Industrial valves manufacturers draw mixed conclusions

The industrial valves sector in Germany looks back on the year 2022 with mixed feelings. The Russian war of aggression in Ukraine, together with the subsequent energy price crisis, has naturally left its mark. On the other hand, the industry managed to generate a nominal 12 percent increase in sales despite the difficult conditions. Domestic business increased by 8 percent. Foreign sales climbed by 14 percent. Adjusted for prices, however, the 12 percent sales growth corresponds to an increase of only 1 percent.

“Unfortunately, the strong sales growth last year was largely due to inflation. Exploding energy and input material prices, in particular, made life difficult for manufacturers. Nevertheless, the valve industry has once again held its course in a difficult environment,” said Wolfgang Burchard, Managing Director of the VDMA Valves Association, assessing the current situation. “In the course of the year, it was possible to gradually reduce the previous year’s piled-up orders thanks to easing supply bottlenecks,” Burchard emphasizes. “For example, valve manufacturers were once again very successful on the important sales market of the USA thanks to the upturn in the oil and gas business. Against this background, we are confident and expect sales to increase by 4 percent in 2023,” predicts the trade association managing director.

All segments with sales growth
A significant increase in sales was achieved in all product groups in 2022. Here, too, however, it should be noted that the development, which appears pleasing at first glance, was driven by inflation. Safety and monitoring valves performed best, with a nominal increase in sales of 17 percent. At the same time, shut-off and control valves recorded sales growth of 10 percent. In the case of safety and monitoring valves, foreign sales climbed particularly strongly. Here, an increase of 24 percent was achieved. In the case of shut-off and control valves, foreign business also outperformed domestic business, although the increase in sales was in the low double-digit range. The outlook remains cautiously positive. According to VDMA figures, order intake in all three sectors is currently higher than in the same period of the previous year.

Exports continue to increase
Last year, German valve manufacturers were able to score points in international competition. Industrial valves worth around 4.8 billion euros were exported abroad. This represents an increase of 6.2 percent compared to the previous year. Exports were thus 6 percent above the pre-crisis level in 2019.

However, export business with China, the most important trading partner, lost ground and remained 6.8 percent below the previous year’s level. Valves worth 577.0 million euros were shipped to the People’s Republic. By contrast, exports to the USA, the second most important customer country, rose by a strong 25.7 percent to 481.6 million euros. They were thus once again above the level of 436.4 million euros in 2019. Exports to France climbed by 8.7 percent. The country continued to maintain third place among the most important sales markets with an offtake volume of 283.6 million euros.  

With exports up 13.4 percent and 8.3 percent, respectively, the United Kingdom and the Netherlands now also managed to return to export levels above those of 2019. Exports to the UK rose to 198.4 million euros, and fittings worth 247.8 million euros were shipped to the Netherlands.

Broad customer structure offers growth opportunities
The order books of the German valve industry are still quite full. The long-term prospects are promising. Even if the important customer chemical industry is currently weakening, other sectors still offer good growth opportunities. The valve industry, for example, sees itself in line with other component manufacturers as an enabler of climate change. The trend topic of hydrogen is also a growth segment. Therefore, the focus of the EU as well as the current US government on sustainability issues is not inconvenient. In China, the industry is hoping for better business as the economy begins to recover.

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