Growth Drivers & Challenges in the HVAC market Middle East & Africa by Global Research Manager -Saziye Dickson
Growth Drivers & Challenges in the
HVAC marketMiddle East & Africa
by Global Research Manager -Saziye Dickson
Why should we care? • Extreme weather conditions
• Disruptions to everyday work and life
• Economic losses
• Prolonged draughts
• Severe water shortages
• Agricultural draughts – famine
• Influx of refugees
• Political unrest
Agenda
Global AC Middle East Africa Special SMART HVAC
Intro to BSRIA
BSRIA VALUES
Building Services Research & Information Association
BSRIA WMI• Consultancy, Test, Compliance and Research
• Promotes best practices in building
• Est. 1955, 800+ members
• Non-profit association
• Over 30 years of Market Intelligence
• Independent, authoritative studies
• Unrivalled technical expertise
• Research in 90+ countries
55
Airtightness
Sound insulation testing
Thermal Imaging of Building Fabric
Ventilation Testing
Construction Compliance
Information & Membership
Technical publications
Training
Membership
Test
Standard testing
Bespoke testing
Witness and on-site testing
Product development, research and
troubleshooting
Instrumentation
Hire, Sales and Calibration of test and measurement
instruments
World Market Intelligence
Market Briefings
Market Reports
Private ClientResearch
Market Consultancy
Intro to BSRIA
6
World HVAC Market
Climate
Change
Urbanisation
Refrigerants
Energy
efficiency
Mergers,
acquisitions
& alliances
Smart revolution
& Hybrid solutions
7
Source: BSRIA
7
CAGR3.7% Vol + 4.5% Val
CAGR4.1% Vol + 5.2% Val
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
200,000,000
2017 2018 2019 2020 2021 2022 2023
Global AC Forecast (2017-2023), by volume
Americas Asia Pacific Europe Middle East India Africa
>70% China
How did the products perform in 2019?
• Growth is apparent across all product areas
• Albeit smaller growth then 2018
• Available projects in residential and light commercial favouring multi splits and VRF
• Growth in Mini-VRF across the globe
• Healthy growth in chillers across the globe with newer lower GWP refrigerants
• Growth in modular/Oil Free Centrifugal Chillers 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Airside
Chillers
Total Large Packaged
Room AC
VRF
Multi Splits
Ductless single splits
Ducted splits
Growth in 2018 vs 2019, by volume
2019 2018
Source: BSRIA
9%
7.2%
12.6%
9%9.8%
0%
2%
4%
6%
8%
10%
12%
14%
Global Europe MEIA Asia Pacific Americas
Mini & Maxi VRF vs Chillers CAGR (2017-2023), by volume
Mini-VRF Maxi-VRF Total Chillers
• Western Europe and some part of Asia are mature VRF markets – replacement coming through
• Americas is really embracing the VRF technology –adoption by specifiers
• Middle East and India also experiencing rapid growth –skilled installers and training needed
VRF versus Chillers
How is Europe doing?
• Overall healthy growth forecast exceeds Asia Pacific’s
• ErP directive and F-gas Regulations
• Rapid increase in Heat Pump sales
• Limitations on use of refrigerants allowed in buildings started to benefit scroll chillers in France
• Pushing towards more hybrid technologies
• Rental market, S&M and Retrofit
CAGR5.7% Vol + 6.3% Val
CAGR4.4% Vol +5.3% Val
How is Asia Pacific doing?
• Overall healthy growth, 3% in 2019
• Slow down in the Chinese economy & real estate
• Trade war taking its toll on China’s economy
• New energy efficiency document due to be published in China
• Japan leading the way with new technology – AC demand from schools and major sporting events
• Mini-VRFs and & Oil Free Centrifugal chillers are winning
CAGR3.3% Vol + 3.9% Val
CAGR4.3% Vol +4.5% Val
How is Americas doing?
