Petrochemical industry feels effects of economic downturn

A new survey by H.S. Pipequipment Ltd (HSP), a supplier of valve to the oil, gas and petrochemical industries, has shown that the difficult financial climate has had a serious impact on petrochemical plants.

The survey, which was conducted predominantly amongst key industry workers such as engineers, buyers, materials controllers and directors revealed the economic downturn has had a significant effect in recent months, with 31% saying that they had seen reduced production. Other consequences have included the movement away from purchasing new equipment (30%) and staff cuts (30%). Overall, 42% of those surveyed said that there was now a greater need to do more with fewer resources.

In addition to these new pressures, identifying the correct product specifications when things go wrong and new equipment or parts are needed is proving extremely time consuming for the petrochemical industry, with 55% of respondents reporting that they spent more time on it during the procurement process than anything else.

According to 29% of those surveyed, valves caused more difficulties than other equipment groups, including pumps, compressors and other rotating machinery combined. During shutdowns, an unexpected need for essential components was the most common problem cited by an overwhelming 80% of respondents.

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‘During all shutdowns, it is vital to move fast to secure replacement parts,’ said Peter Everett, managing director of HSP. ‘It’s surprising that valves in particular are causing more problems than all the other equipment groups. Their complex specifications can cause extreme headaches for the petrochemical industry. Yet when you consider that a valve can last up to 20 years, it’s easy to see when the original paperwork can get lost.’

‘Additionally, a plant may have five or six of the same valve type that have been manufactured to different specifications, which leads to greater time spent getting clarification of exactly what is needed. When time is already tight you’re working against the clock, this is making life very tough.’

Other issues raised by the survey included the trend towards the manufacture of valves in the Far East. While 45% of respondents said that their organisations never procure valves made in the region, 56% believe that in the future, valve manufacture is likely to shift to the Far East.

In addition to cost and quality, the main qualities sought in an equipment supplier were confirmed by the survey as responsiveness (64%), product availability (74%), consistent reliability (64%), technical expertise (66%), delivering on promises (59%) and providing the proper documentation (68%).

‘In tough economic times, plants inevitably want to keep costs down by only purchasing parts as needed, making it essential that suppliers have an extensive inventory and are therefore able to offer a fast response,’ said Everett. ‘In today’s market, it is essential that equipment suppliers have good technical understanding and responsiveness in order to solve problems quickly and help to save time and money.’

H.S. Pipequipment Ltd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/10062010/petrochemical_industry_feels_effects_of_economic_downturn/