Pumps are the prime movers of the HVACR sector, which in turn has a symbiotic relationship with real estate growth. With the construction activity in the region showing signs of life, the pumps market has begun to breathe normally again. Pratibha Umashankar reports.

A pump is a simple and robust piece of machinery which performs a vital function. It is the heart of the HVACR sector. Come to think of it, our heart itself is a pump. We are alive as long as this central pump keeps ticking. The analogy doesn’t end there. Both pumps are sturdy, but demand maintenance and need to be treated with respect. Sarfraz H Dairkee, General Manager, Corp Dev & Engg, MAHY Khoory & Co, Dubai, UAE, endorses this view. “Pumps can operate in a wide range of head, flow conditions, handling a variety of fluids,” he says. “However, just like car engines, they operate efficiently only in a narrow band. Application and system engineering considers the entire pumping system with variances and transients to propose an optimum solution. In simple words, it is the solution rather than the product approach.”

THE REGIONAL OUTLOOK

Given that pumps perform a range of important functions, the pump segment in the HVACR sector in the region regaining its balance after the recession hiccups is good news. “The basic pump sets would roughly constitute about one to 1.5%, and the entire pumping system that includes pipes, fittings and controls around two to four per cent of the total construction costs,” Dairkee estimates.

Nadir Ilmas, Division Manager, Faisal Jassim Trading Co, LLC, Dubai, UAE, admits that pump is a diversified product line, whereby it is difficult to size the entire market, but adds: “The market size of pump for the HVACR segment would be around $100 million. The construction industry size in the region is roughly one trillion US dollars. Out of this, Saudi Arabia holds 51%, UAE 25%, Qatar 13% and others 11%. The size of the market related to pumps in these countries (Saudi Arabia/ UAE/Qatar/Oman) is probably around $75 million.”

Rajat Mathur, Director – Sales & Business Development (Gulf Countries), Grundfos Gulf Distribution FZE, Dubai, pegs the present pumps market in the GCC region at $300 million and gives the breakup: Saudi Arabia – approximately $130 million; the UAE – approximately $75 million; and Qatar – approximately $35 million.

As with so many other things in the HVACR sector, Saudi Arabia and Qatar have become the focal points for the pumps segment for the main players, with huge government spending on housing and infrastructure in the Kingdom and massive construction activity in Qatar in preparation for the World Cup being the key market drivers.

“We see a big potential in Saudi, which currently has 50% of the total construction activities in the region,” says Ilmas, whose company has a presence in the Kingdom, Qatar and Oman. “The market size is around $550 billion in Saudi Arabia and in Qatar it is around $130 billion. We also see Oman as an emerging market with a potential of over $4 billion. Oman, in the last few years, has seen major growth with new state-of-the-art airports lined up in Muscat, Salalah and Sohar.”

Ilmas factors in Oman’s tourism potential and draws attention to hotels coming up in Qasab, Muscat and Salalah. “There is also a new seaport under construction in Duqm, Oman. Obviously, a new port would need infrastructural development, which includes hotels, housing and so on,” he adds.

Mathur, too, admits that Oman appears to hold “good prospects”, but hastens to add that the speed of execution of projects is the key to success and market growth. His company, Grundfos, like many other major entities, has added dedicated resources to serve its customers’ needs from design stage till execution stage of projects, in Saudi Arabia and Qatar. “As of now, there is definitely a boom in Saudi Arabia, but market capacity for realisation of project execution is a challenge,” he warns.

Dairkee, on his part, points out that pumps for air conditioning are generally specified for multi-storey buildings and dense development, while villas and smaller buildings rely on window and split air conditioners. He, therefore, believes that the market outlook would depend on mega development plans and allocation of funds in the two countries.

The subtext to the Saudi-Qatar success story, therefore, is cautious optimism.

LIFE AFTER RECESSION

The three experts agree that the region did, indeed, sustain damage during the recession, and is slowly getting back on its feet, holding hope for the pumps market.

“There has been an impact on all segments of pumps business, but especially building service segment and HVAC sectors (district cooling plants) have been affected,” explains Mathur. He thinks the market is now looking steady. He hopes that it will maintain a defined path.

