Australia is set to be the major beneficiary of a battle between air conditioning manufacturers to establish regional dominance in the Asia Pacific, a market which now accounts for 50 per cent of the global HVAC equipment market.
With no signs of a slowdown anytime soon the Asia Pacific will continue to reign over other regional markets, according to Transparency Market Research (TMR).
In its latest research report TMR attributed APAC's regional supremacy to the economic growth of India and China.
Recognising that the region features some of the fastest growing markets in the world Original Equipment Manufacturers (OEMs) are taking notice and reassessing their strategies to ensure they have a much stronger footprint across the Asia Pacific.
TMR said competition in the global equipment market has reached unprecedented levels with many of the bigger players ramping up investment in the region or using acquisitions to eliminate smaller players and strengthen product portfolios.
Not surprisingly all of this activity has reached Australian shores where the market is undergoing a boom of its own driven partly by commercial construction which is at a decade high.
The latest Building & Construction Industry Forecast produced by Master Builders Australia found that commercial construction will contribute $42 billion to the economy in the 2017/18 financial year.
At the same time the penetration of air conditioners in Australian homes is still climbing.
The latest data from the Australian Bureau of Statistics (ABS) shows that over 78 per cent of households use air conditioners as their main cooling system, up from an estimated 65 per cent in 2008.
Its figures like these that are driving local investment decisions by the industry's biggest players.
Evidence of this trend first emerged last month when market leader, Daikin Australia, revealed it has been ramping up its manufacturing operations in Australia.
Daikin is actually on-shoring and manufacturing products in Australia that were previously sourced overseas. This includes compact ducted air conditioning units and large rooftop units which were previously sourced from Malaysia and China.
Daikin's manufacturing manager, Nicholas MacDonald, said Daikin has invested in developing localised and decentralised supply chains, and effectively de-risked the business.
In the past 18 months, the locally sourced content of products made in Daikin’s Australia factory has risen from 25% to 50%.
In Nicholas’ words: “Australian manufacturing is not dead – on the contrary, it’s waking up and moving to Sydney.”
As well as creating jobs, MacDonald said it has shortened lead times and allowed the company to ensure products meet local conditions.
IBISWorld senior analyst, Brian Lo, said Daikin's manufacturing strategy proves just how competitive the Australian market has become.
He said other drivers shaping the market include energy efficiency and technical superiority.
“Environmental issues have influenced industry activity for the past five years, particularly energy efficiency,” Lo said.
“It is the companies manufacturing energy efficient units that are able to benefit from the increased environmental awareness and stricter regulatory requirements regarding emissions.”
Moreover, building owners are taking Green Star ratings seriously with Green Star certified space doubling in the past two years, according to the Green Building Council of Australia.
Lo said technology is also proving to be a critical differentiator in a fiercely competitive market, especially with the advent of innovations like Variable Air Volume (VAV) and Variable Refrigerant Technology (VRT).
“IBISWorld research shows that technology will be a crucial differentiator over the next five years,” Lo said. A prime example of this has been the evolution of Daikin's Variable Refrigerant Volume (VRV) technologies which set a new standard in performance.
Now the company is building on this momentum with the release of its new VRV H & R series together with a host of new indoor units which will be introduced to the Australian market later this year.
VRV H is Daikin’s next generation VRV Heat Pump series whilst VRV R, refers to the next VRV Heat Recovery range.
Both VRV H & R will be equipped with VRT Smart controls which deliver improved part-load operations and better comfort for occupants.
A step-up from its predecessor VRT or Variable Refrigerant Temperature controls, the VRT Smart technology now incorporates variable air volume control of the indoor fan coil - integrated with refrigerant temperature control from the condenser - to deliver a system which responds rapidly to indoor load changes.
It is far more effective and efficient than VRT technology on its own.
Daikin's national product manager, Raj Singh, said there are plenty of smarts in the company's new series including innovations in compressor technology that improve part load performance when compared to the previous VRV IV series.
Aside from the Air-Cooled VRV H & R series, Singh said there is also a new water-cooled heat pump series available from 8kW to 16kW suited perfectly for high rise apartment developments.
“The condenser features a tube-in-tube heat exchanger, single phase power supply, a refrigerant cooled inverter module and easy service access from the front of the unit,” he said.
To complement the release of the next generation condensers, Daikin is also releasing a broad range of indoor units to meet the needs of the commercial market.
With the strong growth in high rise apartment construction, Daikin has a range of fan coils to meet the design constraints of such developments, these include a compact bulkhead unit (465mm deep), slimline mid-static ducted unit (245mm high) and single flow cassettes.
“These include a compact bulkhead unit (465mm deep), slimline mid-static ducted unit (245mm high) and include a removable and washable polypropylene return air filter,” he said.
Singh said a new range of VRV single flow cassette are ideal where even the slimline mid-static units can’t fit. These units are 200mm high and 470mm deep, available up to 7.1kW in capacity and include a 3-D airflow function which enables vertical and horizontal auto swing for effective air distribution.
Finally, for the light commercial market Daikin will be transitioning its VRV round flow cassettes into a new and improved series. “For the first time, we will introduce a new 16kW model and provide the entire series in white or black fascia," Singh said.
“Apart from the built-in presence and floor sensors that enable draught free comfort and energy saving operations, the redesigned discharge flaps enable wider throws of up to 3.5m and a new circulation airflow mode ensures wider coverage of the conditioned space for rapid and uniform cooling and heating” he said.
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