World air conditioning Poland

Transcription

1 World air conditioning Poland A multi client study By Stan Samek March 2014

2 World air conditioning Poland A multi client study Contract: Report 57308/7 Date: March 2014 Issued by: Limited Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH UK Telephone: +44 (0) Fax: +44 (0) E: bsria@bsria.co.uk W: Compiled by: Name: Stan Samek Approved by: Name: Anette Meyer Holley All rights reserved. This document may not be reproduced, transmitted or redistributed in part or full without prior written consent from a Director. Page 3 of 40 Report 57308/7

3 POLAND CONTENTS INTRODUCTION Methodology Definitions OVERVIEW Economy and construction Local air conditioning market conditions Heating and renewable practices A. WINDOW AND MOVEABLES Supply structure Windows / through the wall Moveables B. SPLIT SYSTEMS Supply structure Single ductless splits Multisplits Japanese style splits (ducted) US style splits (ducted) VRF C. SINGLE PACKAGED Supply structure Rooftop Indoor packaged D. CHILLERS Supply structure E. AHU AND FAN COILS Supply structure Air handling units Fan coils F. MAJOR COMPANIES Page 4 of 40 Report 57308/7

4 POLAND TABLES Table 1 Background data economy and construction, Table 2 Percentage of sales to residential market, by value, 2013 Table 3 Current and future AC penetration into the residential and commercial market (%), 2013 & 2017 Table A1 Windows and moveables market, volume (units), Table A2 Windows and moveables market, value (US$ million), Table A3 Windows and moveables market, average selling price (US$), Table A4 Imports-exports, windows and moveables products, volume, 2013 Table A5 Brand market leaders and other significant companies for window and moveable products by volume, 2013 Table B1 Un-ducted, Japanese ducted, US ducted and VRF split systems market, volume (units), Table B2 Unducted, Japanese ducted, US ducted and VRF split systems market, value (US$ million), Table B3 Unducted, Japanese ducted, US ducted and VRF split systems market, average selling price (US$), Table B4 Sales of single, multi split and VRF systems, value, 2013 Table B5 Imports-exports, splits products, volume, 2013 Table B6 Brand market leaders and other significant companies for splits products by volume, 2013 Table C1 Single packaged market, volume (units), Table C2 Single packaged market, value (US$ million), Table C3 Single packaged, average selling price (US$), Table C4 Imports-exports, single packaged products, volume, 2013 Table C5 Brand market leaders and other significant companies for single packaged products, by volume, 2013 Table D1 Chiller market, volume (units), Table D2 Chiller market, value (US$ million), Table D3 Chiller market, average selling price (US$), Table D4 Imports-exports, chiller products, value, 2013 Table D5 Brand market leaders and other significant companies for chiller products, by value, 2013 Table E1 AHU and fan coil market, volume (units), Table E2 AHU and fan coil market, value (US$ million), Table E3 AHU and fan coil market, average selling price (US$), Table E4 Imports-exports, AHU and fan coil products, value (US$ million), 2013 Table E5 Brand market leaders and other significant companies for AHU and fan coil products, by value, 2013 Table F1 Manufacturer information on major suppliers Table F2 Representation, 2012 FIGURES Figure A1 Windows and movables market analysed by product, volume, Figure B1 Splits system market analysed by product, outdoor units, volume, Figure C1 Single packaged market analysed by volume, Figure D1 Chillers analysed by type of cooling, value (US$ million), Figure E1 AHU market analysed by value (US$ million), Figure E2 Fan coil market analysed by volume, Page 5 of 40 Report 57308/7

5 World air conditioning Croatia A multi client study By Silvia Semova March 2014

6 World air conditioning Croatia A multi client study Contract: Report 57308/3 Date: March 2014 Issued by: Limited Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH UK Telephone: +44 (0) Fax: +44 (0) E: bsria@bsria.co.uk W: Compiled by: Name: Silvia Semova Approved by: Name: David Garwood All rights reserved. This document may not be reproduced, transmitted or redistributed in part or full without prior written consent from a Director. Page 3 of 34 Report 57308/3

