Suppliers of uninterruptible power supply (UPS) systems in Vietnam have recognized the glut of opportunities in the industries of telecommunications, IT, and energy, where end users are eager to protect their expensive electrical and electronic equipment from blackouts, brownouts, and surges. UPS systems are particularly pertinent in the IT and financial sectors for preventing system malfunction and loss of sensitive data.
New analysis from Frost & Sullivan (powersupplies.frost.com), Vietnam Uninterruptible Power Supply Markets, finds that the market earned revenues of $26.0 million in 2007 and estimates this to reach $85.4 million in 2014.
"In the telecommunication industry, the UPS penetration rate in wireless and wire line application is fairly low, and this presents untapped potential," says Frost & Sullivan Research Analyst Teoh Chew Yew. "The lack of basic infrastructure such as global system for mobile communications (GSM), 3G, and the inception of alternative circuits in the telecommunication industry is anticipated to further drive market."
Another sector that is expected to contribute significantly to the market is the oil and gas sector, which is experiencing increased exploration and production activities. Oil majors are setting up new platforms and marginal fields such as Pearl Platform and sub-platforms, which require power distribution units. UPS manufacturers are looking to make the most of these developments by introducing products or technologies that are relevant to this industry.
Overall, the mass infrastructure developments taking place in Vietnam are paving the way for robust and prolonged growth of the UPS market. Currently, the country is beset by problems of frequent power outages, providing UPS suppliers with abundant business prospects.
"The large UPS market segment (above 5 kVA power segment) is expected to benefit the most from the poor quality of power and expansion projects," notes Yew. "The small UPS segment (below 5 kVA) also holds substantial promise and is intensely competitive due to the constant influx of market entrants from China and Taiwan."
However, the foreign competition from these low-cost countries has severely affected pricing trends in the small UPS segment. Market participants are pressured further by the high inflation rate in the country and surge in commodity prices from 2007 to the second quarter of 2008.
End users have reduced their capital expenditure in these straitened circumstances and are reluctant to procure or upgrade systems. UPS suppliers can offset these concerns by charging low prices for their systems and recovering the costs through servicing.
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Vietnam Uninterruptible Power Supply Markets / P0AA
Carrie Low, Corporate Communications – Southeast Asia
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