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Rise In Energy Consumption Powers Brazilian Distribution Transformers Market, Finds Frost & Sullivan

SAO PAULO, Dec. 4, 2012 /PRNewswire/ -- The declaration of Brazil as the venue for the 2014 FIFA World Cup and the 2016 Olympic Games has required power utilities to ensure an uninterrupted supply of electricity during these events. They are, therefore, investing in necessary infrastructure, such as distribution transformers, to cope with the high demand. Sustainable demand for organic energy and the ensuing expansion of generation capacity for wind and hydro power have further made the distribution transformers market more investment-friendly, despite the global downturn.

New analysis from Frost & Sullivan (, Growth Opportunities in the Brazilian Distribution Transformers Market, finds that the market earned revenues of over $505.9 million in 2012 and estimates this to reach $685.0 million in 2017. The study covers oil-type, dry-type, and vegetable oil-filled distribution transformers.

New power quality standards in Brazil require power companies to deliver a minimum level of electricity supply to end users. This necessitates investments in distribution transformers. Moreover in the long term, the law will encourage the replacement of old equipment with more efficient units, and even offer incentives to power utilities.

"Major transmission and distribution grid reinforcements will also improve the market's prospects, though the trend is expected to slow down beyond 2014," said Frost & Sullivan Business Unit Leader Juliana Passadore. "The requirement from industrial and power distribution segments will rise marginally, in line with the country's gross domestic product (GDP)."

Moreover, the shift toward dry-type technologies will expand the product portfolio of multinational and national companies, increasing the scope of the distribution transformer market.

However, international firms will not find it easy to penetrate the market. Fluctuating currencies, the need for high economies of scale, different technical specifications for products, and varied equipment stipulations in the auctioning process are likely to hamper their prospects.

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