Growth by Acquisition: Automation Specialist Metso Targets new Markets
The valves are control valves and actuators – their brands are Neles, Jamesbury and Mapag, but they have recently acquired Valstone Control, a globe valve manufacturer in South Korea. Interestingly, their valve newsletter claims that 60% of the world’s LNG flows through their valves, having supplied projects in most LNG producing areas (See the similar comments from IMI, on page 6). They suggest the valve business operates in a Euro10Bn sector of the Euro44Bn flow control market, which is defined to also include positive displacement and centrifugal pumps – although hopefully these are not areas being considered for other acquisitions!
In their flow control (valve) sector Metso claim #1 position in pulp and paper, #4 in oil and gas, #4 in refining and #6 in chemicals. Their objectives for next year are to grow and develop this business, since they see growth in all main markets: also they plan to gain volume leverage, plus introduce the globe valve ranges from Korea.
Control Systems, Running in the Metso DNA
The process automation systems (PAS) business uses the Metso DNA control system, and is active in a Euro5Bn sector of this Euro25Bn market. This PAS was developed for the pulp and paper industry, where they are #3, and is also used in their power plants, where they consider themselves #9. The current low level of PAS business from pulp and paper has been disappointing, in contrast to the increased business this market provided for valves: the control systems business had to look to new markets for growth, and in 2012 the PAS orders in such new markets were the highest ever.
Future Developments – For Markets in Asia and Beyond
The plan is to further develop Metso DNA, and a JV has been established with Guodian Nanjing Automation covering control systems for thermal power customers in China. In addition there is interest in further developing Metso analytical instruments for use in mining automation.