DEMAND FOR WELDING CONSUMABLES INCREASES IN EUROPE
Listen up, welding companies: “One stop shopping” for all welding needs can be a key strategy to penetrate and grow in this market.
Posted: July 1, 2010
The European welding consumables market has been on the road to recovery this year, after the economic downturn. Increasing installations of wind turbines in Spain, Germany, France, Italy and the United Kingdom will continue, stepping-up the demand for wires and electrodes. There will be greater investments in automotive and construction in the long term, boosting the demand for welding consumables.
New analysis from Frost & Sullivan, Strategic Analysis of European Welding Consumables Market, finds that the market earned revenues of $983.4 million in 2009 and estimates this to reach $1,139.5 million in 2016. The welding products covered in this research service are stick electrodes, solid wires, flux-cored wires, and submerged arc welding (SAW) wires and fluxes.
"Consumption of steel is expected to rise due to the restocking of depleted inventories along with the new demand spurred by the energy and automotive sectors," says Frost & Sullivan Senior Research Analyst Archana Chauhan. "This increase indicates a spurt in welding activities and thereby a rise in the demand for the welding consumables."
However, the spectrum of competition in this market ranges from the highly competitive markets, where there are many sellers and each has little or no control over the product price, to fairly less competitive for niche consumables. Therefore, there is a lack of product differentiation. Additionally, increasing customer service requirements pose a major challenge for European welding manufacturers. Customer satisfaction is essential in building long-term, profitable relationships, which lead to customer loyalty and repeat business.
"With escalating raw material prices, competition from Asian manufacturers, and low profit margins, several manufacturers are unable to provide effective customer services such as efficient packaging, after-sales service, and expert guidance to their customers," explains Ms Chauhan.
Welding consumables manufacturers can differentiate themselves and increase their profit margins by providing rapid and on-time delivery, higher alloys of consumables that present higher productivity, better packaging and marketing, and a reduced average production cost.
"A one-stop-shop for all the welding needs can be one of the key strategies to drive the growth and penetration of welding companies," concludes Ms Chauhan.
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