7 CONTENTS INTRODUCTION Methodology Definitions OVERVIEW Economy and construction Local air conditioning market conditions Heating and renewable practices A. WINDOW AND MOVEABLES Supply structure Windows / through the wall Moveables B. SPLIT SYSTEMS Supply structure Single ductless splits Multisplits Japanese style splits (ducted) US style splits (ducted) VRF C. SINGLE PACKAGED Supply structure Rooftop Indoor packaged D. CHILLERS Supply structure E. AHU AND FAN COILS Supply structure Air handling units Fan coils F. MAJOR COMPANIES Page 4 of 34 Report 57308/3

8 TABLES Table 1 Background data economy and construction, Table 2 Percentage of sales to residential market, by value, 2013 Table 3 Current and future AC penetration into the residential and commercial market (%), 2013 & 2017 Table A1 Windows and moveables market, volume (units), Table A2 Windows and moveables market, value (US$ million), Table A3 Windows and moveables market, average selling price (US$), Table A4 Imports-exports, windows and moveables products, volume, 2013 Table A5 Brand market leaders and other significant companies for window and moveable products by volume, 2013 Table B1 Un-ducted, Japanese ducted, US ducted and VRF split systems market, volume (units), Table B2 Unducted, Japanese ducted, US ducted and VRF split systems market, value (US$ million), Table B3 Unducted, Japanese ducted, US ducted and VRF split systems market, average selling price (US$), Table B4 Sales of single, multi split and VRF systems, value, 2013 Table B5 Imports-exports, splits products, volume, 2013 Table B6 Brand market leaders and other significant companies for splits products by volume, 2013 Table C1 Single packaged market, volume (units), Table C2 Single packaged market, value (US$ million), Table C3 Single packaged, average selling price (US$), Table C4 Imports-exports, single packaged products, volume, 2013 Table C5 Brand market leaders and other significant companies for single packaged products, by volume, 2013 Table D1 Chiller market, volume (units), Table D2 Chiller market, value (US$ million), Table D3 Chiller market, average selling price (US$), Table D4 Imports-exports, chiller products, value, 2013 Table D5 Brand market leaders and other significant companies for chiller products, by value, 2013 Table E1 AHU and fan coil market, volume (units), Table E2 AHU and fan coil market, value (US$ million), Table E3 AHU and fan coil market, average selling price (US$), Table E4 Imports-exports, AHU and fan coil products, value (US$ million), 2013 Table E5 Brand market leaders and other significant companies for AHU and fan coil products, by value, 2013 Table F1 Manufacturer information on major suppliers Table F2 Representation, 2012 FIGURES Figure A1 Windows and movables market analysed by product, volume, Figure B1 Splits system market analysed by product, outdoor units, volume, Figure C1 Single packaged market analysed by volume, Figure D1 Chillers analysed by type of cooling, value (US$ million), Figure E1 AHU market analysed by value (US$ million), Figure E2 Fan coil market analysed by volume, Page 5 of 34 Report 57308/3

9 INTRODUCTION Methodology The research was based on a mixture of methodologies: uses a mixture of its own consultants from the Worldwide Market Intelligence section and its subsidiaries outside of the UK, and its long-term partners. At local level, research was obtained through a range of sources: o statistical collection o desk research o face to face interviews o telephone/fax interviews The research was planned and controlled from, which combined the advantage of using local experts, which are long standing partners, as well as offering expertise in the air conditioning field and the advantage of supplying a comparable set of data across Europe. In Croatia 7 telephone interviews were conducted with major local suppliers and specifiers. Definitions Please note that all market size volumes in this report refer to number of units sold in a given year; for split systems this refer to outdoor units, where not indicated otherwise. Values stated in this report refer to the value of the whole system, with the average prices recorded at first point of distribution. Values of sales at manufacturers selling prices includes ancillaries, such as controls, where applicable. The price excludes VAT or equivalent taxes outside of the UK. Definitions of key product groups are available in a separate definitions report. Page 6 of 34 Report 57308/3

