The global nondestructive test (NDT) equipment market is poised for steady growth with increasing demand from end-user industries, such as automotive, transportation, aerospace, military and defense.These will continue to be the biggest drivers of the global market revenues with trends like rapid industrialization, improvement in road and air infrastructure, and building of oil reservoirs, pipelines, refineries and nuclear power plants making the NDT equipments indispensable. The top 3 industry participants to leverage these trends accounted for approximately 52.4% of the overall market share in 2017.Apart from leveraging these trends they have built on their product portfolios and distribution strategies to gain a competitive edge over the other market participants.This article dwells deeper into the strategies taken by these companies to maximize their overall revenues.

Players gaining or losing share

Companies gaining share: GE Measurement & Control Solutions ,Olympus NDT, Sonatest PLC , Zetec Inc., Werth Inc, Wenzel and Sonotron NDT, Eddyfi Technologies
As mentioned in the report, with some strategic acquisitions of the NDT equipment manufacturers and robust product launches these key players operating in the Ultrasonic NDT equipment market space are expected to gain shares.

Companies losing share:

As companies such as YXLON International GmbH, Nikon Metrology Inc., DÜRR NDT, Carestream NDT, Fujifilm Corporation account for over 60% of the total annual unit shipment sales for NDT applications in the Radiography segment, it is safe to say that they underwent a minor loss in the shares in 2016. Due to divergent market trends in the X-ray systems, on one hand the demand fell due to the decrease in orders for X-ray systems whereas on the other hand the orders for Computed Tomography systems increased two-fold. Overall, it compensated for the dip in the growth rates for 2016.

Direct versus Distribution sales strategy for GE versus Olympus

Both the leading players use a mix of demographic and geographic segmentation strategies to satisfy the changing needs and wants of the customers accordingly. In order to penetrate the APAC and Middle East markets they have enhanced their distribution strategies in the past 4-5 years but given that both are an established brand with multiple technology portfolio and have a large customer base, most of their sales are through direct sales channel.

GE

Direct Sales: Approx. 61%-62%
Distributor: Approx. 34%-35%
Through Web channels: Approx. 3%-5%

Olympus

Direct Sales: Approx. 65%-67%
Distributor: Approx. 30%-32%
Through Web channels: Approx. 1%-5%

Moreover, equipment manufacturers such as GE and Olympus NDT face challenges to track the applications for which their product is used, which may lead to the product being used for an application for which it is not designed. Inorganic Portfolios of GE and Olympus – Strategic Advantages

Both GE and Olympus NDT are market leaders with a strong presence across different NDT equipment segments.

  • GE has a much more varied and innovative product portfolio as they are into different verticals. Being vertically integrated it looks toward leveraging its customer base by developing easy-to-use equipment. The launch of Bently Nevada systems (Bently Nevada System1 Condition Monitoring Software v6.90) led to the installation of condition monitoring and diagnostic software devices for effective management of asset heath. This has helped GE in capitalizing into end-to-end solutions.
  • They recently acquired Baker Hughes to become one of the top oil-field service providers by revenue. This deal is likely to help GE focus more on the oil and gas sector, especially in North America, to shield its earnings from the energy industry’s boom and bust cycles keeping in mind that the energy requirements are still going to increase globally. This deal is expected to move the oil and gas sector toward embracing Big Data in production optimization with support from GE’s Predix software and analytics.
  • Olympus NDT recognized in the industry for a multi modality approach with multiple technologies such as ultrasonic, eddy current, and eddy current arrays. Its USP lies in expanding its NDT product portfolio across different verticals. It recently collaborated with Librestream’s Onsight platform to provide additional functionality to its product portfolio where customers can share live visuals from remote visual inspection (RVI) and non-destructive testing (NDT) instruments for quick decision making.
  • With various recent product launches such as two different types of Upright FV3000 Confocal Laser Scanning Microscopes, it is penetrating into the medical space as well. These strategic decisions and unique customer offerings have helped it in steadily gaining market share as well as a sound customer base.

Growth Rates in the NDT Market

  • The growth rates in the NDT market are based upon the historical data, upcoming keystone projects in all the industry verticals, technology advancements in terms of integration of technology with integrity solution, asset management and decision making tools along with the mega trends such as opportunities arising from automation of inspection, Big Data, predictive analytics, prescriptive analytics, rapid mobilization, real time data visualization, sensorization, and the usage of drones and robots for Remote visual inspection in future.
  • The advancements in usage of composites in the aerospace and defence industry along with the stabilizing oil prices (With World bank predicting the average price of crude oil to be $56 in 2018, $59 in 2019, $60 in 2020, $60.9 in 2021, and $61.9 in 2022, and $62.8 in 2023) have positively impacted the non-destructive testing equipment & services market growth.

Positive growth rates in the NDT services sector

As the demand for NDT equipment industry in oil and gas is low due to the unstable oil prices, it is offset by a strong growth in the maintenance activities in the existing oil fields, thus increasing the revenue share of the NDT services market in the oil and gas industry. It is also attributed to the fact that there is more in-house inspection when it comes to the quality manufacturing side in the oil and gas industry.

Replacement of Radiography in Field Applications by Phased UT and Phased Eddy current

  • This trend of large scale market adoption of Phased Array Ultrasonic (PAUT) flaw detectors has significantly aided demand for ultrasonic test equipment with Olympus NDT leading the competition along with Sonatest PLC and GE Measurement and control systems following closely. Since the launch of PAUT flaw detectors in 2002 the UT market has been growing constantly at a good pace.
  • The key driver for phased array ultrasonic flaw detectors is the willingness from the end-user industries to replace conventional film radiography with PAUT in applications such as weld inspection. This shift of technology is driven by the need for safer, cleaner, and faster technology that PAUT provides.
  • As per Frost & Sullivan’s recent research in the emerging markets for NDT inspection services this trend has been confirmed with countries such as South Africa, India, Brazil and China, previously considered as key users of conventional film radiography, also gradually shifting to phased array.
  • Though there is a significant drive toward its adoption one of the common challenges faced is the lack of PAUT certified technicians as its demand has increased over the past few years.
  • The top two participants in the market, GE Measurement and Control Solutions and Olympus NDT, occupy more than 50% of the total market share. Although Sonatest is the next in line to them, it is part of a bunch of small-to medium-sized participants that are competing in this space. Companies in this group with revenue ranging from $10 million to $20 million include Zetec Inc, Technology Design, Matec Instruments, M2M NDT, and Magnetic Analysis Corp., among others.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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