, the global flow products market is a rapidly growing sector but, despite this, British companies are yet to fully exploit the opportunities presented to them.

With products servicing the oil and gas, power, pharmaceuticals, food manufacturing, chemicals and other process industries, UK flow products manufacturers have a fantastic opportunity to access a broad and growing marketplace.

Flowproducts, such as valves, pumps and actuators, control the release of gas and fluids in a wide range of industrial applications. These smaller parts are integral to the successful operation of plants and processes in many sectors, representing a highly profitable marketplace for those involved.

For example, in the pharmaceuticals sector, containment valves are used in ultra-high purity production applications. Whilst a valve is only a small part of the overall process, its failure can have a detrimental and expensive impact on wider plant operations.

“The end-users of these products range from the likes of AstraZeneca and BP, so the market is enormous for British companies looking to exploit export opportunities offered by the flow products sector,” said Constantine Biller, partner and industrials specialist at Clearwater Corporate Finance.

“Emerging economies, such as those in the Far East and Latin America, see the quality of UK products and recognise their value for their domestic operations. In terms of skill and expertise, UK flow products manufacturers are world leaders and produce specialist, highly-engineered products to the highest of standards. This has proven extremely lucrative for privately-owned UK valve manufacturers such as Severn Glocon and Oliver Valves, which are currently enjoying high levels of export success.”

As a result of flow products acting as essential components of most production processes, there is also an increased appetite from private equity players to invest in these businesses.

At the lower end of the market, venture capital company Enterprise Ventures recently invested in ChargePoint Technology, a supplier of precision containment valves. This is a prime example of a small UK business taking advantage of global growth opportunities by developing best-of-breed flow products for demanding industrial applications. Another example in the mid-market is Phoenix Equity Partners’ £75m buy-and-build investment into Signum Technologies, a producer of offshore flow control products, which will provide the company with the capacity to acquire further niche flow products businesses.

With international acquisitions high on the agenda, there are plenty of opportunities for British flow product companies to step out into the global marketplace and accelerate growth.