Rise in energy costs and greater demand for industrial automation and efficient manufacturing in the well-developed oil and gas and power generation industries in Russia will propel the market for AC electric and servo drives in the region consisting of Eastern Europe, Russia, and the former Soviet states.
While research from Frost & Sullivan has determined “moderate growth” of 7.5 percent per annum by 2016 for electric drives for that region, drive suppliers will be happy to hear that awareness of the benefits of such drives continues to grow there, which should present market opportunities. The development of the market was first stimulated seven years ago, according to the market research firm, by the replacement of older DC electric drive technology and by end-users that found AC electric drives — applied with variable-frequency systems — improve industrial process efficiency and long-run operating costs.
AC drives command 61.8 percent of the regional market, versus 28.6 percent for DC drives; the rest of the market consists of servo drives. Russia holds the lion’s share of the drives market, at 45.6 percent. The more advanced servo drives are likely to lead the future market share, according to Frost & Sullivan. The market is valued at around $450 million.
The market is also ripe for inexpensive Chinese drive imports, especially with the price-sensitive customers in the region, clouding the chances for Western drive suppliers. The adoption of Chinese electric drives is likely to affect the revenue of the $450 million total market as drive prices fall as a result of low-cost competition.
But Frost & Sullivan says there are opportunities for suppliers that position their products with care and also meet customer needs. Suppliers will also have to particularly build strong relations with end-users and be flexible with contracts and technical support in order to penetrate the market. Moreover, market penetration will depend on communicating to end-users that electric drives are an optimization tool that leads to efficiency and energy and cost savings.