Product Definition and UsesThe electrical equipment industry is comprised of firms ÃÂprimarily engaged in manufacturing power, distribution, and specialty transformers; electric motors, and motor generator sets; switchgear and switchboard apparatus; relays; and industrial controls.ÃÂ Firms within this industry distribute their products among many different business sectors within the domestic and foreign markets. Major purchasers of electrical equipment include the manufacturing industry, the construction industry, wholesalers, utilities, and other electricity and energy producers and distributors.
Electrical equipment is manufactured for the purpose of directing and controlling electrical energy. This wide range of use encompasses components that perform everything from delivering electricity to homes and businesses, to directing and controlling the flow of electricity and power at manufacturing and industrial facilities.
Data and Industry AnalysisThe electrical equipment sector has experienced some deterioration due to the current worldwide recession. Revenue and growth rates have been on a downward trend over the past few years (SEE EXHIBIT XX.)
As energy prices and markets have declined, construction and capital projects of many corporations have been put on hold. In turn, the demand for electrical equipment in the economy has been on the decline.
The industrial equipment segment is dominated by motor and generator manufacturing. Exhibit XX below shows the break out of the market segments.
Transformers ÃÂare used to increase voltage for long-distance commercial distribution, and reduce voltage for distribution at the local end for distribution to end users.ÃÂ Transformers were of particular interest to MMG due to their additional surplus of them. Unfortunately, transformers have the lowest market segment in the industrial equipment manufacturing market place. However, their market share has grown slightly since 2002 when it was only 13%.
IBIS notes that the major customers for transformers are power generators and distributors, and large industrial companies. Some surprising consumers in the large industrial...