By James Buckley
Unqualified valve manufacturers operating in the Middle East are competing successfully for projects, which is starving legitimate companies of business.
The standards and specifications used in Middle East valve manufacturing are a minefield, and they are making it harder for companies to compete.
Legitimate companies, compliant with American Petroleum Institute (API) legislation, are having to compete with rogue contractors, which, once on supplier vendor lists, enjoy as much business as approved companies.
"In Europe it is much easier for high-quality valve manufacturers to sell their product because the specifications and testing requirements are much more stringent than here," said Michael Bovey, managing director of Multi Valve Technology (Middle East) and Middle East manager of BEL Valves. "One of the problems is that there is a vast number of vendors of differing standards, but all making the same nominal product."
Avnish Gupta, regional manager of Virgo Valves and Controls, contends the problem extends to more than just design standards. Many manufacturers are also now sourcing fully made valves from other cheaper sources and selling them under their own brand. These cheaper sources have not been subjected to any design or safety specifications.
Typically, institutions such as API, the American Standard of Mechanical Engineers and the American National Standards Institute regulate the design principles. But the end user determines the materials of construction and the level of testing required.
"What has made the procurement of valves difficult is the contractor or end user because all too often the industry wants to re-invent the wheel," added Bovey. "Engineers want to make their mark on designs, as opposed to looking back and acknowledging current designs, which have worked for the last ten years."
Another problem is that capable valve companies are often penalised for falling short on tests, which have little resemblance to real world applications. "The issue is that some of the standards have evolved out of laboratory testing and are often quite far removed from real working conditions," said Elvis Fuller of JC Middle East. "Valve product qualification is at one level, product testing is at another level, and reality is at quite another." In the Middle East, these standards and specifications vary considerably depending on the application of the valve, as well as the level of standardisation the end user wishes to adopt.
An increasing number of Far Eastern manufacturers are being accepted in the industry, not only because they are producing superior product, but because they can do it cheaper. In the Gulf, cost dictates who wins the contract and as a result, local manufacturers are being squeezed the hardest, having a knock-on effect down the line.
"Unless a valve product is absolutely critical and required instantly, there is a reluctance to step out of the box and buy something that is superior to what is required," said Bovey. "In the Gulf, client vendor lists are often out of date either due to changes in company ownership or because [manufacturers] are lacking in specific production capabilities. The end result is that companies have been awarded contracts which have never built the specific product.
"Therefore, to a large degree, the system is a bit of a mockery. There's no real look at lifecycle costings and the valve industry in this part of the world is price driven, rather than driven by the best product for the application."
In Europe and the US, the rise of more demanding projects have ousted many inadequate companies. Advances in valve technology in recent years has been driven by deep water sub-sea projects, particularly offshore in the Gulf of Mexico, Angola and the UK continental shelf. Here technology is being pushed further because production is being forced into deeper water and working at higher pressures. "Having more stringent standards serves to define the best out of the lot," said Yogesh Odhrani, director of Esma Industrial Enterprises.
But in the Middle East, much of the production is occurring onshore, in relatively shallow water, or in remote areas. Therefore testing requirements are not as stringent as they are in Europe and the US, or even the Far East where it is common to have built up areas close to oil, gas and petrochemical process and production facilities.
But, says Odhrani, there are signs that the valve industry in the Middle East is wising up to unqualified traders. "The Gulf has more relaxed testing requirements than Europe, but we are catching up," he said. "These requirements are much stricter than they used to be. Years ago it was much easier for a company to supply a valve; it was more an availability issue than a supply issue. These days companies are more careful when selecting valves, and are cautious of the manufacturing, quality and origin of the valve."
Fuller feels increases in valve technology will ultimately define capable Middle East manufacturers. "With the advent of solid modelling (3D CAD), casting solidification simulation software and finite element analysis (FEA), valve design has been refined a lot, not only in terms of specificity of linear tolerances, but geometric tolerances and also better stress load calculations," he said.
Gupta says better quality control is the answer to exposing rogue companies and ensuring valve standards are enforced. "Manufacturers should be evaluated through visits and audits by users themselves for the quality of manufacturing setup, proven design, ability to understand the specifications, quality control and assurance, management's policy and sensitivity for field failure and track record with other major oil companies over a minimum of five years," he said.
Shaikh Nasimuddin, head of Gerab's valves division contends the advent of emissions specifications in the Gulf, both in API and ISO, as well as in individual end user specifications, have required gasket and packing emissions to be seriously tested for compliance. This requires packings that are compliant, not only to Environmental Protection Agency (EPA) standards, but also to parts per million (ppm) calculations as per the ISO and photoacoustic imaging (PAI) and Shell MESC standards.
"Stringent or hazardous service requirements have created the need to introduce standards, such as API 6D, that provide guidance for fire safe designs and antistatic features, said Nasimuddin. "Also there is the National Association of Corrosion Engineers (NACE) certification for sour applications."
Nasimuddin feels that business for companies without the necessary paperwork will eventually dry up, as codes and specifications become as strict and tightly enforced as in Europe and the US. "Once the manufacturer complies with the relevant standards, you are assured of the quality and reliability of the product to suit the particular service requirement," he said. But Nasimuddin also contends that if these standards are to work for the benefit of all, it is the responsibility of the purchaser to update the manufacturer about these developments. "Regular audits and assessments of manufacturers must be done to ensure that the manufacturer maintains compliances to these standards," he added.
What the industry in the Middle East needs, says Gupta, is to be based on the European model, where stringent standards and specifications sort the competent companies from the incompetent ones, making for a more transparent environment.
"A good and strong vendor qualification system will filter out incompetent manufacturers," he said. "The basic specifications are almost the same worldwide, but [in Europe] they have much stricter controls on vendor qualification.