Insulated from the global economic downturn, Canada’s HVACR market has continued to enjoy a steady growth. Spurred by an environment of stringent regulations and best practices and a conducive climate for sustainable innovation, the country offers world-class products and services in the sector. Pratibha Umashankar reports.

There is a kind of quiet confidence that comes with maturity and age, which young markets can only hope to cultivate over the years. Canada’s HVACR sector is in that self-assured space. Relatively unruffled by the recent – and in some cases ongoing – global economic crisis, the Canadian market continues to grow. But it has its ear to the ground – alert to sudden upheavals. Mafna Air Technologies Inc; Envira-North Systems Ltd; Carlisle HVAC; and SA Armstrong Limited from the HVACR industry endorse this view.

Describing the post-recession ethos, Sal Fasanella, Products General Manager, Carlisle HVAC, says, “The scenario is quite encouraging, particularly with regards to HVAC.” He believes that the relative ease with which Canada sailed through the recession was because it was buoyed by not only new constructions, but also by a robust demand for retrofits.

Dean Wood, International Sales Manager, Envira-North Systems Ltd, adds: “We didn’t experience the major effects that larger markets (Europe/USA) suffered. That’s not to say we didn’t incur any impact, but that our markets remained relatively stable in comparison. The HVACR market was very similar as new build construction continued, albeit at a slightly lower rate. Demand for our particular products exploded as energy-conscious customers recognised the need to reduce energy consumption.”

Highlighting the positive impact of the downturn, he observes: “Traditionally, large markets in Europe and the United States (that consume Canadian products) contracted heavily in the global downturn. This provided the much-needed ‘kick’ for Canadian companies to look to other non-traditional markets, such as China, India and South East Asia. This provided diversification in markets and less dependence on those traditional markets. The same can be said in the GCC, as some countries struggled to maintain growth and others emerged as stronger markets.”

Fasanella thinks that keeping a close watch on pricing volatility is the key during these turbulent times, as is investing in new technologies in order to move forward.

THE MIDDLE EAST CONNECT

Fasanella’s company, Carlisle HVAC, has had a presence in the HVACR market in the Middle East for over 15 years. It primarily sells through distributors in the UAE and Lebanon. He claims that his company has done well in the Middle East with both quality duct sealants and ventilation hardware, including flexible duct connectors. According to him, usually, customers/clients in the region do not ask for additional standards for Canadian HVACR products, although in some cases, he has seen requests for British standards on some products.

Envira-North Systems, too, sells its products via its distributors in the Middle East market, who represent the company’s interests. “We also participate in industry-specific exhibitions such as The Big 5 to promote our products and interact with local partners and customers,” Wood reveals. “Our specifications meet or exceed requirements in the GCC countries.”

Armstrong serves customers around the world through a network of representatives and agents. In the Middle East region, the company has supplied to Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iran, Jordan, Yemen, Lebanon, and Syria, and as far as Morocco and Turkey. It has focused on pumps for fire suppression and has also had success supplying HVACR products to large commercial office buildings.

What does massive government spending in countries like Saudi Arabia and Qatar translate into for Canada’s HVACR industry? Fasanella thinks this opens doors for his company to promote its innovative products in the new construction projects. Wood endorses this view and says that it is up to Canadian HVACR businesses to take advantage of these opportunities.

Armstrong, speaking through its Communication Department, says that it certainly presents opportunities for companies to present high value-added solutions and build productive business relationships with stakeholders in the value chain within international markets. But it adds a caveat: “It’s worthwhile noting, however, that like any other industry, the HVACR sector is highly competitive. Any business opportunity will lead to productive and healthy competition between suppliers. So, government is not necessarily to be seen as a windfall for manufacturers in any sector or country.”

Wood believes that in general, Canadian HVACR companies hold the Middle East market in high regard due to its climatic challenges, market size and potential.

“We think this market is still price-driven and not technology-driven,” observes Andy Beltrame, Sales and Marketing coordinator, Mafna Air Technologies Inc.

ADVANTAGE CANADA

The industry insiders think that innovation is the key business strategy that works in the post-recession world – an area where Canada scores. They attribute this to a highly encouraging milieu of best practices, customer service, logistics, a vibrant R&D culture, a pro-active government enforcing regulations for sustainable products and services and a highly educated customer base, aware of its societal and environmental obligations. To this list Beltrame adds immigration, which he points out attracts the best minds from the world over to Canada. “And the rest is looked after by itself,” he says.

