Powering the region

Since its foundation over 45 years ago, Aggreko has grown to become the world’s leading provider of rental power and temperature control solutions. With more than 3,500 employees operating from over 120 locations, Aggreko provides 24/7 availability and service support. Aggreko offers the highest levels of performance and customer service and is truly a global force in temporary power generation.

Aggreko in the Middle-East
Opening its first regional office in Sharjah in 1991, today Aggreko offers around-the-clock service support and availability in the Middle East region through a network of ten locations in six countries.

Aggreko serves a diverse market - on construction sites Aggreko generators and air conditioning equipment provides power and cooling to allow operations to start ahead of the permanent mains connection, in remote locations Aggreko provides reliable power for oil-field operations or mine sites.

In countries stricken by seasonal power shortages, Aggreko provides base-load and peak shaving power, in factories and refineries Aggreko supplies power and cooling services for planned or emergency outages. Aggreko has supplied power during construction of the Palm Island development in Dubai, Festival City, the Dubai Metro and the Qatar Pearl among other projects. One of Aggreko's most recent projects is the provision of temporary power for the construction of the King Abdullah Economic City in Saudi Arabia.

Aggreko Products and Services
The complete range of power generation services that the company provides includes project management, system design, installation and commissioning plus full operation and maintenance if required. The modular design of Aggreko equipment allows flexible power stations to be tailored to suit every power need. Crucially, the equipment can be installed and commissioned very quickly without the need for expensive site preparations.

Aggreko diesel generators are designed and manufactured at the company's own ISO 9001 accredited manufacturing facility in the UK, and are housed in ISO standard containers for easy transportation by land, sea or air. We can supply generators from 15 kVA to 2000 kVA in single units.

As summer temperatures rise, many industrial processes become less efficient or product quality deteriorates. To overcome this Aggreko offers a range of temperature control equipment especially designed for rental applications. Its industrial air conditioning units can be used to maintain temperatures for critical processes or to provide comfortable temperatures in the workplace.

Our service sets us apart
More than products, Aggreko has significant experience in providing power generators, electrical testing and temperature control services, offering total power and cooling solutions. Its equipment allows the flexibility of creative and novel solutions to suit customer needs - solutions that work not just on paper, but in practice. This means offering 24-hour back-up 365 days a year and making full use of a global network of depots to ensure that the equipment is on-site in the shortest possible time.

To Buy or Rent
There are many features that make the proposition of power rental attractive, including improved cash flow and speed of supply. There are no down payments for a loan for purchase purposes and power rentals have a guaranteed payments schedule over the agreed term, with options to extend the rental period if required. Also, the rental option provides the end user with operational and maintenance services of the rental package.

When a company rents power supply equipment, its management team simply transfers the uncertainties and risks of power equipment ownership to the power rental company. This process allows the company to concentrate on its core business knowing they can rely on continuous supplies of power from the rented equipment. If required, the solution can be tailored to meet specific needs, should these needs then change, the equipment or the period of rental can be adjusted to suit the new demands.

One of the most frequent reasons for choosing a rental solution is timing as a power rental really can be a fast-track supply, thereby giving the end user the vital power supplies needed within a short time. This fast delivery is critical to many users especially if there has been an unplanned power outage and reliable power is of paramount importance. Then there are the long lead times before a purchased power plant can be delivered, meaning it can be 18 months or even two years before the new power plant is "in-power". It as at times like these when power rentals are the answer.  

Another benefit of renting power equipment is the flexibility it offers as rentals allow the customer the freedom to increase or decrease the amount of power generating capacity according to need. Then there is the extensive range of technical support services provided by the rental company which ranges from advice and design through to replacing faulty equipment and even operating and maintaining the equipment.
The Power of Rental in an Economic Downturn

Lack of liquidity, reduced cash flow and inability to finance are problems facing companies of all sizes and in all industries around the world. In addition, many companies are facing general uncertainty in the market, with many projects being put on hold or cancelled. These factors are causing many companies to re-evaluate their purchasing policies and to look at the benefits of using rental providers, particularly when it comes to heavy equipment and machinery.

Lack of Liquidity
For many companies, the sudden lack of liquidity in the market initially came as something of a shock after years of readily available funding and loans. Now, almost a year into the economic crisis, financing of major projects is still a challenge for many companies, particularly those operating in regions which have been hardest hit by banking scandals. For those companies which require large equipment, whether for projects or to run their production facilities, this lack of available funds creates two fundamental problems. First, can the company justify a large down-payment which will further reduce their capital base? And second, is the company able to find a bank which is willing to finance the large down-payment on terms which are not exorbitant? 

