Client Brief

Manufacturer of Circuit Breakers for Retro-fitting into High Voltage (11 kv)Electrical Switchgear

Background

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.

PRODUCT DETAILS

Product Range

 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.

Product Unique Selling Points (USP)

 RVCBs

  • 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.

Spare Parts/Equipment

  • 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.

Quality or Industry Standards

 Products

Standard

All

Fully tested and certified to IEC 56

Product Support

 Item

Remarks

Marketing Materials Marketing literature is currently available in English. The client will work with distributor for Arabic version

Training

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.

Final Assembly

Not required.

Repairs

Repairs – if required – would be at the Client’s UK base.

Backup

Normal technical support available from the Client’s UK base.

Stockholding & Spares

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.

Guarantees & Warranties
  • 12 months parts only.

Supply Time

  • Typically 8-10 weeks for RVCBs.
  • Typically 2-3 weeks for other spares.

Current Production Capacity

Product
Output

RVCB

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.

Range of Product Pricing

 Product

Typical Price Range

 

RVCB £8k (approx) per unit

(N.B. Most switch gear would probably require a minimum of 3 x RCVBs)

Spare Parts To be quoted on basis of individual requirements

Order Fulfilment Criteria

 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.

COMPANY DETAILS

Strategic Statements

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.

Initial Objectives

 Distributor

Sales

Joint Venture

Inward Investment

Yes[ 4 ] No[ ]

Yes[ 4 ] No[ ]

Yes[ ] No[ 6 ]

Yes[ ] No[ 6 ]

Distribution

Requirements

Turnover / Profit

Target

Partner

specification

Capital

Required

  • Distributors or agents are being sought.
  • Total export sales of 300 x RVCB units per annum worldwide (i.e. £0.25m) are being sought initially.
  • Whilst JVs are not actively being sought, the Client would welcome enquiries from any prospective JV partner.
  •  

    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

    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

    Existing Export Experience

     Middle East

    Elsewhere

    Limited to the export of spares only.

    Limited to the export of spares only.

    Current Distribution Channels

     None in the Middle East

    Main Competitors

     Middle East

    UK

    Elsewhere

    None known

    Some UK switchgear manufacturers Some overseas switchgear manufacturers

    Target Markets

     Business To Business

    Business To Consumer

    Operators of national electricity grids.

    Any major electrical consumer who operates an electrical sub-station.

    N/A

    Profile of an Ideal Partner

     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.

    Special Considerations/Conflicts

    It would be necessary to confirm whether or not a prospective agent was already an agent or distributor for a competitor manufacturer of switchgear,

    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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