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SAMPLE Sample country: Kuwait Report: Room and Packaged Air Conditioning From study: Middle East and India Market for Air Conditioning Edition: 2000

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ROOM AND PACKAGED AIR CONDITIONING KUWAIT

Report 14937/8 October 2000

Compiled by: Clive Hogan Andrew Giles

A multi-client study

No. of pages: i - vii of preamble 43 of text Appendices A - F BSRIA

Room and Packaged Air Conditioning Executive Summary

BSRIA Report 14937/8 i

EXECUTIVE SUMMARY

The Kuwaiti market for packaged air conditioning was valued at US$ 90 million in 1999 and US$ 87 million in 2000. Because of renewed strength in the construction sector the market is expected to experience strong growth and be worth US$ 108 million by 2004.

Figure S 1 Kuwait packaged market, % by value, 2000

Window units22%

Mobile units1%

Roof tops32%

Minisplits28%

Other large4%

Close control1%

US-ducted12%

Source: BSRIA/ACNielsen AMER

75% of the packaged units sold are imported. The two local producers RIC (Coolex)

and Al Hassawi (Topcool) are believed to have an annual output of 18,000 window units and 10,000 minisplit units. Approximately 6% of production is exported.

Most of the market is supplied by firms such as :

Hamad Abdulla Al Eisa Craft, Gibson, Trane Al Yousufi National, York Union Trading Co. General Supplying Store Sanyo Kuwait American Air Conditioning Co. Carrier Y.A. Alghanin Hitachi Awal Al Kuwait (Awalco) Pearl Kuwait Japanese Air Conditioning Co. Daikin Al Babtain / Electronic Appliances LG Al Andalus Trading Co. Samsung Sharja Kuwait Mnfg. SKM Al Hassawi Topcool RIC Coolex

Room and Packaged Air Conditioning Executive Summary

BSRIA Report 14937/8 ii

Windows/Through the wall account for 22% of market value. Sales are put at US$ 22 million and 56,400 outdoor units for 1999. Sales volume dropped by some 6% on 1998. 35% are window (rather than wall) units, around 5% are sold with a heat pump and 30% of units sold have a capacity greater than 5kW (1.4 tons). The demand for low end products, such as window units, is lower than pre-war levels because of the drop in size of the less affluent expatriate population. Wealthy and middle income Kuwaitis, however, will continue to replace or maintain residential DX systems and mini-split systems for their houses.

Because of the extreme temperatures in the region the market for low-capacity

mobile units is not significant. Minisplit (ductless split) systems account for 28% of market value. Sales are put at

US$ 24 million and 31,500 outdoor units for 1999. Sales volume grew by 5% on 1998. All splits systems are of the single-split type with about 10% of outdoor units being sold with a heat pump. 50% of outdoor units are in the 3.5-7kW category and 40% of indoor units are wall mounted. This segment will experience higher levels of growth (+10%) over the next few years.

Sales of rooftop units were estimated to be worth US$ 28 million in 1999. 80% of

roof tops have a cooling capacity greater than 5 tons (17.85 kW) and 13% are sold with a heat pump.

Sales of US-style ducted splits were estimated to be worth US$ 7 million in 1999.

15% have a cooling capacity less than 17.85 kW (5 tons) and 15% are sold with a heat pump.

'Other large packaged' is a category of system that includes special one-off

machines. This segment was worth US$ 3 million in 1999. This segments market share is expected to remain constant.

Close control applications are systems designed to meet process or equipment

needs. They are specified in telecomms and computer room situations. The close control market was worth almost US$ 1 million in 1999.

Room and Packaged Air Conditioning Contents

BSRIA Report 14937/8 iii

CONTENTS

1. INTRODUCTION..............................................................................................................1 1.1 METHODOLOGY..................................................................................................1

2. MARKET SIZE, STRUCTURE AND SEGMENTATION ..............................................3 2.1 MARKET OVERVIEW ..........................................................................................3

2.1.1 Market size ......................................................................................................3 2.1.2 Construction activity......................................................................................5 2.1.3 Climate and population...................................................................................5 2.1.4 Opportunities ..................................................................................................5

2.2 WINDOW/THROUGH-WALL UNITS................................................................8 2.3 MOBILE (PORTABLE) UNITS..........................................................................13 2.4 MINI-SPLIT SYSTEMS.......................................................................................16

2.4.1 Conventional split systems ..........................................................................18 2.5 ROOFTOPS ..........................................................................................................22

2.5.1 Villa market ...................................................................................................22 2.5.2 Market by size and type ................................................................................23

2.6 US-STYLE DUCTED (AND LARGE INDUSTRIAL SPLITS).........................25 2.7 OTHER INDOOR PACKAGED..........................................................................27 2.8 CLOSE CONTROL EQUIPMENT .....................................................................30 2.9 REFRIGERANTS .................................................................................................31 2.10 COMPRESSORS..................................................................................................32

3. MAJOR COMPANIES....................................................................................................33 3.1 SMALL SYSTEMS...............................................................................................33 3.2 LARGE PACKAGED UNITS ..............................................................................35 3.3 PRODUCT RANGE OF LEADING SUPPLIERS .............................................37

4. SALES TRENDS AND FUTURE FORECAST .............................................................40 4.1 HISTORICAL SALES TREND............................................................................40 4.2 FUTURE SALES FORECAST.............................................................................41

5. PRODUCERS, IMPORTERS AND EXPORTERS.......................................................45 5.1 BALANCE OF TRADE........................................................................................45 5.2 LOCAL PRODUCERS ........................................................................................45

5.2.1 Importers .......................................................................................................45 5.2.2 Re-exportation and trading activities ..........................................................45

6. DISTRIBUTION ..............................................................................................................46 6.1 GENERAL ............................................................................................................46

7. PRICES, DISCOUNTS, MARGINS AND PROFITABILITY.......................................47 7.1 DISCOUNTS.........................................................................................................47 7.2 PROFITABILITY..................................................................................................47 7.3 CREDIT.................................................................................................................47

Room and Packaged Air Conditioning Contents

BSRIA Report 14937/8 iv

8. END USER SECTOR AND APPLICATIONS ..............................................................48 8.1 END USER SECTORS.........................................................................................48 8.2 APPLICATIONS...................................................................................................48

9. MAIN SPECIFIERS ........................................................................................................49 9.1 SPECIFICATION PROCESS...............................................................................49

10. MARKET ENTRY ......................................................................................................50 10.1 MARKET ACCESS ..............................................................................................50 10.2 RECOMMENDATIONS FOR MARKET ENTRY.............................................50

LIST OF APPENDICES

A Building costs and construction forecasts B Kuwait Economic profile C Average monthly temperatures, major cities D Country map E Notes on Kuwait construction sector [British Embassy] F Product definitions and conversion (kW/BTUs/Tons)

Room and Packaged Air Conditioning List of Tables and Figures

BSRIA Report 14937/8 v

LIST OF TABLES

Table 2.1 Packaged air conditioning market, 1998 ............................................................. 3 Table 2.2 Packaged air conditioning market, 1999 ............................................................. 3 Table 2.3 Packaged air conditioning market, 2000E........................................................... 4 Table 2.4 Window/through-wall, market size, 1998-2000E .............................................. 8 Table 2.5 Window/through-wall, by type of cooling, volume, 1998 ............................... 10 Table 2.6 Window/through-wall, by type of cooling, value (US$ million), 1998 .......... 10 Table 2.7 Window/through-wall, by type of cooling, volume, 1999 ............................... 10 Table 2.8 Window/through-wall, by type of cooling, value (US$ million), 1999 .......... 10 Table 2.9 Window/through-wall, by type of cooling, volume, 2000E............................. 11 Table 2.10 Window/through-wall, by type of cooling, value (US$ million), 2000E ..... 11 Table 2.11 Window/through-wall, by size, volume, 1998 ................................................ 11 Table 2.12 Window/through-wall, by size, value (US$ million), 1998 ........................... 12 Table 2.13 Window/through-wall, by size, volume, 1999 ................................................ 12 Table 2.14 Window/through-wall, by size, value (US$ million), 1999 ........................... 12 Table 2.15 Window/through-wall, by size, volume, 2000E.............................................. 12 Table 2.16 Window/through-wall, by size, value (US$ million), 2000E......................... 13 Table 2.17 Mobiles, market size, 1998-2000E................................................................. 14 Table 2.18 Mobiles, by type of cooling, volume, 1999.................................................... 14 Table 2.19 Mobiles, by type of cooling, value (US$ million), 1999............................... 14 Table 2.20 Mobiles, by type of cooling, volume, 2000E ................................................. 14 Table 2.21 Mobiles, by type of cooling, value (US$ million), 2000E............................ 14 Table 2.22 Mobiles, by size, volume, 1999 ....................................................................... 15 Table 2.23 Mobiles, by size, value (US$ million), 1999.................................................. 15 Table 2.24 Mobiles, by size, volume, 2000E..................................................................... 15 Table 2.25 Mobiles, by size, value (US$ million), 2000E ............................................... 15 Table 2.26 Mini-splits, market size, 1998 ......................................................................... 16 Table 2.27 Mini-splits, market size, 1999 ......................................................................... 16 Table 2.28 Mini-splits, market size, 2000E....................................................................... 17 Table 2.29 Outdoor units by type and mode, volume, 1998 ............................................. 17 Table 2.30 Outdoor units by type and mode, volume, 1999 ............................................. 17 Table 2.31 Outdoor units by type and mode, volume, 2000E........................................... 17 Table 2.32 Conventional outdoor units, by size and mode, volume, 1998...................... 18 Table 2.33 Conventional outdoor units, by size and mode, volume, 1999...................... 18 Table 2.34 Conventional outdoor units, by size and mode, volume, 2000E ................... 19 Table 2.35 Conventional indoor units, by size and mounting position, volume, 1998... 19 Table 2.36 Conventional indoor units, by size and mounting position, volume, 1999... 21 Table 2.37 Conventional indoor units, by size and mounting position, volume,

