EATON Africa, the regional arm of the $22bn-revenue NYSE-listed Eaton Corporation, signed a first premium distribution partnership on Thursday with SA’s R1bn-a-year Diesel Electric Services (DES) to take advantage of Africa’s need for power.
While South African customers are looking for secure and renewable energy supply to offset Eskom’s increasingly costly and unreliable power, the growth of other African economies in the past decade has also created demand for power that utilities are struggling to meet.
According to the International Energy Agency’s 2014 World Energy Outlook, 620-million people, or two-thirds of the population of sub-Saharan Africa, have no access to electricity. The agency forecasts the region’s installed power generation will soar to 38,000MW by 2040 from 9,000MW in 2012, from various sources.
Twenty-three years ago, DES, under MD Kevin Donaldson, broke away from Meissner Power Systems, which was part of NEI Africa and is now part of Eaton Corporation, with the diesel-generation business, leaving the specialised power systems business with Meissner.
Mr Donaldson said the rationale for signing a partnership was that the companies had a similar approach to business and client base.
DES, which employs about 420 people in Johannesburg, designs, manufactures, installs and maintains generator sets, distribution boards and related products.
Mr Donaldson said clients in Africa wanted a single-solutions provider. DES would provide the service, sourcing 80%-90% of its products from Eaton Africa’s range, adding to the existing DES range, and the partnership would also benefit from Eaton’s marketing power.
Eaton Africa MD Shane Kilfoil said the deal would help the company expand its presence, targeting utilities, commercial buildings and data centres.
Eaton Africa employs about 900 people in Africa, and has manufacturing facilities in SA.