In this post, we take a look at some capex project procurement statistics from our MyProtel project database as we move toward 2017/18. Read the chart and analysis below to get our take on potential capex project procurement levels in the processing industries for the next year.
Compared to our previous post covering 2016, we are tracking more active project schemes which are due to enter the procurement phase in 17/18.
As before, pharmaceutical and biotech manufacturers are constantly investing in capital equipment in order to maintain product integrity and to meet regulatory compliance. The split of project sizes (see Fig. 1 below) is still biased toward smaller schemes, as manufacturers focus on getting the most out of existing plants. However, when compared to the previous period, there are a greater number of larger £50m projects in the UK & Ireland – reflecting a growing amount of larger scale investment.
A proportion of these projects are expected to be placed on hold as we progress through 17/18 due to economic uncertainty and other political influences (read more in our UK Pharmaceutical Industry Outlook here). Ireland is still skewed by a number of very high value investment projects, totalling well over €1 billion, full details of which are available to subscribers.
France still leads in the total investment value of projects entering procurement in the coming year, with the trend heavily toward new investment schemes in long extant plants.
In general, project values within the Food & Drink sectors still have a narrower spectrum than pharma/biotech. We are seeing a large number of smaller (£0-10m) projects, with relatively few large schemes (£50m+) planned. As such, the total potential investment value due to enter procurement in the coming year is very high, totalling nearly £900m, split across a wider number of sites when compared to pharma/biotech.
These 3 sectors are still greatly linked across our coverage: 71% of reported energy projects involve some form of chemical and/or gas related process, such as anaerobic digestion or pyrolysis, producing biogas or syngas. As ever, project scale varies dramatically. In energy, almost all reported projects are new builds with a value in excess of £10m.
Chemical projects are more varied in scale, biased more toward the middle bands (£10m-£50m).There are a good number of mid-scale chemical plant expansions entering procurement in 2017, full details of which are available to subscribers. As with the last period, total project value across all 3 sectors is skewed upward by a relatively low number of big budget schemes.
There is a huge amount of capex project activity across the main process sectors due to enter procurement in the coming year. This represents plenty of potential for suppliers of equipment and related services, across multiple regions.
Overall, we are tracking a slightly greater number of projects that are due to enter procurement in 17/18 compared to the previous year. However, we would expect economic and political uncertainty to mean that a higher proportion of these projects experience delays or are placed on hold.
|Food & Drink||41%||26%||21%||9%||3%|
|Chemical, Energy & Gas||13%||21%||23%||19%||24%|
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