http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.93Change: 0.00
R/$ = 12.67Change: -0.01
Au 1095.49 $/ozChange: 0.31
Pt 984.00 $/ozChange: 2.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 20, 2012

Developing markets reluctant to rent equipment, prefer buying

Back
Engineering|Africa|Aggreko|Generator|Generators|Rental|Rental Equipment|Safety|Africa|Europe|North America|South Africa|United Kingdom|Energy|Equipment|Maintenance|Rental Equipment|Rental-Equipment|Service|Services|Solutions|Standby Power Equipment|Turnkey Solution|Turnkey Solutions|Martin Foster|Power|Operations|East Africa|Southern Africa
Engineering|Africa|Generator|Generators|Rental|Rental Equipment|Safety|Africa|||Energy|Equipment|Maintenance|Rental Equipment|Rental-Equipment|Service|Services|Solutions||Power|Operations|
engineering|africa-company|aggreko|generator|generators|rental|rental-equipment-company|safety|africa|europe|north-america|south-africa|united-kingdom|energy|equipment|maintenance|rental-equipment|rental-equipment-industry-term|service|services|solutions|standby-power-equipment|turnkey-solution|turnkey-solutions|martin-foster|power|operations|east-africa|southern-africa-region
© Reuse this



Global temporary power provider Aggreko has recognised that many companies in developing countries still prefer to buy, rather than rent, standby power equipment, despite the numerous benefits of renting the equipment, especially during times of economic difficulty.

“If you look at the more developed markets, such as North America, Europe and the UK, the pendulum is swinging the other way. There, it’s all about outsourcing and bringing specialists in,” says head of local business in Southern and East Africa Martin Foster.

He identifies two possible reasons why developing markets are reluctant to try rental ser- vices. Firstly, he notes that there has not always been a viable alternative to buying equipment and that specialist rental com- panies, with attractive rates and a full 24-hour service operation, were rare in the past.

Secondly, developing markets have also been resistant to change. “If buying has worked for them all these years, why should they change the way they do things now?” says Foster.

Depending on the country and the target market, it typically takes up to five years for Aggreko to move a market from an outright purchase mentality to recognising the advantages of renting standby power equipment.

Companies eventually start to realise that they do not have to own a generator, which entails many hidden costs, such as insurance, maintenance fees, spare parts and ancillary items.

Renting, however, lowers capital expenditure and reduces a company’s risk; companies will also not have to deal with the problem of unused equipment during periods of downtime.

“It’s also the rapid availability and flexibility of renting from companies like Aggreko that makes it appealing,” says Foster. “By providing a turnkey solution, our customers are always at ease, knowing that we will be readily available if anything goes wrong.”

Aggreko also has in-house engineering capabilities to supply its turnkey solutions, with all the right equipment avail- able on a 24/7 basis. This is also important with regard to safety.

“A customer who has opted for outright purchase doesn’t always know what needs to be done to maintain a generator or what it requires when problems arise. This could lead to critical failure,” says Foster.

With renting, however, maintenance need not be a worry for the customer. Should complications arise, Aggreko will take responsibility for it.

Similarly, where an emergency power supply is required, Aggreko can step in within hours, or within weeks if the power requirement is substantial, adds Foster.

He points out that scalability is another key factor that makes renting preferable to buying because, as companies change, so do their power requirements.

In such cases, Aggreko would replace a generator with a more appropriate model, whereas buyers would have to buy a new generator to remain in line with increased or decreased power demand.

“Moreover, when a company no longer needs our services, it can simply request that Aggreko remove the generator from the site.”

Companies, therefore, save on capital and are not left with an unused generator, which would not only collect dust but could also pose a safety hazard.

In South Africa, many key customers and new clients that bought generators during the 2008 energy crisis have been approaching Aggreko.

“Many of these generators have either been poorly maintained or were bought from a questionable source. Companies that have call centres or critical operations are stuck in a situation where the generator doesn’t work when they need it to. It’s at this point that they approach us to start managing their power,” explains Foster.

In a statement released in November last year, Aggreko reported that situations like these would ensure that rental equipment was likely to remain more attractive to customers globally, even as the world economy strengthened and entered another positive growth period.

Despite the current economic uncertainty, Aggreko maintains that many companies are likely to decide that owning standby power equipment may not be worth the hassle.

Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Maintenance News
OPERATOR SAFETY NO.1 The Slogging Hammer is significantly safer than the traditional method of using a wrench and sledgehammer to remove nuts and bolts
Nuts and bolts loosening, tightening and torqueing solutions developer Slogging International’s Slogging Hammer is currently undergoing on-site trials at a railway project for a West African oil and gas exploration company. If these trials prove to be successful,...
CERTIFICATION HARMONISATION The qualification and certification process will also accommodate the American Society for Nondestructive Testing SNT-TC-1A requirements
To achieve international harmonisation in the qualification and certification of nondestructive testing (NDT) personnel, the national ISO 17024-accredited personnel certification body, the Southern African Institute of Welding - Certification (SAIW - Certification)...
US aerospace giant Boeing predicts, in its latest commercial market forecast, that over the next 20 years Africa (excluding Egypt, which the manufacturer includes in the Middle East) will need 1 170 new aeroplanes, worth $160-billion. VP: Boeing International -...
More
 
 
Latest News
Embattled South African steel producer ArcelorMittal South Africa (AMSA) has offered insight into the “fair pricing model” it has tabled before government in return for tariff protection and a government stipulation that locally manufactured steel be designated for...
Telecommunications group Telkom on Friday said it had posted a 1.7% uptick in net revenue for the three months to June 30, on the back of a strong performance by mobile on data revenue and higher fixed-line subscription revenue. Mobile net revenue for the first three...
Dangote Cement revised its 2015 spending plans to $1-billion from the $700-million estimated nine months ago after it commissioned two new African plants this June, Nigeria's biggest listed company said on Friday. The company, majority owned by billionaire Aliko...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
Daimler truck test engineer Dirk Stranz pushes one button, and then retracts his hands from the steering wheel of the Mercedes-Benz Future Truck 2025. “And now the truck is driving itself.”
The statutory body responsible for skills development and support in the banking sector, BANKSETA, was investing R68-million in the capacity building project of the University of Venda (UniVen), announced Bankseta company secretary Caroline King at a media event in...
LIONEL MOYAL Cloud services providers must compete against other cloud services providers for business by providing up-to-date systems and services
Legacy information technology (IT) systems are becoming increasingly obsolete because of the maturity, efficiencies and cost effectiveness of cloud-based IT services, says information and communication technology major T-Systems subsidiary Intervate head Lionel...
ARMANDÉ KRUGER Balancing the collection and processing of data must be aligned to strategy
Many complementary services enable companies to derive broad value from data inside and outside them. The complexity of data management means that companies’ strategies determine the various data systems and functions they will use, says PBT Group regional sales...
The South African Civil Aviation Authority (SACAA) has announced that it had awarded the country’s first remotely piloted aircraft systems (RPAS) pilot’s licence. It was issued on Friday, July 10, to SACAA employee and qualified commercial pilot Nicole Swart,...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96