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Nigeria Diesel Genset Market Overview
Valued at $410.9 million in 2018, the Nigerian diesel genset market is projected to reach $527.4 million by 2024, demonstrating a CAGR of 4.1% during the forecast period. The growth in the market is attributable to the high base power deficit, rapid industrialization, increasing energy demand on account of surging population, and recovery in end-use industries, such as construction and oil and gas, in the country.
A diesel genset or a diesel generator set is an integrated system comprising a diesel engine and an electric generator that work in conjunction to produce electricity. The electricity, so produced, is used for meeting prime and auxiliary power requirements.
On the basis of power rating, the market is classified into 5 kVA–75 kVA, 76 kVA–375 kVA, 376 kVA–750 kVA, and above 750 kVA diesel gensets. In terms of sales volume, 5 kVA–75 kVA gensets held over 86.0% share in the Nigerian diesel genset market in 2018. The demand for these gensets is majorly generated from residential complexes, small commercial installations, telecom towers, and retail establishments. Besides, surge in construction and infrastructure projects in the country is expected to drive the demand for these gensets in the near future.
The Nigerian diesel genset market is also categorized into commercial, industrial, and residential applications. In terms of revenue, diesel gensets used for industrial applications held the largest market share in 2018. This can be mainly ascribed to the large-scale use of high-power diesel generators in Nigerian industries for meeting power requirements. Owing to inadequate and erratic grid power supply, industries in the country are largely dependent on diesel generator sets for operations.
Nigeria Diesel Genset Market Dynamics
Decreasing dependence on the import of low-power diesel generator sets is identified as a key trend in the Nigerian diesel genset market. As per UN Comtrade, a trade database under the United Nations Statistics Division, the import value of diesel gensets in Nigeria has been falling since 2015. Furthermore, in the same year, the Federal Government of Nigeria imposed a ban on the bulk import of low-power diesel generator sets in the country. In the wake of this strategic measure, the local manufacturing and assembling of diesel gensets has considerably increased in the country. With increased focused on local product manufacturing, domestic companies such as SUMEC Machinery & Electric Co. Ltd. and Mikano International Limited are importing components from renowned global manufacturers to assemble diesel gensets in the country.
During the forecast period, the Nigerian diesel genset market is expected to be driven by the substantial power deficit and transmission losses and the growing demand for diesel generator sets in the oil and gas, telecom, and construction industries.
Growth in upstream exploration and production (E&P) projects and refining industry on account of proposed investments by domestic and foreign players is identified as a key factor to propel the demand for diesel generator sets in Nigeria. Additionally, proposed construction projects, such as the construction of the Lagos–Calabar coastal railway line, bridges, and airport terminals, are expected to boost the Nigerian diesel genset market in the near future.
At present, the power infrastructure of Nigeria is quite poor, with high base power deficit and power transmission losses, which together, are responsible for generating a significant demand for diesel gensets in the country. Moreover, grid uncertainty has traditionally been linked to the high demand for these gensets for meeting prime and auxiliary power requirements in commercial, residential, and industrial establishments. Besides, surge in population is expected to fuel the energy demand in the country, further contributing to the growth of the Nigerian diesel genset market.
Growing adoption of renewable sources of energy, such as photovoltaic (PV) modules, to fulfil domestic electricity requirements is identified as a major factor hindering the growth of the Nigerian diesel genset market. Furthermore, government initiatives and policies aimed at improving domestic renewable energy capacity to reduce the demand–supply gap may affect the diesel genset demand in the country.
Nigeria Diesel Genset Market Competitive Landscape
Some of the major players operating in the Nigerian diesel genset market are Jubaili Bros, YorPower Ltd., Denyo Co. Ltd., Honda Manufacturing (Nigeria) Limited, General Electric Company, Kirloskar Oil Engines Limited, SUMEC Machinery and Electric Co. Ltd. (a subsidiary of SUMEC Group Corporation), Cummins Inc., and Caterpillar Inc. Among these, Caterpillar Inc. held the largest market share in 2018, which can be mainly ascribed to its vast product portfolio, strong customer base, and high brand value in Nigeria.