Chapter Two: Introduction

 

Overview

This study analyzes the ultrasonic flowmeter market worldwide.  Flow Research and Ducker Worldwide conducted the study.  This study includes a technology and product analysis, market share and market size data, and also provides in-depth segmentation of the market by various product and geographic categories.  It also includes detailed market growth projections through 2005 for ultrasonic flowmeters.  Detailed market strategies are provided for suppliers.

 

The methodology for this study consists of a “bottom-up” approach.  Flow-Ducker Research obtained detailed information about the sales volume of ultrasonic flowmeter suppliers.  This information was then compiled into a picture of the total market.  Most of the information for this study was obtained through interviews with the suppliers. 

 

In addition to the supplier research, Flow-Ducker Research conducted a worldwide survey of flowmeter users.  For this research, 300 users were interviewed worldwide, with the following distribution:

·        100 from North America (United States and Canada)

·        100 from Europe (Germany, France, the United Kingdom)

·        100 from Asia (China, Japan, Singapore)

The results of this research are being published as a separate study, called Worldwide Survey of Flowmeter Users.  Goals of the survey were to get an understanding of installed base, to find out user purchasing plans, and to determine what problems users are having with their ultrasonic flowmeters.  Other goals included detecting regional differences in worldwide flowmeters, and providing confirming evidence for the supplier data.  These goals were achieved.

 

While the end-user survey is being published as a separate study, the results were available during the forecasting for this study.  Of particular interest were the information on flowmeter installed base, user purchasing plans, and comments about communication protocols.  This information was taken into account in forecasting growth rates for different types of ultrasonic flowmeters.

 

This study is part of a 12-volume set of studies whose purpose is to completely define and analyze the worldwide flowmeter market.  Sometimes when markets are studied in isolation, it is difficult to achieve accurate results.  By studying the entire flowmeter market at once, Flow-Ducker Research believes that a complete picture of the market can be obtained that is not skewed in favor of one technology or another.  The complete 12-volume set is as follows:

Volume I: The World Market for Coriolis Flowmeters

Volume II: The World Market for Magnetic Flowmeters

Volume III: The World Market for Ultrasonic Flowmeters

Volume IV: The World Market for Vortex Flowmeters

Volume V: The World Market for New Technology Flowmeters (includes DP flow)

Volume VI: Worldwide Survey of Flowmeter Users (results of 297 phone interviews)

Volume VII: The World Market for Open Channel Flowmeters

Volume VIII: The World Market for Positive Displacement Flowmeters

Volume IX: The World Market for Thermal Flowmeters

Volume X: The World Market for Turbine Flowmeters

Volume XI: The World Market for Variable Area Flowmeters

Volume XII: The World Market for Traditional Technology Flowmeters

 

Figure 2-1 lists the different types of new technology and traditional technology flowmeters. 

Study Objectives

This study analyzes the market worldwide.  The objectives of the study are as follows:

·        To provide a technology and product analysis for ultrasonic flowmeters

·        To provide the market size in US dollars and unit volume for ultrasonic flowmeters worldwide

·        To provide market shares of the leading suppliers of ultrasonic flowmeters worldwide

·        To provide a detailed forecast of the market for ultrasonic flowmeters in dollars and unit volume through 2005

·        To provide a detailed OEM and end-user analysis of users of ultrasonic flowmeters worldwide

·        To provide market and product strategies for suppliers of ultrasonic flowmeters worldwide

·        To provide company profiles of the suppliers of ultrasonic flowmeters worldwide

Methodology

This study is unique in that both extensive supplier analysis and end-user analysis was conducted.  This proved very useful, as the end-user analysis provided confirmation for the supplier data.  The end-user analysis also proved very useful in doing market forecasts.  The four most important components of the methodology are as follows:

·        Input for Suppliers

·        Supplier analysis

·        OEM and End-User Analysis

·        Forecasting

 

These four components are discussed in the following sections.

Supplier Input.  At the beginning of the study, many infrared suppliers were contacted to find out what information they would like to see in this study.  Flow Research prepared an Input Questionnaire that asked companies what information they would like to see in the study.  Companies were asked to rank the information in importance on a scale from 1 to 5.  These results were tabulated, and used as a guide in conducting the study.  The Input Questionnaire is reprinted in Appendix A.