10 OVERVIEW Map of Croatia Economy and construction Croatia is a country located in the north-west of the Balkan Peninsula, with a moderately warm and rainy continental climate. Croatia s capital and most populous city is Zagreb with around 790,000 inhabitants (2012). Croatia joined the European Union on the 1 st of July The country s population is 4.38 million (2013). A positive growth rate is not expected in the forecast period. Moreover, with 17.4% of Croatia s population over the age of 64, the country is defined with ageing population. Table 1 Background data economy and construction, Units (e) 2014(f) 2015(f) 2016(f) Population Million GDP per capita US$ Change of GDP % Inflation % Unemployment % Construction output US$ Mio. 3,923 3,962 4,029 n/a n/a Number of households ( 000) New dwellings (completions) ( 000) based on various sources Economy According to the International Monetary Fund Croatia is classified as a country with an emerging and developing economy. Its economic development is currently marred by a high export deficit and a high debt. The Croatian economy still continues to suffer stagnation after it was hit by the global economic downturn in In 2012 the real GDP contracted by 1.8%, but showed signs of recovery in 2013 with a growth rate of 0.3%. According to the EBRD, the real GDP growth will continue in 2014 with 1.9%. The slow recovery of the economy was influenced by the cut on public expenditures and lower private consumption due to massive unemployment. Page 7 of 34 Report 57308/3

11 High unemployment rate combined with a high proportion of long-term unemployment has been a marked feature of the Croatian labour market since the start of the post-communist transition. The unemployment rate continued to worsen from 9.1% in 2009 to 13.7% in 2012 and 16.2% in Well above the EU average, a 16.6% unemployment rate is expected for 2014, with central and eastern Croatia having the highest share of unemployment and the highest risk of long-term unemployment among the unemployed. Historically, from 1999 until 2013, Croatia s inflation rate averaged 3.07%, reaching an all-time high of 8.37% in July 2008 and a record low of 0.6% in April The Croatian currency (Kuna) is currently fixed to the Euro, helping the inflation rate subdue. In 2013 inflation has reached 3% and has been projected at 2.5% in From the 1 st of March 2012 the standard VAT rate in Croatia was increased from 23% to 25%. To mitigate the impact of increasing VAT, the government reduced taxes on edible oils, fats, baby food and processes grain based food for infant and young children by 10%. As of 1 st January 2013 tax on tourism related items was also reduced by 10%, specifically on food in restaurants, soft drinks, juices, wine and beer. Tourism is a significant source of income during the summer periods, with Croatia ranked the 20 th most popular tourist destination in the world. Tourism generates income in excess of 7 billion annually, coming from 10 million foreign tourists visiting the country each year. The industrial sector with exports of over 1 billion annually is dominated by shipbuilding which accounts for over 10% of exported goods. Agriculture represents 6% of Croatia s total economic output. Access to large EU structural funds after 2014 is expected to help the country to improve its infrastructure as a whole. Domestic businesses, attracting foreign investments, will improve competitiveness and bring Croatia closer to European markets. Exports of existing companies are predicted to increase which will bring serious positive economic impulses and high growth rates in the coming years. Croatia has established diplomatic relations with 174 countries. The countries from the European Union are the most important trading partners of Croatia. About 50% of Croatia s trade is with the Euro area, primarily with Germany and Italy, and the Euro area is the source of about 70% of foreign-direct investment (FDI) flows into the country. Croatia also has a high concentration of banks whose ownership indirectly exposes them to the Euro-area crisis. Croatia became Party to the Kyoto Protocol in 2007, and in 2009 energy strategy committing to its general objectives. The strategy sets clear goals regarding renewable energy and energy efficiency. The climate and renewable energy policy is designed to reduce carbon dioxide emissions by 20%, increase the renewable energy share of the energy mix to 20%, and improve energy efficiency by 20%, all by Construction The macroeconomic situation and the financial crisis have affected Croatia s construction industry in 2008 when its total construction output decreased to 60% of its size to 2.8 million and has lost a quarter of its employees. Construction output in 2013 has slightly increased compared to 2012 and is expected to grow further in 2014, even though it will highly depend on the investment growth. Downside risks on the other side are considered as significant and real, particularly if more external unfavourable situations occur (such as a return of the EU crisis or a huge increase in oil prices). Currently, there is a significant stock of unsold residential buildings and apartments, which is tying up the capital of construction and development companies. Page 8 of 34 Report 57308/3

