Monday, August 30, 2010

Africa gen-set market growing--thanks to drought

East African Genset Market Poised for High Growth Due to the Power
Crisis, Notes Frost & Sullivan

CAPE TOWN, South Africa, Aug. 30 /PRNewswire/ -- The East African
region is fraught with seasonal droughts and a consequent power
crisis. This crisis, coupled with an expected rise in economic growth
in the region, is the main driver for growth in the East African
genset market. The sectors that are experiencing significant growth
include, but are not limited to, telecommunications, manufacturing,
mining, commercial, and construction.

New analysis from Frost & Sullivan (, The
East African Genset Market, finds that the market earned revenues of
$54.4 million in 2009 and estimates this to reach $212 million in
2014. The end-user sectors covered in this study include industrial
and commercial, mining and construction, telecommunications and

If you are interested in more information on this study, please send
an e-mail to Patrick Cairns, Corporate Communications, at
, with your full name, company name, title, telephone number, company
e-mail address, company website, city, state and country.

"The water levels in the major dams feeding the hydro power stations
in the region have drastically decreased, stepping-up the need for
gensets," says Frost & Sullivan Research Analyst Salima Zyambo.
"Additionally, economic growth ranging between 4 and 8 per cent is
expected in the long-term as East Africa embarks on economic
development programmes, further creating a demand for gensets."

Infrastructure development, road construction and industrial
expansions have led to an increase in the use of gensets, both as a
source of prime power and stand-by power.

However, market growth is hampered by lack of quality control
regulations � a major growth restraint in the genset market for
original equipment manufacturers (OEMs). Furthermore, OEMs from Europe
and North America are facing stiff competition from their Asian
counterparts, who are able to supply gensets of increasingly good
quality at competitive prices.

"The market is flooded with gensets of varying quality and prices as a
direct result of the lack of quality control regulations in the
region," explains Zyambo. "With the demand for gensets expected to
rise as the region's economy grows, more equipment suppliers are
entering the market."

Product quality and efficient after-sales services are however fast
replacing product price as the key differentiating factors in the
genset market. Offering a wide variety of product brands to customers
is another critical success factor that will reduce the probability of
customers switching to other suppliers.

"Equipment suppliers who can ensure efficient service delivery,
product quality and cost competitiveness are in a better position to
capture and grow their market share," concludes Zyambo. "This can be
achieved by either opening more outlets or working in conjunction with
existing equipment stores."

The East African Genset Market is part of the Energy & Power Growth
Partnership Services programme, which also includes research in the
following markets: The Sub-Saharan Africa Large Diesel Generation
Markets and Power Rental in Key African Markets. All research services
included in subscriptions provide detailed market opportunities and
industry trends that have been evaluated following extensive
interviews with market participants.

About Frost & Sullivan

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