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Saudi Arabia Chiller Market Overview
Saudi Arabia chiller market is estimated to value $252.0 million in 2018, and is expected to advance at a CAGR of 2.7% during the forecast period of 2019–2024. Rising number of infrastructural projects, and growing demand for chillers from food and beverage industry are the major factors contributing to the growth of the Saudi Arabia chiller market.
Based on type, Saudi Arabia chiller market is segmented into centrifugal, screw, scroll, absorption, and reciprocating chillers. Of these, centrifugal chiller category is expected to grow at a higher CAGR during the forecast period. This can be attributed to its major deployment in for space cooling in large manufacturing plants, oil and gas sector, and commercial spaces such as airports, and metro stations. Furthermore, infrastructure developments worth $500 million and $700 million respectively, on the construction of Hail International Airport and Jazan International Airport, is likely to drive the demand for centrifugal chillers in the coming years.
Based on screw chiller, the market is further sub-divided into water-cooled and air-cooled screw chillers. Of these, water-cooled screw chillers estimated to hold the largest revenue share in 2018. This can be attributed to its greater deployment in high rise commercial and office buildings, hotels, and hospitals where multi-floor space cooling is needed. Furthermore, water cooled screw chiller category is projected to register healthy growth during the forecast period, predominantly owing to growing infrastructure developments in the country.
Based on region, Saudi Arabia chiller market is categorised into western, central, eastern, and southern. Out of these, the chiller market in Western Saudi Arabia is projected to record the fastest growth rate in the forecast period. This can be attributed to the presence of cities such as Jeddah, Makkah, Madinah, and Tabuk region, where major infrastructure development projects have been exhibited. For instance, some of the infrastructural projects includes, development of $500 billion worth NEOM city at Tabuk region, $8 billion Red Sea project, and $4.8 billion Jeddah downtown residential complex.
Saudi Arabia Chiller Market Dynamics
The key trend observed in the Saudi Arabia chiller market is the increasing adoption of magnetic bearing chillers. The centrifugal chillers use oil as a lubricant for bearings, which causes the machine to run less efficiently; due to wear and friction caused by oil. However, the use of magnetic bearings in the chillers allows compressors to operate without using oil for lubrication, which reduces energy losses due to friction. The magnetic bearing chillers are 40% more efficient and reliable than traditional centrifugal chillers. Moreover, magnetic bearing chiller compressors are lighter and quieter than traditional centrifugal chillers. Hence, on account of these features, demand for these chiller types is increasing in the country.
Increasing number of infrastructural projects is supporting the growth of Saudi Arabia chiller market. With increasing government initiatives toward the development of infrastructure projects, demand for cooling systems, particularly chillers, at metro stations, supermarkets and buildings, is increasing in the country. For instance, railway projects like Makkah Metro Rail, Madinah High-Speed Railway, Eastern Province Municipality-Dammam Metro, and Riyadh Dammam High-Speed Rail are expected to commence in the coming years. As chillers are increasingly used in metro stations, railways, their demand from these application areas is expected to rise in the country, in the coming years.
Growing awareness of energy efficient chillers is poised to be a major opportunity for the growth of players operating in the Saudi Arabia chiller market. Energy efficient chillers reduces greenhouse gas emissions, and other pollutants. Also, a number of energy efficiency initiatives are being taken by the government. For instance, in 2017, Saudi Arabia’s public investment fund (PIF) established a $506.6 million unit to improve energy efficiency across the Kingdom in partnership with private sector. Hence, with increasing government initiatives toward improving energy efficiency in the country, the market for energy efficient chillers is expected to create opportunities for market players.
Saudi Arabia Chiller Market Competitive Landscape
In the recent past, players in the Saudi Arabia chiller market particularly focused on product launches and partnerships to expand their customer base. For instance, in March 2017, Ingersoll-Rand plc (Trane), air conditioner manufacturer, signed a joint venture manufacturing agreement with Dallah Trading Company, a Jeddah based distributor, for the development of a manufacturing facility in Saudi Arabia to serve HVAC customers in the MEA region.
Some of the key players operating in the Saudi Arabia chiller market include Johnson Controls International plc, Ingersoll-Rand plc, United Technologies Corporation, Daikin Industries Ltd., S.K.M Air Conditioning LLC, Petra Engineering Industries Co., Zamil Air Conditioners, Gree Electric Appliances, Inc. of Zhuhai, Mitsubishi Electric Corporation, Thermax Limited, and Danfoss A/S.