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Home / ANALYSIS / Special report: Beyond the horizon

Special report: Beyond the horizon

by Yamurai Zendera on Jan 11, 2017




HVAC suppliers are each responding in their own way to growing demand from clients for energy efficient HVAC systems and also increased competition in the market.

According to 6Wresearch, UAE’s Air Conditioner market is projected to grow at a CAGR of 6.1% during 2016-22. In the UAE air conditioner market, the centralised air conditioning segment accounted for the highest revenue share in 2015. However, ducted air conditioning segment is expected to record significant growth during 2016-22. Further, in the room air conditioning segment, the window air conditioning sub-segment is expected to decline over the next few years due to increasing demand for split air conditioners.

Amongst all the verticals, the residential vertical generated the largest share in the UAE air conditioner market and is likely maintain its market leadership throughout the forecast period. The air conditioner market in the hospitality sector is expected to expand owing to the construction of new hotels due to anticipated surge in number of tourists for Dubai Expo 2020.

Tuna Gulenc, general manager at Daikin Middle East and Africa, says energy efficient models can help to reduce at least 30% of the conventional air conditioning energy consumption rates without sacrificing on the expected comfort levels.

“We have launched a new green refrigerant R-32 for residential products that will set a new milestone in air conditioning sustainability for its low global warming potential and zero Ozone depletion,” he says. “In the pipeline of Daikin’s innovations, this refrigerant has been implemented in an inverter wall split which is considered the most efficient and greenest air conditioner in the market that can help to reduce up to 50% energy consumption, compared to conventional air conditioners.”

Tarek Maleh, operations and technical manager at Clima Uno air conditioning, describes 2017 as “an exciting year” for the company. Clima Uno will be completing the construction of its new factory in Dubai Investments Park by the third quarter of the year.

He says: “We remain positive as we are coming across a lot of projects in design and tender stages. There is increased activity noted, especially in the residential and commercial sectors. In general, we feel the HVAC market in the GCC region will continue to grow despite the decline in oil revenues for the region.

“Energy efficiency is the buzzword. There is increased demand for energy-efficient and high-quality products as customers are hoping not only to reduce power consumption but also abide by energy regulations of the respective countries. Clients on the other hand, are pushing for fast track completion of projects with shorter delivery time.”

Maleh says Clima Uno hopes to meet these delivery times with its aforementioned 100,000ft² factory, which has room to double in size.

He says: “Besides delivery time, aggressive pricing is also a concern. We do cost control analysis and have resorted to bulk purchases of raw materials to save on costs.”

Can Tanyeri, business development manager - Turkey, Middle East & Africa at Danfoss, says 2016 was a challenging year due to many factors, not least the oil price.

“2017 is expected to have moderate growth, as market is only expected to recover a little. If the market recovers faster than expected, there will be significantly higher growth, but no one is currently predicting this,” says Tanyeri.

“We are planning to grow continuously in Turkey, Qatar, Iran and UAE, and improve our project success ratio in Kuwait, Oman and Saudi Arabia.

“Danfoss is planning also to invest heavily in Sub-Saharan countries with a great focus on South Africa. We have already opened two new offices in Johannesburg.”

Manoj Soni, vice president of Schneider Electric’s eco building division, Gulf countries and Pakistan, says customers are looking for smarter systems for buildings.

“With the current trend of cloud and Internet of Things, customers today expect advanced HVAC control systems. They look for integrated and end-to-end solutions that optimise both operational and energy efficiency,” he says.

“Buildings consume 53% of the world’s electricity today. This consumption will grow to 80% by 2040. With the increased cost of energy in most countries, existing building owners are looking for solutions to reduce their energy bills.”

Kevin Cha, president, Middle East and Africa, LG Electronics, adds: “Companies are investing in research and development and designing new products that have better energy ratings and result in lower emissions and utility bills. With such a proactive approach by industry players, including us, the HVAC industry looks set to experience robust growth in the coming years in response to increasing demand.”

Balagopal Nair, regional marketing and business development manager at Faisal Jassim Trading Co, says he is “very optimistic” about 2017 but foresees a number of challenges along the way.

“It has been widely accepted that quality is high on agenda and at the same time the market has become highly cost sensitive. This situation has created an environment where people work off low margins,” Nair says. “We have been working with our partners on ways to reduce production cost and make our offering more competitive without compromising on quality.

“Moreover, ageing receivables is matter of concern. The contractors are taking jobs at low margins which reflects on all their transactions. We are moving very cautiously and trying to overcome this challenge by moving with special terms of payment and delivery.”



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