Page 6 - Climate Control News - July 2018

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OEMs ramp up investment in battle for regional dominance
Competition is fierce but the APAC region features some of the fastest growing markets in the world including India and China
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).
“IBISWorldresearchshowsthattechnology 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
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$42billiontotheeconomyinthe 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
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