12 Since Croatia entered the EU in July 2013, there is a chance that numerous construction projects will be able to access EU funding. It is likely that international companies will increase their market share by being able to use the organisational expertise and resources of their group. Starbag and Alpine Bau are already strong players on the construction market in Croatia. The EU accession and the EU procurement of construction services financed by the EU structural funds will attract the construction sector to large multinational construction companies. Besides the official construction industry, Croatia has a large unofficial do-it-yourself construction industry. This kind of construction is mostly popular in the residential sector, particularly for renovation and maintenance. The main reason for the high percentage of the grey market is high overall taxation that motivates end-users to seek unofficial suppliers of construction services. A high amount of building materials are also bought in neighbouring countries. New house building In 2012, Croatia s housing stock was estimated at 2.07 million units. The average Croatian home includes a kitchen (usually with a dining area), a bathroom, a living room and bedrooms (one or two). Nowadays, Croatian families have one or two children. Families with three or more children are considered large. In 2013, the housing stock in the country is estimated to be 2.09 million units and to increase to 2.11 million units in The country is characterised by a high proportion of multigenerational households. Croatia has a high rate of home ownership, currently estimated at 95.9%. Following the decreasing number of building permits, housing completions declined by around 51.7% in 2012 in comparison to A drastic drop was registered in the construction of multiunit buildings. Private investors remained cautious due to restricted access to housing loans. Total construction works in the residential sector decreased by almost 20% in 2011 to HRK 2.8 billion. It was in 2012, when the residential projects started picking up again due to the general economic upswing and increasing demand of one and two family dwellings and flats. The demand came not as a result of increasing population (currently there is a negative growth rate), but was rather defined by the increasing number of household members and young families trying to get on the property ladder. Housing completions picked up by 7.5% in 2012 compared to In 2013, 12.9 thousands new housing dwellings were estimated to be completed. The positive trend of new housing completions is expected to continue in the forecast period, with 13.4 thousand new dwellings in It is reported that new houses are built around the country with the aim to be completed quickly and sold immediately. Often they are not very well insulated. New commercial construction Non-residential construction in Croatia is highly dependent on the level of investment in the national economy by both sectors, public and private. Public investments have significantly been reduced due to the austerity measures in 2012, and experiences further decrease in Most of the non-residential construction projects thus depend on private investments. On the other hand though, banks have tightened the financing of new commercial projects. Only large private development companies, often financed from abroad, can manage to deal with new construction projects, which are often targeting a niche but high-price market. Page 9 of 34 Report 57308/3

13 Local air conditioning market conditions CROATIA During the period a drastic drop of air conditioning units sales was registered, following the decreasing number of building permits, housing completions and construction of multi-unit buildings. Private investors remained cautious due to the uncertain economic situation. In 2012, the demand of air conditioners started picking up along with the start of new residential projects and due to the general economic upswing. The demand came as a result of increasing housing completions that were fitted with an air conditioner, but also as a result of renovation and refurbishment activities. It is expected that the increasing trend will continue in 2013 and onwards; however, it will not reach the level of when over 80,000 units were sold annually. The definite trend in the next few years will be towards replacement and refurbishment services. However, it has to be taken into account that a high number of the Croatian households prefer to refurbish their homes only if it is necessary because of lack of cash. Further penetration of air conditioning equipment into both, the commercial and the residential market, is expected to increase only slightly and modestly. It will be driven mainly by the refurbishment and renovation activities. The penetration into the commercial sector has achieved a very high level in the last decade as new built hotels, restaurants, bar and shops in the cities near the Adriatic coast were installed with an air conditioner. Because of the very hot summer in Croatia air conditioners became a necessity for most of the non-residential buildings in all large cities in the country. The Croatian market of air conditioning systems is highly fragmented with around 15 well known and established players actively selling products within their portfolio. Therefore it is very difficult for new companies to enter and gain significant market shares. The Croatian market is defined by high owner-occupancy and it is owners responsibility to install air conditioning, sanitary hot water and heating units. Single spits are commonly installed in small flats; multi-splits are seen as a good choice in luxury houses. There is a demand of split, multi splits and VRF systems with integrated heat pump which can be used to provide heating during the spring and autumn seasons. Cooling only systems are not preferred by the end users. Offices and other commercial buildings have different energy needs than households. Usually the installation of an air conditioning unit is specified at the early, design stage of a new building. The most common system for light commercial applications is the VRF system, which has increasingly gaining share at the expense of small capacity chillers due to its easier installation. The market of Air Handling Units (AHU) is currently experiencing decline due to lack of investment. Due to the current economic situation the Croatian air conditioning market is strongly price driven and therefore maintenance costs and the choice of air conditioning system is very carefully considered by investors and end users. There is currently ongoing tax relief program on the purchase of air conditioners. The amount of max. 12,000 Croatian Kuna can be added to the tax return as personal allowance. Page 10 of 34 Report 57308/3