 

Suppliers were asked in the Input Questionnaire to rank in importance questions that would be asked in the end-user survey.  They were also asked to specify any questions or subjects they would like to have included in the end-user survey.   Flow Research conducted some follow-up interviews with suppliers to obtain some additional input for the survey.  This entire process was very fruitful, and many suggestions from suppliers were incorporated directly into the end-user survey.

 

Supplier Analysis. Market size and market shares were determined through a variety of methods.  The primary method of determining market size was through interviews conducted with ultrasonic suppliers.  Most companies were quite forthcoming about revenue figures.  Revenue numbers provided by companies were also cross-checked with other sources, including business directories, interviews with other knowledgeable persons, and other publicly available data sources, including Dun & Bradstreet reports.  In many cases, Flow-Ducker Research conducted multiple interviews to get the most accurate understanding of each company.  Every effort was made to obtain the most accurate information possible about each company.

 

Most interviews were conducted by telephone.  However, as part of the research for this study, Flow Research conducted 27 onsite visits to flowmeter suppliers and flow testing laboratories.  These visits were conducted in four separate trips occupying 32 days during 2000 and 2001.  In addition, Flow-Ducker Research visited the International Society for Control and Instrumentation (ISA) in New Orleans, Louisiana in August 2000, where many flowmeter suppliers were represented.  Many flowmeter products were on display at this show.

 

The purpose of the onsite visits was to obtain more in-depth information on flowmeter companies and their products.  Seeing flowmeters in a catalog or in the Internet provides one level of knowledge.  However, seeing flowmeters being manufactured and tested provides a much better understanding of the products.  Visiting companies also provided additional knowledge about company size and strategies, which is helpful in understanding the total flowmeter market.

 

In those few cases where companies chose not to participate in the study, Flow-Ducker Research used alternative sources of information.  These include business directories, interviews with other knowledgeable persons, and other publicly available information sources.  Product information was requested from every company, and the Internet was also used as a source of information, along with Dun & Bradstreet reports.

 

Total market size for ultrasonic flowmeters was determined by aggregating the total sales numbers for individual companies into a total market size.  Most sales information from individual companies was in dollars rather than units, although some companies also provided unit numbers.  Average selling price was used as a means for calculating unit numbers for ultrasonic flowmeters.  Some allowance was made in determining market size for “other” companies that were not interviewed. 

 

In most cases, the persons interviewed for this study are either the product manager or marketing manager for ultrasonic flowmeters.  In some cases, other persons were interviewed, including company presidents or CEOs.   In larger companies, application engineers were interviewed first in some cases to get a better understanding of company products before marketing and product managers were interviewed.  Flow-Ducker Research wishes to thank the many companies who were so diligent in providing information to make this study both comprehensive and complete.

 

OEM and End-User Analysis.  Flow-Ducker Research conducted 300 interviews with OEMs and end-users of ultrasonic flowmeters in compiling the user survey.  One important purpose of the survey was to provide data for determining the installed base of ultrasonic flowmeters by type.  Other questions dealt with applications, projected spending patterns, and levels of satisfaction with ultrasonic flowmeters.  Flow-Ducker Research tried to determine the reasons behind spending plans, whenever possible.  The end-user survey is discussed in more detail in Chapter six.

 

Besides presenting the results of the OEM and end-user survey, Flow-Ducker Research compared the results of the user survey with the supplier data.  The end-user survey data provides supporting evidence for the supplier data.  This greatly strengthens the supplier data, and provides an additional base of support that is lacking in most studies of this type.  By integrating the supplier and end-user data, Flow-Ducker Research is able to present a balanced picture of the market that is supported from several independent perspectives.  This greatly enhances the value of the data presented.

 

Forecasts.  A number of factors were taken into account in generating forecasts.  Suppliers of ultrasonic flowmeters were asked individually how fast their companies are growing.  Suppliers were also asked to project future sales for their products and for the industry as a whole.  OEM and end-user survey data was used, especially data relating to future spending plans by users.  Industry growth for the industries covered in this study was considered.  Other factors include economic growth in various geographic regions, the recovering Asian economies, and past growth by temperature sensors and transmitters. All forecasts are in real, not current, dollars, meaning that the effects of inflation are disregarded. 

