Demand for Uninterrupted Power Drives Southeast Asian Generator Sets Market

SINGAPORE - The demand for uninterrupted and quality power for energy-intensive industries drives the market for generator sets, considered the best back-up power supply in Southeast Asia. The presence of far-flung islands in this region that are still not connected to national power grids is a major driver for this market.

"Besides remote area electrification, the rapidly growing infrastructure to accommodate commercial and industrial developments in major cities maintains a steady, though rather slow market growth," says Frost and Sullivan Research Analyst Suchitra Sriram. "With companies investing in generator sets to avert unexpected financial losses and inefficient performance due to power outages, demand for diesel powered generators is sustained despite rising fuel costs."

The development of excellent power transmission and distribution lines across some of the Southeast Asian countries such as Singapore, Malaysia and Thailand, along with economical electricity rates in Malaysia, are challenging the growth of the generator sets market.

The influx of low-cost imported products is also a major cause for concern in this mature market, with reputed brands unable to compete with the imported packages on the price front. It is highly challenging for industry players to device competent policies to market equipment and retain their existing customer base.

Emerging renewable energy technologies (RETs) also prove to be a restraint to the uptake of the conventional generator set. The environment- friendly nature of RETs, coupled with negligible operational and maintenance expenses, are the driving factors that attract customers to migrate to this new technology.

However, RETs are not a viable option in remote and inaccessible areas due to high investment costs. Hence, generator sets, which are easy to install and operate, continue to be the preferred mode of power supply here, just as they are with large industrial and commercial establishments.

"Although the industrial and commercial end-user segments continue to promote new equipment sales, dealers can garner larger market shares by aggressively marketing their products, offering value-added services, customer service, spare parts sales, consultancy, and technology upgrades when needed," suggests Sriram.