2000E ................................................................................................................... 21 Table 2.38 Conventional outdoor units, by RAC/PAC, volume, 1998 ............................ 21 Table 2.39 Conventional outdoor units, by RAC/PAC, volume, 1999 ............................ 21 Table 2.40 Conventional outdoor units, by RAC/PAC, volume, 2000E.......................... 22 Table 2.41 Rooftop market, 1998-2000E.......................................................................... 22 Table 2.42 Rooftop and ducted splits residential size products analysed by end user

sector .................................................................................................................... 23 Table 2.43 Rooftop sales analysed by size, 1998-2000E................................................. 23


BSRIA Report 14937/8 vi

Table 2.44 Sales of rooftops by mode, volume, 1998 ...................................................... 23 Table 2.45 Sales of rooftops by mode, volume, 1999 ...................................................... 24 Table 2.46 Sales of rooftops by mode, volume, 2000E.................................................... 24 Table 2.47 US-style ducted split market, 1998-2000....................................................... 25 Table 2.48 US-style ducted splits, by size, 1998 .............................................................. 25 Table 2.49 US-style ducted splits, by size, 1999 .............................................................. 25 Table 2.50 US-style ducted splits, by size, 2000E............................................................ 26 Table 2.51 US-style ducted splits, by mode, 1998............................................................ 26 Table 2.52 US-style ducted splits, by mode, 1999............................................................ 26 Table 2.53 US-style ducted splits, by mode, 2000E......................................................... 26 Table 2.54 Other indoor packaged market, 1998-2000E ................................................. 27 Table 2.55 Other indoor packaged, by size, 1998 ............................................................. 28 Table 2.56 Other indoor packaged, by size, 1999 ............................................................. 28 Table 2.57 Other indoor packaged, by size, 2000E........................................................... 28 Table 2.58 Other large packaged, by mode, 1998 ............................................................. 29 Table 2.59 Other large packaged, by mode, 1999 ............................................................. 29 Table 2.60 Other large packaged, by mode, 2000 ............................................................. 29 Table 2.61 Other large packaged, by cooling, 1998.......................................................... 29 Table 2.62 Other large packaged, by cooling, 1999.......................................................... 30 Table 2.63 Other large packaged, by cooling, 2000.......................................................... 30 Table 2.64 Close control market, 1998-2000E ................................................................ 30 Table 2.65 Close control market analysed by application, by value, 1998-2000E ........ 30 Table 2.66 Close control, by size and type of cooling, volume, 1998 ............................ 31 Table 2.67 Close control, by size and type of cooling, volume, 1999 ............................ 31 Table 2.68 Close control, by size and type of cooling, volume, 2000 ............................ 31 Table 2.69 Refrigerants used, by product, % sales by volume, 1999 .............................. 32 Table 2.70 Compressors used, by product, % sales by volume, 1998............................. 32 Table 3.1 Market leaders for window and mobile products, 1999................................... 33 Table 3.2 Market leaders for ductless split systems, 1999.............................................. 34 Table 3.3 Market leaders for large packaged air conditioning equipment, 1999 ........... 35 Table 3.4 Market leaders for close control ....................................................................... 35 Table 3.5 Product range of major suppliers ....................................................................... 37 Table 3.6 Manufacturing information of major suppliers................................................. 39 Table 4.1 Historical trend for packaged air conditioning, volume (units), 1996-

2000E ................................................................................................................... 40 Table 4.2 Historical trend for packaged air conditioning, value at current prices

(Kuwaiti Dinar million), 1996-2000E .............................................................. 41 Table 4.3 Historical trend for packaged air conditioning, value at current prices

(US$ million), 1996-2000E............................................................................... 41 Table 4.4 Forecast for packaged air conditioning, volume (units), 2000-2004 ............. 42 Table 4.5 Forecast for packaged air conditioning, value (Kuwaiti Dinar million),

2000-2004 ........................................................................................................... 43 Table 4.6 Forecast for packaged air conditioning, value (US$ million), 2000-2004 .... 43 Table 5.1 Balance of trade, packaged equipment, 1999 estimates................................... 45 Table 6.1 Distribution of packaged equipment, % by value, 1999................................... 46 Table 7.1 Prices typically paid for packaged equipment, 1999........................................ 47 Table 8.1 Building sectors for packaged equipment, % by value, 1999 .......................... 48


BSRIA Report 14937/8 vii

Table 8.2 Applications for packaged air conditioning, % by value, 1999 ....................... 48 Table 9.1 Specification of packaged equipment, % value, 1999...................................... 49 Table 10.1 Methods of entering Kuwaiti packaged market .............................................. 50


BSRIA Report 14937/8 viii

LIST OF FIGURES

Figure 2.1 Packaged air conditioning, value and volume, 2000E........................................4 Figure 2.2 Window/through the wall analysed by size and mode, volume, 2000E..........13 Figure 2.3 Minisplits analysed by size and mode, 2000E..................................................19 Figure 2.4 Rooftops analysed by size and mode, 2000E...................................................24 Figure 2.5 US-style ducted splits analysed by size and mode, 2000E..............................27 Figure 4.1 Kuwait packaged market value (US$ million), current prices, 1996-2000E40 Figure 4.2 Kuwait packaged market, value (US$ million), 2000-2004E (2000 prices)42 Figure 4.3 Trend for packaged air conditioning, value (US$ million), 1996-2004 ........44

Room and Packaged Air Conditioning Kuwait

BSRIA Report 14937/8 1

1. INTRODUCTION

This report is the result of BSRIAs first in-depth study on the key Middle East and Indian markets for air conditioning . The 6 countries covered are: 1. Saudi Arabia 2. Kuwait 3. United Arab Emirates 4. Egypt 5. Iran 6. India

In terms of product groups, these are covered in two separate volumes, as follows, for each country:

Packaged Air Conditioning Central Plant Air Conditioning Company Profiles Windows/through the wall Moveables Single splits Multi splits VRF US-Style ducted splits Roof tops Indoor packaged Close control

Chillers Air handling units Fan coils Chilled water cassettes VAVs Constant volume units Induction units

Company profiles for each country, including address listings

Definitions of key product groups are available in Appendix E. Data in the reports are supplied for 1996, 1997, 1998, 1999 and 2000 (estimates), with forecasts to 2004. However, please note that due to the volume of data, the main part of the report will concentrate around 1998-2000 data.

1.1 METHODOLOGY

The research is based on a mixture of methodologies: A network of local research partners are commissioned to write draft reports. Data obtained is verified by BSRIA. Pan-regional cross-checks are undertaken by BSRIAs consultants. At local level, research is obtained through a range of sources: statistical collection desk research face to face interviews telephone/fax interviews The research is planned and controlled from BSRIA. This combines the advantage of using local experts, which are long standing partners, as well as offering BSRIA expertise in the air conditioning field and the advantage of supplying a common comparable set of data across the region. Overall some



300 interviews have been undertaken with key suppliers, installers, industry bodies and specifiers.



2. MARKET SIZE, STRUCTURE AND SEGMENTATION

2.1 MARKET OVERVIEW

2.1.1 Market size

110,000 packaged units were sold in 1998, falling to 108,000 units in 1999 and 106,000 units in the year 2000.

