Strategic Analysis of the Gulf Cooperation Council (GCC) Distribution Transformers Market

This Frost & Sullivan research service titled Strategic Analysis of the Gulf Cooperation Council (GCC) Distribution Transformers Market provides detailed analysis and insights into market dynamics, trends, market shares, and forecasts by product segments split between transformers of ratings 1 MVA to 3 MVA and 3.1 MVA to 10 MVA. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: the Kingdom of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain.

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Market Overview

Continuous Government Investments in the Power Sector Bodes Well for the GCC Distribution Transformers Market

Local Participants to Play an Increasingly Important Role in the Expansion of the Market

The dynamic GCC distribution transformers market is witnessing the emergence of local participants, leading to intense competition and shrinking market shares of the traditional heavyweights. It was only a matter of time before domestic companies came under the spotlight, considering the double digit growth in the demand for electricity from in almost all GCC countries. As there is no sign of let up in demand, GCC countries are aggressively spending on their power sector to improve their generation capacity. This will infuse funds into the transmission and distribution (T&D) segment, which, in turn, will increase the adoption of distributed transformers. Future investments in the power sector in GCC countries could add up to approximately $150 billion in the next 10 years. Half of this is expected to be invested in the T&D sector, which will boost the distribution transformers market.

Further, the GCC grid interconnection project and continued expansion of the oil & gas sector are also expected to indirectly drive the distributed transformers market. “Although, there has been a slowdown in the construction industry in Dubai, infrastructure development and continuous investment in residential and commercial establishments in other parts of the GCC will ensure that this market continues to grow at a healthy rate,” says the analyst of this research. “Further, the upcoming 2022 FIFA World Cup in Qatar will attract investors to infrastructure and construction, which will directly propel the market.”

However, despite the market potential, suppliers’ margins have narrowed due to the rise in raw material (metals) costs and stiff competition among manufacturers. The larger manufacturers with higher overheads face pricing pressures from smaller suppliers. Although the GCC’s policy of liberalisation allows for 100 per cent foreign direct investment and has thrown open the manufacturing sector to foreign investors, customers have begun to prefer local manufacturers. For their part, the governments have been encouraging local manufacturing by creating numerous free zones. “Many MNCs are trying to set up local manufacturing facilities or signing joint ventures with the existing participants to tap the huge market demand,” notes the analyst. “Further, they are adopting efficient manufacturing processes to reduce their production costs and make the most of the opportunities afforded by the GCC distribution transformers market.”

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By Transformer Rating:

• 1 MVA to 3 MVA
• 3.1 MVA to 10 MVA

By Geographic Region:

• The Kingdom of Saudi Arabia
• The United Arab Emirates
• Qatar
• Kuwait
• Oman
• Bahrain

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