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Client Brief
Manufacturer of Circuit Breakers for Retro-fitting
into High Voltage (11 kv)Electrical Switchgear
Background
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The client’s company was incorporated in 1984 to maintain and test
electrical switchgear and transformer installations throughout the
UK and offshore. Subsequent expansion involved further aspects of
the design, manufacture and installation of switchgear and transformers
and a wealth of expertise has been attained in these fields.
The client has recently focused upon an important and innovative
niche market that would be relevant to the export market. It is
that of manufacturing "Retro-fit Vacuum Circuit Breakers" (RVCB)
for fitting into existing 11 kv electrical switchgear of original
UK manufacture. These breakers replace existing oil-filled breakers
that are at the end of their safe working life after – typically
– 10 to 20 years useage. This change from oil to vacuum breakers
is a development based upon the advice of the UK Health & Safety
Executive. It is a highly cost-effective way of giving a mid-life
upgrade to expensive switchgear that would otherwise have to be
scrapped.
Independent consultancy reports on the business confidently predict
an increase from the current annual turnover of about £1 m to £10
m within 5 years and the company is structuring itself accordingly
for this expansion.
Product development and testing is complete and the Client is now
ready to start actively marketing their new range of RVCBs to meet
the predicted international demand.
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PRODUCT DETAILS
Product Range
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RVCB.
- The Client has developed RVCBs for retro-fitting into a wide
range of 11 kv electrical switchgear of UK origin. (These are
of significance since, almost invariably, the degradation of the
circuit breakers – which cannot be accurately predicted - determines
the safe working life of the switchgear. Replacement of the breakers
can therefore be a highly cost-effective extension of the switchgear’s
working life.)
- The product range is being constantly developed and extended,
with RVCBs currently available for most common switchgear/circuit
breakers previously manufactured in the UK by :
- South Wales Switchgear
- GEC
- Reyrolle
- Brush VSI
- The client is willing to consider ventures with other companies
to develop the product range eg 33kv and higher or for other manufacturers
Spare Parts/Equipment.
- The Client also offers a spare parts service to support a wide
range of current, obsolescent or obsolete switchgear, transformers
and associated electrical distribution equipment.
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Product Unique Selling Points (USP)
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RVCBs
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- The retro-fit of an RVCB into existing switchgear can be 60-70%
cheaper than a complete replacement.
- Also, typically, the power supply would only have to be interrupted
for about 30 minutes for this retrofitting, compared with 1-2
days for a replacement. This has obvious benefits to the users
of an electrical supply – e.g. production lines etc.
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Spare Parts/Equipment
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- The Client’s spare parts service either sources or manufactures
spare parts at a fraction of the price charged by the original
manufacturer – typically of the order of 50% cheaper.
- The Client is frequently the only source of spares for some
items, since original UK manufacturers are often either unable
or unwilling to provide them. Even if willing to provide the spares,
the original manufacturer might quote a delivery time of up to
12 months as compared with 2-3 weeks by the Client.
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Quality or Industry Standards
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Products
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Standard
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All
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Fully tested and certified to IEC 56 |
Product Support
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Item
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Remarks
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| Marketing Materials |
Marketing literature is currently
available in English. The client will work with distributor for Arabic
version |
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Training
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Training can be provided if required at
the Client’s UK base at the customer’s expense. |
| Product Documentation |
KEMA test certification and
supporting documents are provided. |
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Final Assembly
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Not required. |
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Repairs
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Repairs – if required – would be at the
Client’s UK base. |
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Backup
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Normal technical support available from
the Client’s UK base. |
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Stockholding & Spares
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A Middle East "partner" would not be required to hold a stock of
RVCBs or other spares since every breaker is designed and manufactured
"to order". However, for planning purposes, a £10k stockholding
would be appropriate for demonstrations etc.
If the circumstances warranted, then the Client would fly out to
a prospective major customer and demonstrate the RVCB in-situ.
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| Guarantees & Warranties |
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Supply Time
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- Typically 8-10 weeks for RVCBs.
- Typically 2-3 weeks for other spares.
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Current Production Capacity
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Product
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Output
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RVCB
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Current production capacity is a minimum of 5 units per week.
Expansion plans have been prepared to increase production capacity
to meet the predicted demand.
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Range of Product Pricing
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Product
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Typical Price Range
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| RVCB |
£8k (approx) per unit
(N.B. Most switch gear would probably require a
minimum of 3 x RCVBs)
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| Spare Parts |
To be quoted on basis of individual
requirements |
Order Fulfilment Criteria
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Detailed order fulfilment criteria for individual
orders are to be subject to negotiation with each prospective distributor.
The Client’s usual terms are by receipt of an irrevocable letter
of credit drawn on a UK Bank prior to shipping the items ordered.
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COMPANY DETAILS
Strategic Statements
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General. The client seeks to increase turnover through export
sales.
Specific Middle East Markets Targeted. No Middle East or
North African countries are excluded and there is a potential market
throughout.
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Initial Objectives
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Distributor
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Sales
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Joint Venture
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Inward Investment
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Yes[ 4 ] No[
]
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Yes[ 4 ] No[
]
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Yes[ ] No[ 6
]
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Yes[ ] No[ 6
]
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Distribution
Requirements
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Turnover / Profit
Target
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Partner
specification
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Capital
Required
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- Distributors or agents are being sought.
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- Total export sales of 300 x RVCB units per annum worldwide (i.e.
£0.25m) are being sought initially.
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Whilst JVs are not actively being sought, the Client would welcome
enquiries from any prospective JV partner.
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Company Accreditation
| Quality systems in accordance with BS
5750 have been introduced. |
Company's Core Skills, Competencies & Unique Selling
Points
| A number of the Client’s key managers
and employees are former members of South Wales Switchgear.
Their combined knowledge base therefore covers almost every aspect
of the electricity supply industry with their expertise being acknowledged
and sought after by their competitors. |
Previous Clients
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Previous clients include a wide range of Authorities – e.g. in
the Health, Aviation, Petro-chemical and Shipping sectors. Particular
clients of note are :
- Associated British Ports
- British Steel
- ICI
- Blue Circle
- Texaco
- BP
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Existing Export Experience
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Middle East
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Elsewhere
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Limited to the export of spares only.
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Limited to the export of spares
only. |
Current Distribution Channels
Main Competitors
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Middle East
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UK
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Elsewhere
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None known
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Some UK switchgear manufacturers
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Some overseas switchgear manufacturers
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Target Markets
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Business To Business
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Business To Consumer
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Operators of national electricity grids.
Any major electrical consumer who operates an electrical sub-station.
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N/A
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Profile of an Ideal Partner
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Essential Attributes. A company or organisation
with the following essential attributes :
- Effective sales and marketing coverage of the country or countries
proposed.
- A distributor or agent, qualified and experienced in the supply,
installation and customer training/support of equipment or services
to the electricity supply industry.
Desirable Attributes. A mature company or organisation with
the following desirable attributes :
- An existing client base of heavy industrial electricity consumers.
- Working level contacts with the country’s electricity grid operators.
- Working level contacts with local electrical contractors and
design consultancies.
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Special Considerations/Conflicts
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It would be necessary to confirm whether or not a prospective agent
was already an agent or distributor for a competitor manufacturer
of switchgear,
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SUMMARY
| The Client’s innovative and niche market
provides an excellent business opportunity. The cost and time savings
possible from the retro-fit of circuit breakers – as opposed to complete
switchgear replacement or refurbishment (if spares are available)
– offer a very attractive commercial proposition. The challenge lies
in establishing the right contacts to penetrate the market. |
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