Table 2.1 Packaged air conditioning market, 1998

Market value Volume Average

Kuwaiti Dinar

million US$

million Outdoor units market

selling price

Window/through-wall 7.2 24.0 60,000 $400 Mobile(portable) 0.3 1.1 1,000 $1,100 Minisplits(ductless splits) 7.2 24.0 30,000 $800 Rooftops 8.6 28.5 15,000 $1,900 US-style ducted splits 3.2 10.7 3,000 $3,581 Other large packaged 0.9 3.2 500 $6,300 Close control 0.3 1.0 150 $6,700

Total market 27.7 92.4 109,650 - Source: BSRIA/ACNielsen AMER Notes: 1. Market size includes indoor and outdoor values

2: Average price is per outdoor unit 3. US$1=0.30 Kuwaiti Dinar

Over the past five years, total packaged unit volumes have experienced a decline of around 2%. Window unit sales declined particularly over this period, whereas those of other packaged units have shown an upward trend. Because of increased competition, prices of various types of packaged units have declined. This has caused lower growth in sales revenues than in sales volumes.

Table 2.2 Packaged air conditioning market, 1999


Kuwaiti Dinar

million US$


selling price

Window/through-wall 6.5 21.7 56,400 $384 Mobile(portable) 0.3 1.1 1,000 $1,056 Minisplits(ductless splits) 7.3 24.2 31,500 $768 Roof tops 8.4 27.9 15,300 $1,824 US-style ducted splits 3.2 10.7 3,060 $3,496 Other large packaged 0.9 3.1 510 $6,048 Close control 0.3 1.0 155 $6,432


2: Average price is per outdoor unit 3. US$1=0.30 Dinar



Table 2.3 Packaged air conditioning market, 2000E


Kuwaiti Dinar

million US$


selling price Window/through-wall 5.9 19.5 53,016 $369 Mobile(portable) 0.3 1.0 1,000 $1,014 Minisplits(ductless splits) 7.3 24.4 33,075 $737 Roof tops 8.2 27.3 15,606 $1,751 US-style ducted splits 3.2 10.6 3,121 $3,396 Other large packaged 0.9 3.0 520 $5,806 Close control 0.3 1.0 160 $6,175


2: Average price is per outdoor unit 3. US$1=0.30 Dinar

Figure 2.1 Packaged air conditioning, value and volume, 2000E

By value By volume

Total: US$ 86.9 million Total: 106,499 units


The early 90s (after the Gulf war) were very good years for the construction industry in Kuwait, and therefore for the air conditioning industry as well. This trend continued until the mid-90s, after which growth slowed, primarily because of the completion of most new / large projects. 1995-96 saw some resurgence in the industry, which experts attribute to the replacement market cycle. 1997 to 1999 were however not as good:

fewer expatriates entered the country in the past few years prices of oil declined significantly in 1997 and 1998 because of over-

supply.

Mobiles $1.0 million

Rooftops $27.3 million

Window/ through the

wall $19.5 million

Minisplits $24.4 million

US-style ducted splits $10.6 million

Other large packaged

$3.0 million

Close control $1.0 million

Mobiles 1,000 units

Rooftops 15,506 units

Minisplits 33,075 units

Close control 160 units

US-style ducted splits 3,121 units

Other large packaged 520 units

Window/ through the

wall 53,016 units



2.1.2 Construction activity

Due to expansion in residential and construction projects the value of the packaged market is expected to grow by 6% per annum, over the next few years. Several major construction and industrial projects are underway including the building of 10,000 residential dwellings. Volumes are expected to pass 120,000 units by 2004, and revenues should reach the US$ 100 million mark by this time. The past few years have witnessed more construction activity in the residential sector than in the commercial sector, and this trend is expected to continue; there are indications that over the next 1-2 years, the National Housing Authority is planning to allot a large number of new plots of land for residential construction. The estimates for the number of plots range from 10,000 to 50,000. Locals as well as expatriates have started moving back to Kuwait now, post the Gulf War and the rebuilding period. 2.1.3 Climate and population

The land is semi-arid with annual rainfall of about 4 - 5 inches in winter months, November to February. Average daytime temperatures often exceed 125F during the summer. These high temperatures during most of the year along with intense seasonal humidity and frequent dust storms make Kuwait an excellent market for air conditioning and refrigeration equipment. The total population is approximately 2.14 million; 35.4% (an approx. 760,000) are native Kuwaitis. Kuwait's much larger expatriate population includes non-Gulf Arabs, East and South Asians. 2.1.4 Opportunities

A selection of recent major projects illustrate the types of requirements for major air conditioning systems: Residential The National Housing Authority is responsible for providing houses for Kuwaiti citizens on a long instalment basis. About 11,000 houses are reported underway which will be ready in two years. Locations include Al-Jahra, Doha, and Jaleeb Al- Shuyoukh. In addition, 603 houses (KD 15.698 million) will be built in Al-Rabia South, 242 houses (11.637 KD) will be built in Suleibikhat, and another 440 units will be built in Al-Wafra area.



Commercial The Municipality of Kuwait now allows real estate investors to construct high rise buildings. Maximum height is 30 floors in the centre of the city and 20 floors outside the city. This will create more opportunities for U.S. air conditioning companies in Kuwait, as these buildings normally use larger packaged air conditioning and central plant equipment. The Ministry of Public Health has issued 14 licences for Kuwaitis to establish private hospitals in the country. In addition, the Kuwait Oil Company (KOC) is planning to establish a new 225 bed hospital in the Ahmedi area. Also the Five Year Plan includes the construction of a new psychiatric hospital, a new chest diseases hospital; several specialist centres in the Al-Ferdous Area and three dental centre in Kuwaiti City, Jahra and Al-Farwaniya. Other air conditioning sales projects include: The construction of the Commercial Tower on Fahad Al-Salem Street. Reconstruction of the Celestial Sphere. Continuous maintenance of all air conditioning equipment in Kuwaiti

government schools, which often requires a great deal of spare parts. Ministry of Defence facilities including military bases often require

electrical and mechanical works equipment and maintenance services. General maintenance services of the electrical and mechanical installations in

all government hospitals and clinics which run about USD 28 million annually.

The Ministry of the Interior's main complex project, still in the design stage, will require large scale installation of air conditioning systems.

Other potential areas for air conditioning sales include: Al-Jahra, one of Kuwait's heavily populated areas. Thousands of housing units

were built during the past ten years largely without commercial facilities such as shopping centres, mosques, and medical offices. 10 to 15 commercial complexes are expected to be built, subject to security stability on the Iraqi border. These will require extensive use of air conditioning equipment.

Jaleeb al-Shuyoukh; Sabah Al-Nasser and Um Al-Heman residential areas also

require service facilities such as shopping centres, mosques and medical offices.

Government Major government consumers of air conditioning equipment are: The National Housing Welfare Authority (NHA) which builds about 2,000

single housing units every year. Each house usually requires an air



conditioning system which ranges between 20 to 45 tons, compared with, for example, single houses in the USA which require 3 to 5 tons. Some of these houses also use split and window units.



There are thousands of Kuwaiti citizens on the NHA waiting list for government houses. Marriage is the basic criterion for eligibility to receive a government house. Because it takes an average of 11 years to actually receive a home or a plot of land, the average age of a recipient is between 35 to 45 (the average marriage age for a Kuwaiti man is 27). This means that the recipients are generally well established in their jobs, and with government financial assistance more funds are available for individual upkeep of the house and expenditure on central air conditioning systems and/or split units. NHA is now preparing sites to build two cities which will accommodate 250,000 people.

The Ministry of Education requires all types of air conditioning equipment

for schools, Kuwait University and all public educational institutes.

The Ministry of Electricity and Water requires all types of air conditioning systems including industrial equipment and continuous maintenance and services.

The Ministry of Public Works is responsible for public facilities such as

mosques and public institutions with high demand for air conditioning systems.

Oil companies, such as Kuwait Oil Company (KOC) and Kuwait National

Petroleum Company (KNPC), require all types of air conditioning equipment, including chillers.

2.2 WINDOW/THROUGH-WALL UNITS

Windows/through the wall account for 23% of market value. Sales are put at US$ 22 million and 56,400 outdoor units for 1999. Sales volumes dropped by some 6% on 1998. 30% are window (rather than wall) units, around 50% are sold with a heat pump and 60% of units sold have a capacity greater than 5kW (1.4 Tons). The demand for low end products, such as window units, is lower than pre-war levels because of the drop in size of the less affluent expatriate population. One interesting trend observed in window units is the relatively large number of expatriates (Arabs, Asians) purchasing new window units and carrying them back to their home countries. This has offset the declining sales of window units to some extent. Wealthy and middle income Kuwaitis, however, will continue to replace or maintain residential DX systems and mini-split systems for their houses.

Table 2.4 Window/through-wall, market size, 1998-2000E




Kuwaiti Dinar

million US$

million no. units market

selling price 1998 7.2 24.0 60,000 $400 1999 6.5 21.7 56,400 $384 2000E 5.9 19.5 53,016 $369




Since a large proportion of all construction activity in Kuwait took place after the Gulf War, the builders / architects, etc. at that time opted for the newer technology splits, roof top and other large packaged units. This was quite unlike UAE market for example, where window units is still a major market. The volume sales of window units have been declining at almost 5% per annum; they are being replaced by splits, packaged roof top units, US-style ducted splits and central plant solutions.

