Emerging markets food production demand provides strong growth - SPX

03-Nov-2011 - Last updated on 03-Nov-2011 at 12:01 GMT

Increased demand for food production technology from emerging markets such as China and Eastern Europe has led to continued “strong revenue growth” for engineering giant SPX in the third quarter of 2011.

High demand in the company’s Flow Technology segment, which includes engineered components for a range of industries including food, dairy and beverage, has seen the company’s emerging market revenue jumped to around $450m – a third of the company’s total revenue for Q3.

SPX revenue witnessed an overall rise in revenue of 7.7%, increasing from $1.29bn in Q3 2010 to $1.39bn for this quarter, with the company’s overall Flow Technology accounting for $527.9m – a leap of 20.4% on $438.6m for Q3 2010.

Increased demand for large-scale systems and components for the food and beverage market also contributed to growth of 16.3% in organic revenue from existing businesses.

Emerging markets revenue increase

SPX president and CEO Christopher J. Kearney said: “Emerging markets continued to be very important to our overall revenue development. As I mentioned, our emerging market revenue increased 29% over last year to about $450m, representing 33% of our total company revenue.”

SPX have put this huge demand for food processing technology down to its customer’s investment and expansion in emerging regions and niche markets where food production demand is very high.

“This growth was concentrated in our Flow Technology segment, where sales grew sharply in China, the Middle East, Eastern Europe and South America,” added Kearney.

“From a geographic perspective, we experienced revenue growth across all major regions. Sales in the Asia Pacific increased 8%, and sales increased 7% in both Europe and in the Americas.”

“During the quarter, we saw continued strong demand in our Flow Technology segment across all key geographies and end markets.”

“This in part reflects revenue synergies we are achieving through the combination of acquired technologies that have allowed us to expand our global systems capabilities and presence.”

Acquisition boost

SPX’s current food and beverage business acquisitions, such as the recent completely e&e purchase, have also contributed to increased revenues, with acquisitions providing a revenue boost of 1.1% for the quarter.

The company hope pending acquisitions, such as the purchase agreement for ClydeUnion Pumps, will further increases its global presence, particularly in these emerging, lucrative markets.

“This acquisition is consistent with our long-term strategy and will increase our Flow Technology capabilities,” added Kearney.

“For the full year, we estimate that our sales of food and beverage systems will grow to approximately $500m. This growth highlights the revenue synergies we’re achieving through the integration of the acquired food and beverage technologies.”

“We expect this to be a defining acquisition for us as it will establish a second global platform with our flow segment.”