Shaping the future: TMC’s drive for global innovation and sustainability

In an exclusive interview with Energy Connects, Paolo Porchetti, Business Head of Asia Pacific (APAC) at TMC, discusses the opportunities of the transformer market in Thailand and APAC, the company’s strategic investments in the energy manufacturing sector, and TMC’s green economy and sustainability goals.

What situation characterises the transformers market now and for the future in Thailand?

The transformer market outlook in Thailand is experiencing very positive, steady growth, mostly driven by nationwide industrialisation and the development of the construction sector, which are and will drive the demand for electricity.

There’s a wide consensus among market intelligence agencies (Fortune Business) that the transformers business in Thailand, together with energy and power generation, will see a CAGR growth rate of at least 4.5% during 2024-2030 (with most forecasts ranging 5-7%, almost doubling the market size!), well in line with the major ASEAN and APAC economies.

TMC has a track record of producing in excess of 1,500 special units, already supplied to data centres across the globe and has, therefore, gained the rank of a world-class solution provider, constantly adding new projects both with hyper scaler and local entities.
- Paolo Porchetti, Business Head of Asia Pacific (APAC) at TMC

The key driver is the demand for electricity, that’s fuelled by an increasing population, a robust post-covid tourism rebound and an expanding energy-intensive industrial base.  As a result, the Thai government has ambitious targets to enlarge the installed power generation capacity, bringing renewable energy to 50% of it by 2037, achieving carbon neutrality by 2050. Transformers are an essential component of the required infrastructure, playing the critical role in distributing energy to and within metropolitan and remote areas of the country.

That said, the Thai transformer market faces significant challenges too. One of the toughest hurdles is the limited capabilities of domestic manufacturers. In fact, most of the transformers currently in service across Thailand are sourced from abroad, whether entirely or partially, which has a negative impact on price, availability, de-incentivizes local competition, research and innovation.

How is TMC positioned today in this landscape? Where is TMC investing?

Over the years, TMC has positioned itself as a strong contributor to the growth of the electricity market in Thailand, as both a direct supplier and also providing its products and key components to leading local manufacturers. Currently TMC has in place a strategic partnership with a top tier Thai transformer manufacture, supplying high quality components and/or complete sets, all designed and manufactured within its European facilities, as well as technical support and aftermarket services. TMC market reach keeps widening with orders and sales nearly doubling each year from 2021, forecasting similar performances to 2026 and beyond.

What are the challenges that TMC is facing? How do you plan to overcome them?

The transformer market in Thailand is highly fragmentated and evolving quickly. Local developers and OEMs, generally small to medium size, are striving for stronger technical and production capabilities, often seeking direct partnership or establishing relations with larger European and Asian counterparts.

Unlike neighbouring markets, China cannot fully leverage its industrial output and low cost-basis, due to laws surrounding indigenous production. Likewise, without its own manufacturing facilities in the country, TMC faces obstacles and tough competition, especially when it comes to the lowest price band or when quick delivery is a deciding KPI.

However, existing business relationships and market intel TMC obtains from its partners, allow it to stay competitive and successful in key applications such as power-generation, distribution for building and infrastructure and data-centre, especially when quality and bespoke solutions make the difference.

For the future, TMC expects to broaden and deepen the current relationship matrix, in order to gain an even wider market penetration and it may actively consider inorganic growth and localisation.

What’s the fastest growing application/sector for the transformers in APAC?

Similar to other regions, APAC records double-digit growth in the data-centre industry and as a collateral of higher electricity demand, also in Power-Generation. For example, looking at data centres in the sole ASEAN association, Singapore, Malaysia, and Indonesia are the leading nations with 87, 93 and 47 locations respectively, with the Philippines and Thailand quickly joining the pack.

TMC has a track record of producing in excess of 1,500 special units, already supplied to data centres across the globe and has, therefore, gained the rank of a world-class solution provider, constantly adding new projects both with hyper scaler and local entities.

How TMC is proceeding on its green economy and sustainability goals?

TMC is a market and technology leader in dry type transformers. This relatively new product, created in Europe roughly 30 years ago, differentiates itself from the more traditional oil-immersed type, because of many constructive, operative and maintenance key features.

Dry type transformers generally do not require external cooling systems, have inherently superior features when it comes to fire, electrical failure, and general safety concerns. Dry type transformers do not use expensive, potentially harmful, and polluting coolants, will not need regular inspecting, cleaning or replacing of operating components and will require very limited maintenance through their entire operating life, which already significantly exceeds 30 years.

Finally, DT transformers are almost entirely residual-free when their end-of-life comes, meaning they are already in line with the strictest sustainability goals and zero-impact policies that are widely adopted by corporate, private companies and public institutions.

What is the future of the energy industry and of TMC in APAC?

Due to its demographics and current trajectory for development, the APAC region is set to be the flywheel for the global economy, from now to 2040-2050, if not beyond.

Already encompassing 40% of the global economy and nearly 60% of the population, it will sustain and boost the global growth with its blend of mature, high-tech economies (Japan, S. Korea), emerging ones (India, Indonesia, Thailand) and the 3 major homogeneous markets by population: India, China and S.E. Asia.

TMC is a private company with a European base, but well projected towards global expansion. In 2023 alone TMC has established fully incorporated entities, both in the US and Singapore. The former already possesses sizeable production capacity, the latter going to oversee the whole APAC market.

TMC is growing and will grow its presence in APAC, expanding its commercial reach and manufacturing capabilities, opening new markets, establishing or strengthening alliances and partnerships, and being constantly willing to be a key contributor in an always wider “World of Transformers”.

Click here to register and attend Future Energy Asia 2024 in Bangkok, Thailand from 15-17 May