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Saudi Arabian market remains subdued, except for the service sector

Johnson Controls outlines trends in Saudi Arabia, reports growth in chillers and AHUs

| | Dec 13, 2018 | 11:07 am
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Jeddah, Saudi Arabia, 13 December 2018: With the exception of the service sector, demand across all segments in Saudi Arabia remains subdued, said Dr Anwar Hassan, Vice President, Field Sales & Operations, Johnson Controls, Saudi Arabia. Dr Hassan shared that, even in this context, the company is successfully growing its market share for chillers and air-handling units. “We are also observing customers demonstrating stronger loyalty to the brand,” he said. “We wonder whether this is driven by being perceived to be more stable than others. Our investment, over the last few years, in growing our service company to become the largest and most capable specialised service company in the Middle East, is now proving to be a very prudent investment.”

Outlining trends in Saudi Arabia, Dr Hassan said that in its totality, the market has been a little down, year on year, in terms of shipments. “[However], not all the segments are flat,” he said. “A few are dynamic and have yielded good success, such as the industrial, in addition to the oil & gas sector, yielding a healthy number of projects.” Dr Hassan added that the unitary products segment, which suffered over the last few years, due to frequent changes in certification requirements and standards, remains depressed “contrary to expectations”.

Dr Hassan added that he is optimistic that the hospitality and healthcare sectors, especially the construction of private hospitals, will see strong growth to address demand of Hajj and Umrah visitors. For the hospitality sector, he said, growth will occur over a longer period of time. “Investment in automation is gaining momentum in novel applications, such as facilities with multiple branches,” he said, “but has not translated into substantial fiscal impact yet.” With regard to District Cooling, Dr Hassan said the anticipated growth, on the back of the Royal Decree mandating it for developments of a certain size, remains a valid promise but has been slow to materialise.

Energy Services Contracting has also gained some momentum, Dr Hassan added, but the growth remains slow and a fraction of what was expected. “Automation of plant rooms in pursuit of energy efficiency is a frequent topic of discussion with clients and a number of the energy services companies but, while it promises strong activity in the near future, projects are taking time to mature,” he said.

As for the anticipation generated by the announcement of Neom earlier this year, Dr Hassan said that the company has yet to see related opportunities under the main project of Neom, but that Johnson Controls has been “favoured by many of the Sharma projects, which are advanced VIP facilities believed to be a prelude to the Neom project”.  He said, “Large visionary projects such as Neom will take time to reach our desks, since our services in the supply and installation are mostly required late in the development cycle.” He added, “We are eager to contribute to discussions with the developers working on concepts and infrastructure to draw their attention to the relevance of District Cooling and availability of sea water for heat rejection to underwrite an advantageous efficiency performance.


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