Trane keeps cool in heated market place

Nigel Hawley from Trane.

CW speaks to Nigel Hawley from Trane, its new GM for the Middle East, Africa and India region, on the outlook for growth in the air-conditioning inidustry.

What does your current role encompass?
I have overall responsibility for Trane’s operations in the Middle East, India and Africa. This includes strategy, sales and operational performance and key customer relations. Our growth initiatives are focused on market expansion (Abu Dhabi, Qatar, Saudi Arabia and India) and new product introductions. With regard to the latter, we are especially excited by our new AquaStream range of air-cooled chiller systems, which are equipped with high-efficiency scroll compressors.

What strategy are you adopting?
Despite the current market we remain fixed on a strategy of profitable growth, based on aggressive new product introductions, market expansion and, of course, providing even better levels of customer service. Growing our services, controls and comprehensive solutions business is a key part of this strategy.

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Will business stabilise this year?
Yes, in terms of our core business, excluding district cooling and unitary, which are two segments badly affected by the market downturn, especially in Dubai. I do not expect to see this changing dramatically in 2010.

Are customers struggling in terms of payment?
We are generally involved at the early stages of projects, so where the credit crisis has affected us most is that projects have been delayed or cancelled.

However, it is clear that some customers, especially contractors, are suffering with delayed payments from their customers (developers). Overall we have not suffered particularly from payment delays, and have no significant exposure.

What are your biggest growth areas at the moment?
Services – maintenance, repairs, parts – and then traditional applied equipment. With such a vast portfolio, it can be difficult selecting just one or two specific products.

However, I would say that we are expecting good growth prospects from our airside range as a result of new product introductions and refinements. In addition, we detect greater emphasis on indoor air quality (IAQ) from owners and developers, which is also driving demand to more sophisticated and efficient selections.

We are also enhancing our manufacturing footprint, which will give clients the opportunity to source quality Trane products from locations closer to their markets, thus saving on freight costs.

Are you expanding regionally?
We have our own offices here in Dubai, plus Abu Dhabi, Kuwait, Egypt, Lebanon and across India. All other countries are covered by distributors, which are also serviced from an experienced team in Dubai. This year we are expanding in the Gulf, and expect to have our own direct office opened in Qatar in the next few months.

How important is MENA to Trane?
Very important. We are the global leader in direct-drive, low-pressure, high-efficiency centrifugal chillers, which is the industry’s preferred choice for large district cooling projects, and therefore the Middle East is a key market for us. Trane has a defined strategy to maximise growth across all emerging markets, and MENA is clearly a key part of this strategy.

Were last year’s economic difficulties compounded by the refrigerant phase-out?
That is not exactly how I would put it. Trane’s philosophy is to produce and sell the most energy-efficient and environmentally-responsible HVAC systems and solutions possible.

Refrigerant change is a constant in our industry. Last year was particularly exciting and challenging due to the US decision to stop producing equipment with R22 from 31 December 2009.

This was the catalyst for a massive redesign project that resulted in Trane introducing more new models in 2009 than we had in the previous 20 years.

But I want to be clear that this redesign process went much further than simply regulatory compliance. We used this opportunity to further raise the performance of our range in areas where we already lead the field – that is, energy efficiency, reliability, durability and serviceability.

What is your outlook for the future?
I believe 2010 will be just as difficult as 2009 – and, in some respects, more difficult this time around, as we all know what to expect now. I believe we will continue to see growth in Qatar and Abu Dhabi, but at levels lower than experienced previously.

Last but not least, even in this tough economic climate, Dubai seems to have more new projects than anywhere else in the world.

BIO
Nigel Hawley joined Trane as finance leader for the Middle East in October 2006. He was promoted to GM of the Middle East, Africa and India region in March 2009. Prior to this he spent four years in a corporate finance role with Trane in its European HQ in Brussels and 13 years with KPMG.