Definitions

This study includes the following product categories:

·        Transit Time Ultrasonic Flowmeters

·        Doppler Ultrasonic Flowmeters

·        Hybrid Ultrasonic Flowmeters

Transit time ultrasonic flowmeters use a transducer to send an ultrasonic signal diagonally across a pipe to another transducer on the other side.  They also send a signal in the reverse direction.  If flow is occurring, there is a difference in transit times between these two signals.  This difference is proportional to flowrate.

 

Doppler ultrasonic flowmeters use a frequency shift method to determine flowrate.  Doppler meters require some impurities in the flowstream so the frequency shift method can be applied.  Hybrid ultrasonic incorporate both transit time and Doppler methods, depending on the flowstream.  An exception to this is Panametrics’ hybrid meters, which use the TransFlection technique instead of the Doppler method, along with the transit time method. 

 

There are several different mounting types available for ultrasonic flowmeters:

·        Clamp-on

·        Spoolpiece

·        Insertion

Many people associate ultrasonic meters with the clamp-on style.  Clamp-on ultrasonic flowmeters have transducers that are clamped onto the outside of the pipe.  Some clamp-on meters are portable, and others are fixed.  Fixed clamp-on meters are also called dedicated meters.

 

Spoolpiece ultrasonic flowmeters consist of a section of pipe with the transducers mounted in the pipe section.  When spoolpiece meters are mounted, they replace a section of pipe.  Spoolpiece meters come in either wafer or flanged models.  If the transducers are in contact with the fluid, they are referred to as “wetted.”

 

Insertion ultrasonic flowmeters are used to measure large pipes.  Insertion meters are also referred to as “hot tap” or “cold tap” meters.  Insertion ultrasonic flowmeters are used to measure flare gas and flue gas, and also for measuring the flow of liquids in large pipes.

 

This study does not include ultrasonic open channel flowmeters.  Flow Research and Ducker Research are publishing a separate study on open channel flowmeters in Phase Two of our series of Worldflow™ studies.  To avoid double counting, ultrasonic open channel flowmeters will be included in the worldwide open channel study, instead of in this study.  For companies that have both Doppler and ultrasonic open channel flowmeters, only their sales of Doppler flowmeters are included in this study.  For anyone who wishes to compare the results of this study with any previous studies, it is important to be aware of whether those previous studies included ultrasonic open channel flowmeters.

 

Smart Flowmeters

 The term ‘smart’ as it is used in this study means “microprocessor based and capable of remote two-way communication.”  Being microprocessor-based is a necessary condition for instrument to be smart.  In terms of the human analogy that the term ‘smart’ makes use of, a microprocessor in an instrument is like a brain.  It allows the instrument to process information, and may also be the basis for self-diagnostic capabilities.

 

The requirement of being capable of remote two-way communication rules out instruments that can only be programmed or calibrated locally, at the device itself.  In effect, this requirement means that the device must be intelligent enough to be able to communicate with another device outside itself.  This could be a personal computer, a laptop computer, or a handheld communicator.

 

In this study, five different means are considered for remote two-way communication.  These are as follows:

·        Serial Ports

·        Proprietary Protocols

·        HART

·        Foundation Fieldbus

·        Profibus

 These five types of protocols are considered in the next section.

Communication Protocols

Both Foundation Fieldbus and Profibus are forms of fieldbus.  Forms of bi-directional, multiplayer digital communication, including those developed by the Fieldbus Foundation, the ISA SP50 Committee, and the Profibus User Organization, are included in the term ‘fieldbus’ as used in this study. 

 

Serial Communication

Serial communication accounts for by far the largest numbers of smart ultrasonic flowmeters.  Smart ultrasonic flowmeters that have serial communication provide two-way communication with the flowmeter via an RS-232 or RS-485 connection.  Flowmeters that have an RS-232 or RS-485 port to send files to a printer, but do not provide for two-way communication, are not considered smart.  Smart flowmeters can be interrogated and programmed remotely from a laptop, personal computer, or handheld device.  Some software programs can also do data analysis.

