Vcp market demand sidf presentation jan 2013

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Brief summary presentation of theStrategic VCP demand in the GCC for the next 5 years and beyond.

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Vcp market demand sidf presentation jan 2013

  1. 1. Vitrified Clay Market GCC STRATEGIC PLAN 2013-2017 SS VCP STRATEGIC PLAN 2013-2017
  2. 2. WHY CLAY PIPES?• Vitrified clay pipes (VCP) have been used for over 6000 years• Clay pipes are chemically resistant.• They have high crushing strengths• VCP is lay and forget piping system SS VCP STRATEGIC PLAN 2013-2017
  3. 3. MARKET DATA• In 2011 some 195,000t was sold in the GCC worth SR280 million• Average price per tonne SR1435• Actual demand was considerably greater than ability to supply. National Water Company (NWC) and Directorates say their need for clay pipes in the Kingdom was for 262,000t worth SR350 million• By 2017 the demand will have expanded to 410,000t. SS VCP STRATEGIC PLAN 2013-2017
  4. 4. SOME MARKET FACTORS• Saudi Government prioritizes completion of sewage networks• Ministry of Water & Electricity announces the need for an investment of SR 350billion in sewage networks over the next 20 years• Population of GCC due to double in 25 years- – Increased demand for housing/schools/hospitals and therefore infrastructure and sewage networks.• FIFA WORLD CUP 2022 in Qatar SS VCP STRATEGIC PLAN 2013-2017
  5. 5. DEMAND DATA NWC VCP REQUIREMENT FOR RIYADH TONNES 2012-2017 (2017 ESTIMATED)DIAMETER 2012 2013 2014 2015 2016 2017DN200SS 7018 7720 8492 9341 10275 11303DN200ES 10191 11210 12331 13564 14920 16412DN250SS 396 436 480 527 580 638DN250ES 582 641 705 775 853 938DN300SS 252 277 304 335 368 405DN300ES 381 419 461 508 558 614DN350ES 656 721 794 873 960 1056DN400ES 1167 1284 1413 1554 1709 1880DN450ES 806 886 975 1072 1180 1297DN500ES 2134 2347 2582 2840 3125 3437DN600ES 2260 2486 2735 3008 3309 3640TOTAL 25843 28428 31270 34397 37837 41621% CHANGE 10 10 10 10 10AVERAGE TONNES /km 58.3 58.3 58.3 58.3 58.3 58.3 SS VCP STRATEGIC PLAN 2013-2017
  6. 6. DEMAND DATA NWC VCP REQUIRMENT FOR JEDDAH TONNES 2012-2017 (2017 ESTIMATED)DIAMETER 2012 2013 2014 2015 2016 2017DN200SS 1186 1825 8213 11388 8943 9837DN200ES 1723 2650 11925 16536 12985 14284DN250SS 0 0 0 0 0 0DN250ES 0 0 0 0 0 0DN300SS 0 0 0 0 0 0DN300ES 4230 6110 37130 50760 36660 40326DN350ES 0 0 0 0 0 0DN400ES 2850 4200 21750 30000 22500 24750DN450ES 0 0 0 0 0 0DN500ES 1824 2508 15504 20748 15960 17556DN600ES 1525 2440 12810 16775 12200 13420TOTAL 13338 19733 107332 146207 109248 120172% CHANGE 48 444 36 -25 10AVERAGE TONNES /km 93.9 93.1 97.6 96.8 95.8 95.8 SS VCP STRATEGIC PLAN 2013-2017
  7. 7. DEMAND DATA NWC VCP REQUIREMENTS FOR MAKKAH TONNES 2012-2017 (2017 ESTIMATED)DIAMETER 2012 2013 2014 2015 2016 2017DN200SS 0 0 4380 3609 913 821DN200ES 0 0 6360 5240 1325 1193DN250SS 0 0 0 0 0 0DN250ES 0 0 0 0 0 0DN300SS 0 0 0 0 0 0DN300ES 11062 8519 33582 20597 4451 4006DN350ES 0 0 0 0 0 0DN400ES 2411 776 2925 2396 488 439DN450ES 0 0 0 0 0 0DN500ES 1507 632 2998 2930 274 246DN600ES 1571 1297 1998 1208 305 275TOTAL 16551 11225 52242 35980 7755 6979% CHANGE -32 365 -31 -78 -10AVERAGE TONNES /km 113.7 109.2 82.1 80.0 75.4 75.4 SS VCP STRATEGIC PLAN 2013-2017
