For the chiller industry, downturn or not, the drive to produce more efficient and environmentally friendly chillers continues, especially from a green context, writes Jose Franco.

There is no question the demand for chillers is heading towards green territory. It is, therefore, proper and logical for manufacturers to invest in environmentally friendly units of the machine that can implement a variety of refrigerants. Innovative products are a must but not enough, to make a company maintain or increase sales volume, however. Tapping new markets is another great way of doing such.

“The challenges for companies include maintaining sales volume,” says Maged Makar, Head of the Product Engineering Department at Daikin McQuay Middle East. “And you can maintain sales volume by adding new markets.” Saudi Arabia is top on the list, what with its rapid urbanisation, high population and massive investments in various projects in the transport, education and healthcare sectors.

Abu Dhabi and the Northern Emirates and Qatar, Kuwait, Oman and Egypt are also on the list of Makar and other experts in the HVAC and refrigeration (HVAC&R) industry in the Middle East. These Arab states are seen either banking on the projected high oil export receipts and/ or reacting to a growing population and consumer demand by spending more on infrastructure projects and social developments.

Camels on Jumeirah Beach, in Dubai: The hot and humid climate in the Middle East is a challenge to chiller manufacturers to produce innovative products

UAE-based B S Prashanth, Regional Manager-Russian Federation at AHI Carrier, remarks, “Ours is a hot and humid climate, so there’s great requirement for cooling systems, including chillers with wide-ranging applications. Manufacturers need to continue making products that could withstand hot climate.” He mentions in particular the residential and commercial (office complexes) buildings in the Gulf as having the highest demand for chillers.

As early as two years ago, BSRIA, a UK-based construction and building services consultancy, predicted the central plant airconditioning market in Saudi Arabia to nearly triple in value by 2012. “Saudi Arabia and Egypt are promising markets for air conditioning products because of a hot climate and rapidly growing population,” it says in a white paper, titled, ‘Middle Eastern and Indian market for air-conditioning 2008’.

In the UAE, reciprocating chillers (which can serve the smallest loads efficiently) were noted to have continued their presence in the market, although the popularity of this type of compressors has been in decline, owing to increasing demand by district cooling for centrifugal chillers. The same report says the UAE would enjoy the greatest progress of all compressor types with an annual growth rate of 20%.

Centrifugal chillers, which are used to cool large buildings in a centralised air-conditioning system, and absorption chillers that utilise water as the refrigerant are also big business in Egypt, the Arab world’s most-populous nation where district cooling has been gaining popularity.

The global chiller market was valued at $1.9 billion as at 2008, BSRIA noted, with the Middle East and India region having the smallest share. The consultancy firm noted, however, of “significant markets” in India, the UAE and Saudi Arabia. “[O]verall the chiller market is expected to enjoy a slight increase over the next few years, although the growth rate will vary from country to country,” it says in an April 2009 article, published on its website. “Reciprocating compressors continue to disappear from the majority of markets, with the trend leaning towards scroll and screw compressors.”

In the Middle East, where the chiller sector is estimated to reach $500 million this year on a 15-20% increase, Makar says, Saudi Arabia will undoubtedly be the biggest market. He and Prashanth disagree with other experts and entrepreneurs who find it difficult to penetrate the Saudi market due to a number of reasons, including too much bureaucracy. “I don’t think there’s a big problem in Saudi,” Prashanth says. “Just look for a good partner, and you need to know the market and its people.”

Most companies engaged in HVAC&R, in fact, are either raring to enter the Saudi market or planning to expand operations in the Gulf country of over 27 million people. Daikin McQuay signed a new distribution agreement in Saudi after having a presence there for the past 10-15 years, and put up an office in Abu Dhabi this year, which will be launched next month. “We have good sales volume in Qatar, and we are increasing our market share there,” Makar says. “We also have good market share in Saudi, Abu Dhabi and Kuwait.”

All this is part of Daikin McQuay’s move to pursue further expansion and business partnerships across the region. Carrier, on the other hand, will continue to rely on its innovative products to maintain and advance its market share. Innovation is what most manufacturers have in their growth and expansion programme, with Daikin and McQuay recently putting up a $50-million research and development (R&D) centre, to develop and test newly created products, including chillers. It’s the world’s most advanced R&D centre dedicated to the HVAC industry.

In December, Daikin McQuay launched two new products – the air-cooled chiller and the magnetic bearing centrifugal chiller, which both boast highperformance and premium efficiency.

The first company to use magnetic bearing technology in the chiller sector in 2004, McQuay says the oil-free design eliminates the efficiency losses created by traditional compressors. Daikin McQuay is part of Daikin Europe, which operates under the umbrella of Daikin Industries. The global company posted about $13-billion turnover in 2009.

Chiller companies worldwide are seen to continue manufacturing products that could withstand hot climate, owing to the growing importance of the Middle East market, Prashanth says. It’s this same extreme heat across the Middle East, African countries and most parts of India which hampers the sales of moveable air conditioning units, according to BSRIA.

And due to pressure from environmental groups, Prashanth adds, one challenge to manufacturers that stands out among many is to produce chillers that are highly efficient with reduced carbon emission. This will be in line with the provisions found in the Kyoto Protocol, which deals with issues on global warming, and the move against refrigerants being called by the Montreal Protocol. The sector has already begun using environment friendly refrigerants.