Market Overview
The U.S. modular process skid market size was valued at USD 603.07 million in 2021, presumed to reach USD 1713.12 million by 2030, expanding at a CAGR of 12.3% during the forecast period. (2022-2030)
Modular process skid is a process system contained within a frame that allows the processing system to be easily transported. The process skid system can be considered as an alternative to the traditional stick-built construction where various process system parts are brought individually and then installed together at the construction site.
Modular process skid systems are self-contained as they are built within frames, which impart them portability and facilitates easy transportation compared to traditional process systems. Moreover, these systems have controlled assemblies, which makes the plant connection easier and operations confined to space where the system is installed. These advantages of modular skid systems over traditional process systems provide an impetus to the growth of the product across various industries, such as energy and electricity, chemical, pharmaceutical, food and beverage, and agricultural/manufacturing.
Market Dynamics
Drivers: shale gas operations in the u.s.
As the world is striving to achieve sustainable development, individuals are shifting to alternative energy for reducing dependence on the already dwindling fossil fuel reserves. However, we have not reached an extent where we can count on other resources for power generation. Thus, to meet the continuously rising demand for energy generation, individuals still rely on the exploration and production \ of oil and gas. Primary energy consumption rocketed at a rate of 2.9% in 2017, which was twice its 10-year average of 1.5% per year and the fastest since 2010.
As per the B.P. statistical review of world energy 2019, global oil consumption rose from 96,737 TBPD in 2016 to 99,843 TBPD in 2018, in which the U.S. accounted for 20.4%. The consumption is yet expected to rise further in the coming years; thus, to maintain the demand and supply chain in the country, global leaders in the oil and gas industry are scaling their drilling and intervention activities expeditiously. As modular process skid systems have shorter installation time and a low wellhead facility footprint and can be relocated after the depletion of the well, they offer an ideal and viable option compared to traditional stick-built process systems in oil and gas operations.
Restraints: limitations & global economic slow down
Regardless of the multiple benefits brought forth by the installation of modular process skids systems, it is essential to realize the drawbacks of these systems as well. Easy portability could be an advantage, but the transportation and cost associated with it can be a limitation. Moreover, it can be hard to transport larger skid systems as there is always a possibility of damaging the system during transportation. Also, the design of these systems necessitates frond-end engineering, which is time-consuming and mandates meticulous planning and coordination between the manufacturer, contractor, and plant owners.
Segmental Analysis
By product type
Based on type, the modular process skid market is segmented into large-scale and small-scale systems. Processing industries such as chemical, food and beverages, pharmaceutical, oil and gas, pulp and paper, and water treatment, among others, are facing challenging circumstances — be it environmental regulations or adoption of new technologies in the market. Modular process skid plays an important role in facilitating operations efficiently with a high degree of flexibility.
Modular process skids contain the entire process system or individual process components. Large-scale modular process systems contain the entire process system comprised of multiple mechanical components, including heat exchangers, pressure vessels, pumps, boilers, storage tanks, and compressors, among others. In the report, a plant comprised of an entire skid-mounted production unit is considered as one unit under large-scale segmentation, while a small-scale unit can be a pump cart or compressor packages, small scale production plants, and individual process units.
The small-scale segment holds the largest share in the U.S. modular processing skid market, accredited to the rising number of small-scale manufacturers, especially in the food and beverage industry. Additionally, small-scale production units are less economically risky than building and maintaining a large-scale plant.
End-use industries
Energy & electricity
The energy and electricity segment held the largest market share in the U.S. modular process skid market, accounting for around 49.3% of the overall market. In the energy sector, modular process skids are primarily employed in the oil and gas industry.
These skids have several advantages and benefits as their robust design enhances the operability and maintainability of the process, especially on offshore-sites. Additionally, the implementation of these systems can mitigate the wellhead facility's footprint, commissioning time, storing inventory, and service and preparation for workovers in offshore and onshore fields. Modular process skids, on the other hand, offer the convenience of the relocation of the system upon the depletion of the well.