  8. 8. DEMAND DATA NWC VCP REQUIREMENTS FOR TAIF TONNES 2012-2017 (2016/2017 ESTIMATED)DIAMETER 2012 2013 2014 2015 2016 2017DN200SS 2975 591 712 1500 1649 1814DN200ES 4320 858 1034 2177 2395 2635DN250SS 0 0 0 0 0 0DN250ES 0 0 0 0 0 0DN300SS 0 0 0 0 0 0DN300ES 3190 1656 373 1319 1451 1596DN350ES 0 0 0 0 0 0DN400ES 2263 725 297 980 1077 1185DN450ES 0 0 0 0 0 0DN500ES 2381 548 291 1377 1515 1666DN600ES 1865 366 223 743 817 899TOTAL 16995 4745 2929 8096 8905 9796% CHANGE -72 -38 176 10 10AVERAGE TONNES /km 74.3 81.2 62.4 72.8 72.8 72.8 SS VCP STRATEGIC PLAN 2013-2017
  9. 9. DEMAND DATA DIRECTORATES PIPLINES TONNES NEEDS FOR VCP 2012-2017 2012 2013 2014 2015 2016 2017RIYADH 16902 16902 16902 16902 16902 16902MAKKAH 20564 20564 20564 20564 20564 20564MADINAH 8451 8451 8451 8451 8451 8451QASSIM 15024 15024 15024 15024 15024 15024ASIR 18780 18780 18780 18780 18780 18780NAJRAN 4695 4695 4695 4695 4695 4695BAHA 32865 32865 32865 32865 32865 32865JAZAN 8169 8169 8169 8169 8169 8169EASTERN PROVENCE 17841 17841 17841 17841 17841 17841HAIL 32865 32865 32865 32865 32865 32865NORTHERN BORDER 5540 5540 5540 5540 5540 5540TABUK 4695 4695 4695 4695 4695 4695JOUF 3380 3380 3380 3380 3380 3380TOTAL DIRECTORATES 189772 189772 189772 189772 189772 189772 SS VCP STRATEGIC PLAN 2013-2017
  10. 10. MARKET SIZE 2012-2017 DEMAND TONNES 2012-2017 2012 2013 2014 2015 2016 2017TOTAL DIRECTORATES 189,772 189,772 189,772 189,772 189,772 189,772TOTAL NWC 72,727 64,131 193,774 224,680 163,744 178,568REST OF GCC 31,000 33,000 35,000 37,000 39,000 41,000TOTAL TONNES 293,499 286,902 418,546 451,452 392,516 409,340 Source: Directorates/NWC and Market intelligence- ISBC Report Note: KSA tonnage based on size range DN200-600mm diameter pipes SS VCP STRATEGIC PLAN 2013-2017
  11. 11. COMPETITION SVCP Strengths• The largest installed capacity at 185ktpa• The oldest and are well established• Can be considered a truly one stop shop• Have defended clay pipes really well• Can call on German partners to supply extra volume. Weaknesses• Still not achieved all capacity of new facility• Monopoly supply situation and therefore influences market approach SS VCP STRATEGIC PLAN 2013-2017
  12. 12. COMPETITION CPC Strengths• Installed capacity of 60 000t• Modern plant• Now in 3rd full year of operation• Have already been approved by SASO and Ministry Of Water & Electricity Weaknesses• Not yet fully operational- Delays and extra loans affecting costs & margins.• Only approved for sizes DN200 and DN300 grade A and B• No know how technical partners• In the throws of re-organizing its– likely to cause further delays as new team takes time to gel. SS VCP STRATEGIC PLAN 2013-2017