14 Table 2 Percentage of sales to residential market, by value % sales to residential market 2013 Window/wall 0% Single and multi splits 75% VRF <1% Unitary products (US-style ducted, indoor packaged, rooftops) 1% Chillers <1% based on various sources Table 3 Current and future AC penetration into the residential and commercial market (%) PENETRATION into commercial (approx) 49% 55% PENETRATION into residential (approx) 23% 28% based on various sources Heating and renewable practices A growing gas pipe network throughout the country is constantly increasing the number of connections. Households, in particular in the continental part of the country and around the capital Zagreb, tend to switch from oil or electricity to gas as a heating source. District heating is supplied to around 26% of the households in Croatia. In all district heating systems, district heat is delivered at the building level and building owners are responsible for the heat installations inside the buildings. Several towns in the country have individual block boilers, i.e. public heating plants, but on a very small scale. As far as the water heating market is concerned, where the grid for natural gas is already developed (in the continental part of Croatia, in large cities and particularly apartments) water is heated as part of the central heating. In the coastal part (e.g. Dalmatia) electric water heaters are used as in this area there is no gas network yet. It is estimated that the grid will be ready in the next two years. Electric storage water heaters represent the preferred choice in this segment. However, it is expected that gas (predominantly storage) water heaters will constantly gain share due to the enlargement of the gas network and rising electricity prices. Solar thermal units and heat pumps are still a niche market in Croatia. End users are waiting for the government to step in and provide subsidies to enable the purchase and installation of affordable systems. The EU membership in 2013 is expected to have a very positive impact towards this direction. There is overall energy saving potential in industrial and residential sector in the country. Energy efficiency measures include use of low-energy bulbs and refrigerators in households. The First National Communication from the United Nations Framework Convention on Climate Change expects these measures to save up to 600GWWh by In accordance with EU Directive on the promotion of the electricity produced from renewable energy source 2001/77/EC Croatia was obligated to set its share or RES in total energy consumption in In alliance with business indicators the recommended targets were 1,100 GWh of electricity from RES, o 5.8% of total energy consumption in Croatia in 2010 (excluding large hydropower plants). However, Croatia has not met its 2010 target for electricity production from renewable energy sources covered by incentives. Increasing investment in renewable energy sources was hampered by a lengthy administrative process, which is acting as a disincentive to prospective investors. Alignment of legislation is advanced, but substantial efforts are required if Croatia is to meet its target of 20% of final energy demand from renewable sources by Page 11 of 34 Report 57308/3

15 Although the Republic of Croatia is almost completely electrified, there are still regions which do not have access to the electricity network or where the network capacity is insufficient. For the most part such areas are under special care of the state (i.e. underdeveloped, devastated by war, depopulated), in islands or mountainous regions. Page 12 of 34 Report 57308/3

16 WINDOW AND MOVEABLES Table A1 Windows and moveables market, volume (units) Annual % change Window % Portable/moveable % Total % Table A2 Windows and moveables market, value (US$ million) Annual % change Window % Portable/moveable % Total % Table A3 Windows and moveables market, average selling price (US$) Annual % change Window % Portable/moveable % Note: 1. Average selling price from manufacturer/importer to first point of distribution. Current prices Constant prices from 2014 onwards. Figure A1 Windows and movables market analysed by product, volume, Page 13 of 34 Report 57308/3

