Cummins Pow er Generation EGSA’s Convention Jaime Teixeira de Queiroz General Manager Cummins Pow er Generation Americas Atlanta - September 2008
Introduction and Some History � Last participation at the EGSA’s Spring 2002 Convention � Latin America’s business Opportunities � Thank you for this one more opportunity � Cummins Power Generation’s vision about: � The current market historic levels � The market drivers � The forecast for the second half of 2008 � The forecast for 2009 and future � Importance of our Dealers � Challenges 2 Confidential
Global Pow er Gen Market � Some numbers that will help us understanding the market dynamics � Global Power Generation Sales (According to the Energy Industry Administration) •Total Power Generation Equipment Sales in 2007 = 210 Gigawatts � 49% Centralized Power � 16% Distributed Generation 20% Natural Gas � 8% Mobile Power 80% Diesel � 27% Stand By Power 3 Confidential
Global Industry Drivers � Higher electricity consumption per capita � Growing demand for reliable power � Limited incentives for investment in central utilities � Unreliable transmission and distribution system � Wide disparity in environmental standards � Increasing fuel and electricity prices � Convenience / Ownership risk 4 4 Confidential
Market Demand History � In NA, the growth pattern started in 2003 mainly driven by � The September 11 th effect driving more security/back up systems in NA � Homeland Security Act � Black out in NA on August 14 th , 2003 and the NA system’s reliability. � Other Natural Disasters in the Caribbean and US � Military action in Iraq/Afghanistan 5 Confidential
Market Demand History � Outside NA � Low Rates of Electrification and Grid reliability and instability � Emerging Economies and their weak electrical infrastructure oLatin America > Brazil, Argentina, Centro America oChile’s energy crisis and their dependency on Natural Gas oAfrica oIndia oEastern Europe oMiddle East oChina, rest of Asia � In conclusion the need for back up power will continue its stronger demand 6 Confidential
Market Drivers � Distributed Generation key drivers •Faster electricity demand growth versus infrastructure development speed •Emergency Power Supply •Shorter Leadtime •Flexibility � Mobile Power •Natural Disaster’s response •Emergency Power Supply •Flexibility •Grid’s reliability •The Increase in Construction activities globally 7 Confidential
Market Drivers � Standby Power •North America & Western Europe about15%+ of the installed capacity •Emerging economies estimated to be below 5% of the installed capacity •System reliability and quality of electricity •Security requirements and disaster responses •Communication’s driving for quality � Datacenter market 8 Confidential
Datacenters � Datacenter growth. Different from the Datacom Bubble Bursting • IT Side � Healthcare data recording � Banking data plus security � Retail (Supply Chain Management) � Transportation (All GPS and Radio) � Regulatory o Sox, Record Retention > Growing at 50 CAGR o Financial Services – SEC, FED, Controller of Currency regulation � Disaster Recovery – Wholesale move to In House model � Number of installed servers to grow 50% from 2007 to 2010 • Internet Side > Traffic growing 4% per month � Video – You Tube now 20% of all Internet traffic � Internet Hosting – Mega Sites � Internet Hosting growing at 13% to 20 CAGR. � VOIP � Online games 9 Confidential
Forecast for 2008 � Low Range Products – Below 500kW � North America seeing some weakness – Residential Market effect � Rest of the World remains stronger in most regions � High Range Segment – Above 500kW � We continue seeing higher demand for products in 2008 � Driven by segments like Datacenter, Industry, HealthCare and Water Treatment markets in all regions including the Americas. � Also existing energy crisis in Argentina and Chile � Potential new crisis in Brazil, Centro America and China will continue driving higher demand of products •Mainly for back up system •Also for prime power application for both Diesel and Gas products 10 Confidential
Forecast for 2009 and beyond � The Global demand for Power Generation should continue stronger in most of the regions for the next few years. � The Low Range should remain weak in US. The recover should come in 2010 � The most recent natural disaster events around the globe and the increasing concerns about potential black outs should continue driving additional business in all sizes and fuels. � The Telecom wireless industry will also continue its stronger growth path driving additional back up system for cell towers stations � The Larger genset product will continue its higher than normal demand. � Mainly driven by the same drivers we see today •Datacenters, Water treatment, •Energy crisis •Industry back up system. 11 Confidential
Distribution / Dealer Netw ork Value � The Mission Critical application requires faster and reliable responses •They expect responses in minutes. •Down time is costly and unrecoverable •Safety is a must. � Distributors are an extension of the factories today. •Systems are more sophisticated and require more expertise •They add capacity and capability •They add value and offer more customization •They are closer to the actions •Travel costs are escalating and less flexible, their responses are faster � Customers want to reduce their costs > Focus on their core competencies •Greater focus on outsourcing of facility/equipment maintenance •By relying on their Vendors to invest in capacity and inventories � The name of the game is thrust, competency, reliability, and supporting excellence 12 Confidential
Challenges or Opportunities to Improve � Managing the Unexpected � Managing demand versus capacity in various location � Escalating costs, commodity, fuels, logistics � Code compliance driving faster and more sophisticated solutions � Seismic requirements � Safety � Cleaner solutions > Emissions, gaseous, noise � Technology responses � Energy efficiency and conservation � Emissions, after treatment � Renewable energy � Hybrid solutions � Usage of alternate fuels, renewable energy •Liquid Fuels Prioritization for Transportation •Flexibility requirements •Lack of standardized specification •Increased number of “experts” in the market trying innovative solutions � Biofuels production � Blending of fuels � Speed for recruiting for talents and experts in all regions 13 Confidential
Thank You
Recommend
More recommend
