HOME Research Insight ABB Ltd (Switzerland), and Siemens AG (Germany), are the Leading Power and Automation Technology Companies Offering a Range of Products in the Variable Frequency Drive Market

ABB Ltd (Switzerland), and Siemens AG (Germany), are the Leading Power and Automation Technology Companies Offering a Range of Products in the Variable Frequency Drive Market

The global variable frequency drive market is projected to grow at a CAGR of 5.94% from 2016 to 2021. The Asia-Pacific is estimated to be the largest market for VFD, followed by North America in 2016. This trend is expected to continue till 2021. The growth of the variable frequency drive market is driven by increasing urbanization and industrialization in developing countries such as India, growing need for energy efficiency, increased activities in the construction sector, and power transmission & distribution networks, regulations on energy efficiency, growing trend of industrial automation, regulations to ensure efficiency and utilization of energy.

The variable frequency drive market is dominated by a few global players. Key players operating in this market include ABB Ltd (Switzerland), Siemens AG (Germany), Schneider Electric (France), Danfoss (Denmark), Rockwell Automation, Inc. (U.S.), and WEG (Brazil).

Major strategies adopted by the players include contracts & agreements, new product development, expansions and investments, and mergers & acquisitions. Contracts and agreements was the most commonly adopted strategy from 2013 to 2016. Industry players also adopted new product development, which was the second most widely followed strategy, during the same period.

ABB Ltd is one of the leading power and automation technology companies offering a range of products, systems, solutions and services in order to boost its productivity, enhance energy efficiency and increase power reliability. It operates through four divisions, namely, power grids, electrification products, discrete automation and motion, and process automation. ABB Ltd offers variable frequency drives under its discrete automation and motion business segment, which accounted for 24% of the company’s total revenue in 2015. The company adopted contracts and agreements as one of the key strategies in order to strengthen its position and increase its market base by entering new markets. For instance, in May 2016, the company was awarded a contract by POSCO Pohang works (South Korea) to replace twin DC motors and associated drives with new AC motors and drive technology for rolling mills. This contract helped the company to strengthen its position in Asia. Hence, its performance is attributed to its ability to sign contracts for variable frequency drives, spanning a range of processes and applications for different industry verticals.

Siemens AG is a manufacturing and engineering company. It offers products and services in the field of electrification, automation, and digitalization. It conducts its operations through nine segments: power & gas, healthcare, energy management, digital factory, process industries & drives, mobility, building technologies, wind power & renewables, and financial services. The company offers its VFD under process industries and drives division, which is a part of the energy and industry sector. This division caters to the needs of end-user industries such as food & beverages, pharmaceuticals, chemical, and other process & infrastructure industries. The company uses contracts and agreements as a key strategy along with mergers and acquisitions to increase its revenue growth by tapping new markets. For instance, the company entered in an agreement with new energy and water efficiency project to install variable frequency drives in order to increase efficiency and to meet the needs if growing demand in energy and water industry. The acquisition of Dresser Rand Group, Inc. (U.S.) in June 2015 shows that the company is ready to take aggressive decisions, in line with its long-term strategy of tapping new opportunities to increase revenue growth.

Related Reports:

Variable Frequency Drive Market by Type (AC, DC, and Servo), End-Users (Industrial, Infrastructure, Oil & Gas, and Power Generation), Application (Pumps, Fans, Compressors, Conveyors, Extruders), Power Range, Voltage, and Region - Global Forecast to 2021

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