Ilmas, too, thinks that the post-recession recovery has been steady and that the pumps and HVACR market are recovering, with 5,045 building construction projects in progress. “Globalisation continues despite regional conflicts throughout the world, but friction in global markets caused by security concerns means that global growth averages around three to 3.5% throughout the period,” he points out, introducing another variable to the discussion. “Oil shocks and a lack of trust undermined international cooperation and trade integration, causing a global recession in 2010-2012, followed by slower growth thereafter. The global economy benefits from increasing globalisation and trade in a harmonious global environment and reaches growth rates of over four per cent,” he adds.

Dairkee believes that the post-global financial downturn is likely to put pressures on the investment as well as operating costs. “This would call for better utilisation of resources with improvement in efficiency and effectiveness of resources in general, and energy and water in particular,” he says. “Efficiency, therefore, is likely to affect profitability more significantly, as compared to the past. This should open up requirements for energy audits and retrofitting of systems to curtail the cost. Considering the increasing awareness and appreciation of environmental footprint, the sector providing effective turnkey services is likely to grow.”

MARKET TRENDS AND INNOVATIONS

In Dairkee’s opinion, there appears to be a growing preference for automation in pumping systems generally for monitoring BAMS. Mathur enumerates high-efficiency, energy-saving, long-life, reliable pumps which cost less, need less maintenance and give value for money as items on everyone’s wish list. When it comes to trends, in terms of digital and electronic technologies, he believes the market is leaning towards variable frequency-driven pumps, digital dosing pumps, dedicated controls for HVAC and sewage pumps.

Ilmas invokes the sustainability mantra, which is on everyone’s lips. “With the world going greener, we can see more and more money being pumped into R&D and the pumps are getting more efficient, more installation-friendly,” he elaborates. Ilmas goes into the finer points: “We are seeing more and more use of investment casting technologies in pumps, whereby we have far less rejections in final pump castings. Pumps have become leaner, which means, with investment casting, we can create a pump with the same hydraulic with much lesser weight. Obviously, this leads to savings on metals, foundry cost and so on.”

The experts agree that the region is responsive to new technologies and innovations. Dairkee qualifies this: “The region is quite responsive in terms of specifying branded modern products. However, innovative applications and methodologies have yet to get the appreciation of their possibilities.”

Mathur, while seeing a growing acceptance towards innovation, sounds a caveat: “It (the market) is still on a learning curve about lifecycle cost of pumps and system, which means, when they get the latest technologies, the premium associated with initial buying should be combined with the benefit of the full running cost of the pump system for a better evaluation and acceptance of new technologies and innovations.”

With sustainability being top priority globally, the question is, how has the sector and the region’s market resonated with this? “Very well,” believes Mathur and cites as evidence, UAE Green Building Compliances, Estidama Compliances (Abu Dhabi), Environmental Safety Compliances (Masdar, Abu Dhabi), which have come up with new regulations.

Dairkee, too, believes that there is now a greater inclination and effort discernible on the part of governments and municipalities in the region towards implementing sustainable practices. However, to reap significant benefits, sustainability has to be adapted and closely integrated into the local environment, he specifies.

CHALLENGES

While the experts broadly agree that the pumps market in the region is quality conscious, responsive to innovation and generally free from the malaise of incorrect selection and installation problems, which other segments suffer from, and which can impact energy efficiency, they concede that there is room for improvement in these and other key areas.

According to Dairkee, the main challenge and, therefore, huge potential areas for improvement is system optimisation and appreciation of lifecycle performance evaluation. “Energy efficiency is yet to be measured, and therefore, to be managed,” he says. “In fact, it is often the case of obese designs that cause system failures and draw attention to the pumping system deficiency. Separate energy measurement for the pumping systems is seldom observed. It is, thus, not routinely checked and optimised. There’s always a tendency to assume a high safety factor, resulting in pumps and systems much larger than actually required being used.

