Faik Tellioğlu

Providing the perspective of an exhibitor at the time of the event was Faik Tellioğlu, General Manager, Fire Suppression Products, Tyco (a Johnson Controls company), who said: “Maybe 50% of those at our stand are international visitors. Turkey is like a hub for the region, and a lot of visitors are coming in from different countries.” Herman Haçaduryan, Deputy General Manager, Sales and Marketing, Executive Board Member, Refkar, added that while the company observed new visitors from countries as far as Australia, the footfall from foreign participants can be attributed to the work and investment of local organisations. “Thanks to ISIB, lots of people are coming to visit the exhibition,” he said in the midst of the event. Speaking for ISIB was Ümit Çinar, Director, who said: “As the Turkish HVACR [Export] Association, we are working to increase the profile of international participation at the Expo by organising buyer-mission programmes and B2Bs to increase foreign visitors. We generally invite sector leaders to come with their delegation, so the international profile of the Expo gets stronger.”

First-time visitor, Uche Iheanyichukwu, Project Head and Managing Director, RhodaFranks, a company based in Nigeria, shared an overall positive review of the fair. “It’s quite impressive, it’s quite vast, and everyone is here,” he said, while speaking to Climate Control Middle East during the event. “What this tells is that there is a future for the HVAC R industry from the interest of the people.” Another such visitor was Jamal Rokhsat, Managing Director, Aykaar Engineering, a company based in the Middle East, who said: “Next year, I will participate as an exhibitor. I found it to be a very important fair, with several major European, Chinese, and Korean companies, and we have made good negotiations with lots of other foreign companies, as well.”

Atasoy added that such diversity could also be observed in seminars on the sidelines, many of which were spearheaded by foreign associations, such as ISHRAE, to help further facilitate knowledge exchange among visitors. For visitor, Adrian Balaoi, CEO, Frigo Consult, a company based in Romania, with projects across Europe and the Middle East, such knowledge exchange was the main driving force for his participation in the show. “I’m here to have more technical information and news about the industry,” he said, while speaking during the event. “I think it is very important, because when you are in contact with the client, they ask what is your opinion, and if you have information, see the products and meet the people, it’s easy to help.”

Herman Haçaduryan

Balaoi also discussed the progress of Turkish manufacturers. “Turkey is a country where a lot of famous companies, like York and Carrier, decided to produce and manufacture,” he said, “But also, in parallel, Turkish companies, which have influence, have started to be a competitor of famous brands.” Rokhsat added, “During my visit, I saw that Turkish factories are really improving more and more in their quality and reaching European standards.”

Atasoy said that, undoubtedly, the fair’s growing international profile was indicative of the strong development of Turkey’s HVACR manufacturing sector. “Our export volume last year [2018] was USD 4.5 billion,” he pointed out. “That’s bigger than the GDP of some countries in the world, so it’s a huge market for us.” Çinar added that ISK Sodex is also one of the biggest expo in Turkey compared to conferences dedicated to other sectors.

TRANSITIONING FROM A GLOBAL MANUFACTURING BASE TO A KNOWLEDGE HUB

Atasoy said that the strong export volume reflects the positive evolution of the Turkish HVACR industry, which has undergone a series of transformations over the past few years. “We started mainly as OEM and part manufacturers,” he said. “Then became product manufacturers, and soon international companies established their own factories and production facilities and produced here for local and also foreign markets.”

While Turkey continues to be a strong HVACR production base, Atasoy said the main transformation has been towards leveraging experience and knowhow to invest in innovation. “Ninety per cent of the added value is from innovation, marketing and sales and R&D – these kind of activities,” he said. “So, we started to concentrate on the 90%, and we started to develop our own products and designs.”

Ümit Çinar

Sharing the same observation was Haçaduryan, who said many Turkish companies have now invested heavily to take a leadership role in developing new products “We managed to realise how important that is and, finally, many companies have people for R&D, with some having a centre for research.” As such, Çinar said that the Turkish market continues to grow year by year. “In some product groups, we are leaders already,” he said. “For example, Turkey is the top country in radiators, and we are also strong in [manufacturing of] boilers. We are also very strong in manufacturing and export of split air conditioning.”

EMERGING MARKETS

Part of the Turkish HVACR sector’s growth strategy, Çinar added, has been to strengthen its presence in key markets, such as Africa, which is poised to demonstrate strong demand for HVAC products. “Africa is a very important [market] for many cases,” he said. “The population is growing, and their market share is increasing year by year.” Most countries, he said, also have strong growth potential, owing to increasing income from petroleum.

Uche Iheanyichukwu

Iheanyichukwu expressed the same opinion. “Africa is developing,” he said, “South Africa is one of the biggest economies in Africa, and the HVACR market is quite huge and fast-growing, as well. In Nigeria, the HVACR market is enormous, because temperature reduction is paramount for people to work in this environment and for preservation of food.” As such, Çinar said, ISIB is actively organising introduction days, which include programmes and seminars in countries such as Tanzania, Nigeria, Kenya and Algeria. In Tanzania alone, he said, Turkish share of the market has increased by five per cent in 2019.

