The generator game

Carl Briden, director at Kaeser.
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What are the effects of the global economic conditions on the Middle East’s vital generators and compressors market?

Contrary to popular belief, there are still certain service sectors for the utilities sector that seem to be outperforming the market. In the field of generators and compressors, the demand has never been higher.

For generator companies, the rental option is still becoming more and more prevalent. “Leasing has a cushioning effect for companies who are uncertain about the long-term future of their projects,” explains Phil Burns, managing director of Aggreko Middle East.

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“By renting equipment, firms can ensure that they will not be left with equipment that will sit unutilised; if a company that has purchased large amounts of equipment decides that a project must be put on hold, the cost damage incurred can be major.”

In general terms, clients’ unwillingness to invest large sums of capital means that the rental option is perfect for companies that may not be able to afford such large lump-sum outlays.

Furthermore, lead times are by definition shorter with rental solutions, which can be utilised within days (or even hours – see case study) of an agreement being signed. Lastly, the flexibility that the leasing option provides – allowing clients to increase or decrease capacity at the drop of a hat – means that, all in all, for some companies, the rental packages are certainly making more sense.

In the market for compressors, however, there is a belief on the part of some that while the rental sector is strong in the construction sector, this has not yet passed over to the utilities industry.

Burns believes that as Aggreko has just come out of a busy summer period, the company is still benefiting from the seasonal increase in business due to summer shortages.

This positive outlook is reflected by Kaeser Kompressoren, a major provider of compressed air technology, which bases its regional head office in Dubai’s Jebel Ali Free Zone.

“Currently, business is running extremely well, in fact our order book has never been higher,” says Carl Briden, director at Kaeser Kompressoren.

“Obviously the first few months of 2009 were difficult for everyone due to the uncertainty in the market. However, we have noticed that with a need for greater efficiency across all market sectors, decision making has tended to be more focused on quality and energy efficiency rather than just the bottom line.”