Deloitte- Maverick Case study Competition

1. 1
BUSINESS CHALLENGE FOR MAVERICK
Case study : Gas turbine market analysis for ABC filters
Compiled By:
Team Name: BELLATOR
Captain Name: SRIJU NAIR
Members: KIRAN KANNAN
K.V.MINI

2. Air filters and filtration equipment are ubiquitous equipment used in
diverse industries and fields, given the universal need to maintain
particulate cleanliness to ensure efficient functioning of
equipment/machinery and the growing pressure to improve urban and
indoor air quality.
What are Air filters?
GAS TURBINE FILTER MARKET
•Reduction in natural gas
price
•Turbine inlet air filter sales to
over $400 million in 2013.
• This segment -6% of the $7
billion air filter market
•Demand for filters -Asia
Pacific -USD 17.78 billion in
2011.
•In Europe the demand for
filters -25% of the total
market share by 2018
Market
Insights
FUNDAMENTAL MARKET CHARACTERISTICS
Global filter market-USD 70 billion, Air filter market -USD 10.3
billion.
2

3. Go to Market -WHOM will we actively target
6.90%
41.40%
16.10%
9.20%
16.10% 10.30%
Between 120- 180
MW Europe
Middle east
Rest of Asia
Africa
North America
Latin America
11.20%
12.90%
11.30%
0.00%58.10%
6.50%
More than 180MW
Europe
Middle east
Rest of Asia
Africa
North America
Latin America
MARKET TARGET
1. Africa
2. Europe
3. Rest of Asia
4. Others
15.00%
45.00%
25.00%
15.00%
MARKET
SEGMENTATION
Europe
Africa
Rest of Asia
Others
World energy consumption
Distribution of turbine installation
3Refer exhibit 1 for further details

4. TARGET –AFRICA
 The IEA forecasted a growing role for natural gas in the
world's energy mix, with the natural gas share growing from
21% in 2010 to 25% in 2035.
 African gas production reached about 203 bcm in 2011,
Gas production in Africa since 2000 has been growing by
about 4% per year.
 Hence distribution of turbine in these area in future for
power generation will be more and hence the client should
focus these markets where no competitors for turbine
capacity ( more than 180 mw )
 5 year CAGR - 7.3 % , 10 year CAGR – 5 % approximate
stable growth.
The average loss of power for synthetic cartridge filter in
arid region is 2% in arid region
Future energy demand and export
Focus on new market
4

5. POLITICAL
ECONOMICAL
SOCIAL
TECHNOLOGICAL
Micro and Macro trends analysis
1. Support the quality standards set by the policy maker and t he
manufacturer
2. The filter offers High Efficiency Particulate Arrester(HEPA)
3. Reduced fouling and no performance loss of GT
4. Well proven and very high combined cycle efficiency
1. Sales growth is expected to be strong in South Africa
2. Over 150 gas turbines are expected to be sold in sub-Saharan
Africa between 2009 and 2014-resulting in an additional capacity
of at least 12 000 MW by 2014 (Frost & Sullivan )
1. The projected average annual growth for Africa is expected to
be rebound further to 5.15 points in 2013
2. Africa is endowed with substantial gas resources for electricity
generation .Eg. Nigeria-has about 186-trillion cubic feet of gas
resources- enough to power the whole of West Africa for the
next 20 years
1. Government initiatives taken to build a reliable power sector
2. Sizeable amount of financial resources have been channelled
towards the development of gas power projects
3. As per 2005 amendment hydrocarbon law, foreign companies will
be taxed on profit rather than revenue
5

6.  Client 2012 sales report shows that it’s
maximum distribution ( 43 % ) is in Europe – hence
no need to diversify its market .
Average loss in power generation using synthetic
filter cartridge is 5 %, hence consumer preference
is more for greater efficiency
 5 year CAGR -2.4% , 10 year CAGR – 1.1%
 Gas production growing in future ,hence
industry will try to expand which makes E10’s
market grow.
 3rd largest client distribution is in Asia 16% ,
hence client is well aware of the market
 As Asia ramps up its infrastructure, better
filtration devices have become a necessity. With
this trend sure to continue, nonwovens makers
targeting filtration are investing rapidly in the
region.
5 year CAGR – 5.2 , 10 year CAGR- 4.5
With the increasing power consumption and
increasing power generation plan by its policy
makers bring E10 a target market
Europe Rest of Asia
World increase in gas production by country grouping , 2010-2040
6

7. E10 Portfolio
Climate conditions
1. Arid
2. Marine
3. Subtropical
Value Proposition :
Competitive advantage
1mw power generation –
requires 10 filters
E10 downtime for filter
cleaning – 200 hr/year
Filter replacement rate – 24
months
Average turbine uptime -
99% hence high productivity
High productivity rate, time saving
Highly efficient
Less downtime for filter cleaning
Less idle time
Used for turbine capacity
range from 150- 190 mw
No competitor above 180 mw
E10 Filter life time = 20 hours per year
Minimization of total cost = Deployment +Operational
7

8. LIMITATIONS TO CURRENT FILTERS
Poor efficiency
High cleaning downtime
Extensive replacement of filters
Increasing foul in turbine function
Higher filter pressure loss & short
lifetime
Less efficiency in electricity generation
in harsh operating conditions
CLIENT’S COMPETITIVE ADVANTAGE
 Lower price ( E9 and E12 )
E9 customers facing less fouling , less erosion
and no corrosion and hence lower turbine wash
time is 90 hr/year
Competitor B and D provide filter servicing
Competitor A and C provide both filter
servicing and gas turbine maintenance
Average turbine capacity of both E9 and E12
is 160- 180
Particulars E10 E9 E 12
Downtime for filter
cleaning
200 hr/year 600 hr/year 3000 hr/year
Filter replacement 24 Months 24 Months 12 Months
Average Turbine
capacity
150 – 190 MW 160 – 180 MW 160 – 180 MW
Average turbine
uptime
99 % 98% 96%
8
Comparative Analysis of E10,E9 and E12
Refer exhibit 1 for further details

9. 1. Utilizing its filters servicing expertise to provide associated services for E 10
Customers.
Since the government policies are favorable in Africa , the selected target
market can be justified for investment in servicing or other maintenance
purpose.
2. Although currently E10 filter is expensive in the market ,the prices of the same
is expected to come down once we meet the initial target market.
The future for E10 with self cleaning mechanism filter is very bright
considering the compounded annual growth rate for the next 10 years in the
desired segment.
3. New technology brings new market
We have focused more on countries having future expansion plans which
support volume and product flexibility.
4. Prepared for challenges in target market
Africa as a focused market faces problem in water and coal which we intend to
cater to by importing the same at the cost saved from tax benefits 9
Conclusion

10. 10
EXHIBIT 1 :
Current installed GT distribution by region
Estimated growth rates of natural gas electricity generation
Client 2012 sales by region type
Source : Case study High efficiency filter consideration set