PRZOOM - /newswire/ -
Palo Alto, CA, United States, 2006/11/03 - New analysis from Frost & Sullivan, North American Enclosed Gear Drives and Gear Motors Markets, reveals that revenues in this market totaled $1.17 billion in 2005 and projects to reach $1.55 billion in 2012..
The material handling mining industry is one of the biggest industries where gears are used. The growth in the mining industry particularly in the iron ore, copper and coal mining helps in the overall growth of the market.
Iron ore, copper, coal and steel production have all seen huge growth. Although there is growth of revenues in the market, the profits still remain very low for some of the manufacturers. Many companies are shifting towards better manufacturing techniques and cost saving production processes. The cumulative growth rate for the years 2005 and 2006, is predicted to be approximately 6.5 percent. The price of steel is supposed to carry an upward trend until the end of 2006.
With raw material prices going up, the price of manufacturing has also gone up. Owing to this, the price of the products and total revenues of the market have also gone up. The increase in raw material prices in the last few quarters has increased the revenues of the market and is driving the market ahead although the profit margins remain low.
New analysis from Frost & Sullivan, North American Enclosed Gear Drives and Gear Motors Markets, reveals that revenues in this market totaled $1.17 billion in 2005 and projects to reach $1.55 billion in 2012.
“Global competitors, particularly from East Europe and East and South Asia are offering products at a lower price within the North American market,” says Frost & Sullivan Mechanical Power Transmission Team Leader Bhavdeep Singh Virdee. “Although the quality of the products is not up to the standards of the manufacturers they are seeking out the large original equipment manufacturers (OEMs) that buy large volumes of units in a single order.”
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The strength of the U.S. dollar (in comparison to the local currency) adds to the advantage of foreign manufacturers. They are able to produce their products at a lower cost and then sell them in North America, where they can get a better selling price. It allows them to undercut the selling price of domestic manufacturers while still providing them with higher profit margins.
One of the key restraints in the market is that the original equipment manufacturers (OEMs) customers of gear drives and gear motors manufacturers are moving out of North America by establishing production facilities in other places; such as South Asia and South East Asia. This is attributed to OEM's strategies of reducing production costs to increase profit margin, and also to their efforts towards increasing their customer base, penetrating new markets and new geographical regions.
“The OEMs have split their production operations between North America and other continents, hence reducing their production facilities in North America,” says Virdee. “This has resulted in reduction of demand for the gear drives and gear motors in North America. Though the pace at which they are shifting is not very swift, this is still considered a serious restraint to the market.”
North American Enclosed Gear Drives and Gear Motors Markets, part of the 9406-A5 subscription, offers a comprehensive analysis of the North American mining machinery (both surface and underground) and mineral processing machinery (crushing, screening and pulverizing) market. It also discusses the various market trends and opportunities while providing in-depth analysis of market share, drivers and restraints. It also includes opportunity analysis and revenue forecasts that can assist participants in capturing market share. Executive summaries and interviews are available to the press.
Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.