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Market transformation

Transformers are a crucial link in the power supply chain

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Umud Yildirim, of Areva T&D, says safety and reliability is a key priority for transformers.
Umud Yildirim, of Areva T&D, says safety and reliability is a key priority for transformers.
Socomec is a French company that works in the Middle East through a network of agents.
Socomec is a French company that works in the Middle East through a network of agents.
Noaman Amjad of ABB sees Saudi Arabia as a place with plenty of business potential.
Noaman Amjad of ABB sees Saudi Arabia as a place with plenty of business potential.
Paneer Selvam, marketing manager for Emirates Transformers is seeing the market pick up.
Paneer Selvam, marketing manager for Emirates Transformers is seeing the market pick up.

As progress toward a GCC-wide power grid continues, the market for transformers continues to appear strong.

As an integral part of any power distribution system, the safety and reliability of any products on offer is a major industry talking point. Although transformers come in a wide range of sizes and are used in an equally wide selection of applications, some issues are common across the sector.

The economic downturn has had an impact, but industry insiders are also keen to improve the efficiency of transformers. Delivery times and the availability of raw materials have both improved, but remain a talking point for those involved in the sector.

Umud Yildirim, marketing manager, distribution transformers, Areva T&D

 How is the transformers market in the Middle East performing currently?

The Middle East market is one of the most attractive and dynamic market for distribution and medium power transformers. For several years, this market has been driven by the strong development of important industrial projects, especially in oil and gas, mining and metals, desalination plants, and by the development of the distribution  network.

The GCC real estate and construction sector has been a booster for the transformer market as well. The current crisis is clearly impacting the real estate market. However, the Middle East remains a very attractive region with continuing investment and new opportunities.

 What are the major issues in the sector?

New challenges are facing the sector with the request to improve electrical network efficiency and safety of the equipment. The environmental impact of the electrical equipment is also a key concern for the customers, and  is considered more and more when they purchase a transformer.

 What challenges are being faced in the Middle East transformer market?

The safety and reliability of transformers is a priority for the customers. In sensitive areas such as refineries, the transformer has to guarantee the security of the operators. The transformer also has to ensure as a continuity of service to the end customers.

 What technological advances have you seen in the market over the past few years?

Areva T&D transformer is a pioneer in developing and supplying innovative solutions and high quality equipment to reduce the losses (no load and load) and noise level of transformers.

 What do you think the future holds?

We are expecting to see a more stable transformer demand in 2009 and we are forecasting an upturn  starting from 2010.

AREVA PROFILE

The transmission and distribution arm of Areva supplies products, systems and services to the medium and high voltage electricity markets. The firm has been in the Middle East for 30 years and has 13 sales offices in the region, including bases in Qatar, Kuwait and KSA.

Jean-Michel Keloumgian, general manager, Socomec

 How does your company deal with transformers?

We deal with transformers as a system, we use them with our machinery. We work with transformers on a regular basis. In terms of units we use one per day.

 How is your company set up in the Middle East?

We do a fair amount of business. We do not have an office, but agents.

 What kind of challenges do you see in the Middle East market?

The efficiency of products. Also the conception of the electricity there and achieving green energy are challenges. Green energy of course is something high on our agenda.

 What are your plans for the Middle East in the future?

We are going to spread and have a regional office in the Middle East. We are covering all the countries but we are planning to open an office in 2010.

 What are the major issues right now?

The postponing of projects is a major issue, otherwise we have no problems. It has not happened to us much, we are not really affected by the crisis; a few things have been postponed but not that much.

SOCOMEC PROFILE

Socomec deals mainly in low voltage switching components, protection systems and uninterruptible power supply systems. It deals in the industrial sector and was founded in 1922.

Noaman Amjad, head of power systems division, ABB

 How is ABB involved with transformers?

We are the largest transformer firm in the world. Our order intake is over US$6 billion. You will see that our company is the biggest by far. And the reason for that is of course because we are able to give a very wide range of transformers. We are doing anything from very small transformers  to very, very large ones. We have about 50 factories for transformers.

We have just purchased a new factory in the US, so we are still doing some acquisitions. I have also just been told that we have successfully tested the first 800kv High Voltage DC transformer as well, which is a very big thing.

 In which countries of the Middle East do you see the most potential?

One of the biggest I would say is the Kingdom of Saudi Arabia, the whole population of Saudi is very big and also a very young population and they need jobs , so we see sustainable growth there. But smaller countries of course will rely on outside funding.

Iraq is the wild card. We should see an upturn in activity in Iraq and it’s a huge market. There is huge potential there.

 How do you see the future of power generation?

We see a move away from the oil and gas, from the fossil fuels to create power. We felt that the Gulf will try to use this fuel to actually crack it into higher end-value products, and move towards alternative forms of energy such as wind, solar and nuclear.

ABB PROFILE

ABB operates in 63 countries in the Middle East and Africa. It recently won a US$24 million power order in Kuwait and a US$32 million order in Mozambique. It deals in power and automation technologies and has a department within the company devoted to transformers.

Paneer Selvam, marketing manager for Emirates Transformers

 How is the market for transformers performing currently?

Our market is picking up, the worst is over and the so called fear is gone.  The market which we operate is mainly the GCC countries. The population growth, there is no stopping it in the Middle East. If this growth is continuing then our product will always be in demand.

We work all the GCC countries, Iran, Iraq and North East Africa. All these countries, the population growth is good, so when the population growth is there you need the basic things like electricity so they will need our product.

 What are the major issues in the market currently?

The major issue in the industry is the price volatility. Our product is based on metal and the metal price is quite volatile now. Until around three months back it was very low and today it has gone up by a lot. This volatility is what really gives people fear. If I booked an order today, it takes around three months and if there are fluctuations in the three months then I am the one that is the loser.

 What are the challenges presented in this region?

As a part of the marketing activity in this part of the world, the local agent plays a huge role. If you want to deal any product in Saudi you need an agent in Saudi, you can’t sell it from the UAE. The same thing is applicable in Sharjah, you need an agent in that Emirate. We have agents in all these countries and can offer a local service.

 How do you see the future?

We are confident, as an infrastructure product, it will develop and continue to be there. But there will be competition, because the GCC market is open to everybody.

The Middle East has always been a growing market, and it has never seen a negative growth or a stagnant growth. The product that we manufacture has no uniqueness, and its quite an old industry. We have the advantage of being here for more than 20 years. We are quite aware of the challenges posed by the environment and
the climate.

Emirates Transformers Profile

Emirates Transformers has been established since 1987 and manufactures transformers and switchgears in the UAE. It’s product range includes distribution transformers, power transformers, switchgear panels package substations and step-lap cut laminations.

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