Needless to say, all these factors have had both a cumulative and incremental effect on the country’s HVACR sector.

CUSTOMER IS KING

Wood believes that of all the factors, best practices and excellent customer service top the list of priorities as a company’s reputation in the market dictates future sales.

Beltrame concurs and adds that customisation is vital, as customers in Canada tend to buy what they need and not what manufactures have. “Mafna is an R&D-based manufacturing firm, and is riding this trend,” he says.

Fasanella, too, stresses that best practices and customer service are fundamental values in which his company continuously invests. “It’s all about long-term added value to the customer and investing in our people is also something we strongly believe in,” he says.

Armstrong elaborates on this: “The history of ‘change’ in Canada and elsewhere suggests that the most effective lever for effecting change is a mature consumer. It would seem that the business strategy of operating as a ‘fast follower’ has many proponents within North America. Businesses are conservative in their approach to un-met customer needs but are quick to innovate as required, to take advantage of an obvious, growing opportunity. At the same time, perhaps, nothing is more motivating to a business operation than a sharp drop in sales, as customers ‘vote with their feet’ to purchase products and services that provide greater utility.”

SUSTAINABILITY – INNOVATION AND TRENDS

Sustainability and innovation, as always, thrive on each other. Canada has witnessed a two-pronged approach in this regard – the government’s aggressive push for stringent regulations and enforcement and customer demand for cost and energy-efficient products. Therefore, as with nearly all developed markets, energy-efficient alternatives to traditional products and methods have become the growing trend in Canada. This has created a competitive landscape in the country’s HVACR sector. The industry has been quick to respond to this.

“Environmental awareness and sustainability have completely shifted the culture of the industry by bringing attention to historically atrocious energy consumption by end-users, both industrial and residential,” Wood confirms. “These are key components, as they lead to quality designed and developed products. Our company is continually looking to enhance or complement our existing energy-efficient products while developing new technologies that can improve on existing techniques.”

The other experts echo this view. Fasanella believes that energy efficiency, not only of the equipment, but also of the complete system is becoming a trend. “It is becoming a systems approach or even a building approach to energy efficiency,” he observes. “Sealing ductwork quickly and efficiently with little or no product waste is also a trend. Carlisle HVAC has introduced ISAAC – the Inspecting, Sealing and Advanced Cleaning Robotic Solution. It enables the efficient remediation of existing HVAC systems. ISAAC can inspect, clean and seal ductwork from the inside, reaching hard-to-reach places that are otherwise inaccessible. Also, the Hardcast Mobile Sealant Delivery System and Spray-Seal are specially formulated for spray applications on the job site and are the best method for sealing ductwork in new construction remediation projects. Targeted precision equals uniform duct sealant coverage, no overspray or reduced job site trash and less product waste. Improving indoor air quality and decreasing heating and cooling costs are other top priorities.”

Armstrong on its part has focused on making its HVAC solutions more energy-efficient through the application of variable speed technology. “Initially, our product development efforts had been focused on the simplification of variable speed. More recently, Armstrong has focused on energy on leveraging all the capabilities of variable speed to maximise energy efficiency,” the company says.

Armstrong seconds the view that research and product information inevitably lead companies to create improved solutions with greater customer utility. “Regulation serves in many instances at the ‘trailing edge’ to ensure that customers embrace new solutions,” the company says, and adds: “In advance of the enactment of regulation, the responsibility lies with companies to promote their own innovations. Collectively, these activities drive business growth. The trajectory of that growth – steady or unsteady – depends on the spirit of entrepreneurialism that exists within the individuals serving customers and competing to serve more customers in more distant markets.”

Amidst the euphoria about innovation, Beltrame cautions that innovation cannot be forced, but adds that when it emerges naturally, based on an existing need, there is generally a high level of support for it in the industry, as is the case with sustainability and environmental awareness spurring innovation. “Canada is working to be in the top level with respect to energy conservation,” he adds.

It is difficult to ascertain if the Canadian model of energy-efficiency, sustainability and best practices and the specific measures the country has used have had a positive influence on the Middle East HVACR market. “The world, in general, has recognised the need to reduce energy consumption,” says Wood. “The Middle East is no different from any other region (including Canada) in that it takes time for widespread acceptance.”

DISTRICT COOLING

Interestingly, district cooling, which found acceptance in the GCC states, but became an unwitting casualty of the double dip, appears to elicit a lukewarm response from the industry insiders in Canada. District cooling/district heating is not a viable option, and, hence, there has not been much focus on it, Beltrame reveals.

