With demonetisation & GST effect waning and the spend on infrastructure increasing, the fluid power industry, especially the mobile hydraulics, is likely to witness remarkable expansion in the coming years.
The fluid power industry is experiencing a robust growth aided by the rising demand for construction equipment in the infrastructure projects and steady need from other sectors. The fluid power industry has three large segments - mobile hydraulics, industrial hydraulics and pneumatics. Historically, the mobile hydraulic segment has been the largest, accounting for about 50-60 percent of total fluid power sales, while industrial hydraulic and pneumatic segments are nearly of the same size.
The current global fluid power market is estimated at about $25 billion. While Asia accounts for over 40 percent of the global fluid power market, India's share, however, is about 4 percent with estimated turnover of Rs 6000 crore. Looking at the GDP growth of India, the country will be one of the growth engines of Asia Pacific.
According to the Fluid Power Society of India (FPSI), of the total fluid power market in India, the pneumatic sector accounts for approximately Rs 1,600 crores. There is a large unorganised sector comprising of over 30 percent of the market share.
The industry had two remarkable periods of growth in the last 14 years. The average annual growth rate between 1987 and 1990 was 9.5 percent. Between 1993 and 1995, annual growth averaged 12 percent. These high rates resulted primarily from growth in existing markets, but the introduction of electrohydraulic and electropneumatic technologies opened up new market, such as active suspension on automobiles and reestablished the industry in older markets, such as robotics, that had been lost to exclusively electronic technology in the early 1980s.
Currently the industry is experiencing growth of about 10-12 percent, aided primarily by rising demand from the construction equipment industry. “After a lull over the past two years, the fluid power industry is seeing an expanding market and a steady growth now. We expect it to continue growing at 10-12 percent per annum, over the next three years,” says B Seshnath, CEO & Managing Director of Walvoil Fluid Power India.
Mobile hydraulics on the move
Quality, cost and delivery are the three parameters for success in the fluid power industry. Of the three large segments - mobile hydraulics, industrial hydraulics and pneumatics, mobile application is witnessing high growth potential. Mobile hydraulics requires more precaution, stringent design and high maintenance (compared to industrial hydraulics).
Though high-end components such as filter, valves, etc are still being imported, Indian manufacturers, indigenously or through tie-up with overseas companies, are fully able to meet the requirement in industrial applications. In addition to material handling equipment, consumption of industrial hydraulics is high in the machine tools industry.
Infrastructure development and power generation are crucial to keep India’s long term growth story intact, thereby stimulating growth prospects of the hydraulic equipment market. Various sub-segments of hydraulic equipment market are cylinders, pumps and motors, valves, power packs and accessories.
The hydraulic system plays a key role in the smooth operation of construction machineries. Hydraulic equipment operates with the help of a vast range of valves, pumps, filters and actuators. The hydraulic system includes parts such as cylinders, control valves, motors, engines, pumps, seals and packing, tubes, etc.
The mobile hydraulic industry is majorly dependent on its OEM customers from industries such as construction, agriculture, mining, etc. With the government initiatives to give a push to these sectors, the industry is hoping for an improved performance in 2017. To tap these opportunities, some OEMs are upgrading their products and working towards introducing new machines in the market.
Over the last couple of years, Indian manufacturers of construction, agriculture and mining equipment have started exporting to other countries. This trend is likely to continue in the future, providing more opportunities for the fluid power companies, especially
those offering high-tech electro-hydraulic systems.
Major equipment manufacturers are now keen on design improvements with special attention on reduced operational cost, improved machine performance by reducing fuel consumption, and low overall life-cycle cost of the machine. The equipment manufacturers and end-users are looking for complete solutions which can give them lower operating cost, higher productivity, ease of operations and reliability. In order to meet these customer needs, the entire hydraulics industry is graduating up the value chain from being just components suppliers to a sub-system supplier to a complete system solutions provider.
In future, the focus is anticipated to shift from components to integrated system solutions that merge hydraulics and electronics in increasingly innovative ways. The products from this kind of integration will combine the intelligence of electronics with the power density of hydraulics and enable all advanced applications.
Pneumatics: Going strong
Pneumatics is widely used today, despite the immense capabilities of hydraulics to move higher loads and its usage in other industrial utilisation. Pneumatics uses pressurised gases to generate mechanical motion, which is then used to perform engineering tasks. On the other hand, hydraulics uses pressurised fluids to execute a mechanical task. Some of the commonly seen hydraulics based machines are hydraulic presses, hydraulic hoppers, hydraulic cylinders, and hydraulic rams.
