Pipes, Pumps and Valves: All Systems Go
Demand is increasing for the type of basic equipment that every vessel needs, but counterfeiting is a growing problem.
By Art Garcia
The tide has turned for major manufacturers of marine pipes, pumps and valves, bolstered by a rebounding economy, increased commercial and military vessel construction, and a strengthened market for offshore support vessels. At the same time, makers of maritime sealants and safety products are fighting intrusion into their markets by producers of counterfeit parts streaming mainly from China, South Korea, India and other areas in Asia.
“The pickup in economic activity started last autumn and led to increased bookings in the fourth quarter of 2010 that brought us up to the level we had budgeted for 2010, a year that went according to plan,” said Geir Olimb, Sales Manager in Norway for Allweiler AS, a business unit of U.S.-based Colfax Corporation. “Volume has grown dramatically,” he added, “and 2011 looks very good so far and we have no reason to believe it should be less positive later this year.” The company’s main market is offshore support vessels, which Olimb described as very strong, both in newbuildings and services. Established in 1860, Allweiler has a long-standing reputation as a German manufacturer of pumps. Today it claims to be the market and technology leader with a product portfolio that includes centrifugal pumps, propeller pumps, screw pumps and progressive cavity pumps, as well as complete pump systems. It also makes hose pumps and macerators.
Business for privately held CSD Sealing Systems in Gilford, New Hampshire was down last year as it was the year before. But sales picked up “substantially” in 2011’s first period, reported Rick Casale, President and Chief Executive. He attributes the two flat years to “a bunch of things, including the global economy and the moratorium on offshore drilling following the BP oil spill in the Gulf of Mexico. That really put a hold on things down in the Gulf.” What triggered the turnaround in this year’s first five months? “There were some additional U.S. Navy contracts released specifically for the Independence-Class Littoral Combat Ship, a $10 billion project,” he stated. “That and some nonmilitary contracts that hit at the appropriate time really helped. It’s an up-and-down business in this game. You just never know.”
Work for the U.S. Navy has also been a boon for W&O Supply of Jacksonville, Florida, which bills itself as the largest marine-piping supplier in the U.S. with annual sales of about $150 million. W&O offers a wide selection of engineered products, pipes, manual and automated valves, and metric valves. It’s a partner with the U.S. Navy, commercial shipping companies, barge owners, cruise lines and shipyards throughout North America and Europe. Its slogan, appropriately, is “We are the right fit.”
And that it has been for naval work, generating about $60 million yearly with a goal of ramping up to $100 million in the next five years. The company is a supplier and distributor to shipyards that have contracts for work on U.S. Navy vessels. One obstacle W&O had to buck was the uncertainty over passage of the federal budget and how that might impact funding for the Navy’s ship repairs. “The Navy continually has to maintain a readiness state for its ships, which have to go in for all types of repairs, upgrades and maintenance. One of the things that’s been difficult this year is the timing of government funding by Congress,” noted Sam Entirken, W&O’s Vice President for Sales and Marketing.
“Pipes, pumps and valves are used in every ship. They are continuously being replaced because they wear in their service duty and have to be kept in a readiness state, so every time a ship goes into drydock a lot of these are replaced,” Entirken added. “They have to be checked for integrity. Pumps wear out, pipes wear out and valves get corroded and wear out so they are constantly being replaced.” The company is a global supplier of materials for both repairs and new construction to cruise companies and every other shipping segment from tugboats to barges to offshore vessels. It has offices in Rotterdam and Antwerp and plans to open another in Rio de Janeiro this month.
PG Marine Group, known in Norway as Ing Per Gjerdrum AS, had a fairly good year in 2010. “The financial crisis and the downturn in the market affected us, but we actually did OK,” said CEO Roy Norum. “We are very close to being back to all-time high figures. We had a fantastic first quarter this year, and the number of systems sold was very close to what we achieved in our best quarter in 2007, an all-time high.” PG manufactures cargo systems for offshore supply vessels and tankers as well as utility pumps and pump modules and systems for the offshore oil and gas industry. The company was founded in 1982 by Per Gjerdrum as a pump supplier for the Norwegian maritime market. It has evolved into a designer and supplier of cargo handling systems for offshore supply vessels and has a major export business. Last month PG and a development partner, Techni, were presented with “Spotlight on New Technology” awards at the annual Offshore Technology Conference in Houston for their innovative pump solutions.
