According to a recent report issued by strategic growth consulting firm Frost & Sullivan, the North American power generation rentals market generated $405.9 million in revenues in 2002 and could top $700 million by 2008. One of its leaders is Aggreko, a U.K.-based company with North American operations based in New Iberia, La. Aggreko, No. 11 on the RER 100, is divided into three primary business units — North America, Europe and Aggreko International. RER recently interviewed its national marketing manager Maury Hammond.
RER: What is your traditional product mix in North America?
Maury Hammond: In North America, our traditional product mix is rental power, temperature control and 100 percent oil-free compressed air systems. Our base business comes from customers in the industrial, commercial, event and entertainment sectors.
We custom package our own generator sets using best-of-breed components, such as compressors from Ingersoll-Rand.
Last year we were the first to release a complete line of electrical distribution equipment, including rugged, custom, NEMA 3R-rated transformers, distribution panels and cabling. The UL listing makes a big difference because it enables users — such as electrical contractors — to get in and out of job sites faster, and speeds up on-site electrical inspections.
We also recently introduced our new generation canopy unit, the GHP2, which runs from 60 to 375 kW in four sizes. We had a successful broad release in Europe. Our first release in the United States will focus in the Northeast in June with other regions to follow. The GHP2 is very strong in terms of spill containment and fuel capacity, and provides longer intervals between service times. The main end users are electrical contractors in the construction market, oil and gas exploration and production companies, refineries, chemical plants and flat-roof manufacturing facilities.
You are well known for working on big projects.
While we have supplied some of the largest temporary power and temperature control projects in the world, our core business is based on day-to-day rental opportunities through our network of 65 depots in North America and over 140 worldwide. This business is 70 percent repeat business. However, we did supply 100MW of power and distribution to the Salt Lake City Olympics. We also did similar work for the World Cup in Japan and Korea. But the high-profile jobs don't come along that often. We didn't have anything on the scale of the Olympics for 2003. We did a lot of work providing power in the aftermath of the northeast snowstorms and have done many disaster recovery projects with our partner, Belfor, which specializes in restoration work worldwide.
Do you sell a lot of equipment?
We are purely rental and do not focus on sales. But we have had success selling our refurbished and repackaged used equipment.
What are some of the services you offer?
In addition to our base business, we have several specialty business units that focus on providing custom solutions and value-added services: Aggreko Cooling Tower Services, Aggreko Partnership Programs, Aggreko Event Services, and Aggreko Process Services.
Our cooling tower division maintains the largest fleet of portable, modular cooling towers in the world. They recently completed a job where a plant customer's permanent cooling tower became old and simply fell over one day. Within days we had a huge replacement system up and running until they could rebuild, saving them millions.
Aggreko Events focuses on the entertainment, sports broadcasting, movie production and special events industries. They were responsible for pulling off the Olympic and World Cup jobs last year and they just secured the contract for the Paris 2003 Athletic Championships scheduled for August. Our Partnership Programs and Process Services provide, respectively, specialized contract pricing and services for long-term, locked-down business agreements and engineered solutions for plant and refinery managers and engineers.
Basically, we're unique in the industry. We've put the whole package together from energy equipment rentals to custom solutions.