  13. 13. Competition Sweillem-Egypt Strengths• Have over 25 years manufacturing experience• Capacity of 50ktpa- output 40ktp• Excellent product quality ( have coveted MPA approval).• Excellent hands on technical expertise in the family from all generations. Weaknesses• Limited GCC market penetration- Sell mainly in Western area.• Poor image in some KSA regions SS VCP STRATEGIC PLAN 2013-2017
  14. 14. AICCP Strengths• Installed capacity of 60,000t• Plan to manufacture in last quarter of 2013• Will have know how from Sweillem• 2014 output will be 15,000t• Can start trading straight away with Sweillem pipes or semi finished products• Own mine for clay Weaknesses• Delays in completing the project• No Natural Gas supply may cause cost disparity. SS VCP STRATEGIC PLAN 2013-2017
  15. 15. Bench Marking-Competition Extruder Information Extruder Installed Capacities Extruder Output Efficiency No: Pipe Extruders Installed Capacity000s t/a Actual Output 000s t/a Output / Extruder 000s t/a Capacity /Extruder 000s t/a % Efficiency 140 185 80 76 50 60 60 40 40 50 50 26 20 20 20 20 15 13 10 10 8 10 10 7 6 5 5 4 3 2 4 5 2 000 SS VCP STRATEGIC PLAN 2013-2017
  16. 16. Table showing supply versus demand Estimated Outputs/Sales YEAR 2013 2014 2015 2016 2017 SVCP 190,000 190,000 195,000 195,000 195,000 CPC 25,200 45,000 60,000 60,000 60,000 AICCP 5,000 15,000 45,000 60,000 60,000 SWEILLEM 5,000 0 0 0 0 TOTAL Supply 225,200 250,000 300,000 315,000 315,000 SHORTFALL/SURPLUS -61,702 -168,546 -151,452 -77,516 -94,340 Source: NWC, Directorates and market estimates ISBC report. Note: KSA demand is based on sizes DN200-600mm SS VCP STRATEGIC PLAN 2013-2017
  17. 17. DEMAND V SUPPLY GAP GAP ANALYSIS OF MARKET DEMAND V SUPPLY OF VCP 2013-2017500000450000400000350000300000250000200000150000100000 50000 0 1 2 3 4 5 YEAR TOTAL TONNES SUPPLIED SHORTFALL SS VCP STRATEGIC PLAN 2013-2017
  18. 18. BEYOND 2017 The next graph shows that there is a strong demand for VCP up to 2026.3 scenarios are given1. NWC 10% Growth figures,2. Growth in line with economic estimates at 6.6%3. No Growth SS VCP STRATEGIC PLAN 2013-2017
  19. 19. Graph of Demand beyond 2017 Conservative growth at 6.6% v NWC 10% rate as forecast for Riyadh 2010-2026 and no growth 2000 Thousands 1800 1600 1400 1200 1000 800 600 400 200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 year Tonnes at 6.6% growth tonnes at approx 10% growth incl GCC tonnes if no Growth incl GCC Source NWC SS VCP STRATEGIC PLAN 2013-2017
  20. 20. DEMAND V SUPPLY GAP GAP ANALYSIS OF MARKET DEMAND V SUPPLY OF VCP 2013-2017500000450000400000350000300000250000200000150000100000 50000 0 1 2 3 4 5 YEAR TOTAL TONNES SUPPLIED SHORTFALL SS VCP STRATEGIC PLAN 2013-2017
  21. 21. Conclusions• There will be a shortfall in supply by 60,000t in 2013• In 2014 the shortfall will be 168,000t.• NWC and contractors welcome competitionIt is, therefore, my considered opinion that the market can easily support a 3rd manufacturer. SS VCP STRATEGIC PLAN 2013-2017

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