The awarding of contracts to General Dynamics Electric Boat and Newport News Shipbuilding to construct the second Virginia-Class submarine was good news for Leslie Controls, headquartered in Tampa, Florida, “because we’ll be providing very specialized equipment on the vessels,” said Leslie’s Maritime Sales Manager Rich Rochford. The Circor International subsidiary markets a wide range of commercial marine products including control valves, regulators, control pilots and ship’s whistles. For the Navy, it produces specialized valves. “We’re still working on a lot of development contracts we received for the new Ford-Class supercarrier, so we’ve been extremely busy,” Rochford said.
For privately held Maritime Diesel Electric in Tamarac, Florida, “Last year was a good year and this year is going to be even better,” stated Juan Jose Samaniego, Manager of Sales and Marketing. “We have demand currently on the commercial side, specifically for new equipment and spare parts on offshore platforms in the Gulf of Mexico. There’s also a lot of growth in the cruise line industry, one of our biggest business areas,” he said. “There’s more equipment being bought and investment in equipment upgrades.” Maritime Diesel does piping, fitting, refitting, modifications, installation of new equipment, refurbishment of pipes, enhancement of compartments, installation of water parts, complete pump assemblies and water systems. It represents several European manufacturers in the U.S. and has additional offices in South America and Romania.
Belgian-based Victaulic Company pioneered grooved piping as a method of joining pipe more than 80 years ago as an alternative to methods such as welding, flanging or threading. One of the benefits to the shipbuilding industry of installing grooved components is the considerable weight and space savings they offer compared with flanged systems. Victaulic manufactures and markets a full range of grooved products from couplings and fittings to valves and mechanical tees.
“A broad variety of vessels and rigs all over the world has already taken advantage of the benefits that come with using the technology in a wide range of applications, such as ballast water piping, sea and fresh water cooling, and lube oil and bilge systems,” said Didier Vassal, Vice President for Maritime, OEM and Global Military Sales. He added that in an industry where time, costs, safety and sustainability are paramount, grooved mechanical piping technology offers unrivaled benefits as a welding-free joining method: “Valve assemblies are typically constructed with flanged components, but this method can add unnecessary weight to a piping system. Installing grooved-end couplings and valves instead of a flanged assembly can reduce weight by 58 percent, resulting in considerable fuel savings.”
The Scourge of Counterfeiting
Unfortunately, with the return of good times comes a corresponding rise in counterfeiters and other imitators looking to cash in on the windfall. According to Maritime Diesel’s Samaniego and others cited in this article, the copying of spare parts by counterfeiters, especially in India, China and elsewhere in the Far East, is a growing problem. “They are benchmarking parts to reproduce and that is affecting a lot of original equipment manufacturers and companies that represent them,” Samaniego explained. “Buyers seeking to cut costs by bypassing OEMs are opening themselves up to safety liabilities. It’s something we see a lot and it’s increasing. It’s one of the biggest threats manufacturers and distributors see every day. This has been going on a long time and it’s getting worse. That’s the scary part. It’s happening pretty much on the wholesalers’ side. We can’t do anything about it because they’ll beat us in price and, essentially, there’s no regulation. How do you regulate that?”
CSD Sealing’s Casale added that counterfeit parts are a problem CSD “faces on a daily basis, from the Far East especially. South Korea has been a major problem for us, one that is extremely difficult to combat and shut down at the source. It’s been a big problem and trying to enforce it within South Korea at the shipyard level is next to impossible.” Counterfeit parts could create “defaults” on OEM equipment, a recent high-profile example being what happened on the BP platform in the Gulf of Mexico.
“Pumps and equipment that weren’t working. Quick fixes,” pointed out Samaniego. “There are reasons why OEM parts are designed and manufactured to be in compliance with the complete assembly. When you put in non-OEM parts that are not certified by the manufacturer, that’s a huge risk. And if there’s a liability claim, the manufacturer gets the short end of the stick. People who replicate spare parts are jackals.” One effort to fight parts counterfeiting is to educate customers, who must be able to trust their company’s purchasing department to assure that only legitimate OEM parts with correct serial numbers are ordered from reputable manufacturers. Sometimes the temptation to buy a duplicate part from a non-OEM provider stems from an OEM’s delay in delivery.
“It’s all up to the customer, to the end-user, to know and to request parts from the original maker,” cautioned Themis Giachos, Managing Director at Maritime Diesel, who has been in the parts distribution business more than 40 years. “Forged wholesale parts are being produced primarily in Mexico, South Korea, India and, let’s not forget the big one, China. China is copying every single piece of machinery it buys, just as the Japanese used to do. Don’t buy parts in the open market,” Giachos warned. “Buy from the manufacturer.” – MarEx
Art Garcia is a West Coast-based writer for the magazine.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.