Other Opportunities Workshop. Saudi Aramco: Public

Transcription

1 2017 Other Opportunities Workshop

2 Table of content Introduction Welding Systems and Consumables Manufacturing Diesel Generators Manufacturing Personal Protective Equipment Manufacturing

3 Disclaimer The next slides contain forward-looking statements regarding future events based on current expectations, estimates, forecasts, and projections. The data is subject to updating, revision, further verification and amendment without notice. No reliance may be placed for any purpose on the information or opinions contained in this presentation or any other document or statement, or on the completeness, accuracy or fairness of such information or opinions therein. No representation orwarranty, express or implied, is made or given by or on behalf of Saudi Aramco or its employees, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for such information or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

4 Table of content Introduction Welding Systems and Consumables Manufacturing Diesel Generators Manufacturing Personal Protective Equipment Manufacturing

5 Several opportunities emerge for SMEs across the welding products and services value chain Manufacturing opportunities Components Finished Products Potential to establish manufacturing facilities for welding components, such as power sources and welding cable Potential to establish assembly facilities for welding machinery and plants for manufacturing welding consumables such as welding electrodes, rods, wires and fluxes Additional opportunities Support products and services Potential for SMEs to offer support services and products such as testing, certification, personal protective equipment and welding gases such as Argon Source: Saudi Aramco analysis

6 Arc welding is the most commonly used technique in the Kingdom and has the most potential for localization Focus Welding types Arc welding Resistance welding Description Uses electric power to create an arc between electrode and base material Most widely used in Oil and Gas and other industrial sectors Heat generated by the electrical resistance of materials Shielded metal arc Gas metal arc, Gas tungsten arc welding Spot welding Flash welding Sub-technologies Submerged arc Resistance butt welding Seam welding Gas welding Solid state Other Welding flame caused by a reaction of fuel gas & oxygen, can be applied with or without pressure and application of filler materials Produces coalescence, for which metals joined retain their original properties without brazing fillers Other technologies applicable are laser, electron beam heating, exothermic, and other fusion welding processes Oxyacetylene welding Oxyhydrogen welding Pressure gas welding Forge welding Cold welding Friction welding Thermite welding Electron beam welding Diffusion welding Ultrasonic welding Laser welding Source: Saudi Aramco analysis

7 Three key sectors are expected to drive the demand for welding equipment and consumables within KSA Welding activity drivers Construction & infrastructure Description Welding of steel and steel alloys used in buildings and other structures supporting transportation and infrastructure development Development in KSA Construction expected to grow 3% annually in KSA, driving demand for welding materials Shipbuilding Welding technologies used during the construction of ships and vessels include Shielded Metal-Arc (SMAW), Submerged- Arc (SAW) and Flux Core-Arc (FCAW) Maritime yard in Ras Al-Khair expected to drive significant demand over the next 5 years Oil and Gas & chemicals Use of welding in the manufacturing and maintenance of equipment, in both plants and midstream (e.g. pipelines and storage) Base demand from Saudi Aramco and other industrial entities Source: Saudi Aramco analysis

8 The scope for localization includes three sets of opportunities: welding machinery and consumable products Scope of localization Welding Machinery Welding consumables Support products and services Source: Saudi Aramco analysis

9 GCC welding machinery market size GCC welding market is expected to reach US$ 545 Million by 2022, growing 3% annually Welding Machinery US$ millions Rest of GCC KSA KSA welding machinery market ~55% of the overall GCC market demand 3% Source: Technavio report; Icon, Saudi Aramco analysis

10 Value chain gaps translate into opportunities that can be localized within KSA Welding Machinery Welding machinery value chain opportunities Focus Technology development & design Raw materials Welding components Final assembly After-sales services Opportunities 1. Limited, since most of the welding equipment designs are standard and done at global technology centers 2. Manufacture raw materials such as iron and steel, copper, aluminum to meet the specifications needed for welding components 3. Potential to develop manufacturing facilities for inverters, welding cables, welding torches and other welding machinery components 4. Establish facilities for final assembly of welding machinery 5. Provide maintenance and repair services including: -Repairs -Spares Source: Manufacturers. Saudi Aramco analysis

11 GCC welding consumables market is expected to reach US$532 Million by 2022, growing at a 4% annually GCC welding consumables size evolution Welding Consumables KSA welding electrodes market composes ~45% of GCC market size US$ millions Rest of GCC KSA 4% Source: Technavio report; Icon, Saudi Aramco analysis

