GEORGE TOWN: UNIMECH GROUP BHD plans to venture into the industrial valve market in the Philippines this year, says group executive director Y F Sim.
He told StarBiz that “we hope to leverage on the country’s (Philippines) growing gross domestic product (GDP) that will see an increase in infrastructure spending.
“This will drive the expansion of the manufacturing and retail sectors, as well as reduce unemployment.”
The Asian Development Bank has forecast the Philippines’ economy to grow by 6% in 2023 and 6.2% in 2024 respectively.
Sim believes that the GDP growth in the Philippines will also fuel the demand for industrial valves controlling the flow and pressure of liquids, gases and slurries within a system.
“We are targeting the heat, ventilation, and air-conditioning (HVAC) segment there, which is needed to regulate the temperature in new factories and commercial buildings,” he said.
He added that Unimech was currently looking at Manila as a potential site for the group’s new warehouse to distribute its industrial valves.
A report by Mordor Intelligence highlighted that the industrial valves market in Asia-Pacific is estimated to reach over US$19bil (RM87bil) by the end of 2023, with a 5.5% compounded annual growth rate (CAGR).
The factors driving the market includes increasing demand for valves from water treatment plants and the oil and gas industry, the report added.
Meanwhile, Unimech also supplies industrial valves to many palm oil mills in Indonesia.
Sim said contributions from Indonesia are expected to continue to generate the most this year.
A year ago, Indonesia generated about 26% of the group’s total revenue.
“Palm oil output in Indonesia in 2023 is likely to rise by 3% to 46 million tonnes if the El Nino weather phenomenon doesn’t disrupt production.
“The biodiesel consumption of palm oil is also expected to rise to 12.5 million tonnes based on the 2023 biodiesel allocation of 13.15 billion litres,” he added.
In the food sector, Sim noted palm oil consumption in the republic is projected to rise by 100,000 tonnes to 6.9 million tonnes in 2023/2024 due to continued growing demand from households and the food industry.
“We expect the rise in palm oil consumption would help increase the demand for our industrial valves,” he said.
Market Research Future in a report said the industrial valve market, which is valued at US$59.2bil (RM271bil) in 2021, is projected to grow to US$95.07bil (RM435.2bil) by 2030.
This is a 6.10% CAGR increase during the 2022-2030 forecast period.
Sim, meanwhile, said the HVAC valve market is also expected to increase to US$6.83bil (RM31.2bil) in 2029 from US$4.7bil (RM22bil) in 2022.
He pointed out that rapid expansion in the industrial and construction industry as well as the growing awareness for energy efficient and air ventilation system are expected to drive the HVAC segment.
Moving forward, Sim said the group would continue to focus on the HVAC, oil and gas, marine and ship building, water and waste water industries.
“We will also continue to improve the effectiveness of our business operations and efficiency of manufacturing processes for cost saving measures to enhance profitability.
“Unimech will also streamline operations that are not contributing to its profitability.
“We will continue to look for new opportunities to grow our businesses through capital expenditures and investments,” he added.