 

The idea of smart instrumentation is often associated with a paradigm of a network of instruments that are digitally integrated with a distributed control system (DCS).  The proprietary protocols that have been developed, including DE, FoxCom, and Brain, were developed to fit this paradigm.  Serial communication does not fit this paradigm.  Hence flowmeters that use serial communication can be considered “less smart” than those that rely on proprietary protocols, HART, Foundation Fieldbus, or Profibus.

 

Serial communications are typically implemented with a Recommended Standard (RS).  The Electronic Industries Association (EIA) sets these standards in most cases.  In most cases, the standard, defines connector pin-out, signal levels, maximum bandwidth, drive capabilities, handshaking signals, and electrical characteristics of the serial lines.  RS-232 is probably the most widely used communication standard.  Variations of RS-232 are RS-232C and EIA-232.

 

RS-485 ports have the capability of being connected in a multi-drop bus and selectively polled.  The electrical characteristics of RS-485 ports allow for 332 drivers and 32 receivers to be connected to a single line.  These features make RS-485 ports ideal for multi-drop or network environments.  They also distinguish RS-485 ports, which are addressable, from RS-232 ports, which are point-to-point.

 

Proprietary Protocols

Proprietary communication protocols were developed by the DCS suppliers to provide secure, high-speed, digital communication between their field devices and the control room.  Examples of proprietary protocol’s include Foxboro’s FoxCom, Yokogawa’s Brain, Honeywell’s DE (Digitally Enhanced), and Endress & Hauser’s Intensor.  Proprietary protocols are what got the movement started towards standardization of communication protocols via fieldbus.  Users soon realized that, as long as they were using a DCS from a particular vendor, they would be unable to use field devices from another supplier so long as they wanted to communicate with those field devices from the control room.

 

Proprietary protocols have advantages, including security and high-speed communication.  However, the days of proprietary communication protocols are numbered.  Now that HART, Foundation Fieldbus, and Profibus are available, users have little incentive to select proprietary protocols.  Instead, they have an incentive not to select them, so they can use instruments from more than a single vendor in the plant.  While some companies are still shipping instruments with proprietary protocols, these protocols are rapidly disappearing as Foundation Fieldbus and Profibus begin to achieve wider market acceptance.

 

HART

The term ‘HART’ stands for Highway Addressable Remote Transducer.  Fisher-Rosemount developed HART in 1984.  The HART protocol makes use of the Bell 202 Frequency Shift Keying (FSK) standard.  HART superimposes a digital signal over a 4-20 mA signal, thereby providing for bi-directional remote digital communication with field devices.  Contained in the signal is information about the process and diagnostic information that could not be included in a 4-20 mA signal.  Information about the value of the process variables can be included in a HART signal.  A handheld device called a HART communicator, a personal computer, or a DCS are used to communicate with field devices, using HART.  HART allows a host application to get two or more digital updates each second from a field device.  It does not interfere with the 4-20 mA signal. 

In 1993, the HART Communication Foundation (HCF) (www.hartcomm.org) was established to support and coordinate the application of the HART protocol.  The HCF replaced the Hart User Group that served this function previously.  The HCF is still an active organization today, with over 130 members.  Many ultrasonic flowmeter suppliers are members of the HCF, including Danfoss, Endress & Hauser, Fuji Electric, Krohne, Panametrics, Rittmeyer, Rosemount (now part of Emerson Process Management), Siemens, and Yokogawa.

 

Many companies are using the HART protocol as a stepping-stone to fieldbus.  Using HART, companies can take advantage of the advanced diagnostic capabilities offered by HART-compatible devices without committing the additional resources to installing a fieldbus network.  One reason that ultrasonic flowmeter users have been slow to adopt HART is that many ultrasonic meters are being used in water and wastewater plants, which do not have the same type of network requirements as large process plants.  However, as ultrasonic flowmeters become used more widely in the process industries, users will find more reason to use HART with their ultrasonic flowmeters.