17 Table A4 Imports-exports, windows and moveables products, volume, 2013 A B C D E F G Home market Imports (1) Imports as % of home market B/C Production (1) A - B + E Exports (1) Balance of trade (1) E - B Exports as % of production E/D Window/through the wall 0 0 0% % Moveables (portable) % % Total % % Note: 1. Excludes all re-exporting / trading activities 2. Figures should be regarded as more approximate than others in this table Supply structure Table A5 Brand market leaders and other significant companies for window and moveable products by volume, 2013 Window / through the wall Room units Moveable / portable Brand market leaders (descending order) n/a Their share % 70% Other significant companies (descending order) Commentary Windows n/a LG Carrier Toshiba Midea Zibro (PVG) Group In Croatia the use of window units remains a niche market with insignificant importance and there is no potential for development of this market. The market of this segment has been declining in the last decade as most of the largest manufacturers have withdrawn the window units from their product range. Last sales recorded in 2010 and 2011 were sales generated from remaining stock of window units. These were mostly installed in shelters for telecommunication or on building sites. Major players did not report sales of window units on the Croatian market in 2012 and in Through the wall There is no market for this product in Croatia. Page 14 of 34 Report 57308/3

18 Moveables The market of portable/movable air conditioners has been replaced by split systems in the last decade. The cheap price of portable/mobile units and no need of installation were not enough to convince the Croatian population in buying them. They have lost their market share and are currently not offered in the country. Major manufacturer believe that there might be around 880 units sold via online shops. The majority of the portable units are used for cooling only and very few also for heating. These are mostly sold to small offices since they can move easily and humidify the air as well. It is expected that the market of portable/movable units will continue to decline in the forecast period as end users prefer to invest in more energy efficient equipment, in particular in the new build. 100% of the sales in 2013 came from imports. Page 15 of 34 Report 57308/3

19 SPLIT SYSTEMS Table B1 Un-ducted, Japanese ducted, US ducted and VRF split systems market, volume (units) Single Splits (un-ducted) Annual % change <5kW 40,690 39,985 40,000 40,130 40,850 41, % Cooling only % Heat pump 40,690 39,985 40,000 40,130 40,850 41, % >5kW 11,400 10,940 10,900 10,660 11,380 12, % Single Splits (Japanese ducted) Single Splits (US ducted) Cooling only % Heat pump 11,400 10,940 10,900 10,660 11,380 12, % Total 52,090 50,925 50,900 50,790 52,230 53, % <17.85kW % >17.85kW % Cooling only % Heat pump % Total % <17.85kW % >17.85kW % Cooling only % Heat pump % Total % Multisplits 5,800 5,400 5,400 5,500 6,000 6, % VRF % Total 53,015 51,785 51,770 51,670 53,230 54, % Note: 1. Manufacturer / importer prices to first point of distribution excluding installation Page 16 of 34 Report 57308/3

20 Table B2 Unducted, Japanese ducted, US ducted and VRF split systems market, value (US$ million) Single Splits (un-ducted) Annual % change <5kW % Cooling only % Heat pump % >5kW % Single Splits (Japanese ducted) Single Splits (US ducted) Cooling only % Heat pump % Total % <17.85kW % >17.85kW % Cooling only % Heat pump % Total % <17.85kW % >17.85kW % Cooling only % Heat pump % Total % Multisplits % VRF % Total % Note: 1. Manufacturer / importer prices to first point of distribution excluding installation Page 17 of 34 Report 57308/3

21 Table B3 Unducted, Japanese ducted, US ducted and VRF split systems market, average selling price (US$) Annual % change Single Splits (un-ducted) % <5kW % Cooling only % Heat pump % >5kW 1,290 1,350 1,430 1,490 1,500 1, % Cooling only % Heat pump 1,290 1,350 1,430 1,490 1,500 1, % Single Splits (Japanese ducted) 1,333 1,397 1,420 1,444 1,485 1, % <17.85kW 1,067 1,107 1,135 1,163 1,192 1, % >17.85kW 1,511 1,568 1,578 1,600 1,660 1, % Cooling only % Heat pump 1,333 1,397 1,420 1,444 1,485 1, % Single Splits (US ducted) % <17.85kW % >17.85kW % Cooling only % Heat pump % Multisplits 1,700 1,750 1,800 1,850 1,900 1, % VRF 11,800 11,890 11,950 12,030 12,110 12, % Note: 1. Manufacturer / importer prices to first point of distribution excluding installation Current prices Constant prices from 2014 onwards. Figure B1 Splits system market analysed by product, outdoor units, volume, Page 18 of 34 Report 57308/3

