Eaton completed the acquisition of a controlling interest in Ulusoy Elektrik, a medium voltage product manufacturing company in Turkey, in April 2019. This transaction happened with the purchase of shares of nearly $214 million on a cash and debt free basis. With this acquisition, Eaton is likely to gain more access to electrical products market in countries within the Middle East and Africa region.
Ulusoy Elektrik’s main products include MV switchgear and distribution transformers, compact substations, and MV cable connection systems. It operates manufacturing facilities in Turkey and Indonesia. The company recorded revenues of USD 126 million in 2018, a 30% growth from the year 2017. Containerized substations, transformers, metal clad switchgears, and components market were the significant revenue gainers in 2018. Other strong revenue contributors include ring main units, gas insulated switchgears, and mobile substations.
Ulusoy Elektrik witnessed a significant rise in its export volumes in 2018. The company’s exports rose from 14% of the total sales in 2017 to more than 40% in 2018, which stood at USD 16.6 million in 2018. The key countries to which the company’s products were exported include Iraq, Algeria, and Tunisia. Other countries include Sudan, Jordan, Indonesia, Cyprus, Malaysia, Finland, and Albania.
MarketsandMarkets™ View Point:
Prashanth – Manager : Energy and Power, at MarketsandMarkets™, shares his Point of View as mentioned below:
MIDDLE EAST AND AFRICA: MEDIUM VOLTAGE PRODUCTS MARKET SIZE, 2017, USD MILLION AND GROWTH RATE
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Source: MnM Knowledgestore, MnM Analysis
MnM analyses the markets of the key products of Ulusoy Elektrik, especially in the Middle East and Africa region. Distribution transformers market stands at over USD 800 million, Packaged Substation market stands at over USD 900 million, Ring Main Unit stands at more than USD 130 million, Distribution Gas Insulated Switchgear at over USD 350 million, Mobile Substation at USD 75 million. Most of the markets in the region are set to grow at least more than 8% CAGR over the next five years, with considerable opportunities across various end-user segments. Medium voltage switchgear market holds the strongest potential of over USD 2 billion in the region.
Distribution Voltage Gas Insulated Switchgear market is worth nearly USD 400 million in 2017 and is expected to grow at a CAGR of over 10% in the next five years in the Middle East and Africa region. The key growth drivers ensuring this growth is the demand for industrial equipment protection, including HVAC and lighting and the demand for residential and commercial infrastructure protection.
MIDDLE EAST AND AFRICA: SWITCHGEAR MARKET SIZE, BY END-USER, 2018, USD Million
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Source: MnM Knowledgestore, MnM Analysis
Distribution Transformer market in the Middle East and Africa region stands at more than USD 900 million and is set to grow at 10% CAGR in the coming years. 2.5 to 10MVA segment holds the largest market potential within the distribution transformer market in the region. This demand is mainly driven by the initiatives towards the development of new power generation capacities, including renewable power, in the region.
MIDDLE EAST AND AFRICA: DISTRIBUTION TRANSFORMER MARKET SIZE, BY POWER RATING, 2014–2021 (USD MILLION)
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Source: MnM Knowledgestore, MnM Analysis
Conclusion
Eaton’s key geographies include North America, Latin America, Europe, and Asia Pacific. More than 80% of the revenue comes from North America and Europe alone and the rest from Asia Pacific and Latin America. The company has limited presence in Middle East and Africa. With Eaton taking over the control of Ulusoy Elektrik, it is likely to gain access to markets in Iraq, Jordan Iraq, Algeria, Tunisia, Sudan, Jordan, Turkey, Indonesia, Cyprus, and Malaysia. Combined with the digital advantages of Eaton and its grid automation products, this acquisition is likely to benefit the company in the upcoming years with multi-fold growth in the region.