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Positive momentum seen for genset market

THE MIDDLE EAST diesel genset market has reached the maturity stage, and will continue to project stable growth rates in the future. Currently, the market is highly concentrated in industrialized countries including Saudi Arabia and the UAE.

p>THE MIDDLE EAST diesel genset market has reached the maturity stage, and will continue to project stable growth rates in the future. Currently, the market is highly concentrated in industrialized countries including Saudi Arabia and the UAE.

Going forward, developing nations such as Lebanon, Iraq, and Egypt are emerging as the key focus areas.
Power shortage in the Middle East region and the inadequate transmission and distribution networks have resulted in a hike in demand for diesel gensets. Besides, the expected revival of the construction industry will be a prominent driver for diesel generator sales in this region.
New analysis from Frost & Sullivan (http://www.energy.frost.com), Middle East Diesel Genset Market (15-2,000 kVA): Year 2008, finds that the market earned revenues of over US$885.0 million in 2008 and estimates this to reach US$1.60 billion in 2015.
?Increasing per capita power consumption, rapid industrialization, and supply shortages in the power sector are the key drivers for the growth of the diesel genset market in the Middle East region,? says Frost & Sullivan Research Analyst Hemanth Nayak. ?Projected high growth in infrastructure, commercial and retail segments are expected to drive the demand for standby and prime power gensets.?
Massive investment in infrastructure projects in the Middle East has triggered greater uptake of gensets, especially for reconstruction activities in Iraq and infrastructure projects in the UAE and Saudi Arabia.
During the first half of 2008, diesel genset prices witnessed robust growth rate of about 10 percent, owing to input costs and high demand.
However, the economic downturn and financial crisis had negatively impacted the sale of diesel gensets, and many ongoing projects in the construction and oil and gas industries were put on hold, precipitating a fall in the demand for diesel gensets.
Along with the slump in demand came the decrease in price increment rate. In 2009, an increment of about three per cent is expected in the prices of gensets; however, recovery is expected only from mid 2011.
Another factor that will accelerate the decline in demand for diesel gensets is the anticipated investment in power generation capacity addition by all the Middle East countries.
Alternate energy sources for standby and peak power demand, such as uninterrupted power systems (UPS) and solar panels are gaining strong traction, posing a challenge for diesel gensets.