Power hub

What is Aggreko’s background and history in the region?

Aggreko opened its first regional office in Sharjah in 1991. It opened its international headquarters in Jebel Ali Free Zone in 1998. Today it offers round-the-clock service support and availability in the Middle East through a network of ten locations in six countries: Saudi Arabia, Oman, Bahrain, Kuwait, Qatar and the UAE. Using these locations as operational hubs, Aggreko works all over the MENA region; for example, currently we have over 200 MW on-hire in Yemen.

In our 18-year history in the GCC, we have worked on a huge variety of projects, including supplying power during construction of the Palm Island development in Dubai, Festival City, Dubai Metro and the Qatar Pearl. One of Aggreko’s most recent projects is the provision of temporary power for the construction of the King Abdullah Economic City in Saudi Arabia.

What main products/services are offered by aggreko?

Aggreko is the global leader in temporary power and temperature controls. Unlike many of our competitors, we do not sell equipment; instead, we specialise in rental services. This allows us to offer our customers engineered solutions which meet their needs rather than simply offering them equipment.

As a turnkey temporary power and temperature control services provider, we are involved in projects from the engineering and design phase all the way through to commissioning and operation, which means we can provide a complete service that allows our customers to focus fundamentally on their core business.

Can you tell us a bit more about your cooling tower services?

Our cooling tower rentals dramatically reduce the risks involved with process cooling at facilities across the world. They enable our customers to maximise production during hot summer months or peak demand times, maintain production while performing cooling tower repair and maintenance, and reduce costly downtimes in case of emergency shutdowns.

What are your plans for the future?

We have had great success with gas power since launching the product in 2005. We are working with our customers to determine how they can utilise gas resources in their regions, and to develop new applications which will enable them to reduce their energy costs.

How has the global downturn affected your business in the region?

Although the GCC has not been affected to the same degree as North America and Europe, the impact of the financial downturn is nonetheless making itself felt around the Gulf, particularly with regard to those projects in the early phases of development.

However, as a provider of high-end services and equipment, we are finding that our services are still in demand. We believe that this is due in large part to our clients looking for ‘turnkey’ rental solutions which enable them to concentrate on their core business rather than focusing on generating power as well.

Renting equipment as opposed to purchasing is an attractive option in these times of limited liquidity. For companies which require large-scale equipment to operate, particularly in the oil and gas sector, the enormous cash outlays required for equipment are a heavy burden to bear, making rental a good option.

Also, we are finding that another advantage of the rental option in this economic climate is the cushioning effect it has for companies uncertain about the long-term future of projects.

By renting equipment, companies can ensure they will not be left with equipment which will sit unutilised; if a company which has purchased large amounts of equipment decides that a project must be put on hold, the financial damage incurred can be a major blow. Ultimately, renting equipment means that, because ownership lies with Aggreko, all risks do as well. Is the demand for rental power solutions from the construction industry still high?

The demand for power within the construction industry has fallen sharply due to the current economic climate, particularly in cities such as Dubai, where many projects in the early phases have been put on hold. That being said, we are still seeing demand from areas such as Abu Dhabi and Qatar, where the majority of the building projects seem to be continuing.

What are some of the latest trends and developments?

One of the trends we are currently seeing is customers looking to diversify their energy portfolios. Rather than relying on one type of fuel, they are looking to expand their generation capacity to include two or more fuel types. For example, one of our customers, a cement company in Ras Al Khaimah, has its own gas-powered turbine, but contracted a diesel-powered package from us to provide additional capacity to their facility.

In response to this trend, we have introduced the ADDGas system, which allows customers to substitute a significant portion of diesel fuel with natural gas. This gives the customer a considerable saving on overall costs.

What is your vision/strategy for the immediate future?

The slowdown has, in some ways, provided breathing space for companies such as Aggreko to take stock and evaluate how to improve their all-around business models. We see this as an important opportunity to improve some of our business processes.

For example, we are busy implementing a back office system to improve and streamline our customer service processes. By taking the time to ensure that our systems are more effective, we will be in a better position to take advantage of the market once the economy improves, and projects that are currently on hold start up again.

As well, we are currently conducting an in-depth market research study, including interviews with executives in industries to discuss their needs and identify where best we can bring our specialist skills knowledge and equipment to support the growth and development of industry in the GCC.