For a number of decades, the Kingdom of Saudi Arabia (KSA) had remained as a traditional Arab country with vast abundance of fossil fuel resources, which ensured wealth but infrastructure remained limited. However, in the recent past, the government has changed its focus onto building metropolitan areas, particularly in the cities of Riyadh, Jeddah, Mecca, and Medina, with the last two being holy place for the Muslim Community to visit. As Saudi Arabia gears up to emulate the United Arab Emirates (UAE), the demand for electrical aspects of infrastructure is expected to rise.
According to an up to date business publication compiled by Transparency Market Research (TMR), the Saudi Arabia electrical market will be worth US$10.8 billion by the end of 2023, with the demand projected to multiply at an impressive compound annual growth rate (CAGR) of 10.4% during the forecast period of 2015 to 2023.
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Overall Shares Fairly Fragmented Among Vast Pool of Players
The analyst of the TMR report has detected a considerably fragmented competitive landscape in the Saudi Arabia electrical market, with a number of players staking a claim for nominal shares. That being said, Schneider Electric SA, ABB Ltd., and Alfanar Electric have been identified as the companies who currently are marginally ahead of the curve on the back of their esteemed product portfolio and global presence. As of 2014, these three players constituted for more than a quarter of the total demand share in the Saudi Arabia electrical market.
The analyst of the report has also highlighted that lighting protection solutions are currently yielding more than 80% of the total demand and focus is expected to remain on their in the near future too. In addition to carving their product portfolio in the direction of demand flow, major players are also indulging in mergers and acquisitions to make a firm entry into the expanding revenue avenues.
Based on solutions, the market has been segmented into lighting solutions and electrical solutions whereas on the basis of product type, the market has been bifurcated into low voltage (LV) systems and metallic cable management systems. Currently, lighting systems and LED lighting segments are gaining traction as they substantially add to the appearance of the location they are fitted at.
LED Lighting Segment Expanding Profitably
The trend in the electrical industry is energy efficiency, and the electrical market in Saudi Arabia is not immune to it either. Despite the abundance of fossil fuel, regulators are encouraging the implementation of renewable energy sources, particularly solar energy as the country also experiences substantial among of sunshine throughout the year. Apart from that, the growth of the building and construction industry in the country is expected to encourage residential and commercial sectors to adopt the new lighting systems. On the other hand, frequent changes in the prices of raw materials and unpredictability of the prices of oil are somewhat hindering the prosperity of this market.