Air brakes in buses, air compressors, compressed air engines, vacuum pumps, jackhammers, etc are some of the commonly used mechanical equipment that are based on pneumatics. In addition to mining and general construction works, pneumatic devices are frequently used in dentistry industry across the world.
Equipment based on pneumatics technology uses pneumatic circuit consisting of active components such as gas compressor, transition lines, air tanks, hoses, open atmosphere, and passive components. Though hydraulics is capable of moving heavier loads (by generating greater force, since its working fluids are incompressible), pneumatic systems require low maintenance & have long operating lives. Since the working fluid of the pneumatic system absorbs excessive force, it causes less damage to equipment. As a viable alternative over hydraulic systems, pneumatic devices are ideally suited to execute low scale engineering and mechanical tasks.
Impact of mechatronics
Rising application of low cost automation (LCA) is likely to give further boost to the fluid power industry. With the advent of low cost automation, usage of compressed air started for low-pressure requirement on the shop floor. LCA finds application in a wide range of activities such as loading, feeding, clamping, machining, welding, forming and packing. It is very useful for process industries manufacturing chemical, oil and pharmaceuticals. Even many operations in food processing are now done by low cost automation system.
LCA reduces manufacturing costs, increases productivity and improves quality as it is tailored to suit existing machines and people working on specific processes. LCA essentially achieves some degree of automation around existing tools, processes and people by using standard components available in the market, along with mechatronics - a highly-specialised application that combines pneumatic and control theory of electronics.
The term ‘mechatronics’, originated at the Yasakawa Electric Company in the 1960s, comes from combining the terms ‘mecha’ (for mechanical) and ‘tronic’ (for electronics). It was used to describe the necessary integration of electrical control with mechanical systems when accuracy and repeatability were needed. Over time, mechatronics has evolved into a multidisciplinary field of science that combines five most recognised areas of engineering – mechanical, electronics, computer, telecommunications and control.
It is said that a mechatronics engineer without proper fluid power knowledge may not have the necessary tools to design the best system. Similarly, the mechatronics technician without fluid power education is ill equipped to maintain, trouble-shoot, or repair even a well-designed system. Hence, as application of mechatronics increases, the demand for the fluid power industry will continue to grow.
New sectors boosting demand
India is also one of the largest importers of conventional defence equipment and about 60 percent of defence related requirements are currently met through imports. As part of its ‘Make in India’ initiative, the Government is now encouraging indigenous defence manufacturing in order to become self-reliant. The opening up of the defence sector for private sector participation is helping foreign original equipment manufacturers (OEMs) enter into strategic partnerships with Indian companies and leverage opportunities in
the domestic market as well as global markets.
With defence sector opening up, there are huge opportunities for the Indian fluid power industry, especially to develop application for marine segment. “The global defence equipment suppliers would prefer to source parts from domestics industry which will lead to the higher requirement of fluid power equipment. To take advantage of this prospect, in addition to established companies in India, international firms, especially from Europe, are expanding their dealership network in the country,” says an expert who has been associated with this industry for last 45 years.
He adds, “The growth is also coming from the government’s efforts to pump in money in infrastructure projects such as roads, airports, construction, etc. This will give lot of scope for the fluid power industry to grow.” Aerospace is another sunrise industry that can give a boost to the Indian fluid power sector.
Though fluid power component industry is majorly mechanical engineering with regard to material science, it is highly precision engineering industry, which raises input, production and investment cost for a new plant. As a result till recently, companies did not invested in setting up manufacturing units in the country to due prohibitive cost. However, with volumes increasing due to growth in demand, many companies are now investing in production unit especially for
The power of fluid
Recent trends in the fluid power industry show massive global waves of consolidation, acquisition and mergers as companies aim to offer a broader range of fluid power products and solutions. Customers too are demanding a ‘total fluid power package of components and systems’.
Growth expectation is high as far as fluid power industry is concern. Unlike other products, fluid power industry in India is a component industry, ie when application grows, the component industry also grows. The industry has been dependent on imported technology all these years; however, with MNCs setting up base in the country and forming joint ventures with local partners, many applications for domestic requirements are now being developed locally.
With the government promising to bring in clarity and transparency in sectors such as mining, housing and infrastructure, the fluid power industry is gearing up for a spur in demand.