Air conditioning market in GCC still thriving

Dubai: The air conditioning market in the GCC region is alive and kicking, despite economic worries, industry experts say.

Right now there is about 1.8 million tonnes of air conditioning from district cooling in the region.

"We expect another 6.5 million tonnes of air conditioning from district cooling between now and 2015," Aftab Khan, chief executive of Carrier, said.

Carrier had previously been a player in the district cooling market 10 years ago, but withdrew due to the small size of the market.

Now it is a good time to be reentering the market.

The 1.8 million tonnes of district cooling currently in the region represents a huge pool of $360 million (Dh1.32 billion) for Carrier to jump into.

"The air conditioning market in the Middle East is very robust. For us, the opportunity for growth is great for the district cooling segment of the business," Khan said.

In the future, with the extra 6.5 million tonnes due to hit, this market will shoot up to $1.2 billion.

While their order books are good for the first six months of 2009, the second half will be different, as the impact of credit crunch is seen.

Key areas

Carrier's overall order books amount to more than $2.2 billion in this region which is about 25 per cent share of the regional market. Carrier's global sales hit around $14 billion a year.

"There are key areas in the market, like sustainable construction, energy management, so we're looking at the Middle East market to see how to enter," Khan said.

The air conditioning business, like the oil business in this region, will be the engine for growth, Khan added.

"If you look at the market, earlier the size of construction used to be one tower of 20-storeys, now you're talking about mega-cities and townships. The scope of projects now are so huge so district cooling is gaining, and has gained, momentum," Khan said.

The Middle East contributes around 25 to 30 per cent of total profits of Europe, Middle East and Africa region.