Flowserve-Velan Most Profitable Niches
Using the Most Profitable Niche Combinations to Maximize EBITA After the Flowserve Acquisition of Velan
• The two companies will combine for just over 1% of the world market.
• With EBITDA of 6% for Velan and 14% for Flowserve, the EBITDA is not that of market leaders.
• On the other hand, the companies have impressive products, technology, international reach, and other tools which should allow them to achieve the 30% EBITDA achieved by the leaders.
• The companies are engaged in 1400 niches and at least 14,000 sub niches which can be mixed to create alternative niches.
• In each sub-niche the value proposition needs to be determined.
• Sales assignments should be dictated by the niche value propositions.
• Millions of forecasts provide the foundation of the niche activity.
• Two examples were provided. One was an application: hydrogen. The other was a product: trunnion ball valves.
• Both companies have been pursuing hydrogen. It should account for a number of niches in the future.
• The chemical industry is a small segment of the hydrogen market. In many countries the valves, pumps, and compressors will be part of the same niche.
• Forecasts for small countries in the Americas show the granularity.
• Forecasts for trunnion ball valves in a number of sizes for various severe service applications show the use of factors to make very detailed forecasts.