Expo 2020 Dubai growth will benefit the Middle East’s elevator firms
Although 2017 was challenging for the Middle East’s building industry, firms operating in the people-flow management sector are optimistic that infrastructure projects and Expo 2020 Dubai will boost market performance
In a recently published report, Technavio revealed that it is expecting the global elevator and escalator market to record a compound annual growth rate (CAGR) of close to 8% from 2018 to 2022 in terms of units, citing a rising preference for smart elevators as the primary factor influencing market demand.
Offering an assessment of the industry’s performance in 2017, the research company notes that Europe, the Middle East, and Africa (EMEA) “accounted for the majority share of the elevator and escalator market” during the year, adding that growth in the construction industry will spur further development in the EMEA region in the next four years.
Relaying the same optimism for what is in store for the people-flow management industry in the region, as well as a similarly positive evaluation of how it performed last year, Toshiba Elevator Middle East’s managing director for elevators and escalators, Mohamed Iqbal, says: “Our performance in the GCC in 2017 was quite satisfactory, in terms of both volume and value of business, especially in the UAE, where we enjoyed a positive market response and secured big projects with developers like Emaar, Damac, Wasl Development, and the Mohammed bin Rashid Housing [Establishment], among others.”
According to Iqbal, although the past year witnessed a global slump in sales owing to low oil prices and economic and political changes in Saudi Arabia, Dubai helped the company achieve steady growth.
“We have been making steady growth due to a vibrant Dubai market, which is marching towards Expo 2020 and compensating for the lack of growth in other Gulf countries,” says Iqbal, revealing that the company is expecting demand in the kingdom to pick up soon, as a result of planned infrastructure developments and the expansion of pilgrimage sites.
“Policy changes, particularly in Saudi Arabia, are going to drive the market exponentially and create opportunities for all stakeholders in the construction industry,” he adds.
Toshiba is said to be among those ready to take advantage of the opportunities, with its systems that “incorporate energy-saving features” and meet safety requirements, in addition to providing “strong after-sales services”.
“Maintenance forms an important part of any elevator company,” says Iqbal. “We have training and development programmes. [We also regularly] update the quality assurance and quality control programmes for our technicians and engineers.”
Like Iqbal, Alain Chemaly sees infrastructure development in Saudi Arabia as one of the biggest opportunities that people-flow specialists in the region can be optimistic about. He points out, however, that other countries and market segments have something to offer as well.
The chief executive officer of Thyssenkrupp Elevator Middle East tells Construction Week: “Apart from large residential projects, due to population growth and increasing urbanisation trends, there are several infrastructure projects, such as airports and metros, planned in Kuwait and Egypt, which are also in Saudi Arabia’s pipeline.”
Indeed, infrastructure and residential developments are already influencing the market at present, particularly in the kingdom and in Egypt, according to Chemaly: “In the UAE, on the other hand, the main driver is commercial projects, such as office buildings, hotels, and shopping malls.”
Talking about trends in the market, he explains: “Traditional elevator products are becoming more and more efficient and sustainable. Nevertheless, real change can only come from truly innovative and disruptive [systems].”
Thyssenkrupp is helping to implement this change in the market through the introduction of a twin elevator system that “handles higher capacities with less space and less construction needed”, and the world’s first rope-free elevator, which “harnesses the power of linear motor technology to move multiple cars in a single shaft”, says Chemaly.
Giving a different take on what will drive future market demand in the Middle East, the chief executive officer of Abu Dhabi-headquartered facilities management and mechanical, electrical, and plumbing contracting company, Adeeb Group, explains: “The demand for people-flow systems and services [is set to] grow in the coming years as most of our clients are in the process of refurbishing buildings.”
An increase in refurbishment activities, in turn, will lead to a greater requirement for service providers, Eng Ansari says, adding that sustainability targets like those introduced by the UAE government are also creating opportunities in the sector.
“With the UAE government focusing on sustainable initiatives, companies are now [paying more attention to] energy savings and innovation,” notes Ansari.
“Even elevators are now being modernised [and installed] with sustainable features designed to cut costs while improving safety.”
To remain up-to-date with technology, sustainability, and safety standards, Adeeb maintains close relationships with organisations including the Middle East Facility Management Association, the Emirates Green Building Council, the Emirates Environmental Group, and the National Fire Protection Association.
Echoing an observation made by his peers, Ansari points to the UAE and Saudi Arabia as the two of the most important markets in the Middle East: “There are a lot of new projects evidenced in these countries, owing to population growth and the different tourism initiatives of their governments, particularly in Dubai.
“Expo 2020, a [highly anticipated event], is boosting infrastructure [spending] in the country, as well as [spurring] hospitality companies to undertake renovation activities and ‘facelift’ their facilities,” explains Ansari.
With the market poised for growth, Adeeb already has plans in place to increase its footprint in the region.
“Adeeb plans to diversify its business activities by establishing an in-house cleaning divisions, as well as expanding into security systems and product distribution,” concludes Ansari.