Cummins now provides rental power mainly in support for its major projects.

Cummins now provides rental power mainly in support for its major projects.

Cummins Power Generation, the Cummins division that operates a power rental business, has confirmed that it will focus on being a supplier to the rental sector rather than a major rental provider in its own right.

The company started investing in rental in 1999/2000 and grew the fleet to a peak size of around 600 MW, but that has now fallen to nearer 200 MW and it is used almost exclusively to support Cummins' major project work.

There are five or six such projects currently ongoing, including in Iraq, the Middle East (with Saudi joint venture partner GCC) and South America, and they typically represent rentals of around 20-30 MW of power. In addition, some of Cummins' US distributors also rent power.

Andy Underwood, general manager of Cummins Power Generation in Europe and CIS, told IRN that Cummins had decided to focus its efforts on supporting rental companies, who currently represent around a quarter of the worldwide generating set market.

The company's power rental revenues were just over US$50 million in 2008, representing around 2% of Power Generation's US$2.66 billion sales. The new strategy was signalled last year when Cummins India sold its power rental fleet to Aggreko. Aggreko is one of Cummins largest customers and alone has around 4000 of Cummins' 1 MW units in its rental fleet.

Mr Underwood acknowledged that Cummins' strength in the rental market was currently in the 500 kVA and larger sizes, including 1 MW and 1.5 MW units in standard 20 ft containers.

However, the company's rental and construction range of gensets also covers the 22 kVA to 500 kVA sizes and Mr Underwood said that Cummins' expertise in emissions and noise reduction would be a key differentiator for the company as these issues grew in importance. Cummins said it can supply Stage IIIA compliant products, ready for legislation that comes into force from January 2011 to 2012.

Cummins Power Generation represents around 19% of Cummins' total US$14 billion business. Sales of engines to OEMs represent around 63% of Power Generation's business, with the rest divided between alternator sales (20%), consumer gensets like the Onan branded units (7%), rental (2%) and other ancillary products such as control systems.

Read the full report on Cummins Power Generation in the November-December issue of IRN.

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