Turbine maintenance market set for moderate growth
Shortage of manpower and other factors prevent brighter outlook.
The GCC steam turbine maintenance, repair and overhaul (MRO) service market will continue to grow at a moderate pace at the rate of 8 percent until 2013, according to law firm Frost & Sullivan.
The spike in demand for power and petrochemical products saw the rise in installation of steam turbines, which in turn has revved up the need for maintenance and regular service of these steam turbines, finds Frost & Sullivan Research Analyst Shwetha Shivarama.
Upcoming projects in petrochemical industries, such as the Kuwait Styrene Company and Kuwait Paraxylene Production Company, are expected to boost the market for steam turbines.
Frost estimates that the market earned revenues of $95.0 million in 2008 and estimates this to reach $114.2 million by 2013.
“Kuwait is estimated to be the largest market both in terms of revenue and units; more than 50 percent of the turbines serviced in Kuwait were light industrial turbines, hence accounted for lesser revenue when compared to units,” says Shivarama. “The country is expected to be a major participant even in the future with a regional share of 30 percent in revenues followed by Saudi Arabia and the UAE.”
Though market prospects are upbeat, there are some challenges restraining forward momentum, according to Frost’s analysis. The region is faced with a shortage of skilled manpower for turbine services and hence, service providers are forced to recruit people from other regions, especially South Asia, South East Asia, and Europe.
Moreover, the localization policy of governments in the GCC has inhibited the growth of turbine service facilities in the region.
In addition, Steam turbines, which are technically easier to service compared to gas turbines, are sometimes serviced in-house by end users. The establishment of central workshops by end users narrows the scope for external services. As a result, service providers suffer revenue loss and overall market growth is curtailed.