Demand for Metalworking Fluids Rebounds
A global consulting and research firm says a revitalized automotive industry is behind the demand increase.
Demand for metalworking fluid products, which had been depressed by the global economic crisis, has significantly increased as a result of the recent rebound of the automotive industry, particularly in North America, according a recent study from global consulting and research firm Kline & Company.
From a volume standpoint, the consultancy predicts a growth rate of 3%, but this will not be enough to compensate for the significant volumes lost in 2008 and 2009. However, from a revenue perspective, the consultancy anticipates robust growth from increased interest in higher-quality metalworking fluids such as synthetics, semi-synthetics/synthetic blends and water soluble products. Asia (primarily China, India, South Korea, Indonesia, Thailand, and Japan), Russia, and Brazil are expected to be the growth engines of the industry in the near future.
The metalworking fluids market accounts for approximately 6% of the total estimated 38 million ton global lubricants market. It is extremely fragmented, with more than 50 percent of fluids delivered by smaller players focused on particular end-use applications, geographic areas or both. According to the consultancy, these smaller but well-established marketers potentially represent lucrative turn-key acquisition opportunities for strategic buyers not yet active in this business or those wishing to increase their market share. Considerable interest has also been generated in the private equity community for opportunistic buy and builds in this industry, it adds.
For more information, visit www.KlineGroup.com.