Armstrong agrees and adds: “Despite the strength of the concept, district cooling has not grown as quickly as expected. Given the positive reviews and strong support for the technology within the HVAC industry, it seems inevitable that district cooling will grow, as more communities are made aware of the potential for energy efficiencies and cost savings.”

THE RETROFIT SCENE

By all accounts, renovating buildings to make them more energy efficient than before has now become the norm rather than a trend in Canada. Beltrame pegs the retrofit market in Canada at 50% – a healthy figure. Wood explains why: “As our climate dictates, energy-efficient heating has always been imperative. Government rebate programmes on new build construction and building retrofits provide incentives for building owners/operators to install energy-efficient equipment. These financial incentives help offset the additional cost of high-efficiency products, while minimising the demand for energy.” Speaking about his company, he says, “As our technology is relatively new to the market (less than 15 years) and a vast majority of buildings being built before that time, retrofitting makes up well over half of our projects in Canada.”

Retrofit proves to be a less expensive exercise than new constructions in most cases, says Fasanella “If you remediate correctly, the labour and material cost can pay for itself quickly by energy saved in old, leaky, outdated buildings,” he points out. “And LEED is becoming a standard for almost every building going up.”

Armstrong adds that in many instances, building owners and operators focus on the near-term competitive issues that demand attention in order to adequately serve customers and remain viable as a business. “In a small percentage of instances, building owners are more secure with their finances or their competitive stance and are willing to make investments in a retrofit installation that involves a longer payback term,” the company says.

CONCLUSION

Riding on the crest of world-class products and best practices, aided by industry regulations, Canada is at the vanguard of nations driving sustainability in the HVACR sector. The market has responded favourably to both industry and government-driven initiatives. But it is work in progress, as the country believes in constantly striving to cut costs and energy consumption.

“Within the Canadian economy, the most frequently used vehicle is industry regulation,” says Armstrong. “Organisations operating in the Canadian economy generally recognise the need to incorporate best practices, including focused research and development into their everyday operations.” But the company adds, “Examining the practices we see in the HVAC industry reveals that as much as Canadians understand these requirements, we still have room for improvement.”

When it comes to the Middle East, like any vibrant economy operating in a globally connected market, it can be expected that the region will experience strong growth over the next five to seven years, driven by the opportunities created by a growing population, Armstrong predicts.

Since it was environmental concerns which led to societal pressure, which in turn spurred reduction in energy consumption in Canada, the same model might get replicated in the Middle East, believes Wood. “‘Newer’ technology, acceptance in the Middle East has been relatively straightforward, as the customer base is well-versed and highly educated,” he says. “However, as with most markets, the higher capital cost to implement our products deters customers initially.”

In Fasanella’s view, in the final analysis, although regulation and enforcement can certainly help the cause, it is products that get bought and sold. It is their ability to demonstrate long-term added value to the customers which ultimately drives best practices.

It is therefore, a good product which can act as a harbinger of positive change.

DEEP LAKE WATER COOLING – A NEW WAY OF TAPPING NATUREA strategic collaboration between enwave corporation and the city of Toronto has enabled downtown Toronto to tap the renewable source of energy for district cooling from Lake Ontario, using 90% less electricity than chillers would consume.A natural and excellent alternative to conventional, energy-intensive air conditioning, enwave’s Deep Lake Water cooling (DLWc), which uses icy water from the depth of the lake, is regarded as the world’s largest lake-source cooling system.This is how the system works: In winter, the surface of Lake Ontario cools to about 4°c (41°F). The density of the cold water increases, causing it to sink. conversely, during the summer, the surface water heats up and remains at the surface because it is warm, as it is not dense enough to sink. consequently, no matter how hot the summer, the water in the deep recesses of the lake remains very cold. Over millennia, this natural phenomenon has created a permanent reservoir of cold water at the bottom of the lake.Enwave has installed three high-density polyethylene (HDPe) pipes along the natural slope of the lake bottom, which pump water from a depth of 83 metres. This water is transported to the Toronto Island Filtration Plant. The cold water is processed there and channelised to enwave’s energy Transfer Station at its pumping station.Heat exchangers then enable energy transfer between the cold lake water and enwave’s closed chilled water supply loop. When this process is complete, the lake water fl ows to the city’s potable water system. It is not the water itself, but its coldness which is harnessed.