«Welcome to our regular Industry Insight, giving you a birds-eye view in the most recent developments concerning the Pipes & Fittings market. Plastic Pipes are expected to increase in popularity because of their wide range of applicability for potable water management systems and lower material costs. We assess that this will positively impact M&A and Joint Venture activity in the market.»
Pipes & Fittings Market
by Product in %
Forecast per Segment
global in USD b 2020-2025
- The pipes & fittings market comprises a variety of groups with Plastic Pipes, Steel Pipes and Fittings, making up almost 80% of the market.
- Especially Plastic Pipes and Fittings are expected to fuel the global market at a CAGR of 3.4% with individual growth rates of 4.9% and 3.4% respectively.
- After the recent impact of COVID-19 on the industry, market reports estimate that the Pipes & Fittings market will further speed up in terms of CAGR. Moreover, emerging markets will dominate the growth in the displayed sectors.
Sources: PrNewswire (2021), Lucintel (2020,2021), Cognitive Market Research (2021), verifiedmarketresearch (2020)
Market Details & Industry Segments
Development per Industry 2020-2025
Development per Industry 2020-2025
- Among the Plastic Pipes application, the telecommunication sector and the oil and gas sector are expected to stagnate because of current saturation in the market.
- Nevertheless, compared to metal pipes, plastic pipes have witnessed strong popularity and opportunity for growth among potable water management systems in the APAC region.
- Within the Metal Pipes sector, almost all applicable industries seem to stagnate, excluding wastewater management. Analysts expect further declines in the application because of the comparatively higher material cost and more complex handling.
Note: Growing >3%⬆, Flat 0%-3% ➡ | Sources: Lucintel (2020), Lucintel (2019), Businesswire (2020)
COVID-19 enacted a variety of challenges for the Pipes & Fittings industry, because of production facility shutdowns. This is expected to cause an additional economic burden on market participants because the daily business is already governed by increasing prices and shortages in supply.
The Pipes & Fittings industry is controlled by high capital expenditures, especially in the metal segment. Therefore, it is expected that cheaper alternatives, such as Plastic Pipes, will experience further growth in the future. On a global comparison, analysts expect the largest growth in APAC countries because of their ongoing urbanization and infrastructure development.
The importance of sustainability in the Pipes & Fittings Industry will continue to increase because of the corporations’ goal to commit to ESG standards. Nevertheless, large room for improvement is presented on a global scale when analyzing the ESG risk in the peer group’s sectors.
With the growing market, Intellectual Property protection is on the rise which resulted in the imposing of tariffs from the US towards China. Additionally, Plastic Pipes are seen to become more popular. Therefore, analysts expect rising M&A and Joint Venture activity in the market.
Note: ESG = Environmental, Societal and Governance risk |
Sources: Grandviewresearch (2021), Lucintel (2021), Sazun Pipes & Fittings Peer Group (2021), Sustainalytics (2021), National Bureau of Asian Research (2021), The Business Research Company (2019)
Valuation Trends and Developments
- The peer group consisted of stock-listed multinationals in the various Pipes & Fittings sectors. For Small and Mid sized businesses 20-30% markdowns in multiples may be expected.
- In 2020 EV/SALES plummeted because of the impact of the COVID-19 pandemic and the correlated closures of production facilities. Nevertheless, the market recovered greatly above past years averages and surpassed the multiple threshold of 1x within Q3 2020*.
- EV/EBITDA displays slighter fluctuations during Q2 2020 and it is expected that the market recovery will continue to rise up to levels in FY17.
*Note: Applies to companies with industry-standard margins
Source: Sazun Equity Research, Pipes & Fittings (2021)
Key Performance Indicators
Selected Latest Deals (YTD)
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Your SAZUN Team