22 Table B4 Sales of single, multi split and VRF systems, value, 2013 A B C D Value of system (US$ million) Outdoor units (1) Volume Indoor units Average market price for system / outdoor unit US$ A/B Single split (one-to-one)* ,875 45, Multi split (2) 9.5 5,400 15,120 1,750 VRF ,550 11,890 Total ,785 63, Note: 1. Includes US ducted 2. Includes ducted multisplits Table B5 Imports-exports, splits products, volume, 2013 A B C D E F G Home market Imports (1) Imports as % of home market B/C Production (1) A - B + E Exports (1) Balance of trade (1) E - B Exports as % of production E/D Single split (one-to-one)* 45,875 45, % ,875 0% Multi split** 5,400 5, % 0 0-5,400 0% VRF % % Total 51,785 51, % ,785 0% Note: 1. Excludes all re-exporting / trading activities 2. Figures should be regarded as more approximate than others in this table Supply structure Table B6 Brand market leaders and other significant companies for splits products by volume, 2013 Brand market leaders (descending order) <5kW Single Unducted splits Daikin Carrier Toshiba Mitsubishi Electric Panasonic Samsung LG >5kW Daikin Mitsubishi Electric Carrier Toshiba Panasonic Samsung LG Single Japanese ducted splits Daikin Mitsubishi Electric Carrier Toshiba Fujitsu General Single US ducted splits n/a Multisplits Daikin Carrier Toshiba Mitsubishi Electric Fujitsu Samsung Panasonic Their share 55% 50% 80% 45% 85% Other significant companies (descending order) Fujitsu General Haier Hitachi Midea Acson Vivax Arcelik Nippon Vaillant Fujitsu General Midea Hitachi Acson Vivax Arcelik Vaillant Hitachi n/a LG Hitachi Midea VRF Daikin Mitsubishi Electric Panasonic Carrier Toshiba LG Samsung Gree Fujitsu Vivax Page 19 of 34 Report 57308/3

23 Commentary Croatia is a country with moderately warm climate and therefore sales on air conditioning systems depend highly on the weather conditions. Cooler temperatures in the summer season have a negative impact on the demand of splits, especially in the residential sector. In 2013, a total of 51,785 splits and VRF units were sold on the Croatian market, with corresponding value of US$ 43.3 million. On the base of the forecasted building permits, following a positive trend, it is expected that the overall market will increase by 0.5% by Almost 78.5% of the unducted splits are below 5KW. These are installed mainly in the residential sector. The remaining share of splits over 5kW is installed for light commercial application. It is very likely that unducted splits with smaller capacity will maintain their market share of around 78% each year. In the last decade the most of the manufacturers have switched to R410A refrigerant as the use of R22 was forbidden. In 2012, the world s first R32 air conditioner was launched by Daikin. Supported by the Japanese Ministry for Economy, Trade and Industry (METI), Daikin completed tests and training in India. R32-air conditioning split units were installed in India (35 units in New Delhi, 10units in Kolkata, 7 units in Bangalon and 20 units in Mumba). Under METI of Japan s leadership, Panasonic and Daikin agreed to help Indonesia introduce this technology. Within weeks of the above agreement Fujitsu General Hitachi and Toshiba joined the partnership to introduce and promote R32. R32 is considered as more energy efficient compared to R410A and R22, easy to recycle and reuse and affordable for developing countries. In the autumn of 2012, R32 refrigerant was introduced to all air conditioning models of the residential sector in Japan and is expected to expand its use to all commercial air conditioning equipment in the future. Certainly air conditioning splits with R32 refrigerant will be offered and have potential for the European, and therefore the Croatian market. Nevertheless, manufacturers need to decide the use of R32 depending on the application and the need of the market, considering local legislation and standards. In Europe, R410A will still be used, particularly for such applications, where the use of flammable refrigerants is currently still restricted. Most of the systems sold are inverter; it is expected that this trend will continue in the forecast period as suppliers invested in marketing campaigns and promotions of these products. However, sales of non-inverter air conditioners are also recorded in Croatia as this type continues to have a market price advantage. Inverter penetration accounted for around 90% for single splits. In Croatia, the vast majority of the split and VRF systems are supplied by well-known and established manufacturers at high quality standards. In 2012, around 70% of the split systems were channelled via the network of professional installers. The remaining 30% of the splits were supplied through the retailer channel and online shops. The retailer share that includes the sales of low cost Asian made products have increased in the last years and it is very likely to keep its growing trend. The retailer share/online offers include a product range at lower price, usually made in the Asian countries. Page 20 of 34 Report 57308/3