 

The adoption rate of HART is much higher among the other new technology flowmeters than it is among ultrasonic flowmeters.  ABB, Endress & Hauser, and Krohne are now making HART standard on their magnetic flowmeters.  This means that users who order a magnetic flowmeter will receive HART, unless they either request not to get it or request Foundation Fieldbus or Profibus instead.  While Panametrics is beginning to introduce HART-compatible ultrasonic flowmeters, nothing like this is occurring for ultrasonic flowmeters.  This is likely to change, provided that more broad-line instrumentation suppliers enter the ultrasonic flowmeter market.

 

As of December 2000, the Device Description Library, owned by the HCF, includes device descriptions for more than 200 devices from 69 manufacturers.  Currently HART installations account for 10 million nodes, and are projected to double to 20 million by 2006 (see “Around the Loop” in Control magazine, May 2001).  HART has benefited greatly from the delay in getting Foundation Fieldbus products approved and ready to ship.  HART has become the de facto protocol for smart field devices.  While some HART users will eventually upgrade to Foundation Fieldbus or Profibus, HART provides a comfortable plateau for many users while they wait for fieldbus protocol issues to be sorted out.

 

Foundation Fieldbus and Profibus

Foundation Fieldbus is a communication protocol that was developed as a result of the merger of WorldFIP and ISP (InterOperable Systems Project) in the mid-1990s.  Both WorldFIP and ISP represented groups of very powerful companies that seemed destined to compete with each other.  Clustered around WorldFIP were Honeywell, Allen-Bradley, Elsag Bailey, and Square D.  Clustered around ISP were Rosemount, Fisher Controls, Siemens, and Yokogawa.  Both groups decided it would be in their best interest to cooperate to form a joint communication protocol.  The formation of the Fieldbus Foundation was announced in June 1994.

 

At the same time the Fieldbus Foundation was being formed, members of the Profibus Users Group took over the work of the ISP.  The Process Automation (PA) protocol for intrinsically safe applications was also added to the Profibus group of protocols.  Sponsored by Siemens, Profibus attempted to bring out products earlier than the Fieldbus Foundation and also have them commercially installed earlier.  Profibus has had good success in Europe, but not as much success in North America or Asia.

 

The Flow-Research survey of flowmeter users shows strong penetration of flow users by HART.  For example, 36 percent of North American users say they are using HART, and 12 percent of European users.  Among Asian users, 14 percent are using HART.  There was little enthusiasm for Foundation Fieldbus among European users, however.  Only two percent of European users indicated an intention to buy Foundation Fieldbus products in the future, while 13 percent reported that there are already using Profibus.  In North America, three percent of users reported using Profibus, while 13 percent said they intent to buy Foundation Fieldbus products in the future.  In Asia, no users reported using Profibus, while nine percent said they intend to buy Foundation Fieldbus products in the future.

 

Based on this data, it is clear that European users feel much more inclined to use Profibus than Foundation Fieldbus as things stand now.  This could change, however, as a larger number of Foundation Fieldbus products are released.  It does seem that North American and Asian users are more ready to adopt Foundation Fieldbus products.  Whatever happens, one thing has been true all along.  It is taking longer than anyone expected for these protocols to be incorporated into products, and it will most likely take longer than anyone expected for Foundation Fieldbus and Profibus protocols to be adopted by users. 

Geographic Regions

This study includes the following geographic regions:

·        North America (United States and Canada)

·        Europe (Western Europe, Eastern Europe, Russia, and the Commonwealth of Independent States)

·        Japan

·        Asia without Japan (including China, India, Pakistan, Southeast Asia, Indonesia, Malaysia, Oceania, and all other Asian countries)

·        Rest of World (including Mexico, Central and South America, Africa, the Middle East, and all remaining countries)

End-User Industries

This study includes the process industries, which are as follows:

·        Oil & Gas

·        Refining

·        Chemical

·        Food Processing

·        Pharmaceutical

·        Pulp & Paper

·        Metals & Mining

·        Power

·        Water & Wastewater

·        Other, including cement, ceramic, rubber, paint, and other process industries

 

Ultrasonic Industry Structure

Ultrasonic suppliers use a variety of methods to get their products to end-users.  Many of the larger companies have direct sales forces.  Others use independent representatives who only represent one company for each type of product line.  Distributors are another sales channel.  The difference between distributions and independent representatives is that distributors normally take control of the product.  One disadvantage of using distributors, however, is that manufacturers have less control over purchase price.  They also have less control over how their products are portrayed and sold when distributors are used.

