SIC 3491
INDUSTRIAL VALVES



This category covers establishments primarily engaged in manufacturing industrial valves. Establishments primarily engaged in manufacturing fluid power valves are classified in SIC 3492: Fluid Power Valves and Hose Fittings; those manufacturing plumbing fixture fittings and trim are classified in SIC 3432: Plumbing Fixture Fittings and Trim; and those manufacturing plumbing and heating valves are classified in SIC 3494: Valves and Pipe Fittings, Not Elsewhere Classified.

NAICS Code(s)

332911 (Industrial Valve Manufacturing)

Industry Snapshot

A valve is a device designed to regulate the flow of a gas, liquid, slurry, or dry material through a pipeline or a chute. Valves not only regulate the flow of material but also the rate, volume, pressure, and direction of the flow. The Valve Manufacturers Association observes that valves are basic yet indispensable items in our society; they are required in "virtually all manufacturing processes and every energy production and supply system." Today's valves are made from a variety of materials and range in complexity from simple to highly sophisticated. They range in size from a fraction of an inch to more than 30 feet in diameter, and they can handle pressures ranging from a vacuum to more than 20,000 pounds per square inch, as well as temperatures ranging from cryogenic extremes to more than 1,500 degrees Fahrenheit.

In the late 1990s, according to the U.S. Bureau of the Census, 427 companies were engaged in the manufacture and distribution of industrial valves in the United States. In 2000, the industry employed a total of 52,707 individuals, of which 34,741 were production workers. Total payroll for the industry was $2.01 billion, and total payroll for production workers was $1.11 billion. In 2000 the average wage for the industrial valve industry was $15.07.

The Valve Manufacturers Association of America totaled the value of industrial valve shipments at $3.08 billion in the late 1990s. This was down from a total value of $3.11 billion in the middle of the decade.

Compared to other manufacturing industries, the industrial valves segment was both labor and capital intensive. High-tech equipment was used in researching, designing, manufacturing, and testing products. Comparative ratios of employees, production workers, wages, and hours worked per establishment were much higher than in other manufacturing industries. Cost, shipments, and investment per establishment were also higher than the manufacturing average.

The U.S. valve industry was segmented, with several large companies making a wide variety of valve products but with the majority of industry players being small and medium-sized companies focusing on a particular market niche. Throughout the late 1990s acquisitions and mergers in the industry focused on expanding product lines, increasing sales, and providing long-term viability for companies. The industry was also experiencing shrinking demand for traditional cast iron valves and fittings but growing demand for high technology products, especially automated valves. According to Wendy E. Jovan, a research analyst for the Freedonia Group, and Stanton G. Cort, a Case Western Reserve University marketing professor, the investment in technology necessary to produce these advanced valves exacerbated the capital intensive nature of the industry.

Organization and Structure

Valves are made from metals, including brass, bronze, iron, steel, and alloys, as well as from plastics. In the late 1990s some valve companies operated their own foundries to make the castings from which the valves were fashioned. Sourcing parts offshore was another practice that some valve companies engaged in.

According to the Valve Manufacturers Association of America (VMAA), shipments of industrial valves are divided among six product groups. These groups and the value of their 1997 shipments were: gate, globe, and check valves ($481.7 million); ball valves ($548.7 million); industrial butterfly valves ($282.9 million); plug valves ($195.1 million); automated valves ($936.0 million); and pressure relief valves ($176.9 million). This totaled to $3.08 billion in 1997 shipments, with 1998 shipments forecast to reach $3.2 billion.

According to Jovan and Cort, valves typically accounted for 5 to 10 percent of an end-user's capital budget in the 1990s. The VMAA lists 15 categories of end-users for industrial valves. These end-users and their forecast percentage of 1998 industrial valve shipments were: chemical industry (17.6 percent); water and sewage industry (17.0 percent); petroleum production (12.7 percent); power generation (10.7 percent); pulp and paper industry (7.0 percent); oil and gas transmission (5.6 percent); commercial construction (5.0 percent); gas distribution (2.4 percent); food and beverage industry (2.3 percent); iron and steel industry (1.9 percent); co-generation (1.7 percent); marine industry (1.5 percent); mining (0.6 percent); textiles (0.5 percent); and other (2.6 percent).

In the late 1990s, there was a trend toward integrated supply programs in the industry. These allowed for closer relationships between valve producers, distributors, and customers, resulting in more accurate usage forecasts for the valve industry.

Background and Development

The invention of the valve, like the invention of the wheel, is obscured by antiquity. It is known that the ancient Greek and Egyptian cultures used primitive valves to divert the flow of water for agricultural use and public consumption. The ancient Romans refined the concept and developed plug valves and check valves for their plumbing systems. Further developments in valve technology did not occur until the Renaissance, when Leonardo da Vinci designed canals, irrigation projects, and hydraulic systems that incorporated valves.

Valves first began taking a modern bent in design with the introduction of Thomas Newcomen's industrial steam engine in 1705. The development of steam engines and valves paralleled and complemented one another, as steam engines required more sophisticated valves that could withstand high pressures and high temperatures. However, large scale production of valves did not occur until the proliferation of municipal water systems began with New York City's Croton Waterworks project in 1842.

