USE OF ELECTRICITY GENERATORS INDICATE OPPORTUNITY FOR INVESTORS
TARIQ AHMED SAEEDI (email@example.com)
July 13 - 19, 2009
Loss of a person or thing often spawns benefit for other. This statement can be applicable on several instances, but its applicability at the time when people are suffering long hours of electricity load shedding is perceptible far and wide. While electricity consumers of all over the electrified areas around the country are under limited supply of electricity, guess who is cashing on the constraints? Alternatively, put it in another way, which industry is taxing on the strip to take off thanks to load shedding? Well thought out, assemblers and manufacturers of power generators.
The electric generators industry is progressing at a rapid pace ever since the power crisis in the country is worsened. In past, users of electric generators are confined normally to those who use them for purposes, which could be commercially at stake due to electricity outage. Shopping centres, roadside gatherings that could be troubled in case of power outage, health centres, etc. were common in sight two or three years ago for using alternative outlets of electricity generation. Utilization of power generators was not as widespread like durable goods as it is nowadays. One readily recalls a day when it was plainly rare to experience electricity load shedding to the extent right now people are suffering from. Residents of a house of 120 square yards considered a monthly bill of over Rs300 for standard non-commercial electricity consumption inordinate few years back.
Importantly, both electricity outages and exorbitant bills have made people to incline towards using electricity generators. The fast adaptability to this alternative mode has reason in long hours of load shedding. In addition, electricity consumers often find the cost of electricity generation through this mode lower than monthly electricity bills. Consumption for non-commercial purposes like in residential areas is perhaps still cost effective with main gird supply. However, for bulk consumption, self-generation is more cost effective when compared to high commercial bills incorporated with add-ons in form of variety of taxes. Although, the use is not affordable to all right now, the usage is disproportionably high owing to an extent to personal financing options provided by retailers of electronic items. Normally, people prefer to take services of such retailers for getting household products on credit and they avoid formal banking channels. Since the reasons would open up other Pandora box, it is better to leave them for other discourse.
Like other products that lack local manufacturing facilities, power generators are mostly imported in Pakistan from different countries and they are assembled locally. The leading suppliers of core parts of generators to Pakistan belong to Japan, China, West Germany, UK, etc. They also supply complete built units in the country. For example, electric generators of many Chinese and Taiwanese companies are sold popularly in electronic markets across the country. Buyers prefer to purchase them due to low price as compared to other leading brands like Honda, Daihatsu, and Mitsubishi and of Japan and Germany. For residential use, two categories of generators are popular nationwide. A standard one KV power generator, which could electrify four fans and four tube lights, has varying cost of Rs10,000 to 20,000 while a two KV produces additional electricity for a television and refrigerator. The running time of a standard two KV gizmo with one litre petrol is one hour. A substitute electronic gadget requiring high power such as air-condition could be run with substitute consumption on such load supply. Its cost varies largely depending on the additional features such as self-starter cum manual powered, brands, and market from where it is purchased.
The price mechanism is totally non-regulated. It is entirely on the discretion of a seller that at what price he auctions off his product. Except some well-known brands that have inflated price tags, usually sellers of poly-brands power generators offer no guarantee or warranty. Therefore, substandard generators are also penetrative in the market. Although sellers give brief demonstration of generators at the selling point, no replacement or maintenance facility within a certain period, make customers sustain loss in case of generator broken down. A good quality power generator has a normal life span of 10 to 15 years or 6,000 to 10,000 working hours.
In past, generators were only fuelled by motor sprits or diesel, but now traditional fuels as well as natural gas could power them alternatively. The gas kit is installed in power generator separately to make them gas enabled. Such kit is manufactured in Pakistan. Its separate installation cerates functional faults sometimes, as built-in petrol running mechanism does not adjust with new configuration. The complaints of improper working of petrol-cum-gas widget are common. There are anecdotal evidences of such generators blasted off as simultaneous fuel supplies triggered a clash. A local dealer rejected such news as rumours. However, one cannot deny the possibility of any such untoward accident in the existence of careless and unmonitored installations of sophisticated devices by dabblers in a dark passageway, which embraces some installation workshops in crumbled and crowded generators market of Saddar town. Addition of new buyer group, which is craving for alternative ways to counteract against load shedding, in the cart of industrial buyers, hospitals, publication houses, retailers and wholesalers is indicating new opportunity for investors who can get a significant internal rate of returns by manufacturing locally low capacity electricity generators for households.