Modernization Creates Electric-Motor Markets in Russia and Ukraine

Sep 20, 2006 1:25 PM

While old and outdated equipment is undermining the competitiveness of the Russian and Ukrainian manufacturing sectors, at the same time it is creating considerable opportunity for replacement sales. However, with only a few companies capable of investing in new equipment, Russian and Ukrainian electric motors suppliers may be forced to consider extending their product portfolios, as a route to supporting market share while better responding to customer needs.

In a report from Frost & Sullivan, “Emerging Opportunities in the Russian and Ukrainian Electric Motors Markets“ (B594 – 17), it is estimated that revenues in the Russian electric motors market will rise to $1,456.2 million in 2012, while the Ukrainian electric motors market will expand to $287.8 million over the same period.

However, despite both the optimism of suppliers and a broader industry recognition that relatively obsolete equipment is hampering their competitiveness in the global markets, only a few Russian and Ukrainian manufacturers, for example those connected to the oil trade, actually possess the resources to invest in the modernization of their production facilities. Many companies lack the capital to update their facilities as their sales are low, their production capacities are often severely underutilized and their margins poor.

The inability or unwillingness of manufacturers to invest in new equipment has a number of more strategic ramifications. The overall quality or technology requirements of the Russian and Ukrainian markets are, typically, relatively low. Inevitably, companies with limited financial resources tend to focus on the basic configuration of electric motors.

Emerging Opportunities in the Russian and Ukrainian Electric Motors Markets is part of the Power Transmission Subscription, which also includes research in the following markets: Germany, UK, France, Italy and Western Europe.