Frost & Sullivan Lauds Chloride for its Robust Growth During the Economic Downturn That Saw Its Competitors Being Left Far Behind in the European UPS Market

Feb 01, 2010, 02:00 ET from Frost & Sullivan

LONDON, Feb. 1 /PRNewswire/ -- Based on its recent research on the uninterruptible power supplies (UPS) market, Frost & Sullivan presents Chloride with the 2009 European Frost & Sullivan Award for Company of the Year. While the past year has seen intense price competition, a decline in the revenues and profits of major participants in the European UPS market and the shelving of orders from the datacenters – the main revenue generator for the market, Chloride has successfully overcome these challenges through innovative growth to gain stronger foothold in the European UPS market. The company increased its sales in Eastern Europe by 15 per cent in 2009 as compared to 2008. Moreover, the order book was around 16 per cent higher in September 2009 as compared to the same period last year.


"Given the challenging times facing UPS manufacturers in 2008 and 2009 due to the recession, Chloride has been able to post positive growth and performance mainly due to its strategy of identifying and diversifying in high growth markets; both geographically as well as in terms of end-user applications," says Frost & Sullivan Research Manager Malavika Tohani. "While certain competitors have posted decline of nearly 15 per cent or more in their sales, Chloride was able to increase its global sales marginally by 1 per cent for the first half of 2009/10."

Chloride achieved this sound growth by strengthening its foothold in higher growth regions. – In the first half of 2009/10 46% of Chloride's revenues accrued from countries outside Western Europe. Eastern Europe and APAC accounted for 10% and 16% of revenues respectively. In 2009 Chloride increased its holding in India's leading UPS company, DB Power, to 90% and made a strategic investment in Newtech, Hong Kong, a critical environment infrastructure solutions provider. The company also opened a subsidiary in Russia in 2008 and in 2009 added a sales and service office in Kazakhstan. It also has a presence in Azerbaijan to take advantage of the opportunities arising from offshore oil and gas installations and established a representative office in Vietnam. Philippines and South Korea are a few other new regions which Chloride has entered in the past year.

The company has also kept an unwavering focus on upcoming applications such as energy & infrastructure, healthcare, transport, oil and gas, which have been less impacted by the downturn. While datacenters traditionally accounted for the highest revenues (20 per cent) for Chloride, during the first half of 2009, Chloride witnessed a 16 per cent increase in its product sales from the energy & infrastructure sectors and a 42 per cent increase in sales from the transportation sector. Chloride also acquired Emergency Power Systems, a UK based company, in 2009, to further increase its stronghold in the rail and underground networks and emergency lighting applications. It also acquired AEES ("Automatismes Energie Electroniques Systemes SAS"), a French secure power company focused on the Energy and Infrastructure market in 2009.

In addition, Chloride has refreshed and enhanced its product portfolio to be at the forefront, when the market recovers mid 2010. This is reiterated by its high vitality (% of sales attributable to products introduced to the market in the last three years) index of 76 per cent in 2009. The company has historically been strong in the medium to high power UPS systems but has also strengthened its product offering in the small power ranges. In 2009, it introduced the Trinergy modular and scalable UPS system offering 99 per cent energy efficiency in the 200 to 1200 kVA range. It also has strong R&D capabilities in Europe, USA, India and China.

"None of Chloride's competitors have adopted such diverse strategies to ensure growth in these difficult times, which is reflected in the rankings," says Tohani. "While the majority of the competitors adopted some degree of cost control or cost cutting measures during the past year, Chloride has kept the long-term vision in mind while undertaking this exercise. Restructuring has not meant a significant reduction in workforce or halt in new product development."

As compared to 2008, Chloride has moved away from outsourcing manufacturing in Europe to outsourcing  almost 60 per cent of its manufacturing to Asia. In 2008, production came online in its China manufacturing JV with a capability to produce products from 10 kVA to 200 kVA. This is expected to improve the company's margins as well as operating profit. Moreover, being a global company it is standardizing its processes as well as products across all regions.

"Chloride has exhibited leadership in customer value and market penetration, consistently increased its market share and penetration over the past 4-5 years from around 5 per cent in 2005 to 9.5 per cent in 2008 in EMEA," notes Tohani. "This has been possible due to its commitment to deliver high level of service covering not just UPS systems but also other equipment such as gensets, batteries, static switches, flywheels, and fuel cell systems."

Chloride's strategy to focus on services during the time of downturn, when product sales suffered, was a step in the right direction as service revenues grew by 13 per cent for the first half of 2009/10. It regularly undertakes customer satisfaction surveys to keep abreast of the market trends, customer behaviour and needs., the company's remote monitoring service has gone from strength to strength and the number of connections has increased significantly.

Moreover, the company has built its reputation as a reliable service provider through acquisitions. In 2009, Chloride acquired the UK UPS service business from Siemens and added Malcolm Power Systems, a small UPS service provider in Scotland to its portfolio. In 2008, Chloride took over Power & Electronic Services in Ireland and further strengthened its presence in that region by acquiring Alternative Energy Systems (AES), a generator servicing company in 2009.

Finally, Chloride understands that the route to success is by investing in its people. The Chloride Academy, established 2 years ago, has grown to become a reputable institute to gain professional and technical knowledge. The academy now has around 10 accredited training centres and 1240 certificates have been awarded till date.

Overall, not a single competitor could match Chloride in terms of its service offerings and growth. In recognition of its innovative strategies and continued growth, Frost & Sullivan is proud to present Chloride with the 2009 European Frost & Sullivan Award for Company of the Year in the UPS market. Each year, Frost & Sullivan presents this award to a company that has demonstrated great growth strategies and implementation. The award lauds the recipient's innovation in business processes, products and/or technologies to garner leadership in customer value and market penetration.

Frost & Sullivan Best Practices Awards recognize companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research in order to identify best practices in the industry.

About Chloride

Chloride began its operations as a leading battery manufacturer over 100 years ago Today, it is the leading provider of complete power protection solutions to its customers encompassing UPS, industrial systems, power conditioning, generators and alternative energy sources along with top quality pre and post sales services. The reputation of the company is built on its varied and reliable product offering as well as the highly skilled technical staff providing the best-in-class service to its customers.

In 2008, the company held a 9.5 percent share of the EMEA UPS market and was the second largest player in the EMEA UPS market for above 50 kVA UPS systems.

About Frost & Sullivan

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