Perkins enters China gas engine market

The industry giant forays into the Mainland with the introduction of the turbocharged 6-cylinder 4006-23TRS gas engine.

On a trip to Shanghai for the Power China 2013, Asian Power caught up once again with one of the leaders in the field, Perkins Engines Company Limited, which was showcasing three of its diesel engine ranges. But most notable this time around was that Perkins also brought a gas engine to display, the first time it has ever done so in the China market, in order to strengthen its local offerings.

Perkins displayed a 4006-23TRS, turbo-charged, air-to-water charge-cooled, 6-cylinder inline engine, designed for operation on a wide range of methane-based gases. The company claims that the advanced combustion technology in each engine ensures durable and reliable power, while a high commonality with other engines in the 4000 Series range means a reduced parts inventory for the original equipment manufacturer (OEM).

“We’ve been developing gas engines for power generation and different markets for a long time. The first time we developed a gas engine was in 1968 but generally, we’ve had a different marketing strategy for these engines in the past,” said Simon Gray, Perkins product marketing manager.

Gas centers of excellence

Daniel Bentley, Perkins general sales manager for north Asia, explained that the next phase of its power strategy in the China market is to penetrate the ‘loose’ gas engine sector in China. Displaying a gas engine at the exhibit, he added, was just one of the first activities that Perkins would leverage to break into the sector. The company has also selected two gas partners to become Perkins’ gas centers of excellence, said Bentley.

“We’ve just appointed two gas centers of excellence for the China market - our distributors Sime Darby Elco Power Equipment and Lei Shing Hong Machinery. These centers have been appointed because of their ability to customize, install and support our gas customers and their end users in their very specific requirements. They are Perkins’ authorized channels to market for large gas engines.”

Benny Wang, general manager of Lei Shing Hong Machinery was delighted at the appointment as he believes that his company’s partnership with a leading brand opens up bigger opportunities for them. “It’s good doing business with Perkins. Perkins is becoming one of the greatest brands in China. I think six years ago, Perkins was just an upstart in the power sector. Its market share was probably close to zero, but over the last few years we have seen continued growth. Our management is also in talks right now to extend the range of engines we use so as we can be more competitive in the market.”

Moving forward, Wang expects Perkins’ share in the electric power market to continue to grow. And in terms of distribution, Wang said he expected Perkins sales to quintuple by 2016.

For his part, Billy Liu, general manager of Sime Darby Elco Power Equipment, shared the same bullish sentiment while noting that the gas appointment propels them to increase investments in their facilities. “For this new business, we will need more than RMB4 million to invest in our facilities. We need to have gas pipeline, a commercial panel, some equipment for bigger modifications of our engines, some testing equipment to run the business, and then we need to have a dedicated technical team to support our customers for the business.” Elco Power is responsible for 18 provinces and cities in China. Liu said that over the years, its own business has grown by almost 50% every year.

Diesel engines

While Perkins is making some strong headway in the China gas engine market, it has also taken huge strides in the diesel engine market.
Among the diesel engines on display during the Power China 2013 exhibit was the 403-15G1 rated at 13.2 kVA prime power. According to Gray, this cost-effective engine is one of their products built out of the Wuxi facility.

Another one is the 1106A-70TAG, the first engine that the firm designed and developed out of its Wuxi facility. “1106A-70TAG is really groundbreaking for Perkins as this is one of the first engines we have developed outside of our Peterborough and Stafford bases in the UK,” said Gray. Lastly, Perkins introduced the 1606A-E93TAG which gives a range of 250 kVA. Gray said that it was first launched in China last year. According to Gray, the key advantage of Perkins’ power solutions is their power density. “After speaking to some of our customers who are also here exhibiting at the show, I see that they are really keen on a power-densed product which we are delivering to them. Businesses liked the logistic advantages of needing smaller packaging, and the fact that customers will need to move around less weight. Costs were also kept to the minimum while keeping the high durability and long service that you expect from a Perkins product.” Gray said that there are plans to strengthen its distribution network for its diesel business, to establish a branch office in every province in China by the end of this year.

The Wuxi facility

Perkins’ state-of-the-art Wuxi facility continues to play a pivotal role in the company’s business strategy of manufacturing close to its customers. According to Gray, Perkins’ Wuxi facility has made additional improvements to the 400 Series. “We continue to invest in maximizing the powers out of these products going forward, and it’s essential that service in all systems is kept at a 500 hour standard.” Gray said that Perkins continues to invest in the Wuxi facility, bringing in new products like the 400A which is now built there to support the Chinese market. In 2010, Perkins also opened it’s 1100 Series facility.

“Over the last year a lot of work has been undertaken to localize the components on the 1104 engine.” According to Gray, Perkins is on its way to making its products a lot more localized with 85% of their components already coming from Asia. Gray noted that the original investment to the Wuxi facility was around $130 million but there are no plans to increase it at this present time.

Asian expansion

In terms of the size of the business, Perkins’ Bentley explained that the Asian electric power business constitutes a growing percentage of Perkins’ global electric power business. He added that growth in the Asian electric power market was increasing year on year, compared with the European and North American markets which had so far shown relatively flat growth. Over the next few years Bentley said that Perkins would see Asia’s share in the company’s electric power business continue to increase. Apart from China, Perkins is establishing its brand presence in India with a new manufacturing facility in Aurangabad scheduled to open in 2014. The 120,000 sqm manufacturing facility is being built for the production of the large 4000 Series.

The Aurangabad facility though will be smaller than the Wuxi facility in terms of people, with the former employing up to 500 people when fully operational compared to the 800 staff at the later.

According to Bentley, the territories are quite different and so are the strategies for each market. “We have to respect the different markets and that’s why we have manufacturing and sales and marketing teams in both China and India.”

“With respect to Electric Power, China is very much an export market. All of the parts of the engines that we supply are exported around the world. India, on the other hand, is more of a tactical domestic electric power market. We don’t see so many exports from the Indian market.” In terms of sales and marketing staff strength, Bentley said that the Perkins team in China consisted of around 30 people. In India, Perkins have 6 sales and marketing staff at the moment, but Bentley said the company plans to grow the team as soon as the facility is operational.

For more information on Perkins and how its power solutions can meet your needs, visit www.perkins.com