Global MRO Industry Outlook

  • The global MRO market is valued at $ 605 billion 
  • The global market is forecasted to grow at a CAGR of 1.72 percent and reach $660 billion by the end of 2020
  • Mature Markets: North America, Western Europe 
  • Fast Maturing Markets: APAC, LATAM, and Australia 
  • APAC accounts for ~37 percent of the global MRO market, and it is expected to remain in the similar range (34 percent-38 percent) until 2020

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Global Mining Industry: Outlook

Mining companies are expected to spend more on MRO activities to improve the operational efficiency of the equipment by reducing the downtime and lower the spend on new capital equipment.

  • The global mineral output was at 11.37 billion metric tons in 2014 and  expected to grow at a CAGR of 1.8 percent and reach 12.01 billion tons billion by the end of 2017. The slow growth of mineral output is due to low commodity prices and low demand from China, and this trend is expected to continue until 2017
  • Coal accounts for ~74 percent of the total mineral output and is expected to remain in the similar range (73 – 75 percent) until 2017 
  • The APAC contributes to two third of the mineral output and is expected to grow lesser than the global average, due to the slow economic growth of China. Although Latin  America and Africa contribute to around 14 percent of the mineral output currently, it is expected to witness maximum growth compared to other regions, owing to the participation of global players and changing local regulations 
  • Global exploration spend declined by about 31 percent to $20 billion in 2014, as major miners cut short their exploration spend, due to the falling commodity prices 

The key Market Trends 

  • Due to slowdown in the mining industry and the falling commodity prices, mining companies have been compelled to refrain from high capital expenditures and resort to  technologically intensive investments, such as mine technology products, which enable them to enhance the production level by improving the equipment performance and reducing the downtime

Global MRO Industry Trends

  • Increasing levels of MRO outsourcing and adoption of Integrator model for MRO sourcing in developed regions like North America and Western Europe signal increasing buyer maturity and willingness to partner with suppliers 
  • Global suppliers are entering new geographies in developed regions through mergers and acquisitions, thus offering multi-location solutions to global buyers
  • Customers expect MRO integrated suppliers to provide highly tailored solution, with real-time access to information and just-in-time delivery for products and services 
  • Additionally, due to increased information access, the demand for transparency is consequently increasing
  • The fragmented MRO market in APAC and the MEA has produced a big opportunity for global distributors and integrators to tap this market
  • These regions are considered to be developing regions, in terms of MRO Sourcing maturity, with OEM and Distributors being the preferred souring channels E-procurement is gaining popularity in Asian regions, like India and China. Increased purchase of low-value, high-volume spend is driving the B2B platform in these regions
  • MRO consolidation is steadily being implemented by mature Indian buyers. Companies, such as, TATA Steel, BASF, Shell, PepsiCo, etc., engage in consolidation activities through established MRO distributors, like Rexel India

 Global MRO Industry Drivers and Constraints

  • MRO sourcing not being a core competency of most buyers, mature markets are increasingly seeing adoption of MRO outsourcing and integrated supply solutions and are reaping the benefits in terms of hard cash savings and manpower reduction. The awareness of the same is low in maturing/less mature markets, such as APAC, the MEA and LATAM 
  • Large scope for MRO market lies in the shale gas processing equipment market, by component type, which includes compressors and pumps, internal combustion engine, heat exchangers, electrical machinery, and measuring and controlling devices