The Southeast Asian power and distribution transformers markets are poised for strong growth, buoyed by the increase in power demand, the addition of power generation capacity, and active government support for infrastructure development. Other prominent factors contributing to market momentum are cost efficiency, design enhancement, and partnerships. At the back of economic growth, the energy needs of the region have been escalating across the industrial, commercial, and residential end-user segments.
New analysis from Frost & Sullivan (energy.frost.com), Southeast Asian Power and Distribution Transformers Markets, finds that market earned revenues of over $6.02 billion in 2007 and estimates this to reach $15.08 billion in 2014.
"Figures indicate that between 2007 and 2008, Southeast Asia has experienced an increase of about 7,000 MW to the capacity," says Frost & Sullivan Research Analyst Do Thai Son. "Every MV capacity addition would translate into proportionate spending on the transmission and distribution infrastructure to support the overall development of the region's economy."
Vietnam and Thailand have been at the forefront of the transformers' market development in Southeast Asia. In the long term, Indonesia is slated to become the new hotspot for the power and distribution markets, aiming to reach a target of an electrification ratio of up to 90 percent within the next decade. Rural electrification is another factor that is driving the growth of distribution transformers.
The benefit of increased power generation to the end users has been accomplished by a well-developed transmission and distribution infrastructure. The Southeast Asian countries exhibit differences in priorities in developing power transmission infrastructure focused on rural electrification and the primary focus of rural electrification includes improving the electrification ratio, expanding electrical network to address growing demand, and optimizing the assets to make the network more efficient and reliable.
However, transformer prices have registered a steep rise owing to the sudden increase in demand and the decrease in supply. Over the past four years, the average price prices have jumped by one and a half to two times, depending on system specification. The worldwide increase in the prices of copper, aluminum, and steel has contributed to the upswing in transformer prices, registering an increase of 20 to 25 percent per annum since 2004. The fluctuations in price have affected both power and distribution transformers alike.
Cost efficiency remains a major concern for users and great stakes are placed on the government's strategies to promote the green approach. Combining the ability to provide efficient lead time along with competitive pricing will enable participants to steal a march over competition. To circumvent the pricing pressure, manufacturers are pulling out all stops to enhance the efficiency of the design or set up budget manufacturers in low-cost countries.
"To ensure business expansion and divergence, it is imperative for participants to establish sound partnerships with local manufacturers, government agencies, value-added resellers, and distributors," explains Thai Son. "Manufacturers are striving to provide a broader portfolio of products, more comprehensive solution to customers; thus, the industry is becoming consolidated through mergers and acquisitions."
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Southeast Asian Power and Distribution Transformers Markets / P1F9