Valves will be in demand wherever there is a need to control, isolate or protect industrial processes, which includes the HVACR industry, which subsumes within it the building services projects and large-scale applications like District Cooling. Ergo, there is a steady demand for valves in the Middle East, as they check all the boxes. Add to it the burgeoning retrofit market, and there is a potential scope for expansion.
Besides the growth triggered by the construction industry, there is a conscious push by the UAE government, with the Dubai Supreme Council of Energy (DSCE) in 2011 launching the Dubai Integrated Energy Strategy 2030, whose avowed objective is to reduce energy demand in the emirate by 30% by 2030. One of the strategic pillars of DSCE to achieve the goal is District Cooling, which translates into lower power consumption and the use of valves.
Coupled with this, Dubai has embarked upon an ambitious drive to retrofit 30,000 buildings by the year 2030, again, with the aim of achieving 30% energy savings, which includes HVACR retrofit projects. This bodes well for the valves sector.
Apart from the United Arab Emirates, several mega projects are currently under construction across the Middle East, as part of efforts to diversify the economy from oil- and gas-dependence, as well as to provide jobs to a growing population. In this regard, Qatar and Saudi Arabia, are widely seen as the major growth areas for valves.
Despite the demand, and despite experts underscoring the importance of control valves, customers, unfortunately, are often dictated by extraneous factors when it comes to the selection of valves, which could prove detrimental to the market. Three main factors appear to influence their decision: Stiff competition, which nudges construction companies to cut corners and opt for lower cost products; time constraints, which puts manufacturers and suppliers under pressure to deliver within unreasonable project delivery deadlines, which does not allow for careful evaluation of products, and sheer negligence, prompted by the fact that valves are not exposed or visible to the end-users and, therefore, not a priority. The ongoing economic downturn, too, seems to have facilitated the entry, and eventual popularity of low-cost valves. The result is the use of cheap substitutes. And cheap substitutes come at a price – a compromise on quality. In the final analysis, cost seems to be the lowest common denominator governing all the other factors.
One of the strategic pillars of DSCE to achieve the goal is District Cooling, which translates into lower power consumption and the use of valves
Valves carry the onus of ensuring that HVAC systems function efficiently and, more importantly, reliably. Substandard or damaged valves could cause maintenance problems, leading to loss of time and money due to temporary shut-down of systems. It is evident that from a lifecycle perspective, compromising on quality could prove expensive in the long run. Therefore, in order to reduce capital and operating costs, and to ensure that cooling systems operate smoothly, it is important to invest in high-quality valves, say experts. They believe that savings that are generated over a period of time by having good controls, will supersede the savings made by reducing the cost of investment.
Towards a quality-conscious market
While the more established companies concede that cheaper products may thrive in the market for a while, they believe that their products will prevail, and ultimately win the price war, not only on the strength of their product quality, but also because they are responsive and adaptive to market changes and, additionally, provide support and guidance to their customers. The big players in the market, armed with the mantra of energy and cost efficiency, are also investing in innovation. This, coupled with the strategy of aggressively promoting their products, they think, will help combat the competition posed by new market entrants. They claim that reliability can offer peace of mind to customers, which is a much-valued commodity.
Building a culture of better awareness towards quality and its resultant benefits, and all stakeholders working together, could, indeed, be a solution to the challenge posed by substandard products.
Industry experts believe that the valves sector will always find opportunities for growth. However, economic uncertainty is a reality all sectors in the construction industry, and by extension, the HVACR sector, has to live with, and has learnt to live with. As a result, the valves market has become price-sensitive, paving the way for low-cost products from new players. Despite this, the more established companies think that as the market matures, merit of their products, which avowedly offer enhanced energy efficiency and considerable savings in lifecycle costs, will ultimately emerge as winners. New government initiatives in the region, like retrofitting of Existing Buildings and spurring the District Cooling industry, holds promise for the valves market, with new products which can conveniently be fitted without any interruption in service.
Innovation is probably the key to a more dynamic market, with the acceptance that uncertainty is the new norm and that a disruptive market is a good market, especially for those who disrupt the status quo. It’s, indeed, a revolving door.
(The writer is the Associate Editor of Climate Control Middle East.)