This obesity/over-sizing is due to consultants putting more safety margins while selecting pumps, Ilmas points out. “So, we see a lot of pumps running at 50 to 60% of the rated RPM, whereby they work on lower part-load efficiency, leading to the efficiency of a pump dropping substantially,” he says.

Mathur believes that improper installation practices and operation and lack of periodic maintenance are areas that need tightening in the region. “We are helping as much as we can in all the major projects,” he says. Acknowledging the difficulty customers sometimes face in finding servicing facilities, especially for models and product lines that are no longer being manufactured/when the dealer has stopped operations, he says: “Our distribution partners across the Middle East keep sufficient stocks. As a policy, Grundfos maintains spare parts availability for almost 10 years after a particular model is discontinued.”

Dairkee concurs that prompt and satisfactory service and repairs catering to pumps irrespective of brands are much sought after. He believes that most customers/clients appreciate this only after facing a crisis at firsthand.

Ilmas is critical of the lack of a real service culture in the region, when it comes to maintenance. “Most of the pumps run endlessly unless they break down,” he points out. “We hardly find customers and end-users who regularly maintain their pumps. The contractor normally finishes the contract at the end of defect liability period. Once this period is over, the building is taken over by the maintenance contractor, who hardly maintains the pump. I suppose there could be much better maintenance of prime movers in the region, which is currently not the case.” Going into specific issues, Ilmas makes the following observations:

Pumps need periodic greasing of the bearings along with realignment of pump coupling – we hardly see that happening in the region.

Corrosion issues are not particularly common in the region, as pumps normally last 10 to 15 years in a typical HVAC application.

There are installations, especially with cooling towers, where there are NPSH (Net Positive Suction Head) issues leading to cavitation. It has also to do with air getting mixed in water in cooling tower applications.

The majority of cavity issues occur in condenser pumps, as they work in open circuit.

We have started offering customers ceramic coating on pumps to extend its life span – we have supplied pumps with ceramic coating on three major contracts in Dubai, Muscat and Salalah International Airports.

Educating the customers/clients and offering the right product for specific applications and assisting them in the initial pre-sales stages in order to avoid future problems can go a long way in countering the challenges faced in the region, believes Mathur.

PRICE VERSUS QUALITY

An accusation commonly levelled against the region, in general, and the HVACR market, in particular, is that despite being open to the latest innovations and being environmentally aware, it is governed by price rather than by quality, reliability and sustainability. This is more so when the market goes through times of economic upheaval and uncertainties, such as the one we have been witnessing in the last few years. The HVACR sector is no exception. But when it comes to the pumps segment, the experts tend to adopt a less cynical view. “Yes to a certain extent,” Mathur says cautiously, regarding price dictating terms. Adds Dairkee: “The market is rather brand conscious and reliability is linked to the brand rather than better engineered solutions. Appreciation for integrated design and that each application is unique is gradually sinking in, albeit at a very slow pace.” Ilmas, on his part, asserts that the market in the region is conscious about quality, reliability and sustainability. Speaking from his company’s perspective, he says, “Obviously, the customer today is looking for the best product with the most competitive price. We cannot out-price the product just because it has got inherent better quality.”

When it comes to pump design, Dairkee stresses that since manufacturing has reached a certain level of maturity, there is little to differentiate between products in the same bracket. But he points out that much difference could be achieved with better application and system engineering.

Mathur highlights the importance of raising awareness to win the quality versus price battle. “We market our product features by educating customers on the value of quality, lifecycle cost, energy-saving through one-on-one meetings, seminars and factory visits,” he says. “We work closely with all the stakeholders who drive this change. And we see an encouraging response. Hope it will improve more in future.”

In the final analysis, if a product is known for its quality, reliability and sustainability, then customers do recognise and respect this, believes Mathur.

TESTING TIMES

The HVACR sector plays an important role in the region’s economy and comfort, given its construction activity and climatic conditions. And the pumps segment forms a vital component of the sector. Therefore, pumps sold in the region, typically, need to withstand the harsh environment. Testing normally involves parameters of flow, head, efficiency, NPSH value, power consumption and material-worthiness conducted according to international standards ISO 9001, ISO 14001, UL/FM approved (fire pump norms). “Most of the American products are tested in accordance with Hydraulic Standard while all European counterparts do their testing in accordance with EN ISO 9006 Class 2 Standards,” Ilmas explains.

