South American market for process, environmental equipment on upswing

Demand for Brazilian ethanol and Chilean metals are two reasons for a forecast for healthy growth in process and environmental equipment in Latin America. The market for pumps will grow from $2B this year to $2.8B in 2010 in all countries of the Americas except the U.S. and Canada, in the latest online forecast in the McIlvaine report, "Pumps: World Markets." Another online report, "Valves: World Markets," predicts annual sales of valves in Latin America will rise from $3.2B to $3.9B by 2010...

May 7th, 2006

NORTHFIELD, IL, May 4, 2006 -- The demand for Brazilian ethanol and Chilean metals are two of the reasons that healthy growth is forecast for process and environmental equipment in Latin America. The market for pumps will grow from just under $2 billion this year to $2.8 billion in 2010 in all countries of the Americas with the exception of the U.S. and Canada, according to the latest online forecast in the McIlvaine report, "Pumps: World Markets."

Another online report, "Valves: World Markets," indicates that annual sales of valves in Latin America will rise from $3.2 billion to $3.9 billion by 2010.

Twenty-five percent of all the process equipment used by the mining industry will be delivered to Latin America over each of the next four years. As a result, McIlvaine in its "Liquid Filtration World Markets" report predicts that Latin America will be the leading purchaser of belt filters, drum filters, and a major purchaser of filter presses.

Brazil is leading the way in the conversion of sugar cane to ethanol. Already 40% of the transportation fuel is ethanol. Over the next decade Brazil plans to be energy self sufficient through a massive investment in more ethanol plants. Each of these plants requires environmental equipment such as scrubbers and fabric filters. McIlvaine in Fabric Filters and Elements: World Markets predicts that Brazil will be a major purchaser of fabric filters in part because of the ethanol plant activity.

The curtailment of natural gas to Chile by Argentina will result in major investments in retrofitting Chilean power plants to burn coal. The cost of scrubbers to remove the SO2 will be in excess of $500 million. Other Latin American countries will spend another $1.3 billion on scrubbers for SO2 removal in the next five years (according to the McIlvaine FGD World Markets).

In general industries using process and environmental equipment are growing in Latin America. In Brazil manufacturing rose from 39% of GDP in 2004 to 40% last year. Latin American GDP is expected to rise 3.6% this year compared to only 2% for Europe. GDP in Latin America will rise from 8% of global GDP this year to 8.5% in 2010, according to the McIlvaine report, "World Market For Your Products."

One of the big potential markets for process and environmental equipment in Latin America is in municipal wastewater treatment. As shown in the following chart excerpted from "World Market for Your Products," the percentage of municipal wastewater which is presently receiving secondary treatment is less than 12%. Therefore the upgrading of existing primary treatment plants and the construction of treatment plants where sewage is now directly transported to waterways represents many billions of dollars potential in process and environmental equipment.
In general industries using process and environmental equipment are growing in Latin America. In Brazil manufacturing rose from 39% of GDP in 2004 to 40% last year.

The McIlvaine Company (www.mcilvainecompany.com) is based in Northfield, IL, with a staff of 35 people that includes engineers, scientists and market researchers.

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