The global distribution transformers market is poised to grow from $13.74bn in 2015 to $16.67bn by 2020, representing a compound annual growth rate (CAGR) of 5%, according to a report by GlobalData.
Titled “Distribution Transformers Market, Update 2016 – Market Size, Competitive Landscape, Key Country Analysis and Forecasts to 2020”, the report states that the Asia-Pacific region will be a major driving force of growth.
Emerging economies of the Asia-Pacific (APAC) and Middle East regions have also witnessed large power capacity additions. Improved access to electricity in the region is increasing the need for expanding and upgrading existing distribution infrastructure, resulting in market growth.
The distribution transformers market in the APAC region is expected to reach $7.66bn by 2020 as industrialisation and rural electrification continue to grow.
Comparatively, demand for transmission and distribution infrastructure in North America and the EU remains low, says Swati Gupta, GlobalData’s Analyst covering Power.
Growth in the North America region is contributed by the replacement market involving the replacement of transformers older than 25 years. Countries in the EU including the UK and Germany are also replacing aging grid systems and upgrading distribution infrastructure.
Focus from the Americas is now shifting towards emerging economies of the APAC region and Latin America. A number of companies are also establishing operations in emerging economies to take advantage of the low production costs, adds Swati.