Mena non-destructive testing market to top $1.3bn
New oil and gas as well as power generation projects is accelerating the need for non-destructive testing (NDT) inspection services in the Mena region, boosting the market revenues from $796.4 million in 2014 and estimates this to reach $1.31 billion in 2019, a report said.
Despite pressure on global oil prices and fears of a slowdown, the Middle Eastern oil and gas industry is expected to remain robust, offering immense growth opportunities for the NDT inspection services market.
Saudi Arabia will be the biggest market and grow at a compound annual growth rate of 11.6 per cent over the next five years, added the new report Beyond BRIC—Strategic Analysis of the Middle East and North African NDT Inspection Services Market released by Frost & Sullivan, a growth partnership company.
The Brent crude oil price, against which the Mena countries benchmark their oil industry, has remained high since 2011. As a result, oil and gas companies have earned significant revenue and duly invested back in infrastructure development.
“A number of new construction projects were announced between 2012 and 2014, benefitting the NDT inspection services market since an average of one percent of the cost in any new construction project can be attributed to NDT inspection,” said Nikhil Jain, measurement and instrumentation senior research analyst at Frost & Sullivan.
“In addition, the growing focus on safety in the oil and gas industry is driving the demand for NDT inspection services in Mena.”
An important trend in the market is the increasing competition based on price. The influx of Korean and Indian NDT inspection service providers has caused average prices to decline to historically low levels, affecting profits.
For instance, companies such as S&K Engineering (www.skengineering.net), Samsung Engineering (www.samsungengineering.com) and Hyundai Engineering (www.hec.co.kr) have recently won contracts for mega construction projects by quoting extremely low prices. To maintain a healthy profit margin, they then source products and services from less expensive Korean companies.
Educating customers on the importance of quality over price will be vital to succeed in this competitive market. Participants must also explore the possibility of providing advanced NDT services to offset low profit margins, the report said.
“Competition in the advanced NDT services segment is far lower than for conventional services,” noted Jain. “Hence, service providers offering sophisticated solutions can charge a premium and boost revenues in the Mena market.” – TradeArabia News Service
This story originally appeared at tradearabia.com
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