Table 2.5 Window/through-wall, by type of cooling, volume, 1998

Window Wall Total units % units % units % Cooling only 19,740 94% 37,050 95% 56,790 95% Heat pump 1,260 6% 1,950 5% 3,210 5% Heating element 0 0% 0 0% 0 0% Total 21,000 100% 39,000 100% 60,000 100% Source: BSRIA/ACNielsen AMER

Table 2.6 Window/through-wall, by type of cooling, value (US$ million), 1998

Window Wall Total $US million $US % $US % $US % Cooling only 7.9 94% 14.8 95% 22.7 95% Heat pump 0.5 6% 0.8 5% 1.3 5% Heating element 0.0 0% 0.0 0% 0.0 0% Total 8.4 100% 15.6 100% 24.0 100% Source: BSRIA/ACNielsen AMER

Table 2.7 Window/through-wall, by type of cooling, volume, 1999


Table 2.8 Window/through-wall, by type of cooling, value (US$ million), 1999




Table 2.9 Window/through-wall, by type of cooling, volume, 2000E


Table 2.10 Window/through-wall, by type of cooling, value (US$ million), 2000E


Because climatic conditions in Kuwait are desert-like, with almost 8-9 months of high temperatures, cooling is the largely the only cycle that is really required for air-conditioning purposes. The above proportions are expected to remain relatively stable. Over the next five years, the trend towards splits, other packaged units and central plant equipment is expected to continue.

By 2000, window unit sales are expected to fall to 25,000 units. The key importers of window units in Kuwait are Hamad Abdulla Al Eisa, Al Yousufi, Union Trading Co., Supplying Store and Kuwait American Air-conditioning Co.

The most popular window unit capacity was 3.5-5.0 kW, accounting for more than 60% of this segment; the larger sizes accounted for an additional one-third of the segment.

Table 2.11 Window/through-wall, by size, volume, 1998

Window Wall Total units % units % units % 5 kW 6,300 30% 11,700 30% 18,000 30% Total 21,000 100% 39,000 100% 60,000 100% Source: BSRIA/ACNielsen AMER



Table 2.12 Window/through-wall, by size, value (US$ million), 1998

Window Wall Total $US million $US % $US % $US % 5 kW 2.6 31% 4.8 31% 7.4 31% Total 8.4 100% 15.6 100% 24.0 100% Source: BSRIA/ACNielsen AMER Note: most suppliers sell the 2 ton units at prices which are lower than the 1.5 ton units, even lower than the

1 ton units, at times. This is to sell higher volumes of the 2 ton units.

Table 2.13 Window/through-wall, by size, volume, 1999

Window Wall Total units % units % units %

5 kW 5,922 30% 10,998 30% 16,920 30% Total 19,740 100% 36,660 100% 56,400 100% Source: BSRIA/ACNielsen AMER

Table 2.14 Window/through-wall, by size, value (US$ million), 1999

Window Wall Total $US million $US % $US % $US % 5 kW 2.4 31% 4.3 31% 6.7 31% Total 7.6 100% 14.1 100% 21.7 100% Source: BSRIA/ACNielsen AMER Note: Most suppliers sell the 2-ton units at prices which are lower than the 1.5 ton units, even lower than

the 1 ton units, at times. This is to sell higher volumes of the 2 ton units.

Table 2.15 Window/through-wall, by size, volume, 2000E

Window Wall Total units % units % units %

5 kW 5,567 30% 10,338 30% 15,905 30% Total 18,556 100% 34,460 100% 53,016 100% Source: BSRIA/ACNielsen AMER



Table 2.16 Window/through-wall, by size, value (US$ million), 2000E

Window Wall Total $US million $US % $US % $US % 5 kW 2.1 31% 3.9 31% 6.0 31% Total 6.8 100% 12.7 100% 19.5 100% Source: BSRIA/ACNielsen AMER Note: most suppliers sell the 2-ton units at prices which are lower than the 1.5-ton units, even lower than

the 1-ton units, at times. This is to sell higher volumes of the 2-ton units.

Figure 2.2 Window/through the wall analysed by size and mode, volume, 2000E

By size By mode

Total: 53,016 units Source: BSRIA/ACNielsen AMER

Given that there is an overall shift in the air-conditioning market towards larger capacity units, within the window unit segment, it is expected that the market will move towards the larger sizes. This means that the sales of less than 5 kW units will decline over time.

2.3 MOBILE (PORTABLE) UNITS

Because of the extreme temperatures in Kuwait the market for mobiles (portables) is small, accounting for 1% of market value at around 1,000 units. The size of the market is expected to remain constant. As with window and fixed-split units, price levels have been eroded by increased competition.

Under 3.5 kW 5,302 units

3.5 - 5.0 kW 31,810 units

Over 5 kW 15,905 units

Cooling only 50,180 units

Heat pump 2,836 units



Table 2.17 Mobiles, market size, 1998-2000E

Market value Volume AverageKuwaiti Dinar

US$million

no. unitsmarket

selling price1998 0.3 1.1 1,000 $1,100 1999 0.3 1.1 1,000 $1,056 2000E 0.3 1.0 1,000 $1,014


Table 2.18 Mobiles, by type of cooling, volume, 1999

Self-contained Split Total units % units % units % Cooling only 900 100% 100 100% 1,000 100% Heat pump 0 0% 0 0% 0 0% Heating element 0 0% 0 0% 0 0% Total 900 100% 100 100% 1,000 100% Source: BSRIA/ACNielsen AMER

Table 2.19 Mobiles, by type of cooling, value (US$ million), 1999

Self-contained Split Total $US million $US % $US % $US % Cooling only 1.0 100% 0.1 100% 1.1 100% Heat pump 0.0 0% 0.0 0% 0.0 0% Heating element 0.0 0% 0.0 0% 0.0 0% Total 1.0 100% 0.1 100% 1.1 100% Source: BSRIA/ACNielsen AMER

Table 2.20 Mobiles, by type of cooling, volume, 2000E

Self-contained Split Total units % units % units % Cooling only 900 100% 100 100% 1,000 100% Heat pump 0 0% 0 0% 0 0% Heating element 0 0% 0 0% 0 0% Total 900 100% 100 100% 1,000 100% Source: BSRIA/ACNielsen AMER

Table 2.21 Mobiles, by type of cooling, value (US$ million), 2000E

Self-contained Split Total $US million $US % $US % $US % Cooling only 0.9 100% 0.1 100% 1.0 100% Heat pump 0.0 0% 0.0 0% 0.0 0% Heating element 0.0 0% 0.0 0% 0.0 0% Total 0.9 100% 0.1 100% 1.0 100% Source: BSRIA/ACNielsen AMER



The main players in this small segment are Union Trading Co. (General), Al Yousufi (York) and Supplying Store (Sanyo). The most popular size in the mobile unit segment are below 3.5 kW. Once again, similar to window units, one would typically find mobile units only with the cooling cycle, and no heating element.

The forecast for the next five years is expected to be similar to follow the pattern shown over the previous five years: this sector will grow both in volume and value however, its share of the packaged unit market will remain constant. A maximum CAGR of 2-3% is expected over the next five years for this sector.

Table 2.22 Mobiles, by size, volume, 1999

Self-contained Split Total units % units % units %

5 kW 0 0% 0 0% 0 0% Total 900 100% 100 100% 1,000 100% Source: BSRIA/ACNielsen AMER

Table 2.23 Mobiles, by size, value (US$ million), 1999

Self-contained Split Total $US million $US % $US % $US % 5 kW 0.0 0% 0.0 0% 0.0 0% Total 1.0 100% 0.1 100% 1.1 100% Source: BSRIA/ACNielsen AMER

Table 2.24 Mobiles, by size, volume, 2000E

Self-contained Split Total units % units % units %

5 kW 0 0% 0 0% 0 0% Total 900 100% 100 100% 1,000 100% Source: BSRIA/ACNielsen AMER

Table 2.25 Mobiles, by size, value (US$ million), 2000E

Self-contained Split Total $US million $US % $US % $US % 5 kW 0.0 0% 0.0 0% 0.0 0% Total 1.0 100% 0.1 100% 1.0 100% Source: BSRIA/ACNielsen AMER



2.4 MINI-SPLIT SYSTEMS

There are two basic designs of split systems : 1) single-split or conventional multisplit systems

In a single-split, one internal unit (evaporator) is matched with one external unit (condenser). In a multisplit system, more than one internal unit is served by a single external unit. The same indoor and outdoor units can be used in either the single or the multi-arrangement. Hence they are analysed together.

