Developing Thermal Power Plants Service
Haluk Direskeneli Haluk Direskeneli printable version
5 June 2007
This commentary is from USAK’s Energy Review Newsletter
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This paper is prepared in order to explain how best to get prepared, what actions to be taken for “Developing Thermal Power Plants Service Business Plan" in Turkey and adjacent Countries. The plan could be implemented in 3Q07, however implementation of the specified measures is suggested for any time period.
Although our local companies generally receive some percent of service business as part of their major boiler sales, percent of Service Orders is approximately 10% out of their total bookings. This figure is approximately more than 20% in USA since USA Company bookings also include major share in Utility Plant Service. In the world markets, Service Business or Field Engineering Services normally work in the captive market, therefore the profit margin is relatively high since one works with own existing clients plus competitors’ unsatisfied clients.
Currently industrial boiler market is shrinking in Turkey due to low industrial activity for upcoming general elections and service market could be a good alternative for fast cash earnings with relatively high gross margin.
However in the local market, Company has serious concerns for promotion of service business. Servicing the existing EUAS Utility plants is not feasible in the short run, since EUAS traditionally prefers to use their own resources and/or alternatively they work together with original boiler supplier(s). After “Privatizations” are implemented, the new owners may ask companies with experience to make the necessary upgrading of existing utility units. On the other hand, the former managers, engineers, technicians of competitor boiler companies, formed new service companies to serve existing steam boilers in the local market.
They get qualified easily and their prices are low since their overhead and profit expectations are low. In the local industrial size steam boiler services, price is the king; therefore COMPANY should offer special services, such as diagnostics, plant optimizations, which are not easily available by the local small service companies.
For the nearby international region, a reputable Service Company can always work directly and/ or together with reputable/ reliable foreign partners
Recommended Action Items
1. COMPANY should make list of applicable service subjects, At this time, main service subjects are Condition Assessment, Diagnostics, Boiler Retubing, Natural gas and/or Multi- Fuel Burner conversion, Repowering, CHX, FGD, Low NOx burner applications, addition of Economizer(s), updating existing I&C etc.
2. COMPANY should list existing own design boiler owners in Turkey, regularly visit their plants, and maintain monthly contacts to serve them, by phone or written communication.
3. COMPANY should list other water tube (as well as fire-tube) steam boiler owners in Turkey by tracing the competitor reference lists and maintain quarterly contact to serve them by phone and/or written communication.
4. COMPANY should visit at least … clients per year in order to explain Company capabilities in service Business.
5. COMPANY must prepare technical papers to present in Domestic and International Symposiums on "Service Business" and Company should regularly attend relevant similar activities in order to have mutual communication with our existing and potential future clients. It is very well known that in our local culture, verbal communication is more effective than written communication.
6. Technical paper Presentation will need to be done on an ongoing basis but it may originate from some of the existing papers that have currently been prepared by foreign partner Field Engineering Services. COMPANY can provide...
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