Project Overview – Initial Situation

Market potential for the manufacturing of thin-walled work pieces

The European relevance of thin-walled work pieces is illustrated by the expected market trends in the industries, which increasing rely on this type of work piece: 

The turbo machinery power generation segment in Western Europe generated a turnover of 473 Million Euro in 2010. The total market size until 2017 is expected to amount to 12.11 Billion Euro with more than 12 GW installed. According to the research institute Frost & Sullivan, the growth rate between 2010 and 2017 reaches 32.3% for gas and steam turbines [FROS11]. The commitment of the European industrial nations to reduce the greenhouse gas emissions by 20% until 2020 compared to 1990, is an ambitious goal [EURO07]. Furthermore, it is assumed that the world's energy needs for the electricity production in 2035 are met by around 70% of fossil energy sources (Figure 1). Hence, among others there is need for action in the turbo machinery sector.

Development of global power generation by energy source [EIA10] (Figure 1)

The worldwide air traffic is expected to grow by 5.3% in 2011, carrying more than 6 billion passengers [IATA10]. The European Commission recently estimated a figure of 16 billion air passengers by 2050. [EURO11]. Jet engine manufacturer Rolls-Royce has calculated a demand of 63,000 commercial airplanes between 2010 and 2030, leading to a demand of about 137,000 jet engines [ROLL10]. This would account for a market volume of $800 Billion. The German engine manufacturer MTU Aero engines generated a turnover of €2.7 billion, whereas the larger enterprise Rolls-Royce generated about $14 Billion [MTU11]. MTU’s turnover is expected to grow to more than €6 billion by 2020 [MTU10].

The development in the automotive sector leads to smaller, turbo-charged engines with less fuel consumption (Downsizing), resulting in a higher demand of turbochargers [FROS09].  In 2010, more than 10 million turbocharged vehicles were delivered; this figure is expected to grow to 17 million in 2017 [FROS10a]. Due to forecasts the market share of those vehicles will be 25-30% in 2016, which leads to a higher demand for this type of milled components [FROS10b].

However, to be able to truly unlock and benefit from this market potential, European manufacturers of thin-walled work pieces need to outpace non-European competitors, often from low costs countries, on costs, production time and work piece quality. Therefore, flexible as well as time and resource efficient production processes for the manufacturing of these thin-walled work pieces will be of vital importance for the competitiveness of the European industries involved. High process stability, availability, accuracy and reliability are important conditions for achieving high-quality production with almost zero-defects in order to sustain and foster the competitive position of European industry in this growing market.

Literature

[EURO07]

European Council

Presidency Conclusions, Brussels, (8/9 March 2007)

[EURO11]

European Commssion

Flightpath 2050 – Europe’s Vision for Aviation (2011)

[FROS09]

Frost & Sullivan

Improving fuel efficiency in automobiles (2009)

[FROS10a]

Frost & Sullivan

European powertrain and technologie database (2010)

[FROS10b]

Frost & Sullivan

OEM Strategies for Passenger Vehicle Engine Downsizing in Western Europe (April 2010)

[FROS11]

Frost & Sullivan

Western European Gas and Steam Turbines Market (Mai 2011)

[IATA10]

International Air Transport Association

Financial Forecast (December 2010)

[MTU10]

MTU Aero Engines

Presentation Investor and Analyst Day 2010

[MTU11]

MTU Aero Engines

Company Presentation 2011

[ROLL10]

Rolls-Royce Group plc

Annual Report 2010

DynaMill