2) VRF multisplit These systems are more sophisticated and use many outdoor units which serve many indoor units. By installing multiple condensers - up to ten or twenty have been used on some sites - one can reproduce many of the features of a central plant system using a packaged approach. Thus the VRF market is seen as one which 'crosses over' from packaged products to central plant products.

Minisplit (ductless split) systems account for 30% of market value. All splits systems are of the single-split type with about 10% of outdoor units being sold with a heat pump, 40% of indoor units are wall mounted. The largest market is for residential applications where minisplits is gaining share against windows in retail outlets.

Table 2.26 Mini -splits, market size, 1998

Value Average Kuwaiti US$ Outdoor Indoor market Dinar million units units price million US$ Single split (one-to-one) 7.2 24.0 30,000 30,000 $800 Multisplit 0.0 0.0 0 0 n/aVRF 0.0 0.0 0 0 n/aTotal 7.2 24.0 30,000 30,000 - Source: BSRIA/ACNielsen AMER Note: Market average price is per outdoor unit

Table 2.27 Mini -splits, market size, 1999

Value Average Kuwaiti US$ Outdoor Indoor market Dinar million units units price million US$ Single split (one-to-one) 7.3 24.2 31,500 31,500 $768 Multisplit 0.0 0.0 0 0 n/aVRF 0.0 0.0 0 0 n/aTotal 7.3 24.2 31,500 31,500 - Source: BSRIA/ACNielsen AMER Note: Market average price is per outdoor unit



Table 2.28 Mini -splits, market size, 2000E

Value Average Kuwaiti US$ Outdoor Indoor market Dinar million units units price million US$ Single split (one-to-one) 7.3 24.4 33,075 33,075 $737 Multisplit 0.0 0.0 0 0 n/aVRF 0.0 0.0 0 0 n/aTotal 7.3 24.4 33,075 33,075 -

Source: BSRIA/ACNielsen AMER Note: Market average price is per outdoor unit

This segment has been experiencing relatively high levels of growth, at the expense of window units. Single splits are found in the Kuwait market. Sales of multi-splits or and VRF units are negligible.

Table 2.29 Outdoor units by type and mode, volume, 1998

Single split units % Cooling only 27,000 90% Heat pump 3,000 10% Heat recovery 0 0% Total 30,000 100% Note : heat recovery only available with VRF systems Source: BSRIA/ACNielsen AMER

Table 2.30 Outdoor units by type and mode, volume, 1999


Table 2.31 Outdoor units by type and mode, volume, 2000E




It is estimated that the market for minisplits will be worth $US 36 million by 2004. The larger size splits account for almost half the sales in this sector. Similar to window units, almost all (90%) of fixed-split units are cooling-type only. Although winters are cool and wet, the average temperature in December is still 14-15C so there is only a limited need for heat pumps. Out of all ductless split units, 40% are wall-mounted, whereas 30% are ceiling-mounted and 20% are cassette-type units; the balance, 10%, are floor / vertical consoles. It is expected that the wall-mounted units will lose share over the next 5-7 years, similar to window units. 2.4.1 Conventional split systems

As shown, larger units dominate with almost all sales above 5 kW. However, RAC minisplits account for some 50% of the market as there are many larger sized residential design units found.

Table 2.32 Conventional outdoor units, by size and mode, volume, 1998

Cooling only Heat pump Total units % units % units % 17 kW 0 0% 0 0% 0 0%Total 27,000 100% 3,000 100% 30,000 100%Source: BSRIA/ACNielsen AMER

Table 2.33 Conventional outdoor units, by size and mode, volume, 1999




Table 2.34 Conventional outdoor units, by size and mode, volume, 2000E


Figure 2.3 Minisplits analysed by size and mode, 2000E

By size By mode

Total: 33,075 units Source: BSRIA/ACNielsen AMER Though the wall-mounted 2.5 ton units account for the greater part of the ductless split market, ceiling-mounted units are expected to replace them slowly but surely.

Table 2.35 Conventional indoor units, by size and mounting position, volume, 1998

Wall mounted Ceiling Floor/vertical Cassette Total (Hi-wall) mounted or consoles

units % units % units % units % units %

17 kW 0 0% 0 0% 0 0% 0 0% 0 0%

Total 12,300 100% 8,700 100% 3,000 100% 6,000 100% 30,000 100%

5.0 - 7.0 kW 13,230 units

7.0 - 10.0 kW 15,547 units

10.0 - 17.0 kW 992 units

3.5 - 5.0 kW 3,306 units


Heat pump3,307 units



Table 2.36 Conventional indoor units, by size and mounting position, volume, 1999



17 kW 0 0% 0 0% 0 0% 0 0% 0 0%

Total 12,915 100% 9,135 100% 3,150 100% 6,300 100% 31,500 100%


Table 2.37 Conventional indoor units, by size and mounting position, volume, 2000E



17 kW 0 0% 0 0% 0 0% 0 0% 0 0%

Total 13,562 100% 9,593 100% 3,306 100% 6,614 100% 33,075 100%


Table 2.38 Conventional outdoor units, by RAC/PAC, volume, 1998

5kW Total units % units % units % RAC 2,400 80% 5,400 20% 7,800 26% PAC 600 20% 21,600 80% 22,200 74%Total 3,000 100% 27,000 100% 30,000 100%


Table 2.39 Conventional outdoor units, by RAC/PAC, volume, 1999

5kW Total units % units % units % RAC 2,520 80% 5,670 20% 8,190 26%PAC 630 20% 22,680 80% 23,310 74%Total 3,150 100% 28,350 100% 31,500 100%




Table 2.40 Conventional outdoor units, by RAC/PAC, volume, 2000E

5kW Total units % units % units % RAC 2,647 80% 5,953 20% 8,600 26% PAC 661 20% 23,814 80% 24,475 74%Total 3,308 100% 29,767 100% 33,075 100%


2.5 ROOFTOPS

Sales of rooftop units were estimated to be worth US$28 million in 1999. 80% of rooftops have a cooling capacity greater than 17.85 kW (5 tons) and 90% are sold with a heat pump. Though this segment is expected to experience positive growth over the next few years, its overall share of the packaged unit market should remain fairly stable.

Table 2.41 Rooftop market, 1998-2000E


Kuwaiti Dinar

million US$


selling price 1998 8.6 28.5 15,000 $1,900 1999 8.4 27.9 15,300 $1,824 2000E 8.2 27.3 15,606 $1,751 Source: BSRIA/ACNielsen AMER

Besides split units, packaged rooftops have also contributed to the shift away from window units. During the past five years, various large construction projects have opted for packaged rooftop units, thus resulting in an increase in its volumes and revenues. This is now expected to plateau in the future. 2.5.1 Villa market

Rooftops are also found in villas. There are essentially two types of villa: smaller ones where the basement will be ducted split and the ground and first floor will be rooftops. Larger ones will have ducted splits in the basement and ground floor, and rooftop in the first and second floors. Typically only small ducted split (2.5 ton) issued in the basement, but for the first floor, four to five roof tops are needed per villa, because zoning is very important. There is also a significant market outside of villas. Market arenas are often installed with rooftops. The analysis below shows the end user market for residential-sized products (below 5 yons or 17.85 kW).



Table 2.42 Rooftop and ducted splits residential size products analysed by end user sector

Rooftop Ducted split

Villas 80% 15% Apartments 5% (top floor) 80% (up to 50 per

apartment block) Schools (1) } Offices (1) } Open air market }

15%

15%

Total 100% 100% Source: BSRIA/JARN Note: 1. Also use package chillers

Typically the villas are some 600 square metres in size and are installed absolutely adjacent to one another, there is almost no space left for the garden. 2.5.2 Market by size and type

Table 2.43 Rooftop sales analysed by size, 1998-2000E

1998 sales 1999 sales 2000 salesUnits % Units % Units %

< 7kW 0 0% 0 0% 0 0% 7-10kW 0 0% 0 0% 0 0% 10-17.85kW 3,000 20% 3,060 20% 3,121 20% 17.85-50kW 12,000 80% 12,240 80% 12,485 80% > 50 kW 0 0% 0 0% 0 0% Total 15,000 100% 15,300 100% 15,606 100% Source: BSRIA/ACNielsen AMER

Over the next few years this sector will grow at around 7% per annum.

