GCC genset market set to grow to $950m by 2018

Report by Frost & Sullivan predicts strong growth for gensets in GCC

An Atlas Copco generator on display at last year's Intermat Middle East expo.
An Atlas Copco generator on display at last year's Intermat Middle East expo.

The sale of generators in the GCC is set to grow from $564.6m in 2011 to as much as $950.4m in 2018 - a 68% increase - due in part to the insecure supplies of national electricity grids, according to an estimate by Frost & Sullivan.

According to the report, Strategic Analysis of GCC Diesel Genset Market (15-2,000 kVA), sales of gensets will be boosted by electricity transmission and distribution bottlenecks, and the ensuing power shortages.

"Since grid electricity supply is either unreliable owing to extreme desert conditions or is prohibitively priced, several companies, particularly those drilling in oil reserves, rely on diesel genset power to maintain operational effectiveness," said Frost & Sullivan's energy and power systems program manager Anup Barapatre.

"Demand from the residential segment will increase owing to the growing population and higher living standards."

In Saudi Arabia, high peak power deficit, along with delayed power plant projects, is expected to drive the uptake of diesel gensets. Qatar, Oman, United Arab Emirates, and Kuwait will witness high growth rates due to industrial and commercial development, said the report.

Nevertheless, the increasing presence of manufacturers from China and India will intensify competition in the region, thereby decreasing profit margins.

"Suppliers must form local joint ventures and partnerships to strengthen their brand name and establish business relationships with key end users," noted Barapatre. "Sound local logistics support is necessary to supply units and transfer personnel to remote locations."

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