Hussain ADEL
CEO
TIEPCO

Saudi Arabia’s switchgear pioneer

Saudi Arabia

Hussain Adel, CEO of TIEPCO, talks to The Energy Year about the company’s core business, the types of products they supply to electrical substations, the Saudi Electricity Company’s plans to upgrade its distribution network and how the upgrades will impact the electrical manufacturing sector. TIEPCO manufactures switchgears and other electrical parts.

What is TIEPCO’s core business?
Switchgear manufacturing is our core focus. We supply our products for electrical distribution, transmission and generation systems. While we supply all three, our primary volume delivery is in distribution, which includes utilities, malls, palaces and other entities within the distribution network.
Our company was established in 1987. In 2001 it was re-established under the name TIEPCO and became a producer of switchgears in Saudi Arabia. In 2003 it obtained quality certification and became the first company in the region to manufacture switchgears. We are leaders and pioneers in this field. That’s our strength and always has been.

What types of products do you supply to electrical substations?
We supply protection panels that are mostly used in electrical substations to ensure the safety and reliability of the power system. They play a crucial role in detecting and responding to abnormal conditions or faults in the network and act in correlation with the switchgear. We also make what’s called a package substation. They are used when you combine the switchgear with parts such as transformers.
We have delivered some substations on a turnkey basis, but generally we sell them as separate products. There are some products that we sell with our partners, such as transformers. However, we do not manufacture transformers, which are a large and important product in the network.

What are the key aspects of the Saudi Electricity Company’s upgrade of its distribution network?
The SEC [Saudi Electricity Company] is restructuring the entire existing electric distribution network. In Saudi Arabia we have ring main units (RMUs), which are small switchgear units that are completely enclosed and gas insulated and installed across the whole network.
The Saudi Electricity Company wants to replace them with what’s called smart RMUs, where communication between the different products and the network operator will be automated and work through online control.

How will this project impact the electrical manufacturing sector’s ambition to expand?
This project will demand a huge expansion from us and from other switchgear manufacturers. To visualise it, consider the following: TIEPCO is used to delivering between 500-1,000 RMUs per year, but these SEC tenders are for 30,000 or 40,000 RMUs per year.
No one in Saudi Arabia is capable of handling such demand, and the government is pushing us in a good way so we keep up with that demand. Every company in the sector is expanding its capabilities. These projects are so large that the ROI will be achieved within the project’s lifetime. Whatever we invest, we will recover from this project.

How is TIEPCO participating in these Saudi Electricity Company tenders?
We already have an agreement to make more than 3,000 RMUs per year. We will be supplying the SEC directly or through a contractor, and they will do the installation. In some cases, we are bidding independently, with our Saudi-made switchgears.
We are also working with foreign partners that need to manufacture here and found us, the pioneers in the field of switchgears in the kingdom. Plenty of foreign manufacturers are also participating in these large tenders. As per BENA [build and employ national abilities] standards, the SEC’s local content programme, 70% of the manufacturing has to be done in Saudi Arabia.

How will the localisation of RMUs increase over time?
Our agreement to supply SEC with 3,000 RMUs per year is divided in phases. In phase 1 we will have a 25% localisation rate, and this percentage will increase in subsequent phases. For this project, we should reach 70% localisation within one year, which is very doable.
These new contracts are forcing us to evolve. We are pioneers in switchgear engineering, but we still had to conduct thorough studies and order new machines. Our engineering expertise is solid, but achieving such a high volume of production with these new RMUs requires both technology and labour, along with ample storage space.

What kind of opportunities have arisen following the pandemic in the Saudi market?
Massive companies such as Schneider had to stop manufacturing in the kingdom. After the pandemic, they could not sustain their overhead costs.
This created opportunities for local manufacturing companies to become partners, representatives and distributors of some of these companies that were previously our competitors. In this way we increased our business portfolio, and we manufacture some of their products here, which enables them to meet local content requirements.

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