Table 2.44 Sales of rooftops by mode, volume, 1998

17.85 kW Total units % units % units %

Cooling only 2,700 90% 10,320 86% 13,020 87% Heat pump 300 10% 1,680 14% 1,980 13% Gas fired 0 0% 0 0% 0 0% Total 3,000 100% 12,000 100% 15,000 100%




Table 2.45 Sales of rooftops by mode, volume, 1999


Cooling only 2,754 90% 10,526 86% 13,280 87% Heat pump 306 10% 1,714 14% 2,020 13% Gas fired 0 0% 0 0% 0 0%Total 3,060 100% 12,240 100% 15,300 100%


Table 2.46 Sales of rooftops by mode, volume, 2000E


Cooling only 2,809 90% 10,737 86% 13,546 87% Heat pump 312 10% 1,748 14% 2,060 13% Gas fired 0 0% 0 0% 0 0% Total 3,121 100% 12,485 100% 15,606 100%


Figure 2.4 Rooftops analysed by size and mode, 2000E

By size By mode


The major players in this segment are Al Yousufi (York), Hamad Abdul Al Eisa (Trane), Y. A. Alghanin (Hitachi) and RIC (Coolex). The most popular sizes of roof-top packaged units are 6-7 tons, followed by the 5 tons units. Larger capacity units account for 10% of this segment. Overall, there will be a shift towards larger capacity units. As a result, the growth in roof-top packaged unit sales is expected to be higher in value than in volume over the next few years.

10 - 17.85 kW 3,121 units

17.85 - 50 kW 12,485 units Cooling only

13,546 units

Heat pump 2,060 units



2.6 US-STYLE DUCTED (AND LARGE INDUSTRIAL SPLITS)

Sales of US-style ducted splits were estimated to be worth US$ 7 million in 1999. 15% have a cooling capacity less than 17.85 kW (5 Tons) and 15% are sold with a heat pump.

Table 2.47 US-style ducted split market, 1998-2000


Kuwaiti Dinar

million US$


selling price 1998 3.2 10.7 3,000 $3,581 1999 3.2 10.7 3,060 $3,496 2000E 3.2 10.6 3,121 $3,396


The most popular tonnage capacities for this sector are the 5-ton and 5-10 ton units, which account for more than three-quarters of sales in this segment. The 3-ton units account for the remaining quarter.

Table 2.48 US-style ducted splits, by size, 1998

Value Volume Average Kuwaiti Dinar

million US$


selling price

17.85 kW 2.9 9.6 2,550 $3,765 Total 3.2 10.7 3,000 $3,581 Source: BSRIA/ACNielsen AMER

Table 2.49 US-style ducted splits, by size, 1999


million US$


selling price




Table 2.50 US-style ducted splits, by size, 2000E


million US$


selling price


US-ducted split unit sales volumes have been increasing over the past five years; their market share is also increasing, slowly but steadily. The past five years experienced a volume growth of around 2%. Volumes in the year 2004 are expected to be in the region of 4,000. The growth of villas will help boost the market.

Table 2.51 US-style ducted splits, by mode, 1998


million US$


selling price

Cooling only 2.6 8.8 2,550 $3,462 Heat pump 0.6 1.9 450 $4,159 Total 3.2 10.7 3,000 $3,581 Source: BSRIA/ACNielsen AMER

Table 2.52 US-style ducted splits, by mode, 1999


million US$


selling price


Table 2.53 US-style ducted splits, by mode, 2000E


million US$


selling price




Figure 2.5 US-style ducted splits analysed by size and mode, 2000E

By size By mode


2.7 OTHER INDOOR PACKAGED

This is a catch-all category which includes all self-contained units except windows, through the wall portables and rooftops. This category includes special one-off systems.

Table 2.54 Other indoor packaged market, 1998-2000E

Market value Volume AverageDinar

millionUS$

millionno. units

market selling price

1998 0.9 3.2 500 $6,300 1999 0.9 3.1 510 $6,048 2000E 0.9 3.0 520 $5,806

Source: BSRIA/ACNielsen AMER They will be a single unit comprising all the elements of cooling and air distribution designed for internal mounting. Both ducted and non-ducted units are available and air-cooled and water-cooled units are included. Units are available which also provide heating by reverse cycle. Products in this category are often called the following as well as indoor packaged : roof tops, cabinet heaters; packaged terminal units (PTAC, PTHP) found in North America, ceiling pack units, air-cooled and water-cooled consoles.


Heat pump 468 units

Over 17.85kW 11,047 units

Under 17.85kW 3,603 units



Table 2.55 Other indoor packaged, by size, 1998

Value Volume Average

Kuwaiti Dinar

million US$


selling price 36 kW 0.7 2.3 325 $7,019

Total 0.9 3.2 500 $6,300 Source: BSRIA/ACNielsen AMER

Table 2.56 Other indoor packaged, by size, 1999


Kuwaiti Dinar

million US$


selling price 36 kW 0.7 2.2 332 $6,650 Total 0.9 3.1 510 $6,048 Source: BSRIA/ACNielsen AMER

Table 2.57 Other indoor packaged, by size, 2000E


Kuwaiti Dinar

million US$


selling price 36 kW 0.7 2.2 338 $6,500

Total 0.9 3.0 520 $5,806 Source: BSRIA/ACNielsen AMER

This is a very small market, with most units large air-cooled units for specific applications. Daikin and Hitachi were providing some free standing units of around 5 tons 3-4 years ago, but the main type is now ducted units. Water cooled, which is the main type in the rest of the world is a small market in Kuwait. This segment was worth US$3 million in 1999. This segments market share is expected to benefit from the general strengthening of the market.



Table 2.58 Other large packaged, by mode, 1998


million US$


selling price

Cooling only 0.6 2.2 375 $5,890 Heat pump 0.3 1.0 125 $8,000 Total 0.9 3.2 500 $6,300Source: BSRIA/ACNielsen AMER



million US$


selling price

Cooling only 0.6 2.1 383 $5,654 Heat pump 0.3 1.0 127 $7,680 Total 0.9 3.1 510 $6,048 Source: BSRIA/ACNielsen AMER



million US$


selling price

Cooling only 0.5 2.1 390 $5,300 Heat pump 0.3 0.9 130 $7,200 Total 0.9 3.0 520 $5,806 Source: BSRIA/ACNielsen AMER

Table 2.61 Other large packaged, by cooling, 1998


million US$


selling price

Air cooled 0.6 2.1 300 $6,847 Water cooled 0.3 1.1 200 $5,478 Total 0.9 3.2 500 $6,300 Source: BSRIA/ACNielsen AMER





million US$


selling price




million US$


selling price


2.8 CLOSE CONTROL EQUIPMENT

These are systems designed to meet process or equipment needs. They are specified in telecomms and computer room situations. Table 2.68 shows the two main application sectors.

Table 2.64 Close control market, 1998-2000E


Kuwaiti Dinar

million US$


selling price 1998 0.3 1.0 150 $6,700 1999 0.3 1.0 155 $6,432 2000E 0.3 1.0 160 $6,175


Table 2.65 Close control market analysed by application, by value, 1998-2000E

1998 sales 1999 sales 2000E sales $US million $US % $US % $US % Telecommunications 0.6 60% 0.6 60% 0.6 60% Computer rooms 0.3 30% 0.3 30% 0.3 30% Other sectors 0.1 10% 0.1 10% 0.1 10% Total 1.0 100% 1.0 100% 1.0 100% Source: BSRIA/ACNielsen AMER



Table 2.66 Close control, by size and type of cooling, volume, 1998

Air cooled Chilled water Total units % units % units % up to 7 kW 0 0% 0 0% 0 1% 7-20 kW 11 40% 24 20% 35 24%> 20 kW 19 60% 96 80% 115 61% Total 30 100% 120 100% 150 100%Source: BSRIA/ACNielsen AMER


Air cooled Chilled water Total units % units % units % up to 7 kW 0 0% 0 0% 0 0% 7-20 kW 12 40% 25 20% 37 24% > 20 kW 19 60% 99 80% 118 76% Total 31 100% 124 100% 155 100% Source: BSRIA/ACNielsen AMER


Air cooled Chilled water Total units % units % units % Cooling only 0 0% 0 0% 0 0% Heat pump 12 40% 26 20% 38 24% Heat recovery 20 60% 102 80% 122 76% Total 32 100% 128 100% 160 100%Source: BSRIA/ACNielsen AMER

2.9 REFRIGERANTS

R22, which is a relatively less environmentally harmful refrigerant, has been the most widely used refrigerant in the past, and is expected to continue to be extensively used over the coming years. This refrigerant is the most popular for a majority of packaged unit systems. A few sales were found in 1998 but these have now stopped. Sales of HFCs such as R407c are still comparatively rare, and are most common for larger size equipment.



Table 2.69 Refrigerants used, by product, % sales by volume, 1999

Window, through the

wall

Moveable / portable

Ductless splits

Roof top US-style ducted


Close control

R11 (cfc) R12 (cfc) 90% R22 (hcfc) 100% 100% 99% 90% 90% 100% 90% R134a (hfc) 10% R407c (hfc) 1% 10% 10% R410a (hfc) Hydrocarbon

Total 100% 100% 100% 100% 100% 100% 100%


Kuwait is categorized as operating under Article 5 paragraph 1 of the Montreal Protocol. This means Kuwait is "... entitled to delay for ten years its compliance with the control measures set out in Articles 2A to 2E...." . Kuwait signed up to the protocol in November 1992 so it is not until 2002 that the ban on CFCs becomes official.

