In 2009, researchers from T.A. Cook asked a large number of business leaders, production managers, plant and TAR managers at petrochemical facilities as well as service providers about their prognoses on trends, strategies and scenarios related to TARs. They identified two main trends: Longer production uptime and a reduction in downtime at processing facilities. The technical service providers forecast that operators would increasingly turn to long-term partnership models. Almost half of the respondents believed there would be an increase in safety and security measures due to new industry standards and that projects would become more complex.
Ten years later – at the TAR seminar hosted by T.A. Cook in Potsdam 2019 – Gerald Pilotto contrasted the prognoses with current developments. The executive president of the Engineering & Maintenance Continental Europe division at Bilfinger SE, confirmed that 80% of the service trends forecast had been correct. Only the first claim in the study, namely that the demand for TAR services would decline by 20% by 2020, was off the mark. There are in fact three huge Turnarounds scheduled over the next three years, which according to Pilotto means that the number of service providers will hardly change. At the same time, there has been a lot of consolidation on the service provider side.
The trend is now towards EPC or Engineering-Procurement-Construction projects. "TAR service providers are increasingly being asked to carry out projects. Because smaller and larger projects are overlapping more often, complexity and risk is also growing," stressed Gerald Pilotto. To meet these demands, the industry is witnessing more joint ventures, working groups and strategic alliances.
"We can confirm the accuracy of the prognoses made at the time in relation to volume growth through increased investment," said Pilotto. "We initiated a market model at Bilfinger, which then confirmed that the number of maintenance and project contracts in German-speaking Europe was roughly the same. We then developed a strategy based on these findings. Turnarounds are heavily driven by investment, even if the industry trend is moving towards smaller Turnarounds," Pilotto added.
The study further forecast that more planning groups, both from the operator and service provider sides, would be deployed. This trend is now fully established on the market and there are currently a number of independent project and planning partners. Even the big EPC contractors are beginning to work with independent planning and project partners during Turnarounds. At the same time, there has been an increase in international competition within the TAR industry, particularly in the mechanical sector. "There is increasing competition from firms in Eastern Europe and the Baltic states, as well as many Spanish and southern Italian contractors," Pilotto continued to explain.
What has not happened is expansion into the booming markets in Eastern Europe. The markets in Hungary, Slovakia and Poland are heavily nationalized. In fact, some private companies in these markets have even been nationalized. The result has been that the markets bordering the DACH region have been stagnating or even shrinking.