HVAC accessories play a significant role in the build of an HVAC system; however, industry professionals assert that pinpointing an exact number that indicates the market size of HVAC accessories can be difficult. Brian Suggitt, Managing Director, Systemair, and Chairman, Eurovent Middle East, says, “Pinpointing an accurate market size for the accessories sub-industry is difficult, because there are so many different accessories for different products within the HVAC sector.” Fans, pipes, ductwork, all have a different range of accessories, he says. “Clients select a small quantity, while others select a larger quantity and, hence, you can’t accurately pinpoint the market size,” Suggitt asserts. Providing a different perspective, Jithender Malhotra, Channel and Distribution Manager, GAMI, highlights that the market size of the HVAC accessory sub-industry could be best understood if compared directly to the HVAC market. “The HVAC market is approximately USD 8 billion, while the accessories market for the Middle East is approximately USD 1.6 billion,” Malhotra says. Meanwhile, Ravi Wadhwani, Managing Director, Hira Walraven AC Industry, asserts that the market size of the HVAC accessories sector in the Middle East region is in excess of USD 500 million. “The figure varies depending on the size of projects in the country,” he says. Presently, because of the Expo projects in Dubai, the requirement for these products has gone up. “Each region releases a slew of projects in a year, which keeps the market busy,” he adds.
Elaborating on the emerging market trends, Amir Naqvi, Business leader for Fluorine Products, Middle East, Honeywell, asserts that the United Arab Emirates is an exciting place to do business. He says, “Given the growth and evolution the region is witnessing, the key drivers for the HVAC market in the region are the need for infrastructure, housing and the government’s push for energy efficiency.” Pointing to energy efficiency as a crucial element of the UAE’s 2050 Energy Strategy, he says, “HVAC accessories are an integral part of the larger HVAC industry, and there are more opportunities for the new-build market.” The industry, he says, is constantly evolving and leads to demand in people’s need to optimise and further improve their systems. He adds that there has definitely been a rise in, and an uptake for, projects in the region, and with the demand for energy efficiency and the cost benefits, customers are more aware of the refrigerants they use.
Malhotra highlights an overall HVAC market growth rate of four per cent in four years and says, “Certain countries have to buy spare parts and accessories from other countries and then assemble them in their respective countries.” Syria, Iraq, Turkey and South Africa are all growing markets, which he says, are likely to grow at the rate of four per cent till the year 2021. Wadhwani, on the other hand, asserts that the region continues to record double-digit growth every year, and stakeholders prefer dealing with manufacturers to provide solution-based products, hence reducing wastage on site, installation time and cost. “Countries in the region,” he says, have their own requirements with regard to the standards required for fire safety, which is based on international guidelines. “This is very good for the industry,” he says, as he points to fire safety as the most critical component of any project. “Civil defence regulations,” he adds, “are very clear, and if the product meets these standards, approvals are generally straightforward.”
Malhotra, while sharing a similar perspective, says, “The demand for accessories is big in the service industry, but the challenge lies in maintaining and getting certifications in place.” Overall, with regard to certifications for finished products, air-handling units or chillers, he says, the question is mainly around maintenance. Pointing to ESMA, Estidama, MEW and SASO as common regulations, he adds that in order to have these regulations in place, a company has to spend approximately 2.5 million AED a year, without which a product cannot be moved.
Speaking of minimising the dependence on external vendors as an attempt towards ensuring maximum control over production, Wadhwani says, “Our group has been manufacturing HVACR products for the past two decades and works on the principle of maximum backward integration to ensure that we are in control of the complete supply chain.” However, the challenge, he says, is with regard to sourcing raw materials, which in turn, meets these standards. “We have an approved vendor list and work closely on each and every vendor by providing them with a forecast to ensure on-time availability,” he says. Malhotra says, “As many as 90% of manufacturers buy directly from the supplier, because you get the exact specification you need.” Very often, he adds, you cannot rely on local showrooms and shops, because you cannot rely on their product.
Giving an overview of the quality of products being manufactured and the relevance of servicing HVAC accessories, Saugata Sarkar, Divisional Manager, Spare Parts, Gulf Sail, says, “For the first five years, the manufacturer provides a warranty for everything.” Units that are there in the market for 20 years also need servicing, because they are expensive, he says. “There is a gradual upward graph,” he says. However, he cites the influx of Chinese imports, which are shaping the market, hence making it competitive. By principle, he adds, we stick to genuine products and keep our focus on big FM companies, who provide good quality and service. With reference to giving the quality of products within the HVAC industry a rating, Malhotra says, “I’d rate manufacturers with a 4.5, because the equipment being manufactured has to have legislation.” However, pointing to a challenge, he says, the contractors carrying out the installations are not always qualified to do the job. Wadhwani says, “Manufacturing in our industry has still not reached the stage as compared to other countries.” There are few companies, he says, who focus on producing products that meet international standards. “It is important that the industry understands that quality products come at a price,” he says. Reputed manufacturers, he further says, also have technical teams for design, installation and training. Wadhwani adds: “Professional manufacturing companies are those that take accountability for the performance of their products, and stakeholders should insist on visiting the factories of local manufacturers to view the manufacturing process, the quality controls and the testing facilities. Some of the facilities in the United Arab Emirates are much better than their international counterparts.”