2.10 COMPRESSORS

At least three-quarters of packaged units use reciprocating compressors, Additionally, at least one-fifth of the smaller-sized units (windows, splits) use rotary compressors. On the other hand, rotary compressors are not used by roof-top units and US-ducted, where scroll compressors are more popular.

Table 2.70 Compressors used, by product, % sales by volume, 1998

Window, through the

wall

Moveable / portable

Ductless splits

Roof top US-style ducted


Close control

Reciprocating 70% 70% 70% 85% 85% n/a n/a Rotary/Swing 25% 25% 25% 0% 0% n/a n/a Scroll 5% 5% 5% 15% 15% n/a n/a

Total 100% 100% 100% 100% 100% 100% 100%




3. MAJOR COMPANIES

A majority of the Kuwait air-conditioning market is supplied by 5-6 large importers, which cumulatively account for more than 90% of all sales and who bring in a number of leading international brands. The main countries from which suppliers imported air conditioners in 1998, were:

Other Gulf countries - Saudi Arabia, UAE and Bahrain; Asia-Pacific countries - Japan, Korea, Malaysia, Singapore and Thailand. USA.

There are only two air conditioning assemblers in Kuwait - RIC (Coolex) and Al Hassawi (Topcool); however, they account for less than 10% of the packaged unit market. Exports / re-exports are almost negligible, accounting for about 5% of total annual sales. After the Gulf War Kuwait is pro USA with Carrier, Trane and York particularly successful.

3.1 SMALL SYSTEMS

Table 3.1 Market leaders for window and mobile products, 1999

Window/wall Mobile/portable Market leaders Hamad Abdulla Al Eisa (Craft, Gibson, Trane) Al Yousufi (York) (Importers) Al Yousufi (York) Union Trading Co. (General) Union Trading Co.(General) Supplying Store (Sanyo) Supplying Store (Sanyo) Kuwait American Air-conditioning Co. (Carrier)

Easa (National)

Their share (%) 80% 95% Other significant Y. A. Alghanin (Hitachi) (Fragmented) companies Awael Al Kuwait (Pearl) Al Andulas Trading Co (Samsung) Al Babtain / Electronic Appliances (LG)

Y.A. Algahanim (Toshiba,Hitachi)

Their share (%) 10% Others (%) 10% 5% Total 100% 100%


General, National, Alessa (Gibson, Craft) are understood to dominate the window market but there are also a number of other big brands gaining share, notably Sanyo, Hitachi, Daikin and Carrier, Trane and York (whose 50 kW products are made by Alessa in Saudi).



Table 3.2 Market leaders for ductless split systems, 1999

Single splits Market leaders Hamad Abdulla Al Eisa (Craft, Gibson) (Importers) Al Yousufi (York) Union Trading Co. (General) Supplying Store (Sanyo) Kuwait American Air-Conditioning Co. (Carrier)

Easa (National) Their share (%) 80% Other Al Babtain / Electronic Appliances (LG) significant Y. A. Alghanim (Hitachi, Toshiba) companies Awael Al Kuwait (Pearl) Al Andalus Trading Co. (Samsung) Kuwait Japanese Air Conditioning Co (Daikin) SKM Al Hassawi (Topcool) RIC (Coolex) Their share (%) 15% Others (%) 5% Total 100%


The largest players for minisplits are National, Sanyo, General and Alessa (Gibson, Craft). Other major players are Carrier, Trane, York and increasing involvement from Hitachi, LG, Samsung, Pearl and Daikin.



3.2 LARGE PACKAGED UNITS

Table 3.3 Market leaders for large packaged air conditioning equipment, 1999

Roof top US-style ducted Market leaders Hamad Abdulla Al Eisa (Craft, Gibson,

Trane) Al Yousufi (York) Kuwait American Air Conditioning Company (Carrier) Y. A. Alghanim (Hitachi, Toshiba, Goodman) SKM RIC (Coolex)

Hamad Abdulla Al Eisa Al Yousufi (York) Kuwait American Air-conditioning Co. (Carrier) Union Trading Co. (General) Kuwait Japanese Air-conditioning Co. (Daikin)

Their share (%) 85% 85% Other significant Easa (National) Easa (National) companies Al Hassawi (Topcool)

Eubank (Eubank US) Others

Y.A. Algahanim (Toshiba, Hitachi, Goodman) SKM Al Hassawi (Topcool) Eubank (Eubank US) Others

Their share (%) 10% 10% Others (%) 5% 5% Total 100% 100%

Source: BSRIA/ACNielsen AMER York and Trane are the leaders of the villa market and rooftops as a whole closely followed by Carrier and also SKM, Coolex, Hitachi. For ducted splits, the market leaders are Carrier, Trane and York, with activity from Goodman, Unionaire, Rheem, Hitachi and SKM also significant. Goodman are understood to sell under different brand names for certain dealers; GMC, Alsaka, Goodman and Janitrol. For close control there are fewer players than in the rest of the Far East because of the small market in Kuwait. Again Liebert-Hiross are very strong, but Airedale has a significant presence along with the US companies Trane, Lennox, and Data Aire.

Table 3.4 Market leaders for close control

Close control Market leaders Bader Al Mulla (Liebert US, Liebert-Hiross) (Importers) Their share (%) >40% Other Kazema Engineering Projects (Airedale) significant Al Magwa Trade (Airedale) companies Trane Al Ahila (Lennox)

Data Aire (Data Aire, US)



3.3 PRODUCT RANGE OF LEADING SUPPLIERS

Table 3.5 Product range of major suppliers

Company Window / wall

Mobile units

Split fixed

systems

Rooftop units

US ducted

Other large

Close control

Country of manufacture

Origin company

Al Ahila I I I I I USA Lennox

Al Andalus Trading

I I I Korea Samsung

Al Babtain Electronics

I I I I I Korea (after 1999) LG (after 1999)

Al Hamed Al Eisa I I Saudi Arabia Alessa (Craft, Gibson)

Al Hamed Al Eisa I I I I I USA/Latin America, France

Trane

Al Hassawi M M M M M Local Assembly Topcool

Al Magwa Trade I UK Airedale

Al Turki Est I I I USA Goodman

Al Yousufi I I I I I I Saudi Arabia (windows), Thailand (minisplits), USA (packaged, ducted)

York

Awael Al Kuwait I I Bahrain Pearl

Bader Al Mulla I I Malaysia McQuay (McQuay Ascos brands)

Bader Al Mulla I Japan, Thailand Mitsubishi Heavy

Easa I I I I I Japan, Malaysia National (Matsushita)

Electronics Appliances

I I I I I Korea (until 1999) LG (until 1999)

Fawaz Refrigeration and Air Conditioning

I I I I Malaysia Dunham Bush

Gulf Engineering Company (GEC)

I I Japan, Thailand Mitsubishi Heavy

Gulf Engineering Company (GEC)

I I I USA Rheem

Kazema Engineering Projects

I I I USA Goodman

Kazema Engineering Projects

I UK Airedale

Kuwait American Air-conditioning Co

I I I I I USA, Saudi Arabia, Korea

Carrier

Kuwait Electronics

I I I I Japan, Thailand, Malaysia

Mitsubishi Electric

Kuwait Japanese Air-conditioning Co

I I Japan Daikin

RIC M M M Local Assembly RIC

Sharco International

I I I USA Goodman

SKM I I I UAE SKM

Supplying Store I I Japan, Singapore Sanyo

Trane I USA Trane

Union Trading Co. I I I Japan, Saudi Arabia Fujitsu General

Y.A. Alghanim Industries

I I I I I UK, Japan, Thailand Toshiba




I I I USA Goodman


I I I I I Japan, Asia Hitachi

Source: BSRIA/ACNielsen AMER Key: M manufacture; I import



Table 3.6 Manufacturing information of major suppliers

Company Local production

Imports Company

(manufacturer) Al Andalus Trading No Samsung (Korea)

Al Babtain / Electronic Appliances No LG (new) Al Hamad Al Eisa No Craft, Gibson (Saudi Arabia), Trane

(USA) Al Hassawi Yes Topcool Al Yousufi No York (Saudi Arabia, Thailand, USA) Awael Al Kuwait No Pearl (Bahrain) Easa No National/Panasonic (Japan, Malaysia) Kuwait Japanese Air-conditioning Co No Daikin (Japan)

Kuwait American Air-conditioning Co No Carrier (USA, Saudi Arabia, Korea) RIC Yes Coolex SKM No SKM (UAE) Supplying Store No Sanyo (Japan, Singapore) Union Trading Co. No General (Japan, Saudi Arabia) Y. A. Alghanin No Hitachi, Goodman, Toshiba Source: BSRIA/ACNielsen AMER The two main manufacturers are RIC and Al Hassawi (Topcool). The two companies focus on minisplits and some large packaged production is primarily aimed at the local Kuwaiti market. Prior to the Iraqi occupation in 1990, only Refrigeration Industries Company (RIC) produced York air conditioning equipment direct expansion systems, and minisplit units under licence. RIC, which is 70% owned by the government of Kuwait, was destroyed during the war. In early 1993 RIC re-established and rresumed its production activities under its own brand name Coolex. RIC is seeking to form a joint venture with well known international firms to manufacture air conditioners under the foreign firms name in Kuwait, and may move into the window market. As a Kuwait government-owned firm, RIC benefits from a 10% margin on all government tenders, and is expected to possess a large share of the market within the next two years. Production of the Topcool brand is mainly limited to condensing units.