As the Industrial Revolution continued and the scope of industry expanded, so did the development of the modern industrial valve. The quarter-turn plug valve was developed in the 1920s, and the diaphragm valve was developed during the 1940s. Since then, the use of synthetic materials as valve linings has greatly increased the performance of valves. The ability to automatically control valves is another development of the last half of the twentieth century.

Current Conditions

According to the Freedonia Group, a Cleveland market research firm, demand for industrial valves was expected to grow 5.8 percent per year in the United States through the year 2003. This growth would be fueled by new construction in the utility industry and increased activity in chemical process industries. Demand for automated valves and some ball and high-performance butterfly valves was expected to be strong.

Data from Thinking Cap Solutions, Inc., showed that valve prices increased in the late 1990s despite adequate supplies of valves on the market, reduced demand due to the Asian financial crisis, strong competition among valve producers, and low costs for raw materials. Valve prices in February 1999 were up 3.2 percent over 1998 prices, 5.5 percent over 1997 prices, and 7.6 percent over 1996 prices. Meanwhile, direct manufacturing costs in February 1999 were 3.2 percent lower than in 1998 and 6.5 percent lower than in 1997 due to low metals and plastics prices.

Although the value of industry shipments grew from $9.2 billion in 1999 to $9.4 billion in 2000, it remained lower than its 1998 level of $9.9 billion. The total number of employees declined from 56,237 in 1998 to 52,707 in 2000.

Industry Leaders

In 1997, according to Jovan and Cort, the top seven industrial valve manufacturers in the United States were Watts Industries, Emerson Electric, Crane Valves, Neles-Jamesbury, Tyco International, Duriron, and Keystone International. These seven companies accounted for 20 percent of the U.S. industrial valve market, with Watts Industries and Emerson Electric accounting for 9 percent of valve sales.

Watts Industries Inc. is located in North Andover, Massachusetts. The company began in the late 1800s as Watts Regulator and produced valves for water heaters and boilers. By the 1970s Watts had become one of the world's most diversified valve makers, supplying the market with state-of-the-art quarter-turn valves and actuators. In 1984 Watts surpassed $100 million in sales and embarked on a selective acquisition strategy. By 1995 Watts' sales were totaling $750 million annually.

Emerson Electric, located in St. Louis, Missouri, is a diversified company with 60 divisions, a number of which produce a variety of valves.

Crane Valves of Stamford, Connecticut, was founded in 1855 by Richard Teller Crane and manufactured its first valve in 1858. Crane produces cast steel, bronze, iron, ball, and butterfly valves. The company also has a subsidiary, Crane Nuclear, Inc., that is a valve vendor for the nuclear power industry. In 1997 Crane acquired the nuclear valve products and services of ITI Movats, Inc. from Westinghouse.

America and the World

The United States is the largest market for and largest producer of industrial valves. According to Jovan and Cort, the United States produces 23 percent of the world's valves. Other major producers of valves are Germany, Japan, Italy, France, and the United Kingdom, as well as Russia, China, and Taiwan. Other major markets for valves, in order of market size, are Germany, Japan, China, the United Kingdom, Italy, and South Korea.

Research and Technology

There is an ongoing trend in the valve industry to produce technologically advanced automated valves that can be activated by pneumatic, solenoid, electric, hydraulic, or digital mechanisms. These valves can be used in remote or hazardous environments, such as in oil pipelines in the Arctic or within nuclear power plants. Such specialty products provide a growing market segment for valve producers, but they also require costs to be incurred in the form of materials research, product design and testing, and more sophisticated production methods.

Further Reading

Baumann, Hans. "Noise Regulated; Aerodynamic Noise Prediction Using Control Valves." Process Engineering , October 1996.

"Crane Co. Announces China Joint Venture." PR Newswire , 14 June 1995.

Farrar, Gary. "Indexes for Selected Equipment Show Moderate Increase." Oil & Gas Journal , 5 April 1999.

Genna, Albert. "Prices Inch Up, but Supplies Are Good." Purchasing , 6 May 1999.

Jovan, Wendy E., and Stanton G. Cort. "A World View of Industrial Valves." Business Economics , April 1997.

Kirgin, Kenneth H. "Solid Casting Markets Fuel 1997 Expansion: Industry Overview." Modern Casting , January 1997.

Murphy, Elena Epatko. "Prices Rise Slightly in Healthy Market." Purchasing , 13 August 1998.

Rhodes, Anne K. "Integrated Process Plant Management Systems Proliferating." Oil & Gas Journal , 7 October 1996.

Rudnitsky, Howard. "Metals." Forbes , 13 January 1997.

Sherwood, Robert J. "Who's Where in the Industry Groups." Forbes , 13 January 1997.

Skousen, Philip L. Valve Handbook. New York: McGraw-Hill, 1998.

"Taking Control of Industrial Processes." Manufacturing Chemist , February 1997.

"Transtech Industries Announces that it has Completed the Sale of its Hunt Valve Subsidiary." Business Wire , 4 March 1996.

"Uniroyal Chemical and Fisher-Rosemount Systems Win Microsoft Technical Innovations in Manufacturing Awards." PR Newswire , 11 March 1997.

United States Census Bureau. Industrial Valve Manufacturing 1997: Economic Census, Manufacturing, Industry Series, November 1999. Washington, D.C.: GPO, 1999. Available from http://www.census.gov .

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .

Zappe, R.W. Valve Selection Handbook. Houston: Gulf Publishing, 1999.



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