An observation of current production trends reveals that the Indian fluid power industry has grown

in line with industrial production. This is because of the underlying trend towards automation and
the presence of fluid power products across the spectrum of industrial applications. The privatisation
drive and increasing defence expenditures in many countries are now providing tremendous
business opportunities for this sector.
With market leadership well matured and established in North America and Europe, the focus on
geographic expansion has moved to emerging markets in Latin America and Asia. Especially in Asia,
the industry is estimated to achieve a growth of over 30 per cent.
This global trend indicates a modest business growth in this sector. As the industry matures and
settles into a slower growth mode, market leaders will seek acquisitions in order to maintain
comparable growth in sales and earnings.
A drive towards consolidation has been witnessed in the global fluid power industry. On the
manufacturing side of the industry, companies such as Aeroquip-Vickers (Hydrokraft Germany),
Mannesman / Rexroth (Uchida Hydraulics Japan), Parker Hannifin (Siebe Sweden, VOAC
Sweden, Power Systems division of Figgie International) and Sauer (Control Concepts) have made
acquisitions over the past few years. These consolidations and transactions have brought the
companies into new markets and have expanded the customer base and technical expertise in this
sector.
Apart from the consolidation in the manufacturing segment of this industry across the globe,
mergers have also happened on the distribution side. Industry leader, Sophus Berendsen (Vescor,
Doedijins Group Netherlands), as well as diversified industrial distributors, which include Applied
Industrial Technologies (Engineered Sales) and Wajax (Yellowstone Hydraulics, Spencer Industries)
have made acquisitions. These acquisitions focus on the benefits of increased sales coverage, more
complete product offerings, assembly capabilities and additional purchasing leverage.
It is also interesting to note that most leading fluid power companies are divisions of larger industrial
units. Such companies would encompass the likes of Eaton Hydraulics Division (Eaton Corporation),
Rexroth (Mannesman) and Motion Industries (Genuine Parts, US). As such, these companies already
offer a broad range of components and systems to their aerospace, construction, heavy truck,
agriculture, machine tool and material handling divisions of the parent companies.
these corporations are now showing a preference to conservative expansion as opposed to making
aquisitions in the field of fluid power