The increase in drilling and well intervention activities around the globe demands technologies that will enable shale gas producers to maximize production time by minimizing the tie-in period of traditional pad oil producer wells. This is the key factor that makes modular process skid systems the preferred choice for these applications.
Chemical
The chemical industry has a prominent shareholder in the U.S. modular process skid market, accounting for around 25.2% of the overall market. Processes in the chemical processing industry are complex, and there are always underlying risks and hazards associated with working at typical production sites, which are usually outdoors. These sites are susceptible to damage during installation and extreme weather changes. Thus, to mitigate risk and enhance worker safety, plant manufacturers are focusing on the installation of these sites in a safer and controlled environment. Hence, manufacturers are shifting to modular process skid systems for their excellent space allocation and system integration.
Another factor that is expected to propel the growth of the modular process skid market in the chemical processing industry is the schedule efficiency of these systems. As players in the chemical industry are pursuing strategic mergers and acquisitions to expand their business in emerging markets, they are seeking methods that will help them set up their plants at a faster pace, allowing them to leverage quick turnover from installation to product production.
Pharmaceutical
The pharmaceutical segment was valued at USD 61 million in 2019 and is expected to be the fastest-growing segment with a CAGR of 13.9%. The increasing need for manufacturers to increase efficiency in manufacturing and provide quality performance to their clients in the national and the international markets is one of the key factors driving the growth of the modular process skid market in the pharmaceutical industry. Additionally, the growing requirements in the pharmaceutical industry to offer economical and standardized products produced from processes that comply with governmental regulations also propel the adoption of these modular skid systems in the pharmaceutical industry.
Modular process skid systems reduce the engineering time, construction time, and comply with standard testing and qualification procedures and protocols that can be monitored directly through the software, thereby decreasing documentation work. The increasing demand for pharmaceuticals is seeing the industry adopt technologies that will enable players to manufacture products faster and meet the rising consumer demand.
Food & beverage
The food industry is thriving on account of changing consumer preferences, which are leading to the introduction of novel products, ingredient formulations, and packaging formats. Speed-to-market has been a crucial factor in the food processing industry as by using modular skids, leaders in the food industry can simultaneously work on-site and facility construction along with production system fabrication, condensing the project timeline by at least 20%.
The modular skid is also efficient in scaling up the manufacturing process quickly, as by installing multiple skids, product consistency can be achieved immediately across various parts of the globe. Moreover, it also provides quicker delivery of products and requires less labor, which in turn lowers overall capital costs. Thus, to reduce the manufacturing cost and increasing profit margins, players in the food industry are installing modular process skids in their production facilities.
Agriculture/manufacturing
Mechanization has dramatically reshaped the agricultural landscape. It has a significant impact on the agriculture industry as it decides the profitability and demand and supply of farm laborers. In the agriculture industry, skids are extensively used as sprayers to spray pesticides and other chemicals in large fields.
To meet the rising organic food demand, farmers are expanding their cultivation area and utilizing technologies that will help them to grow better yields. And since it important for farmers to protect their crops from pesticides, they frequently use these modular skids to spray pesticides in their lands. Moreover, increasing agriculture activities across developing economies are expected to augment the demand for these systems in the upcoming years.
Impact of covid-19
As the COVID-19 pandemic is spreading like wildfire with no signs of slowing down, it has adversely impacted many industries around the world, including the mining and energy industries. The operations and supply chains of leading players in the global market have been drastically affected. For instance, the nationwide lockdown announced by governments of multiple countries, such as Canada, Chad, Colombia, and many others, has led to disruptions in international mobility, transportation, and supply chains.
Glencore's, a leading player in the market, and a wholly owned subsidiary, PetroChad (Mangara) Limited, had to cease production at their Badila and Mangara oil fields. Apart from this, the demand from key importers of cobalt, i.e. China, has witnessed a sharp fall due to the halt in operations, which is affecting the overall supply and demand.
