Cummins Says It Is Considering Entering 10kW Fuel Cell Marketplace

Power Generation unit projecting 10% to 15% sales growth due to telecomm and internet power needs.

Published: 15-Nov-2000

COLUMBUS, Ind.--(BUSINESS WIRE)--Nov. 15, 2000--Cummins Inc. (NYSE:CUM) projected today at the Powergen 2000 Conference that Cummins Power Generation would grow sales at 10% to 15% over the next few years. Increased sales will come from new technologies, growth in the internet and telecommunications sectors, and a continued shift toward services. Jack Edwards, Executive Vice President and Group President - Power Generation, speaking to investors at the conference hosted by Morgan Stanley Dean Witter in Orlando, Florida, projected that the operating margin for the business would be in the range of 9% of sales by 2004.

Edwards said that the worldwide market traditionally served by Cummins Power Generation would grow 3% to 4% annually over the next few years. "The internet segment and telecommunications are a rapidly growing market for quality power, but that growth is starting from a small base," said Edwards. He also noted the trend toward distributed power generation, which is a move to put electricity generating capacity closer to utility customers rather than solely in large, centralized utility plants. This trend has created new business opportunities for Cummins Power Generation, especially in North America.

Edwards identified the natural gas portion of the worldwide generator set market as one of the fastest growing segments. "We have an excellent new product in our 1.5 megawatt prime power natural gas generator set, and we have a growing standby business in lower kilowatt ranges. We are also in the process of expanding our high-horsepower gas product offering."

Cummins Power Generation is placing increasing emphasis on services, said Edwards, citing the successful launch in North America of the Power Rent(TM) business in 1999 and its planned expansion, as well as several operations and maintenance (O&M) projects around the world.

Edwards discussed the emerging technologies below the 1 megawatt node that are now beginning to be economically viable. "Microturbines will likely create a new market rather than draw away from Cummins' traditional business. Cummins hopes to enter the microturbine market in the next few months. With our strong worldwide distribution network, we don't have to be the technological innovator to offer new customers an innovative solution for their prime power needs," said Edwards. With reference to another new technology for power generation, fuel cells, Edwards said that Cummins is considering participating in a Department of Energy program for advanced research on 10 kilowatt fuel cells. This segment of the fuel cell market complements Cummins' small genset business for recreational vehicles and other consumer and portable markets.

Cummins, headquartered in Columbus, Ind., is the world's largest producer of diesel engines above 50 horsepower. The company provides products and services for customers in markets worldwide for engines, power generation and filtration. Cummins reported record sales of $6.6 billion in 1999. Cummins Power Generation is one of the three segments of Cummins Inc. Sales of Cummins Power Generation in 1999 were $1.4 billion. Press releases by fax may be requested by calling News on Demand (toll free) at 888-329-2305. Cummins' home page on the Internet can be found at http:\\

Certain information in this press release is forward-looking and involves risks and uncertainties, including general economic and competitive conditions that could significantly affect expected results.

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