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Analysis

Gas, Diesel and Bi-fuel Generators

Tue, 01/22/2013 - 14:55

In November 2012, Generac, one of the leading electricity generator companies in the world, purchased Ottomotores’ UK, Brazilian and Mexican businesses for US$46.5 million in cash. With its new owner, both Ottomotores’ product portfolio and its ability to launch products into the market have grown. Therefore, the company’s expansion plans for this year are aggressive. In 2013, Ottomotores is planning to grow by capitalizing on the enlargement of its product portfolio, thus offering products that currently are not being commercialized in Mexico, such as lighting towers and gas-fed equipment that use either natural or propane gas to generate electricity for residential, commercial or industrial applications.

Ottomotores’ access to capital for investment and product development has also increased greatly as a result of Generac’s purchase. “Generac is financed by a large group with a large amount of capital for investment. Now that we are part of a larger platform, we are introducing new product lines, we are physically growing with new facilities, and we are investing in people, which are the most important resource for Ottomotores,” says Francisco Haro Martínez, General Director of Ottomotores. To this end, the company is designing a training center for employees and customers that will operate at an international level, with the combined aim of developing Ottomotores’ human capital and generating clear and direct communication with its clients. “Nowadays, a Generac distributor has to go to Wisconsin to get training, and the information he or she receives is entirely in English. We are bringing that training center to Mexico instead. This will support our expansion strategy, since it will allow us to speak the same language as our customers and supply them with the latest technology without any language or distance barriers,” explains Haro Martínez.

The company’s focus on training its personnel and providing quality service to its clients will only intensify with its increased capabilities. “I believe that an electric generator is like insurance: you hope to never have to use it, but if you need one then it is better to have it,” states Haro Martínez. Appropriate maintenance is crucial to ensure that a generator is ready for use at any time. For this reason, Ottomotores has a fleet of engineers that provide preventive and corrective service to all machines. Now, the company can supply and upkeep generators of up to 3000KW, thus expanding its horizon on the industrial sector.

Ottomotores believes that demand for equipment powered entirely by gas will grow in the near future as a result of low natural gas prices and growing demand for cleaner solutions. He also mentions that there is great potential in the bi-fuel generator market because of the various advantages posed by utilizing an electricity source which works with 60% gas and 40% diesel. “For bigger capacity equipment, the bi-fuel system provides industries with the opportunity to have cleaner emissions and alternate fuel usage, as well as widely proven technology that increases the performance and energy output of a generator. The demand for bi-fuel generators exists, but the market is waiting to be educated about this kind of application,” asserts Haro Martínez.

“Bi-fuel generators are designed for prime applications, where plants work for six to eight hours per day. They are safe for continuous use because the diesel motor is not modified and the control system for using dual fuels provides the protection and operation commands required for optimal performance and added efficiency,” says Haro Martínez, “a very important feature of the bi-fuel system is that, when operating with a combination of gas and diesel there is an immediate response to sudden loads of the diesel motor, thus avoiding power shortages in crucial production stages.”

As environmental awareness and regulation increases in Mexico’s industrial sector, more projects demand cleaner and more efficient power generation solutions. Ottomotores currently provides equipment in line with both US and European emissions regulations. The company is growing in all of its residential, commercial and industrial markets, but it considers the oil and gas sector to be very important because of its size and the great technical and service needs it has for power generators. Apart from Pemex, Ottomotores’ client list includes Ecopetrol and Petrominerales from Colombia, as well as PDVSA from Venezuela, to which the company sells large quantities of equipment and provides service and maintenance.