When it comes to quality, how relevant is region-specific testing, is a question often raised, now that GCC markets have been using HVACR equipment now for several decades, and will continue to use them in the foreseeable future. “SASO (Saudi Arabia) and KUCAS (Kuwait) are relevant testing norms for small range of pumps, and in large contexts, Grundfos globally takes care of the quality and testing of all our pumps,” says Mathur. He would advocate region-based testing centres only at the pump manufacturer’s facility. “We, at Grundfos, have the same at our Dubai facility covering our Middle East customer base and are already operating in the region for more than 40 years along with our distribution partners, and we will continue to invest in the region,” he says, indicating that region-specific testing is a feasible idea.

Citing the example of large facilities in Saudi Arabia which are doing testing for the process industry, Ilmas, too, emphasises the need for a regional testing centre. “The testing lab should be able to test pumps up to 50,000 gallons,” he says. “We, at Xylem (Bell & Gossett), do not have a local testing centre. However, Xylem has already taken necessary initiatives to establish testing centers throughout the region. We should have a test pad to test the 20,000 gallon in the next one or two years.”

However, Dairkee points out that with limited manufacturing in the region, such facilities may have a limited role. “As such, it is pumping system engineering that offers a significant scope for improvement,” he says. “Therefore, I would rather advocate a pumping system training and optimisation centre.”

DOES RETROFIT HAVE A FUTURE?

The poser is seemingly an oxymoron, but as technology improves – as it must – retrofitting has become an ongoing process, driven, not only by natural wear and tear of products and systems, but also by considerations of energy efficiency and sustainability. In this regard, the region does have a promising retrofit market, the experts agree. “Pump system re-engineering and retrofitting offer very promising running cost optimisation and higher system reliability potential,” says Dairkee. “And yes, there have been several occasions when our services have been sought. In all the cases, the pumping system engineering has resulted in energy reduction in the range of 50 to 70% and increase in reliability. The pumping systems which used to fail frequently are operating for years without any recall and with much lower operating costs after re-engineering.”

Ilmas reveals that his company has been called to replace pumps in cases of incorrect installment or selection, vis-à-vis application. “We have started a new initiative to address the retrofit market of late,” he highlights. “This is quite a profitable business. We see a lot of installation in the region which are not delivered in the desired effect. We get repeat requests from customer for upsizing/downsizing of supplied equipments.”

Mathur adds that his company is promoting the Energy Audit and Pump Audit programmes in the region. “Although, as long as prices of water, electricity and fuel are heavily subsidised and do not reflect the cost, it will be difficult to create such a culture,” he warns.

CONCLUSION

The post economic downturn phase has been a difficult one, but things have now stabilised, and with pumps playing a pivotal role in the HVACR industry, they continue to command a steady market. Working with the stakeholders to increase their market share, educating customers and consultants to help them keep pace with innovation, with an eye on sustainability and quality are strategies the big players have adopted to bring a level of standardisation in the market. And it is not long before standards set in Europe come to the GCC region and get implemented, they believe.

“We have increased our efforts throughout the GCC region and have been able to maintain the growth story,” admits Ilmas. “The region is slowly adapting to IE-3 design of motors which are even more efficient than the earlier high-efficiency designs. The introduction of investment casting technology has made the pumps much more compact than before. They are much lighter in weight and environmentally friendly in comparison to older heavier designs.”

Mathur believes that the growing preference towards energy efficiency, smart design for easy installation and maintenance and environmental-friendly products is good news for the pumps segment.

In Dairkee’s opinion, pump specifications/standards, materials and processes of manufacture are getting standardised with application. “There is discipline in manufacturing and commitment to ensure consistent quality of every pump being manufactured,” he says, and succinctly sums up: “Pumps are simple and robust machines, and with better understanding of the variances, the system dynamics and integrated approach, much higher reliability and system efficiencies are achievable.”