12 The gaps provide multiple opportunities to support welding consumables localization Welding consumables value chain opportunities Welding Consumables Focus Raw materials Consumables manufacturing Opportunities 1. Opportunity to manufacture metals such as iron, steel, copper, aluminum, brass and bronze and coatings materials to welding consumables specifications 2. Limited players manufacturing consumables locally and current production meets <30% of KSA Demand. Opportunity to set up new manufacturing facilities for producing welding consumables: Manual welding electrode Flux Coated wires for Arc Welding (FCAW) Rods for Gas Tungsten Arc Welding (GTAW) Wires for Submerged Arc Welding (SAW) Source: Manufacturers, Saudi Aramco analysis

13 Opportunities exists for SMEs to manufacture products and provide services needed for welding operations Support products and services localization opportunities Support products and services Safety related products Personal protection equipment such as helmets, goggles, gloves Insulated blankets Other accessories Consumables pre-heater Wire feeders Workstations Products Gases Argon is commonly used in Arc Welding processes, since it is inert in high temperatures KSA annually imports US$ 12.7 million of Argon Argon is produced by fractional distillation of air in a cryogenic air separation unit Argon production is a potential localization opportunity for the Kingdom Testing and inspection Liquid penetrant inspection Acoustics Radiographic Mass particle Metallurgical analysis Certification Welder qualification training and testing Product certification Other services Services Consulting welding process design and evaluation Source: Manufacturers, Saudi Aramco analysis

14 KSA companies involved in Oil and Gas, and other industrial activities are current consumers of welding 1 Oil and Gas and Refining Chemicals and Utilities EPC and Maritime Construction 1. Does not represent future demand or opportunities Source: Manufacturers, Saudi Aramco analysis

15 Table of content Introduction Welding Systems and Consumables Manufacturing Diesel Generators Manufacturing Personal Protective Equipment Manufacturing

16 Diesel generators manufacturing represents an attractive opportunity in KSA Manufacturing opportunities Sub-assembly Potential to set-up facilities for assembly of diesel engines, alternators and heat exchange units Final assembly Potential to develop assembly facilities in collaboration with large global players to increase domestic diesel generator assembly capabilities Additional SME opportunities Components manufacturing SMEs for manufacturing of components (such as engine blocks, crankshaft, pistons, valves etc. for diesel engines) Source: Saudi Aramco analysis

17 Diesel generators are segmented by level of power output, which typically correlates with size and weight Diesel generators product segmentation Product type (by power output) Small (<375KVA) Medium (375-1,000KVA) Large (>1,000KVA) Typical application Standby generators for residence/small business Prime generators for low consumption professional devices Prime generators for mobile equipment Prime generators for equipment requiring heavy power Standby generators to provide grid back-up for offices and equipment Length cm cm >450 cm Weight 80 3,500 kg 3,500 7,500 kg >7,500 kg Indicative price range (in US$) 3,500 45,000 30, ,000 75, ,000 Source: Manufacturers, Saudi Aramco analysis

18 Diesel generators are consumed across various industries in the Kingdom Diesel generators demand drivers Segments Construction Oil & Gas Manufacturing and industrial Type of product Current consumers 1 Mobile generators for cranes, lifts etc. Medium to large for heavy machines Small generators for hand tools Medium to large for heavy duty equipment for heavy drilling, etc. Medium to large generators for peak loads, during shut-downs and maintenance work, back-up power Telecommunications Small generators to power transmission towers Commercial Residential Small to medium for SMEs Medium for hospitals, hotels, IT centers, amusement parks, malls Small generators for back up power or remote locations Offices Retail stores Healthcare centers Residences 1. Indicative only, Does not reflect any specific future opportunities Source: Saudi Aramco analysis

19 The demand for diesel generators in Saudi Arabia is expected to reach ~17,600 units by 2022 KSA diesel generator expected market size evolution 000 Units % Large (> 1,000 KVA) Medium (375-1,000 KVA) Small (< 375 KVA) Small diesel generators are expected to be the largest segment in terms of number of units in demand

20 The demand for diesel generators in GCC is expected to reach ~32,000 units by 2022 GCC diesel generator expected market size evolution 000 Units % Rest of GCC Saudi Arabia

