The heating, ventilation, air-conditioning and refrigeration (HVAC-R) sector in Saudi Arabia is poised for solid growth over the next five years with the kingdom's market growing at a CAGR of 11.9 per cent during 2019-2024, said a report by Research And Markets.
The Saudi HVAC-R market is set to hit $7.1 billion by 2024 from $3.7 billion last year, owing to the growing demand from the residential building construction and tourism industries, it stated.
Moreover, the increasing need to reduce food wastage is expected to aid the refrigeration market in Saudi Arabia. To cater the increasing demand for HVAC-R systems, the market players are expanding their product portfolio in the country, it added.
According to the study, key factors such as the increasing demand to reduce energy consumption and extreme climate conditions are likely to drive the Saudi Arabian HVAC-R market.
Additionally, growing urbanization rate in cities is resulting in the development of smart buildings, which require efficient HVAC-R systems, thereby strengthening its demand in Saudi Arabia, it stated.
In terms of end-users, the Saudi market has been categorized into residential, commercial real estate, institutional, power, oil and gas, marine and offshore and others.
Of the above end-users, residential and commercial real estate categories are anticipated to account for more than 50 per cent market share, on account of increasing smart building construction and commercial registrations in different cities of Saudi Arabia, said the report.
Furthermore, the Saudi Arabian HVAC-R market is segmented by product type, namely direct expansion and central air-conditioning, with direct expansion system capturing the largest chunk of the market in 2018.
Due to the factors such as low installation cost, low noise, and low energy consumption, direct expansion system is expected to lead the market during the forecast period, said the report.
The Northern and Central regions are likely to exhibit the fastest growth in the Saudi Arabian market during 2019-2024, on the back of the increasing demand for HVAC-R systems from the growing residential and commercial sectors in areas such as Riyadh and Eastern Region.
However, alarming pollution levels and stringent laws introduced by the government to curb pollution are expected to hinder the market growth in the coming years, it stated.
The Saudi Arabian HVAC-R market is highly competitive and fragmented in nature. Some of the major companies operating in the Saudi market are Trane, Johnson Controls International (Al Salem York), Carrier, LG Shaker, Zamil and Daikin.
These companies, through strategic developments, aim at entering new markets and improve their product offerings in order to consolidate their position in the industry, said the report.
With increasing number of collaborations between regional and global players, the Saudi market is likely to grow steadily during the five-year period, it added.