Many companies are choosing to rent rather than purchase equipment, especially when it comes to large equipment such as power stations. In recent years, with the economy booming and industry growing, one of the most common reasons for a company choosing a power rentals energy solution has been timing. During an economic up-turn, the lead-time for the purchase of generation equipment can be anywhere up to two years, meaning that companies which need power urgently will find a rental option very attractive, due to the 'fast-track' aspect of rentals. However, the current financial turmoil is encouraging companies to consider rental for different reasons, such as how to better utilise working capital and to ensure that it is not tied up in large capital purchases for items such as power plants.

The advantages of renting power are also strong in an economic down-turn: renting power generation equipment eliminates the need for capital expenditure on equipment. It incurs no large down payments or interest costs and preserves borrowing capacity. In addition, power rental guarantees fixed and regular payment schedules over an agreed term with options to extend the rental period if required which improves cash flow and allows for more accurate budgeting.

Hidden Costs and Human Capital
When making the decision between purchasing and renting equipment, it is important for a company to evaluate the decision in light of the many hidden costs that are incurred when equipment is purchased; insurance is one item which is often overlooked by companies seeking to purchase large equipment. In addition, for equipment such as generators, there are many spare parts and ancillary items that need to be purchased regularly to ensure that the equipment is able to operate. Not only do items such as spare parts need to be purchased, but they also require storage space to house them. With a rental solution, all spares and ancillary items are the provision of the rental provider, enabling the customer to budget more effectively.

Refuelling is an additional cost which is often forgotten when the decision is made to buy equipment. Refuelling one generator is a time-consuming task; a project site with thirty to forty generators on it will require the contractor to purchase trucks and staff simply for refuelling. Therefore, the use of rental specialist who includes refuelling in the rental package can be an attractive option for customers.

Another factor in the rental versus purchase argument that becomes even more prominent in an economic downturn is the element of human capital. At times it is tempting for companies trying to save money to minimise the number of staff they require for operating the equipment, however, this short-term solution often leads to greater problems in the long-run. Heavy equipment such as generators require regular servicing and maintenance in order ensure that they are operating a peak efficiency; a poorly maintained generator will have greater fuel consumption, higher emissions and may even break down entirely, negating any cost benefits that may have come from reducing the number of technicians working on a project site. Through a rental provider, all service and maintenance is included in the rental package, ensuring that the equipment is always running at peak efficiency.

Flexibility is Paramount
Projecting the power demand of projects also becomes a problem for companies in a financial down-turn. Purchased generators are often either under or over-utilized since the power need on a construction site tends to follow a specific pattern of ramping up and then falling away, meaning that a contractor who purchases enough equipment to meet peak demand on site will find that the generators are underutilized and burn fuel less efficiently for most of the project.

Risk Management
The past year has seen much construction work come to a grinding halt as projects are re-evaluated for viability. Although most partially completed projects appear to be going ahead, the number of projects in the design phases which have been put on hold is staggering. One of the greatest advantages of the rental option is the cushioning effect this has on companies which are uncertain about the long-term future of their projects. By renting equipment, companies can ensure that they will not be left with equipment which will sit unutilised; if a company renting equipment is told that one of its projects has been put on hold, the financial damage incurred by having purchased large amounts of heavy equipment can be a major blow for a company without large cash reserves. Ultimately, renting equipment means that because ownership lies with the rental company, all risks do as well.

The Future of Rental
Analysts are divided as to their opinions of when the economic climate will begin to improve, with some saying late 2009 and others pointing to early 2011 before any real recovery will occur. However, it seems unavoidable that there will be some fundamental changes to the way that people think about investment and financing, and to how companies handle their asset management. Cash reserves may very well regain their old popularity; certainly it seems unlikely that companies will be willing to leverage their assets to the degree that has been the norm in the past decade.

With a greater emphasis on keeping capital available and with rental providing benefits such as lowered capital expenditure, flexibility and risk management, the option of renting as opposed to purchasing equipment will likely remain an attractive one even as the world economy eventually strengthens and the world enters another positive growth period. And although the question, 'Is it better to buy or to rent', will continue to be asked by companies contemplating large equipment purchases, many companies will likely find themselves deciding that during this period of economic uncertainty, ownership may not be worth the hassle.