http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.34Change: -0.10
R/$ = 10.71Change: -0.09
Au 1296.13 $/ozChange: 0.93
Pt 1477.50 $/ozChange: 0.00
 
 
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 Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 21, 2012

Developing markets reluctant to rent equipment, prefer buying

Back
Engineering|Africa|Aggreko|Energy|Generator|Generators|Rental|Rental Equipment|Safety|Africa|Europe|North America|South Africa|United Kingdom|Energy|Equipment|Rental Equipment|Rental-Equipment|Standby Power Equipment|Turnkey Solution|Turnkey Solutions|Martin Foster|Power|East Africa|Southern Africa
Engineering|Africa|Generator|Generators|Rental|Rental Equipment|Safety|Africa|||Energy|Equipment|Rental Equipment|Rental-Equipment||Power|
engineering|africa-company|aggreko|energy-company|generator|generators|rental|rental-equipment-company|safety|africa|europe|north-america|south-africa|united-kingdom|energy|equipment|rental-equipment|rental-equipment-industry-term|standby-power-equipment|turnkey-solution|turnkey-solutions|martin-foster|power|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
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Maintenance News
A Metrorail coach in need of refurbishment
The Passenger Rail Agency of South Africa (PRASA) will continue refurbishing its existing Metrorail fleet for another 15 years, despite the R51-billion acquisition of 600 new trains of six cars each, signed last year. Not all the new coaches will come on stream at...
Confirming that the South African economy had “struggled” to fully recover after the 2009 recession, Statistics South Africa (Stats SA) statistician-general Pali Lehohla said on Monday that the manufacturing industry was a sector not immune to the downturn,...
The Manufacturing, Engineering and Related Services Sector Education and Training Authority (Merseta) advocates artisan training, coupled with workplace experience, as a way of developing technical skills that are in demand, which will create high-quality jobs and...
More
 
 
Latest News
Updated 2 hours 31 minutes ago Tembakazi Mnyaka has exited, effective immediately, her position as the chairperson of the South African National Roads Agency Limited (Sanral) for “personal reasons”, the Department of Transport has announced. Transport Minister Dipuo Peters accepted the...
Minister Malusi Gigaba
Updated 2 hours 39 minutes ago The home affairs department will not relax onerous new immigration rules but will fast-track visa centres and biometric-data capturing systems to reduce upheaval, Minister Malusi Gigaba said on Wednesday. Gigaba said spending R5-million on installing biometric...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
GARYN RAPSON Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will open the door for court battles to determine who will be held liable for the remediation
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...
 
 
 
 
 
 
 
 
 
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