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The East African Genset Market
Frost & Sullivan, April 2010, Pages: 88
The East African genset market is entering a period of very high growth. There are currently no quality control regulations in the region as a direct result the market is highly competitive with 3 international OEMs dominating approximately 78% of the total market share.
Research Overview
This Frost & Sullivan research service titled The East African Genset Market provides a comprehensive overview of the current market environment for diesel gensets in East Africa, and highlights and explains the impact of market developments on future growth. This research service provides an insight into the industry challenges, market drivers and market restraints and determines their impact on the future market demand for diesel gensets. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets by end-user sectors: industrial and commercial, mining and construction, telecommunications and agriculture. The regions covered in this research service are Kenya, Uganda, Tanzania and Ethiopia.
Market Overview
The East African Genset Market on an Upswing, Driven by the Power Crisis and Anticipated Increase in Economic Growth
A power crisis due to seasonal droughts coupled with an expected rise in economic growth in the East African region is the main driver for growth in the East African genset market. The sectors that are experiencing significant growth include, but are not limited to, telecommunications, manufacturing, mining, commercial and construction. “The water levels in the major dams feeding the hydro power stations have drastically decreased, stepping-up the need for gensets,” says the analyst of this research. “Additionally, economic growth ranging between 4 and 8 per cent is expected in the long-term as East Africa embarks on economic development programmes, creating a demand for gensets.” Infrastructure development, road constructions and industrial expansions have led to an increase in the use of gensets, both as a source of prime power as well as stand-by power.
However, the market growth is hampered by lack of quality control regulations – a major growth restraint in the genset market for original equipment manufacturers (OEMs). Furthermore, OEMs from Europe and North America are facing stiff competition from their Asian counterparts, who supply gensets of increasingly good quality at competitive prices. “The market is flooded with gensets of varying quality and prices as a direct result of the lack of quality control regulations in the region,” explains the analyst. “With the demand for gensets expected to rise as the region’s economy grows, more equipment suppliers are entering the market.”
Product quality and efficient after-sales services are fast replacing product price as the key differentiating factors in the genset market. Offering a wide variety of product brands to customers is another critical success factor that will reduce the probability of customers switching to other suppliers. “Equipment suppliers who can ensure efficient service delivery, product quality and cost competitiveness are in a better position to capture and grow their market share,” concludes the analyst. “This can be achieved by either opening more stores or working in conjunction with existing equipment stores.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
By End-User Sectors:
- Industrial and commercial
- Mining and construction
- Telecommunications
- Agriculture
By Region:
- Kenya
- Uganda
- Tanzania
- Ethiopia
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