On Fire: Consolidation and Code Compliance

Oct. 27, 2008

Dear Readers:
Seems everyone has their eyes on the fire alarm and detection systems market these days. On the manufacturing side, mergers and acquisitions continue to consolidate the industry. Many of your customers are being driven by code compliance. For dealers, integration is at work as more technologically advanced equipment is being introduced.

New analysis from Frost & Sullivan on the North American Fire Alarm Equipment Market, reveals that this market generated revenue of $768.3 million in 2004. Total market revenue expects to reach $1,128.5 million in 2010. Frost & Sullivan Research Analyst Girish Kachroo explains that while companies can gain by expanding product portfolio and markets, many companies also look at enhancing their distribution channels. The price sensitivity of the end user market compels manufacturers to find ways to keep manufacturing costs low, while also providing high quality products, says Kachroo.

"Stringent inspection of testing, especially sensitivity testing for devices and intelligibility/audibility testing of voice evacuation systems, has raised the quality of the devices by several notches," he says. This, in turn, has led to greater adoption of the devices.

The market has received a further boost with newly mandated federal, state, and local building codes. Several recent studies are uncovering even more business potential for dealers. Pennsylvania Auditor General Robert P. Casey, Jr., for example, released a report on Fire Safety at State Institutions. Half of the 60 state institutions Casey reviewed had major fire equipment deficiencies, such as fire alarm systems that were not functioning, fire extinguishers that were not inspected properly, or a lack of smoke detectors and sprinklers in dormitories and residential halls.

The National Institute of Standards and Technology released a 600-page draft report containing 12 fire-safety recommendations for nightclubs. The report is a result of the Feb. 20, 2003, fire at the Station nightclub in West Warwick, RI, during a Great White concert. Several states, including Rhode Island, have instituted changes in codes in the wake of the fire. Also in Rhode Island state officials have 90 days to come up with a plan to bring the State House into compliance with the new fire codes enacted in response to The Station nightclub fire. Inspectors found 32 fire-safety violations beneath the marble dome. For example, inspectors said the State House lacks sufficient smoke- and heat-detection devices.

It is a trend that is sure to continue. Investments in the fire alarm system market for dealers can be really hot-be it upgrading current systems to comply with the latest codes, new construction, compliance with the American with Disabilities Act (ADA) or simply making sure all your residential customers are properly protected.