What is propelling the growth of HVAC Middle East and Saudi market?

Recently, the Middle East and Saudi Arabia regions have attracted the big players of the HVAC-R (Heating, Ventilation, Air Conditioning and Refrigeration) industry. All thanks to the tremendous opportunities for the sector to grow like never before. The industry is witnessing a whole new exposure manufacturing better products. There is a lot to explore and meet the rising demands. There are various factors accelerating this expansion. Mainly, the growth is evident in the Saudi region followed by the rest of the Middle East.

According to the forecast, the refrigeration market in Saudi Arabia will grow at CAGR of 13.38%, in value terms, by the year 2021. And, the HVAC-R market will grow at a CAGR of 13.11%, in value terms, during the financial year period of 2016-2021. The market expects a double growth to $6.36bn in 2022 as compared to $3.33 in 2017. The figures give a shining picture of what lies ahead for the HVAC-R industry players. It’s the big rise of the sector that will continue for many years.

What are the reasons behind this progress?

Every nation tries to put its best foot forward for the development. Talking about Saudi and the Middle East, these countries have always embraced innovation. Sustainability, new projects, tourism, high income, increasing population, technological innovation and government policies are few catalysts driving the current expansion of HVAC-R industry. Let us have a look at these factors-

Sustainability 

Saudi Arabia and the entire Middle East fall under a high-temperature zone. This accounts the need for more cooling, thermal insulation and refrigeration systems. At the commercial, industrial and residential levels, the use of energy efficient HVAC-R machines is supposed to increase. The new and improved appliances are needed to meet the demands of consumption as well as the standards of efficiency. There is a need to have new and improved appliances that meet the demands of consumption as well as the standards of efficiency.

New Projects 

The revival of the housing market is playing a key role here. There are several housing and construction projects underway to provide shelter to the people as well as to develop a smarter economy. The government has initiated many new housing projects for the next decade that will support the growth of the HVAC-R market. Also, various construction projects are booming to support the development process. For example, two upcoming mega projects are Jeddah Tower in Saudi Arabia and Kuwait’s $490m (KWD149.7m) harbour facility for small boats.

Tourism 

The region attracts lakhs of tourists, mainly pilgrims, across the year. The share of religious tourism is quite high in the economy as it boosts the creation of new hotels, villas, and facilities for the people. Dar Al-Handasah Group Building Abraj Kudai in Mecca is expected to be the largest hotel in the world. A property with around 10,000 rooms in 12 towers will be ready by 2018. Projects like this, are putting huge HVAC-R requirements. Also, the installation of air conditioning systems in the holy mosques is an example of tourism-driven HVAC-R growth.

Increasing Population & Income 

The population-rise indicates more residential units, buildings, facilities, and projects. The population of Saudi is estimated to reach 37 million by 2021. Along with that, people are earning well. They have a high disposable income that has increased the living standard. For example, a huge population is relocating from rural to urban areas. For urban citizens, cooling and refrigeration systems is no more a luxury, but a need.

Technological Innovation 

Technologies like district cooling, solar air conditioning, connected buildings, etc. are bringing many changes in the market. For example, district cooling enables central cooling for multiple buildings and cost savings of about 25%. With such new innovations, there is a competition to develop smarter products. The commercial units are more interested in installing equipment that helps them to save costs. Thus, the HVAC Middle East companies have the opportunity to excel in their outstanding products.

Government Policies 

The Green initiatives are one of the top priorities of the nation. As per the rules, there is a pressure to replace the conventional systems with the new and efficient ones. To control the harmful emissions, the government has framed certain guidelines which make it mandatory to use appliances with the proper rating. Meeting the standards and maintaining the quality is more than necessary. There is no room for 15-20 years old systems that degrade the environment in some or the other way.

Don’t miss the boat!

The HVAC Middle East market is rising in an exponential manner. The companies can experience an unprecedented success if they brace up well. Also, with the right equipment and a bespoke solution to manage their business, there is no looking back.

Let us know your thoughts?