large-bore antifriction bearings industry research...

Large-Bore Antifriction BearingsIndustry Research Report

May 2008

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© Boston Strategies International, Inc

www.bostonstrategies.com(1) (781) 250‐8150

This report has been prepared by Boston Strategies International at the request of CLIENT for the purpose of establishing its operating strategies. It may not be appropriate for other purposes or audiences. This report contains forward-looking statements andprojections with respect to anticipated future performance of CLIENT, suppliers, customers, and/or general or specific economic conditions and factors that are based on Boston Strategies International’s analysis of market trends and external data. Forward-lookingstatements and projections are not guarantees of future performance and involve significant business, economic and competitive risks, contingencies and uncertainties, which are difficult to predict. Accordingly, these projections and forward-looking statements may

not be realized and actual results may vary up or down. This report may not be reproduced or distributed without express written approval from Boston Strategies International.

Contents

• Snapshot of the Overall Bearing Market• Large-Bore Antifriction Bearing Market


Snapshot of the General Bearing Market


Demand will grow rapidly in the short-term and be concentrated increasingly in Asia; capacity adequate for bearings in general

• Asia will dominate demand.• The American market will remain flat, averaging 2.5% growth through 2012.

Europe Middle East & Africa (EMEA) is the current dominant growth driver but• Europe, Middle East & Africa (EMEA) is the current dominant growth driver, but its growth will drop markedly by 2010, from12% demand growth in 2007 to 3% in 2012.

• Asia’s demand growth will stay high, particularly in China, India.• Global production capacity will continue to outpace demand.

• Global capacity will increase by an average 4%, vs. 5% demand growth, through 2012.

• Capacity utilization, currently at 75-80%, will not change appreciably.Capacity utilization, currently at 75 80%, will not change appreciably.• The US, Japan, and Western Europe will have excess capacity.• Asia Pacific will continue to see added capacity, particularly in China and India,

to cater for strong regional demand.Th i l t f il bl it i th k t h l ($8• There is plenty of available capacity in the market as a whole ($8 billion of available capacity).

• Lead times will drop 8% at the end of 2009 as demand slows and new capacity comes on stream


new capacity comes on-stream.

Metals costs are projected to decline; labor cost increases will make up the difference

• Machinery and parts is the largest input costs for bearing production.

• Shop floor labor cost is the second largest input.• Professional labor cost accounts for a small percentage of total

cost inputs (in contrast to large bore bearings).• Decreasing metal cost will occupy a smaller share of total cost.• In total, prices will slowly rise.


Large Bore Antifriction Bearing Market


ScopeScope


Study Scope

• This study assesses the supply market for large bore bearings. • The antifriction large bore bearing family includes multi-row tapered g g y p

and cylindrical roller bearings, which are critical in steel and aluminum rolling mills.

Tapered CylindricalMulti-Row Roller Bearings

Bearing Families

Tapered Cylindrical


What are the parts of an Antifriction Bearing?


What is Large Bore? How to Measure Antifriction Bearings

• Bore: the inside diameter of the bearings• Large bore: more than 10 centimeters (about 4 inches)


Source: efunda

Types of Large-Bore Antifriction Bearings

• Large-Bore Ball Bearing• Large-Bore Tapered Roller Bearing• Large-Bore Cylindrical Roller Bearing • Large-Bore Spherical Roller Bearing • Large-Bore Needle Roller Bearing


Large-bore ball bearings

• Distinguishing characteristicsP i t t t• Point contact

• Highest speed bearings• Poor static load ability

• Not adjustable• Applications

• Electric motors• Conveyor rollers• Light duty gear boxes• Light duty gear boxes• Small vehicles


Tapered Roller Bearings

• Distinguishing characteristicsLi t t hi h l d i• Line contact – high load carrying

• Radial + axial loads• Wide range of speeds

• ApplicationsApplications • Vehicles• Power systems• Extra precision applications


Cylindrical Roller Bearings

• Distinguishing characteristicsLi t t bl hi h di l• Line contact enables high radial loads

• Low axial load• Applicationspp

• Rolling mills• Electric motors: medium to heavy

duty


Spherical Roller Bearings

• Distinguishing characteristicsG d f h di l l d• Good for heavy radial loads

• Poor for thrust load• Skew under axial load

• ApplicationsApplications • Fabricated housings• Windmills• Rolling mills

P ill• Paper mills• Pillow blocks• Large gear boxes


Needle Roller Bearings

• Distinguishing characteristics• Thin cross section

Accept large shaft• Accept large shaft• Good stiffness/rigidity• Light duty bearings• Limited axial loads• Cage guides rollers

• Applications • Gear boxes• Reduction units• Reduction units


Global demand for large bore bearings will continue to grow rapidly, driven by China and India’s economic growth

• Demand for large bore bearings will increase and will stay elevated for the foreseeable future due to the high growth rate and increasing capital expenditure in the major consuming industriescapital expenditure in the major consuming industries.

World Demand for Large Bore Bearings

4,500

2 500

3,000

3,500

4,000

,

1,000

1,500

2,000

2,500Sales($M US)

0

500

2008 2009 2010 2011 2012 2013 2014

Asia-Pacif ic Americas EMEA


Source: Boston Logistics analysis

Basic metal, wind and paper industry are driving increasing demand for large bore bearings

• Major Buyers include:• Basic metal extraction and processing industry• Wind power transmission industryWind power transmission industry• Paper and pulp industry• Others (e.g., mining, power generation, cement, construction)

World Demand of Large Size Bearing by Applicationg g y pp

$3,500

$4,000

$4,500

$5,000

$1 000

$1,500

$2,000

$2,500

$3,000

,

Sales ($M US)

$0

$500

$1,000

2008 2009 2010 2011 2012 2013 2014



Basic Metals Wind Energy Paper Other

Global basic metal production will continue growing rapidly and be concentrated increasingly in Asia

• Global metal production will increase at 8-12% annually through 2014.