Team History and Experience

The Market for Infrared Thermometers and Thermal Imagers Worldwide is the result of a partnership between Flow Research of Wakefield, Massachusetts and Ducker Research Company, Inc. of Bloomfield Hills, Michigan.  The lead analyst in the project is Jesse Yoder of Flow Research. Flow Research specializes in market research on instrumentation and process control subjects.  Dr. Yoder did the supplier interviews, data analysis, forecasting, and writing of the study.   He has previously written a worldwide flowmeter study, a worldwide ultrasonic study, a worldwide vortex study, a worldwide pressure study, and numerous proprietary studies on flowmeters. 

 

Michael Kirsch, Market Analyst, has 28 years of consulting experience in the chemical and plastics industries.  He has a BSChE and an MBA.  Mr. Kirsch performed the extensive product analyses in chapter three, and also wrote many of the company profiles.

 

Nick Limb, Partner at Ducker Worldwide, has overseen the publication of many reports in areas such as adjustable speed drives and flat glass.  He has a Masters Degree in economics.  Mr. Limb is the overall manager of the project.

 

Scott Shober, Project Manager at Ducker Worldwide, has extensive experience in technology-driven markets.  He specializes in market sizing and forecasting.  He has a B.S. in engineering.

 

Josiah Waxman, Market Analyst at Ducker Worldwide, has research experience in the building & construction industry.  He specializes in size and segmentation studies and has a B.A. in Marketing.

 

Kelly Deppen of Flow Research served as research assistant and Lorena Ferrari of Ducker Worldwide served as production coordinator.

 

Ducker Research carried out the end-user survey, under the leadership of Scott Shober, assisted by Josiah Waxman.  Nick Limb of Ducker Research served as project manager.

Flow Research

Flow Research is the only market research company whose primary mission is to research temperature and flowmeter markets.  The lead analyst for this study, Jesse Yoder of Flow Research, has over 15 years experience writing about and analyzing process control and instrumentation markets.  He has written over 30 market research studies and published numerous articles on instrumentation in industry journals.  To read more than 15 articles on instrumentation written by Dr. Yoder, visit the Flow Research website at www.flowresearch.com.

Ducker Research

Ducker Research has 36 years of experience in researching industrial and business markets.  This experience gives Ducker Research access to a wide array of industry knowledge, technology awareness and current market trends.

 

Today, the firm has a staff of 65 in its Bloomfield Hills, Michigan offices.  This staff in­cludes 30 professionals in engineering and scientific disciplines.  In addition, the company has a dedicated, full-time staff of 35 experienced interviewers and support staff.  Ducker maintains the capabilities to conduct all phases of a research project, without outside support, in its offices.

 

Ducker Worldwide services a worldwide clientele through its Michigan-based staff and through its offices and partner firms throughout the world.  In addition to Ducker’s international offices and capabilities, on staff in Detroit are several individuals with multi-lingual capabilities.  Several staff members (analysts and project managers) are fluent in French, Spanish, Italian, German and Japanese.  With this capability, coupled with offices overseas and many long-standing relationships with partner firms, Ducker has successfully studied world markets for over three decades.

 

Flow Research and Ducker Worldwide maintain an ongoing interest in the flowmeter industry.  We are prepared to do further research that builds on the comprehensive research that is detailed in this study.  Companies that would like further detailed research are invited to call Flow Research or Ducker Worldwide for more information or to discuss specific research needs.

 


Figure 2-1

New Technology and Traditional Technology Flowmeters

 

 

 

New Technology Flowmeters

Traditional Technology Flowmeters

Coriolis

Differential Pressure (DP)

Magnetic

Open Channel

Ultrasonic

Positive Displacement

Vortex

Thermal

Multivariable Differential Pressure

Turbine

 

Variable Area

 

Other