Atasoy said Europe continues to be a market of interest, as many Turkish companies supply to the region, meaning products are developed in a way that comply with stringent EU standards. Speaking on the Middle East, Çinar said the region will always be a key area of interest for local manufacturers. “Middle East is always important, because they have big markets,” he said.

Similarly, Turkey is full of opportunities for foreign companies, as well, said Atasoy, highlighting interest from Asian markets, following the strong adoption of VRF technology. “VRF started around the end of 1990s and the beginning of 2000s,” he said. “In those days, no one was expecting it would be so successful. At the moment, the applied systems market – AHUs, FCUs and chillers market – is worth around USD 300 million in Turkey, while split air conditioner market value is USD 350 million. Totally, the market value of HVACR products is around USD 1 billion dollars, and at the moment VRF, has more market volume that applied systems in Turkey.”

Atasoy said the strong adoption of VRF in the Turkish market can largely be attributed to the expertise of local technicians and engineers, when it comes to design, installation and commissioning of the system, which breeds trust among the project owners. “There’s a lot of trust in the technicians,” he said, adding this is owing to investment of leading Chinese and Japanese companies to educate local technicians on best practices. “People are happy with the application, because it’s easy for them – they just order the product, technical teams come and make the piping and refrigeration, press the button and it works.”

GLOBAL MARKET LEADS TO GLOBAL TRENDS

Jamal Rokhsat

Considering the growing nature of export business and the international profile of attendees, Atasoy highlighted how ISK- Sodex provides a snapshot of global trends within the HVACR sector. “As we are part of the global market as the HVAC industry, we are not excluded from those trends,” he said, adding that in addition to energy efficiency and digitalisation, the refrigerant transition is the biggest issue facing HVACR sector, in view of deadlines imposed by F-gas Regulation and the Kigali Amendment.

Iheanyichukwu said the topic of refrigerants is something he hoped to gain further clarity on by attending the event. “I had a lot of questions at the bottom of my heart, and I was also looking forward to answers,” he said. “I wanted and expected some workshop talk that could have been helpful to answer some of those questions, which I didn’t see. One of the things I am looking at is how to control climate change. It’s a concern. I want to see how can manufacturers contribute and manage the byproducts from heating, ventilation and air conditioning and the use of refrigerants. You cannot solve one problem and create another problem. You’re trying to provide cooling, but we have to also take into consideration the side-effect of this development.”

Atasoy said there is a need for further discussion among stakeholders on the issue. “The Turkish market adapted to the F-Gas Regulations,” he said. “We started to adapt around three to four years ago. I can say we are almost ready for F-gas regulation, but we have to get ready all the infrastructure, training, certification, information collection and test procedures. Now, we are focusing on that. Certification companies have been established, and now they start to give training and provide examinations for technicians. Companies are investing in that part of the business. We have to adapt ourselves – there is no other option.”

Adrian Balaoi

Discussing the Kigali amendment, Atasoy said there should be greater urgency among stakeholders due to the fact that refrigerants in the market will be phased out by 2029. “That means a big change in the industry,” he said. “It also means a big risk for our industry. Because we have products, we develop them, certify them and make a lot of investments in them. We are exporting them to other countries.” As such, he pointed out that manufacturers must future-proof their technologies to adapt to these trends.

Additionally, Atasoy said local regulations in Turkey would be poised to implement similar regulation in this direction. “We are not a member of the European Union, but we strictly follow the European regulations,” he said. “In the past, trends or regulations that happen in Europe came to our country five or 10 years later, but now it comes to our country one or two years later. So, we adapt the regulations to our industry.” Regulations, he emphasised, incentivise companies to develop products according to energy- efficiency requirements, pointing out that on one side, manufacturers are forced to develop themselves to comply with local regulations, but that similarly, it allows them to maintain competitive advantage by ensuring
products comply with global standards and regulations, especially those in the EU.

Atasoy said: “It is important for our members to develop a strategy on how we handle this change, and on January 15, 2020, we are organising a big seminar for our members and manufacturing companies to discuss the roadmap to this issue. We have to be ready.” Atasoy added that some manufacturers are moving ahead of the curve. “Components – for example, heat exchangers – they are almost ready,” he said, “but some components and companies have to start thinking in that direction and develop a strategy for this big change. As ISKID, we want to show the big picture to our members, we want to show what will happen in 5-10 years’ time. It’s very important. It’s a risk for us, as an industry, but if we help our companies adapt in a good way, we can turn it into an opportunity.”

In the December 2019 edition: A cross-section of manufacturers who exhibited at ISK-Sodex will discuss product innovations, digital initiatives and global business strategies

 

Hannah Jo Uy is Assistant Editor at Climate Control Middle East magazine. She may be contacted at hannah@cpi-industry.com