Pumps perform two key functions – the transfer of liquids from one system to another and the circulation of liquids within a system. Some of the key components that determine the configuration of pumping systems are pumps, prime movers (electric motors, diesel engines or air systems), piping, valves (to control flows in the system), other fittings, controls and instrumentation, and end-use equipment.
Pumps are generally classified into positive displacement and dynamic pumps based on the type of operating principle. Displacement pumps can be subclassified as rotary and reciprocating pumps, while dynamic pumps can be centrifugal and special effect pumps.
The Indian pump market can also be segregated on the basis of end- use. The main sectors in which pumps are used are agriculture/irrigation, building services, water, wastewater/sewage management and industrial uses (power, oil and gas, metals and mining, etc.).
Market size and growth
The Indian pump sector provides one of the highest net value additions (over 20 per cent) in the engineering sector. The industry has witnessed significant growth in the past few years. It has matured significantly and its domestic sales are increasing at a rate of 16-18 per cent per annum. According to industry estimates, India produces about 4.5 million pumps per annum. The market for pumps is already worth Rs 90 billion-Rs 100 billion and has around 800 manufacturers making pumps of different capacities.
Indian pumps and valves are exported to more than 100 countries across the globe. The present market scenario suggests that export growth is likely to double in the next two years. India’s key export markets include the Middle East, North Africa, the US, Germany, Russia, China and Latin America.
With regard to imports, Indian pumps are sourced from the US, China and France. Availability of low-cost models makes local manufacturers competitive and this has limited the inroads by Chinese products, especially in the agricultural sector. Also, the lack of adequate after-sales service has restricted the acceptance of Chinese supplies by industrial sectors.
Most of the pump market, about 95 per cent, comprises centrifugal pumps, while the remaining 5 per cent are positive displacement pumps. Agriculture and building services comprise the major portion of demand at 46 per cent of the market in terms of value, while the rest of the infrastructure sector together constitutes the remaining 54 per cent.
Going forward, the market is expected to grow at a compound annual growth rate of 10 per cent. The domestic market for pumps is expected to touch Rs 130 billion-Rs 140 billion by 2017-18.
Industry structure and key players
There are over 800 domestic pump manufacturers and the industry employs over 120,000 people. Almost 95 per cent of the country’s demand is met by domestic pump manufacturers and about 5 per cent through imports. Thus, both Indian and foreign players play a role in the local market.
The pump industry comprises a few large players – both Indian and multinational companies (MNCs) – and many small and medium enterprise (SME) players. Some domestic SMEs have entered foreign markets like Egypt, the US, West Asia, Greece and Italy, while MNCs have either entered into joint ventures or made direct investments in the Indian market.
Some of the larger Indian players like Kirloskar, CRI Pumps, Texmo Industries, Jyoti Pumps, WPIL Limited and Flowmore have a considerable footprint in the pump market, and offer customised solutions to different segments. The pump industry is seeing change as well as consolidation globally. Major international players are seeing growth prospects in the Indian market and are thus seeking to increase their presence.
Foreign companies like KSB Pumps, Grundfos Pumps, Wilo AG and Flowserve Corporation are already active in India and are leaders in industrial pumping systems. In addition, several medium-sized players like Shakti Pumps, Falcon Pumps, Roto Pumps, Kishor Pumps, Sharp Pumps, Suguna Pumps and Aqua Sub Pumps also have significant market share in the Indian pump industry.
One of the biggest challenges faced by pump manufacturers is the unpredictable business scenario which makes it difficult for them to maintain a certain level of inventory. This is especially relevant to micro, small and medium enterprises. Besides, site conditions across different states with regard to voltage bands, water levels and quality of fluids makes it difficult for pump manufacturers to adhere to actual standards. Another big challenge is the lengthy approval process for certification which varies from department to department across states. Other issues include poor selection of pump sets with respect to head and discharge as well as poor maintenance practices.
Focus on energy efficiency
Despite several challenges, pump manufacturers in the country are undertaking continuous improvments to enhance productivity, quality and service. There is significant engineering expertise in pump manufacturing, and as a result, industry players, especially leading manufacturers, are able to offer a wide variety of efficient products.
Currently, the average efficiency of inefficient, non-star rated pump sets is in the range of 25-30 per cent, while that of star-rated energy-efficient pump sets is 40-45 per cent. However, there is huge scope for improvement. According to the Indian Pump Manufacturers’ Association, there is a potential of 20 per cent savings by mere replacement of inefficient pum psets by star-rated ones.
Since the Indian pump business accounts for just about 5 per cent of the global pump market, there is huge scope for business expansion. Also, India is one of the world’s fastest growing economies and is all set to surpass China to become the market leader in Asia. The government’s Make in India initiative has already attracted several investors in the pump sector, and this is likely to significantly boost India’s standing in the world market.