• Asian production will increase by 12 16% and China by more than• Asian production will increase by 12-16%, and China by more than 20%

Basic Metal Production and Capital Investment

250

300

350

i l

50

100

150

200Basic Metals Production & Capex Index

(EMEA 2008=100)

0

50

2008 2009 2010 2011 2012 2013 2014

Asia Americas EMEA



Wind energy is the fastest growing industry that drives large bore bearing demand

• The global wind market, which grew by 24% in 2007, will continue growing at an average 19% growth over the next seven years.

• Europe is the largest wind energy market in the world• Europe is the largest wind energy market in the world.• Asia is the fastest growing region.

Wind Power Cumulated Capacity Wind Power Annual Installed Capacity (GW)Wind Power Cumulated Capacity Wind Power Annual Installed Capacity (GW)

2007 2012Latin America &

Caribbean 0.5 4.5250

300

350

Pacific 1.2 3.5Africa & M. East 0.5 3

Asia 16.1 66100

150

200

250

Cumulated Capacity

(GW)

North America 18.7 61.3Europe 57.1 102

Total 94.1 240.30

50

2008 2009 2010 2011 2012 2013 2014


Source: Global Wind Energy Council, Boston Logistics Group Source: Global Wind Energy Council

Asia and EMEA’s growing investment will propel the pulp & paper industry, but the growth will slow down from 2010

• Global production will increase at 5-10% for the next seven years.• Asia is the fastest growing region, with an average growth

exceeding 10%exceeding 10%.• Chinese production will grow by nearly 20% annually.

Paper and Pulp Production and Capital Investment

120

140

160

180

40

60

80

100Paper and Pulp Production and Capex Index

(EMEA 2008 =100)

0

20

2008 2009 2010 2011 2012 2013 2014

Asia‐Pacific America EMEA



Asia‐Pacific America EMEA

Tapered, cylindrical and spherical roller bearings dominate the large bore bearing market

• Tapered roller bearing, cylindrical roller bearing and spherical roller bearing dominant the large bore bearing market.

• Ability to sustain the axial load or radial load or both• Ability to sustain the axial load, or radial load, or both• Wide application in the industrial machinery

Demand for Large Bore Tapered Roller Bearings

1,200

1,400

1,600

1,800

LBTapered Roller

200

400

600

800

1,000LB Tapered Roller Bearing Sales($M US)

0

200

2008 2009 2010 2011 2012 2013 2014

Asia‐Pacific Americas EMEA



Tapered, cylindrical and spherical roller bearings dominate the large bore bearing market (cont’d)

Demand for Large Bore Cylindrical Roller BearingDemand for Large Bore Cylindrical Roller Bearing

1 400

1,600

1,800

800

1,000

1,200

1,400

LB Cylindrical Roller Bearing Sales($M US)

0

200

400

600


2008 2009 2010 2011 2012 2013 2014



g y

Tapered, cylindrical and spherical roller bearings dominate the large bore bearing market (cont’d)

Demand for Large Bore Spherical Roller BearingDemand for Large Bore Spherical Roller Bearing

500

600

300

400

LB Spherical Roller Bearing Sales($M US)

0

100

200($M US)


2008 2009 2010 2011 2012 2013 2014



g y

The large bore ball bearing market is small and demand will increase slowly

• While ball bearings account for almost 50% of the general bearing market, their application in the large bore bearing market is limited due to their point contact characteristic which leads to poor static

Demand for Large Bore Ball Bearing

due to their point contact characteristic, which leads to poor static load ability.

200

250

300

100

150LB Ball

Bearing Sales($M US)

0

50

2008 2009 2010 2011 2012 2013 2014




Needle roller bearings represent a small percentage in total large bore bearing market

• Needle roller bearings represents a small proportion of the large bore bearing market since they are typically designed as light duty bearings

Demand for Large Bore Needle Roller Bearing

bearings.

40

20

25

30

35

40

LB Needle Roller B i S l

0

5

10

15

20Bearing Sales($M US)


0

2008 2009 2010 2011 2012 2013 2014



Top 10 Suppliers

Rank CompanyHome

Region

Sales (2007)

(Million $US)

Sales (2006) (000's $US)

Bearings as a % of

Sales in 07

2007 Bearings Revenues

(M$US)

LBB as a % of

Bearing Revenue

2007 LBB Revenues

(M$US)Market Share

1 Timken USA 5,236 4,973 38% 1,979 45% 891 28.39%

2 SKF Sweden 7,872 7,760 41% 3,240 20% 648 20.66%

3 Schaeffler Germany 12 133 11 030 25% 3 043 18% 548 17 46%3 Schaeffler Germany 12,133 11,030 25% 3,043 18% 548 17.46%

4 NSK Japan 6,256 6,074 63% 3,925 8% 314 10.01%

5

JTEKT Corp.

(KOYO) Japan 9,725 8,683 25% 2,388 12% 287 9.13%

6 NTN Japan 4,141 3,848 64% 2,650 8% 212 6.76%

7 Minebea Japan 2,804 318 34% 942 4% 38 1.20%American

Roller8

Roller Bearing USA 39 NA 100% 39 80% 31 0.99%

9Nachi-

Fujikoshi Japan 1,640 1,604 35% 574 4% 23 0.73%

10RBC

Bearings USA 306 274,500 100% 306 4% 12 0.39%


Note: LBB = Large Bore Bearing

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