Commercial and Residential Construction Activity Revs Up Asia Pacific Low Voltage Switchgear Market, Finds Frost & Sullivan
SINGAPORE, Jan. 20 /PRNewswire/ -- The low voltage switchgear market in Asia Pacific is presently in the growth stage in the industry lifecycle, driven by strong demand from commercial and residential building development in Southeast Asia. Besides demand from office buildings, hospitals, hotels, shopping malls, condominiums, transport building, and car parks that contributed to high demand levels for the low voltage switchgear market, the increasing electricity consumption and improved business climate in the economies of Southeast Asia are also helping the market along. The commercial buildings segment in the region experienced a 30 percent growth in 2008 compared with 2007 figures.
New analysis from Frost & Sullivan (http://www.energy.frost.com), Asia Pacific Low Voltage Switchgear Market, finds that market earned revenues of over $6,177.3 million in 2008 and estimates this to reach $6,851.5 million in 2015.
"Growth for large residential projects is strongest in Vietnam with a slew of multi-tower apartment projects slated for sites in and around Ho Chi Minh City," says Frost & Sullivan Research Analyst Do Thai Son. "Growth also remains strong in Hong Kong and Taiwan where mega projects covering several hundred thousand square meters of residential floor area are coming on stream."
These developments open up huge opportunities for the electrical industry and indicate that its fortunes strongly depend on the ongoing power sector reforms and capacity building programs. Also, governments across the Asia Pacific are unleashing stimulus packages aimed at encouraging spending and investment.
However, the recession has led to credit constraints for electricity distribution companies and will deter the market in the short term. Most companies facing budgetary concerns are likely to curtail capital spending for the installation or up gradation of power systems.
The repercussions of the economic crisis were felt in the chemical and semiconductor industries in 2008, especially in Japan, South Korea, Taiwan, Singapore and Malaysia, where manufacturing is the backbone of the economy. Petrochemical producers in Japan, Singapore, Taiwan, Thailand, and South Korea have reduced operating rates, closed facilities, and performed maintenance shutdowns earlier than scheduled because of the sharp reduction in demand.
"The fourth quarter of 2008 saw a drastic drop, with roughly 25.0 percent shutting down capacity in the Asia Pacific region," says Thai Son. "As many switchgear suppliers are holding inventory that was acquired while prices were high, they are unable to reduce the earlier price quotes based on the current price of products and hence find it difficult to capture or retain orders."
Nonetheless, manufacturers across the globe are attracted to the Asia Pacific, especially in Southeast Asia to achieve better economies of scale in production. The Asia Pacific low voltage switchgear market is highly competitive with numerous local and multinational companies. Local companies have the advantage of selling the products at a lower price and reasonable quality. Multinational companies are left to deal with the pricing race, which is challenging their margins and profit.
As price remains a key concern for customers in purchasing decisions, the challenge for well-known participants is to walk the tightrope between low price requirements and maintaining product quality. This pushes manufacturers to produce products with varied specifications. Offering products with value added services that include highly integrated technologies in terms of multifunction and synchronization at an affordable price is of vital importance, determining success or failure in the low voltage switchgear market. In addition, manufacturers must ratchet down production costs, seek new customers, and partner with local companies.
If you are interested in more information on this study, send an e-mail to Donna Jeremiah, Corporate Communications, at firstname.lastname@example.org, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.
Asia Pacific Low Voltage Switchgear Market is part of the Energy and Power Growth Partnership Service program, which also includes research in the following markets: APAC Power Rental Market, Asia Pacific Stationary and Portable Fuel Cell Market, Asia Pacific Medium and High Voltage Switchgear Market, SEA CDM Market - Opportunities for Equipment Suppliers, APAC Generator Sets Markets, Asia Pacific Automatic Meter Reading Market, Energy Management in Oil Refineries, Southeast Asian Transmission & Distribution Cables Market, and South East Asian Power and Distribution Transformers Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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