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RELATED ARTICLES: Saudi Arabia leads Middle East rental power demand | Unrest in MENA to fuel rental power growth in 2012 | Algeco and Byrne Rental extend deal for Qatar
Generators have long played a vital part in the development of the construction industry. Companies have used them to provide electricity for anything from a 100 storey tower to an industrial yard for decades.
With that in mind, it’s easy to draw a parallel between the growth of the generator industry and the growth of infrastructure and construction activity throughout the GCC.
While Dubai and the UAE have led the way in this regard for a long time the slowdown in the Emirates means that all eyes are now turning towards Saudi Arabia and Qatar.
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These two Gulf countries are expected to be the next focus markets for growth in the regional generator industry.
One sector of that industry certain to benefit are the rental power companies who lease out generators to construction sites and utility companies in the region.
According to Shrikant Pataskar, general manager of the Dubai office of Kirloskar, an Indian generator manufacturer, the increased demand from Saudi Arabia and Qatar is likely to see the market grow by at least 20% over the coming year.
“We also expect the re-export market to pick up from Dubai, as users in the neighbouring region would prefer to purchase as per requirement, rather than carrying a large inventory,” he adds.
Furthermore, with the recent political uncertainty in the Middle East and North Africa, coupled with the European debt crisis, the rental market is expected to flourish as companies grow reluctant to invest in bigger units and would prefer to rent them out.
“Because of the worldwide credit crunch, the lead time on generators is now, certainly on the larger ones, anywhere from 14 to 18 weeks. As a consequence, a lot of contractors will require them.
Even though there is a sort of purchase mentality because of their longevity, there will be a four or five month high while these guys are waiting for equipment to come in,” says Jeff Hollingsworth, CEO of Prime Power, a Qatari rental power company, who also expects demand to pick up very quickly.
“On top of that, we expect a lot more European companies to come in to Qatar because of the scale of the projects, and they’ll tend to have a rental mentality because they’re not too sure of the market here and they prefer to have somebody else do the service, so that they only have to worry about turning the lights and computers on, and so on.”
“We expect that as we move further along, the client base mentality will be opposed to purchasing. This tends to be the norm in the Arab world, and we’ll benefit from that, to be honest,” Hollingsworth says, highlighting an uncomfortable truth.
However, while this demand is all well and good, concerns have been voiced over the environmental efficiency and sustainability of these generators.
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