• Mixed picture, overall with the US outperforming the other countries
• The market is shifting away from traditional systems to single ductless splits and VRFs
• Energy Efficiency is driven by each state with California leading the way
CAGR2.9% Vol + 5.4% Val
CAGR3.6% Vol +6.1% Val
Residential Room AC, <17.5kW ducted and ductless splits
CAGR6.3% Vol + 7.6 Val
CAGR4.3% Vol +4.9% Val
• Splits and rooftops being replaced by ducted splits and mini-VRFs in the Middle East
• District cooling/mega projects favouring Centrifugal chillers
• Growing population and urbanisation creating 96 cities
• Forecast growth exceeds the Global Average
Egypt3% Qatar
4%
Kenya11%
Growing AC markets in MEIA, 2019 (volume)
Ghana10%
Algeria9% India
9%
Morocco5%
Nigeria10%
Saudi Arabia2%
Tanzania3%
0
1,000
2,000
3,000
4,000
5,000
6,000
2017 2018 2019 2020 2021 2022 2023
Growth in Commercial AC Systems by value (USD millions)
Airside Chillers Large Packaged Ducted Splits VRF Multi splits
UAE AC market
• Demand from the residential construction which is favouring mini-VRF
• Introduction of VAT (5%)
• Splits market continued to decline
• Over supply of office spaces
• Significant increase in number of delayed projects
$186m$148m
$276m
$205m
$52m
$28m$79m
Total AC Market size: 679,000 Units + USD 733 million in 2019
Please note, the size of each box represents the volume data and values are as inserted. The product that is too small to show is Scroll chillers.
• US sanction on Iranian trade with UAE - Recent disruptions of trade with UAE - USD 17 billion worth!
Challenges in the UAE
Qatar 4 Arab nations
X
• Lack of access to credit for public and private investments
• Bans on imports from four Arab neighbours continues
Global & Regional Players, by volume in 2018
Oth
er
Co
mp
an
ies
Ma
rke
t Le
ad
ers
Gree
Midea
Daikin
Haier
UTC
LG
Panasonic
JCI-Hitachi
Mitsubishi Electric
Samsung
Aux
Chigo
Fujitsu
General Electric
Hisence
Trane
Sharp
MHI
Lennox
>65% <35%
Oth
er
Co
mp
an
ies
Ma
rke
t Le
ad
ers
LG
Daikin
JCI-Hitachi
Samsung
UTC
Voltas
Panasonic
Gree
Midea
Fujitsu
Blue Star
Llyod
Mitsubishi Electric
Zamil
Sharp
Whirlpool
Godrej
Others
Midea
Panasonic
Others
>60% >40%
BACS15%
BEMS6%
Smart HVAC6%
Smart Home73%
BACS
BEMS
Smart HVAC
Smart Home,
Source: BSRIASource: BSRIA
Total Smart Buildings Market, 2019, USD billion (Including Services)
Global Growth 2018-21
Where the Growth is Happening…
Source: Forbes 500 Top Global Companies, Hoovers, Others, BSRIA Analysis
0 50,000 100,000 150,000 200,000 250,000 300,000
Apple
Amazon.com
Samsung Electronics
Alphabet
Microsoft
Siemens
IBM
LG Electronics
Cisco Systems
Honeywell International
Johnson Controls International
Schneider Electric
Million USD Sales 2018
Building automation
Other Smart Buildings
Smart Appliances
Smart Home
The Companies with Deepest Pockets are Entering Smart Buildings
Summary
The economies are diversifying - HVAC business models must follow
New opportunities
In new markets, Retrofit & After Sales Sustainable cooling is achievable in Middle East, but Industry needs to
work together
Saziye DicksonGlobal Research Manager – VAC&R Worldwide Market Intelligence
Old Bracknell Lane West, Bracknell, Berkshire RG12 7AHD : +44 (0)1344 465536 F : +44 (0)1344 465626
E : [email protected] : www.bsria.co.uk
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