4. SALES TRENDS AND FUTURE FORECAST

4.1 HISTORICAL SALES TREND

The packaged unit air-conditioning market in Kuwait has witnessed little change in volume terms over the past few years. This could be attributed to the growth in non-window packaged units marginally offsetting the declining sales of the high-volume window units. The past five years have seen mini-split unit volume sales surpass window unit volume sales; roof-top unit sales have also been increasing.

Figure 4.1 Kuwait packaged market value (US$ million), current prices, 1996-2000E

$91M $92M $92M $90M $87M

$0M

$20M

$40M

$60M

$80M

$100M

$120M

1996 1997 1998 1999 2000

Source: BSRIA/ ACNielsen AMER

Volume sales have declined by approximately 2% over the past 2-3 years.

Table 4.1 Historical trend for packaged air conditioning, volume (units), 1996-2000E

1996 1997 1998 1999 2000E CAGR Window/through-wall 67,904 63,830 60,000 56,400 53,016 -6.0% Mobile(portable) 1,000 1,000 1,000 1,000 1,000 0.0% Minisplits(ductless splits) 27,211 28,571 30,000 31,500 33,075 5.0% Roof tops 14,418 14,706 15,000 15,300 15,606 2.0% US-style ducted splits 2,884 2,941 3,000 3,060 3,121 2.0% Other large packaged 481 490 500 510 520 2.0% Close control 140 145 150 155 160 3.3%Grand total 114,037 111,684 109,650 107,925 106,499 -1.7% Source: BSRIA/ACNielsen AMER



The years 1997 and 1998 were relatively bad years in view of the crash of oil prices; this led to a decline in construction activity. In turn, this had a direct impact on the air-conditioning industry, resulting in very low growth rates in volume as well as revenue terms.

Table 4.2 Historical trend for packaged air conditioning, value at current prices (Kuwaiti Dinar million), 1996-2000E

Kuwaiti Dinar millions 1996 1997 1998 1999 2000E CAGR Window/through-wall 8.1 7.6 7.2 6.5 5.9 -7.7% Mobile(portable) 0.3 0.3 0.3 0.3 0.3 -2.0% Minisplits(ductless splits) 6.5 6.8 7.2 7.3 7.3 3.0% Roof tops 8.2 8.4 8.6 8.4 8.2 0.0% US-style ducted splits 3.1 3.1 3.2 3.1 3.1 1.0% Other large packaged 0.9 0.9 0.9 0.9 0.9 0.0% Close control 0.2 0.3 0.3 0.3 0.3 3.3%Grand total 27.3 27.5 27.7 26.9 26.0 -1.2% Source: BSRIA/ACNielsen AMER

Table 4.3 Historical trend for packaged air conditioning, value at current prices (US$ million), 1996-2000E

US$ millions 1996 1997 1998 1999 2000E CAGR Window/through-wall 27.0 25.4 24.0 21.7 19.5 -7.7% Mobile(portable) 1.1 1.1 1.1 1.1 1.0 -2.0% Minisplits(ductless splits) 21.7 22.8 24.0 24.2 24.4 3.0% Roof tops 27.4 27.9 28.5 27.9 27.3 0.0% US-style ducted splits 10.3 10.5 10.7 16.1 10.6 1.0%Other large packaged 3.0 3.1 3.2 3.1 3.0 0.0% Close control 0.9 0.9 1.0 1.0 1.0 3.3%Grand total 91.4 91.7 92.4 89.7 86.9 -1.3%Source: BSRIA/ACNielsen AMER Sales of window units have been declining at 6% per annum for the past 2-3 years. This trend is expected to continue. On the other hand, the revenues from other packaged units have increased at 2-5% annually.

4.2 FUTURE SALES FORECAST

Window unit sales are expected to continue to decline over the next five years; it is expected that by the year 2004, window units will account for 38% of packaged unit volumes in Kuwait, compared with 60% in 1996. The highest potential for growth is expected to be for mini-splits (ductless splits), followed by rooftop and US-ducted units. The overall CAGR (compound annual growth rate) is expected to be much stronger over the next five years. The Kuwaiti government is planning some large residential projects over the next few years; this will result in an upward trend in the air-conditioning industry in general in Kuwait. Rooftops and US-ducted split which are used in villas will benefit particularly from this.



Figure 4.2 Kuwait packaged market, value (US$ million), 2000-2004E (2000 prices)

$87M$91M

$96M$102M

$108M

$0M

$20M

$40M

$60M

$80M

$100M

$120M

2000 2001 2002 2003 2004


Table 4.4 Forecast for packaged air conditioning, volume (units), 2000-2004

2000 2001 2002 2003 2004 CAGR Window/through-wall 53,016 50,895 48,860 46,905 45,029 -4.0% Mobile(portable) 1,000 1,000 1,000 1,000 1,000 0.0% Minisplits(ductless splits) 33,075 36,383 40,021 44,023 48,425 10.0% Roof tops 15,606 16,698 17,867 19,118 20,456 7.0% US-style ducted splits 3,121 3,340 3,573 3,824 4,091 7.0% Other large packaged 520 557 596 637 682 7.0% Close control 160 171 183 196 210 7.0% Grand total 106,499 109,044 112,099 115,703 119,893 3.0% Source: BSRIA/ACNielsen AMER Though window unit sales will continue to decline, the growth in sales of the larger, higher-value packaged units will lead to an increase in overall revenues over the next five years. As with volume sales, the highest potential for revenue growth is expected to be for US-ducted splits.



Table 4.5 Forecast for packaged air conditioning, value (Kuwaiti Dinar million),

2000-2004

Kuwaiti Dinar millions 2000 2001 2002 2003 2004 CAGR Window/through-wall 5.9 5.6 5.4 5.2 5.0 -4.0% Mobile(portable) 0.3 0.3 0.3 0.3 0.3 0.0% Minisplits(ductless splits) 7.3 8.0 8.9 9.7 10.7 10.0% Roof tops 8.2 8.8 9.4 10.0 10.7 7.0% US-style ducted splits 3.2 3.4 3.7 3.9 4.2 7.0% Other large packaged 0.9 1.0 1.0 1.1 1.2 7.0% Close control 0.3 0.3 0.3 0.4 0.4 7.0% Grand total 26.0 27.0 28.0 30.7 32.6 5.6% Source: BSRIA/ACNielsen AMER

Table 4.6 Forecast for packaged air conditioning, value (US$ million), 2000-2004

US$ millions (2000 prices) 2000 2001 2002 2003 2004 CAGR Window/through-wall 19.5 18.8 18.0 17.3 16.6 -4.0% Mobile(portable) 1.0 1.0 1.0 1.0 1.0 0.0% Minisplits(ductless splits) 24.4 26.8 29.5 32.5 35.7 10.0% Roof tops 27.3 29.2 31.3 33.5 35.8 7.0% US-style ducted splits 10.6 11.3 12.0 12.9 13.8 7.0% Other large packaged 3.0 3.2 3.5 3.7 4.0 7.0% Close control 1.0 1.1 1.1 1.2 1.3 7.0% Grand total 86.9 91.5 96.4 102.0 108.2 5.6% Source: BSRIA/ACNielsen AMER



Figure 4.3 Trend for packaged air conditioning, value (US$ million), 1996-2004

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1996 1997 1998 1999 2000E 2001 2002 2003 2004

US

$ m

illio

n

Window/through-wall Mobile(portable) Minisplits(ductless splits)

Roof tops US-style ducted splits Other large packaged

Close control




5. PRODUCERS, IMPORTERS AND EXPORTERS

5.1 BALANCE OF TRADE

The overall balance of trade for the air-conditioning industry in Kuwait is highly negative, with imports of 70-75% of sales v

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