The Hindu Business Line : `Distribution control systems market set to cross $450 m by 2009'

THE distribution control systems (DCS) market in India is projected to grow at a compounded annual growth rate of 17.4 per cent over the next five years taking it from $205 million in 2004, to past $450 million in 2009, according to the ARC Advisory Group study.

This is based on the fact that most manufacturing companies in India are operating close to full capacity coupled with rising consumer demand and capital spending by the manufacturing industry. In most industry verticals, including chemical and petrochemical, electric power, oil and gas, and metals, many greenfield projects are coming online that will continue to spur the DCS market growth for the next several years.

"The DCS market has witnessed a dramatic upturn in 2004 resulting in an upward rescaling of our five year growth estimates, and we believe that the market will continue to grow rapidly through 2009," according to the ARC Research Director, Process Industries, Mr Larry O'Brien, and their Senior Analyst, Mr S.R. Venkatapathy, the authors of ARC's Distributed Control System India Outlook Study.

"Some of the global suppliers, such as Honeywell and Yokogawa, attracted by the Indian DCS market growth prospects have converted their joint ventures in the country into wholly owned subsidiaries," the report stated.

The electric power industry will continue to remain a large user of DCS. As the economy expands, the demand for electric power will continue to increase. Demand for electric power outstrips supply by about 7 to 8 per cent. Coal-based generating plants constitute close to 65 per cent of generating capacity and this share is expected to remain in that range in the next five years. During this period, generating capacity will increase by about 40,000 MW. With coal fired electric power generating plants using DCS extensively, DCS market growth is assured.

The Electricity Act 2003 will positively influence private participation in the growth of the electric power industry, the report noted.

Nuclear power generation capacity in the country is set to increase by 4000 MW in the next three years and by another 5000 MW by 2012. In India's scheme of things, nuclear power emerges as a serious alternative source of energy. With nuclear power plants using DCS extensively, rising investments in this sector bode well for the DCS market. The challenge for DCS suppliers will be to establish that they have the necessary engineering wherewithal to meet these requirements.

Founded in 1986, ARC Advisory Group is considered a thought leader in manufacturing and supply Chain solutions.

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