Indian Low Medium Voltage Switch Gear Markets Final

INDIAN LOW & MEDIUM VOLTAGE SWITCHGEAR MARKETS:

GEARING FOR AN UPSURGE

Anup Barapatre

Industry Analyst

Energy & Power Systems

July 06, 2011

22

Focus Points

Research Introduction, Methodology, and Coverage

Key Market Trends

Conclusions

Market Dynamics

Indian Low Voltage (LV) and Medium Voltage (MV) Switchgear Market Analysis

33

Introduction

The aim of this Research Service (RS) is

to provide actionable data, market

intelligence, and opportunity related to

the Indian LV and MV switchgear

markets. To achieve this, the following

objectives were identified:

• Overview of the Indian LV and MV switchgear markets

• Total LV and MV switchgear market size estimate in 2010

(base year)

• Demand analysis of various product segments

• Revenue-based analysis for LV and MV switchgear

products by end users, regions, and sales channels

• Competitive landscape

Time Period

� Frost & Sullivan has considered one calendar year (January to December) for market data and analysis:

� Base Year: 2010

� Historical Data: 2009

� Forecast/Projections: 2011 to 2017

Currency Exchange Rate

� Frost & Sullivan has considered an average exchange rate of 1 US dollar = INR 45.71. The forecast is done with INR

as the base currency and market revenues are expressed in $ million (using the prevalent Exchange Rates)

Research Aim Objectives

44

Research Methodology

Frost & Sullivan used a three-step approach to develop the analysis

1. Internal Expertise

2. Desk Research

3. Primary Research

Frost & Sullivan tapped into the extensive expertise of its research team,

as well as retained market intelligence regarding the LV & MV

switchgear markets

Desk Research was then utilized to further expand and detail the

information collected from Frost & Sullivan’s Internal Knowledge Banks

and Targeted Primary Research

Primary Research focused on obtaining targeted information from select

market participants (manufacturers, contractors, utilities) related to LV

& MV switchgear markets and for updating information from other

sources

LV and MV Switchgear Market in revenue terms ($ million)

55

Research Service Coverage & Market Segmentation

MARKET COVERAGE

Low Voltage Switchgear

1.1 kV & Below

Medium Voltage Switchgear

3.3 kV to 36 kV

REGIONS:

• North

• South

• East

• West

CHANNEL:

• Direct to end user

• Stockists/Distributors/Dealers

• EPC/Panel Builders/System Integrators

• OEM

COMPETITION:

• Supplier market share analysis by product segments

REGIONS:

• North

• South

• East

• West

CHANNEL:

• Direct to end user

• Stockists/Distributors/Dealers

• EPC/Panel Builders/System Integrators

• OEM

COMPETITION:

• Supplier market share analysis by product segments

66

Market Snapshot

Switchgear Markets:

Key Market Characteristics (2010)

Market Size:

•LV Switchgear - $950.0 million

•MV Switchgear - $795.0 million

LV Switchgear MV Switchgear

Number of

Competitors40 + 20 +

Key Market

Participants

L&T, Schneider Electric,

Siemens, ABB, Havells,

Legrand, etc.

Areva, Siemens, CGL,

ABB, Schneider Electric,

BHEL, etc.

High Growth

Products

� Contactors & Relays

� MCCB

� MCB

� RMU

� CSS

Competitive

Trends

� Highly-competitive

market

� Highly price-sensitive

� Competitive market

� Price-sensitive

Key Success

Factors

� Market penetration

with dealer/distributor

network

� Strong after-sales

service

� Competitive pricing

� Wide product portfolio

� Strong after-sales

service

� Competitive pricing

Key End Users

� Industries

� Construction

� Infrastructure

� T&D Utilities

� Industries

� Power Gencos

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan

77

Market Analysis by Product Segments

� C&Rs led the LV switchgear demand in revenue

terms followed by MCCB

� Demand for C&Rs was primarily from the

industrial segment driven by the need for

automating and optimizing processes

� MCB, RCD, and DB are high volume, low margin

business due to high competition from

unorganized participants

� ISGs dominated MV switchgear demand followed

by OSGs

� RMUs are preferred in urban centers where the

power distribution network is predominantly

underground

� CSS is a relatively new concept and is steadily

gaining significance


Revenue:

$795.0 millionRevenue:

$950.0 million

88

End-user Analysis

Revenue:

$795.0 million

� Industries dominated the demand for LV

switchgears, followed by commercial &

infrastructure segments

� It had demand across all product segments

� Residential segment primarily had demand for

MCBs, RCDs, and DBs

� Transmission & Distribution (T&D) utilities

dominated demand for MV switchgears. Most

T&D utilities prefer OSGs over ISGs due to low

initial investment

� Power gencos and industrial segment followed

primarily with demand for ISGs and CSS

Revenue:

$950.0 million


Others include agriculture & other end-user segments Others include commercial, residential & other end-user

segments

99

Regional Analysis

Revenue:

$795.0 million

� North: The North Indian market dominated the demand with huge investments in industrial and power

infrastructure development, apart from increased use of compact switchgear technologies

� South & West: Demand in these markets was driven by expansion and renovation of T&D infrastructure,

coupled with extensive industrial and commercial development in the regions

� Eastern India: Low demand due to less spending on infrastructure and residential development, compared to

other regions

Revenue:

$950.0 million


1010

Competition Analysis

� The prominent suppliers in the LV switchgear

market have an established distribution network

complimenting their wide product portfolio

� Other suppliers either operate with limited

products or cater to few end-user segments.

However, these participants are steadily expanding

their product offerings

Revenue:

$950.0 million


Revenue:

$795.0 million

� Top four participants have significant presence

across all product segments in the MV switchgear

market

� Other prominent participants either have a limited

product portfolio, or primarily focus on limited end-

user segments

Others include HPL, IndoAsian, GE, C&S, BCH etc. Others include Megawin, Jyoti, MEI, KECL, Easun Reyrolle etc

1111

Market Tiers

TIERRevenue

Range

Brand Presence Among

End-User Segments

(Domestic & Global)

Brand Recognition Technology Superiority

TIER 1Above $100

million

Global/Pan India/All

End-User Segments

Globally-Recognized

Brand

High Degree of

Innovation and R&D

TIER 2$30 million to

$100 million

Pan India/Major End-

User Segments

Pan India

Recognition

Low Degree of

Innovation and R&D

TIER 3Less Than $30

million

Regional Presence/

Limited End Users

Locally Recognized

Brand

Negligible Innovation

and R&D


� LV SWITCHGEAR: Even with a large number of suppliers

operating in this highly price-sensitive market, Tier 1

participants had over 50 percent share

� MV SWITCHGEAR: Tier 1 and Tier 2 participants together

had approximately 75 percent share

1212

Key Market Trends

KEY TRENDS

Price & Market

Penetration – Key

competitive factors

Customization: End

users demanding tailor-

made equipment,

which best suit their

project needs

Increased demand for

compact and hybrid

technologies

Products like C&R,

MCCB, RMU, & CSS are

likely to have better

market growth rates

Embedded intelligence

and communication-

enabled switchgear

Increased acceptance of

electronic releases in

circuit breakers

1313

• Fluctuating raw material prices

• Uncertainty and delays in

implementation of various power

reform programs/initiatives

Market Dynamics

MARKET DRIVERS

MARKET RESTRAINTS

INDUSTRY CHALLENGES

• Price competition

• Poor financial health of State

Electricity Boards (SEBs)

• Macro economic challenges

constrain public and private

funding

• Expansion in key industry

segments

• T&D network and power capacity

augmentation

• Growing infrastructure and

construction segments

• Increasing demand from

replacement and retrofitting

programs

1414

Conclusions

Factors determining the future of the LV and MV Switchgear Market

�Investments in infrastructure, industrial, and construction (commercial/residential) segments

�Implementation of reforms regarding T&D network development and power augmentation

�Efforts to arrest energy crisis and improve power quality and safety

BRIGHTER SIDE OF SWITCHGEAR MARKET:

India Inc. witnessing

� Increased investments � industrial expansion and infrastructure development

�Increased budgetary allocations for Revised Accelerated Power Development and Reform Program (R-APDRP)

and Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY) schemes by the Government of India (GoI)

�Commercial & Residential Corridors: Post 2009, more and more construction giants are investing in massive

commercial and residential projects across the country

� Increasing focus on alternative energy sources (wind, solar, etc.)

1515

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1616

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For Additional Information

Ravinder Kaur

Assistant Manager

Corporate Communications

(+91) 44 - 66814080

[email protected]

Vivek Verma

Business Development Manager

Energy and Power Systems

(+91) 22 - 66072034

[email protected]

Anup Barapatre

Industry Analyst


(+91) 22 - 66072012

[email protected]

Amol Kotwal

Deputy Director


(+91) 80 - 67028006

[email protected]

Indian Low Medium Voltage Switch Gear Markets Final

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