The electrical industry in Saudi Arabia is booming and exhibits
lucrative prospects for both large companies and local players. The
vendor landscape of the market has thus emerged as a highly
fragmented one. A new study by Transparency Market Research (TMR),
forecasts this competition to intensify further as the emirate
increasingly invests in upgrading infrastructure at par with the
international standards.
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Since most companies currently have a diverse product portfolio,
specialization is the key for market players to achieve a competitive
advantage, says TMR. For instance, among lighting protection solution
providers, companies providing lighting protection held approximately
82% in the market in 2014, while providers of earthing protection
accounted for almost 18% of the market in the same year. Similarly,
the presence of a large number of companies has rendered the wiring
devices segment highly competitive. Schneider Electric SA, Alfanar
Electric, and ABB Ltd. are the top three players in this segment of
the market holding more than 24% in 2014.
Rising Construction Activities Boost Sales Prospects for
Electrical Products in Saudi Arabia
The population in Saudi Arabia is rising at a steady pace. Moreover,
the emirate has also witnessed an increasing influx of expatriates in
the recent years. This has compelled the government to invest in
large scale infrastructure projects. As per a lead analyst at TMR,
“The increasing construction activities make the country extremely
lucrative for enterprises operating in the electrical market.” “The
rising demand for advanced electrical products compatible with the
infrastructure has been boosting sales of lighting systems in Saudi
Arabia further,” he added.
The rising energy demand in the Middle East will also bolster sales
of electrical and lighting products in Saudi Arabia. The country is
also planning to invest in the construction of suitable
infrastructure to support energy generation and transmission. This
will further accelerate demand for electrical products in Saudi
Arabia.
Companies Look to Explore Growth Opportunities through Mergers and
Acquisitions
Frequent changes in raw material prices will inhibit the market’s
growth to an extent. The unforeseen economic recession related to the
unpredictability of oil-prices is also likely to create bottlenecks
for the market. Nevertheless, with companies focusing to expand their
businesses through mergers and acquisitions, the electrical market in
Saudi Arabia witnesses lucrative opportunities in the near future.
Grid modernization and the increasing opportunities in the solar
energy industry are also expected to accelerate demand for electrical
products in Saudi Arabia.
Electrical Product Manufacturers to Gain from Increasing Demand
for Energy-efficient Lighting Solutions
By application type, the electrical market in Saudi Arabia is
witnessing rising demand for LED lighting. Furthermore, demand from
the tunnel lighting segment is expected to increase in the
forthcoming years. Demand for energy-efficient lighting solutions is
expected boost sales of lighting products and systems from both the
aforementioned segments.
In terms of product type, the demand for lighting control systems is
expected to surge at the fastest CAGR of 14.3% between 2015 and 2023.
The growing infrastructural development in Saudi Arabia, coupled with
the rising demand for energy-efficient lighting solutions, is
expected to considerably drive demand for lighting control systems.
Low voltage lighting systems will continue to perform well in Saudi
Arabia through the forecast period.
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As per Transparency Market Research, the Saudi Arabia electrical
market, which stood at US$4.5 bn in 2014, is expected to reach
US$10.8 bn by the end of 2023. The market is poised to rise at a CAGR
of 10.4% between 2015 and 2023.
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