Switchgear and transformer market to reach A$1,699 in 2013

The trend of replacing or upgrading old transformers by the power transmission utilities and the boom in the mining industry has spurred the growth of the switchgear and transformer market in the ANZ region, said a report by Frost & Sullivan.

The company said the ANZ switchgear and transformer market generated revenues of A$1,544 million in 2006 and estimates this number to reach A$1,699 million in 2013.

"The efforts of utilities to extend the lifetime of their equipment by increasing maintenance spending and refurbishment did not show expected results," noted Frost & Sullivan industry analyst M. R. Srivatsan. "However, their new strategy of replacing and upgrading the assets has resulted in increased demand in switchgear and transformers market in Australia."

Growing investment in the mining industry is further expected to drive the demand for transformers and high, medium, and low voltage switchgears in the ANZ region.

Despite the growing market, Frost & Sullivan believes local manufacturers are hesitant to increase their production capacities, fearing the market to subdue in future. The resultant gap in the demand-supply chain has encouraged new participants from low-cost countries to increase their market presence in the ANZ region, the company said.

"Manufacturers who source transformers from manufacturing facilities in low-cost countries must educate their end-users and convince them that engineering and design of the equipment have been done in-house," said Srivatsan. "In addition, end-users need to be assured on the after-sales service capabilities of the manufacturers."