21 Value chain gaps translate into opportunities that can be localized within KSA Value chain opportunities Design Input materials Components and sub-assembly Focus Final assembly Installation and after-sales services Opportunities Limited opportunities 1. Manufacture steel alloys, copper to meet the specifications needed for generator components 2. Potential to develop manufacturing facilities for heat exchangers, alternators and engines components 3. Potential to establish facilities to manufacture diesel engine, alternator and heat exchanger subassemblies 4. Establish facilities for final assembly of diesel generators, made to final customer specifications 5. Establish QA/QC testing facilities for generators (either in-house by assembling company or third party service providers) 6. Provide after sales support including Maintenance Remedial work Spares and parts manufacturing Source: Saudi Aramco analysis,

22 KSA companies involved in Oil and Gas, and other industrial activities are current consumers of diesel generators 1 Oil and Gas and Refining Chemicals and Utilities EPC and Construction Telecommunications 1. Does not represent future demand or opportunities Source: Manufacturers, Saudi Aramco analysis

23 Table of content Introduction Welding Systems and Consumables Manufacturing Diesel Generators Manufacturing Personal Protective Equipment Manufacturing

24 Personal Protective Equipment (PPE) equipment manufacturing represents an attractive opportunity Manufacturing opportunities PPE Manufacturing Potential to establish facilities to manufacture: Hard hat Face and eye protection Fall protection systems Protective clothing materials and fire resistant clothing Additional SME opportunities Raw materials SMEs to manufacture raw materials to specifications Testing and after-sales services SMEs for after-sales services such as testing, certification and remedial actions Source: Saudi Aramco analysis

25 Personal protective equipment can be broadly classified into six different categories Personal protective equipment types Protective clothing Key items: Fire resistant clothing Hand protection Key items: Fabric/ butyl gloves Protective footwear Key items: Toe guards, safety shoes Hand, eye, hearing and face protection Key items: Goggles, hard hat, face shields, ear plugs Fall protection Key items: Fall arrest systems, belts, harnesses Respiratory protection Key items: Respirators Source: Saudi Aramco analysis

26 The demand for PPE equipment in KSA is expected to grow at 7% annually to reach ~US$ 480 million by 2022 KSA PPE expected market size evolution US$ millions 7% Oil and Gas Non Oil and Gas Source: Frost and Sullivan, Transparency, Saudi Aramco analysis

27 The demand for PPE equipment in GCC is expected to reach ~US$ 610 million by 2022 GCC PPE expected market size evolution US$ millions % Rest of GCC Saudi Arabia KSA market demand is expected to be ~70% overall GCC demand for PPEs Source: Frost and Sullivan, Transparency, Saudi Aramco analysis

28 Manufacturing of PPEs represent attractive localization opportunities PPE materials and manufacturing localization PPE type Example PPE materials PPE manufacturing process Protective clothing Hardhat Face protection Eye protection Polyamides / Nylon widely used Key supplier within KSA: Petrochemical Conversion Company (Jubail) Outer shell made of light weight materials: Polyethylene (HDPE) - SABIC ABS - SABIC Polycarbonate - SABIC Made of materials that offer impact, heat & chemical resistance, optical quality Polycarbonate - SABIC Treatment and clothing manufacturing Compounding to add color, modify properties etc. Injection or blow molding Compounding to add color, modify properties etc. Injection or blow molding Hearing protection Made of materials that offer noise resistance Polyurethane Juffali (Polyols from SABIC) N/A 1. Acrylonitrile Butadiene Styrene Source: 3M, SABIC, Uvex, Saudi Aramco analysis,

29 The PPE value chain has potential for localization across all the stages Value chain opportunities Focus Design Input materials Manufacturing Sales and distribution Opportunities Limited design opportunities 1. Input materials such as High Density polyethylene, Polyurethane, etc. are available within KSA. Localization opportunity involves manufacturing them to specifications needed for PPEs 2. Opportunity for SMEs to establish facilities to manufacture: - Hard hat - Face and eye protection - Fall protection systems - Protective clothing materials and tailor fire resistant clothing to customer specifications 3. Facilities to test and certify PPEs 4. Opportunity for SMEs to provide services such as storage, logistics, distribution and repair services for PPEs Source: Saudi Aramco analysis

30 KSA companies involved in Oil and Gas, and other industrial activities are current consumers of PPE 1 Oil and Gas and Refining Chemicals and Utilities EPC Construction 1. Does not represent future demand or opportunities Source: Manufacturers, Saudi Aramco analysis

31 Please direct all inquiries to: Farah Al Turkestani Industrial Development & Strategic Supply Department Saudi Aramco Office number: We invite you to engage with the iktva program and grow your business in Saudi Arabia