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Home / ANALYSIS / Special report: Winds of change

Special report: Winds of change

by Yamurai Zendera on Jan 11, 2017




The UAE is one of the prime revenue contributing countries in the GCC air conditioner market, led by factors such as government initiatives and developing infrastructure on the back of Dubai Expo 2020. Additionally, as per Abu Dhabi Economic Vision 2030, the government is taking initiatives to increase the non-oil share dependency to 64% by 2030 by intensively investing in the areas of real-estate, retail, hospitality, manufacturing, infrastructure and transportation. These initiatives would drive the construction of public and private infrastructures resulting in a rise in demand for air conditioners in the country.

According to market intelligence firm 6Wresearch, the UAE air conditioner market is projected to grow at a CAGR of 6.1% from 2016 to 2022. Despite a decline in the construction industry due to unstable oil prices, the air conditioner market growth rate remained positive with steady growth registered in both 2015 and 2016.

With the aim of hosting a successful Dubai Expo 2020, the Government of UAE is encouraging public and private investments to build the infrastructure for the upcoming event. The booming tourism industry as well as budding residential, commercial and retail verticals would excel the demand for air conditioning systems in the country.

Rajat Kharbanda, senior consultant, 6Wresearch, said: “In UAE, centralised air conditioning systems have captured major revenue share in the overall air conditioner market. Centralised air conditioning systems are highly deployed in a wide range of verticals such as residential, hospitality, healthcare, public infrastructure, retail and industrial.

“In the centralised segment, the VRF market is growing at a significant rate and is expected to surpass chiller market demand in the coming years. This would be predominantly attributed to government initiatives along with stringent regulation to use energy saving air conditioning systems in the country.”

According to Sathi Paul, research analyst, research and consulting at 6Wresearch, the residential vertical has captured major revenue share in the overall UAE air conditioner market, followed by commercial and retail vertical. Key growth is expected particularly in the hospitality sector owing to development of new hotels, which is expected to fuel the demand for air conditioners in UAE.

Paul added: “Additionally, sectors such as government and transportation are anticipated to register significant growth during the forecast period due to public infrastructure projects in the areas of rail and air transportation.”

A report by Research and Markets said that one of the key factors contributing to this market growth is the increasing level of construction activities in the region. This has driven the growth of the HVAC market in the GCC countries, as the sale of HVAC equipment is highly correlated to construction activities. Rising demand for commercial and residential buildings is also fuelling regional HVAC market growth.

Commenting on the report, an analyst from the Research and Markets team, said: “The GCC HVAC market is witnessing the use of highly advanced and innovative technologies. Evaporative cooling is one such technology that has huge growth potential in the region.”

Unlike traditional air conditioning systems, which work on a vapour-compression technique, evaporating cooling works on the concept of water’s large enthalpy of vaporisation. This can easily be used in open spaces such as schools, factories, bus stops, sports grounds, and outdoor swimming pools. The factors leading to the growing use of this technology in the GCC are an increasing awareness of cooling systems’ effectiveness, increasing electricity costs, and the low energy consumption of air-cooling systems. Also, an increased awareness of health and safety in workplaces, which places greater emphasis on the need for comfortable conditions in hotter industrial and construction environments, has led to the increased use of advanced and innovative technologies in the GCC.

Spurred on by the development, regional vendors in the HVAC market have devised new technologies and solutions to satisfy the growing demand.

Additionally, a number of HVAC-related regulatory bodies have begun to crop up across the region. These include LEED certification, GCC Standardisation Council (GSO), and Arab Energy Efficiency Building Regulations. As a result, HVAC manufacturers and their respective suppliers need to ensure their offerings adhere to the energy efficiency standards set out by regional policymakers.

Saudi Arabia leads the way for the strongest air conditioning industry in the GCC, followed by the UAE, Qatar, and Kuwait. Although the HVAC market will continue to grow in the region, supported by the robust construction sector, it will be interesting to see whether or not the increasing shift towards energy and environmental design certifications will spur the adoption of better HVAC design standards.



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