24 Single ductless splits The majority of air conditioning units installed in the residential sector are the smaller single splits (<5kW). The total market size of the ductless splits market is estimated to be 50,925 units. In 2013, the market decreased by 2.2% compared to 2012 and it is believed to continue declining in the next couple of years. However, a recovery of the market is expected from 2016 onwards. The value of the ductless splits market increased in 2013 due to higher selling prices and was estimated to be US$ 36.8 million (in comparison to US$ 36.3 million in 2012). All splits sold were with a heat pump, so they can be used also as heater in the autumn and winter period. Supply of cooling only units has completely stopped in 2011 and it is not expected that the market of this segment will recover. All splits are manufactured out of the country and the importers have established their own distribution chains covering all the major cities in Croatia. Single splits are offered also through DIY stores and via online shops. As the split market is very fragmented and competitive, the establishment of new market entrants will be difficult in the future as theses will need to operate through their own distribution channels or use those of local partners selling already existing brands. End users have a wide selection of brands, features and prices available to them due to the high competition. Daikin held the leading position in the splits market. It was followed by Carrier Toshiba, Mitsubishi Electric, Panasonic, Samsung and LG. Other players on the market were Fujitsu General, Hitachi, the Turkish Arcelik with its Beko brand, O.L.Y.Manufacturing with its Acson brand and the Chinese Haier. Single splits are usually installed mainly in the residential sector, in small flats or for cooling/heating of only one room. For cooling of bigger areas, such as 3, 4 or 5- bedroom house, multi splits are required. On/off units are mainly small single splits; larger units are all with inverter. It is expected that sales of on/off systems will continue to follow decreasing trend as many manufacturers have switched to inverter products. The average selling price increased in 2013 to US$ 722 (from US$ 696 in 2012). Page 21 of 34 Report 57308/3

25 Multisplits Multisplits are estimated to be 5,400 units in 2013, with a total value of US$ 9.5 million. Single splits clearly dominate in the Croatian market as multi splits is more expensive solution than installing a number of single splits. Multi splits are more aesthetic as they have only one external unit. Multi splits are usually installed in the non-residential sector, such as smaller offices or education centres where VRF is still too expensive to be installed. However, the industry believes that the multi splits market share will increase in the next five years due to the increasing demand from the residential sector. Multi splits can provide air conditioning in houses with more than one room. The market of multi splits was supplied by major well-known manufacturers. The leading brands for multi splits are Daikin, Carrier Toshiba, Mitsubishi Electric and Fujitsu General. it will be difficult for new suppliers to enter the Croatian market Due to the significant price difference compared to VRF systems, multi splits are set to grow in the future. In 2012, an average selling price of a multi split outdoor unit was US$ 1,750. Inverter penetration reached 98% for multi splits in The average indoor to outdoor ratio in Croatia is 2.8 internal units per external unit. Multi splits in the lower capacity (below 5kW) are usually installed in the residential sector. The vast majority (over 90%) of multi splits was supplied through professional installers. Single Japanese style splits (ducted) The market leader of Japanese style ducted splits was Daikin, followed by Mitsubishi Electric and Carrier Toshiba. 100% of the units sold in 2013 were with a heat pump and can be used also as a heater Ducted splits are a niche, but fairly stable market in Croatia. They account for less than 1% of the total split and VRF market. This segment is usually installed in specific building projects (mainly in the residential sector) where there is no suitable location for multiple outdoor units, but where a three or four bedroom house needs to be heated and cooled. Some homeowners go for ducted units because of aesthetic reasons. In 2013, there were 350 units sold with a total market value of US$ 0.5. It is expected that sales in the capacities below 17.85kW will follow up going trend. It is very likely that that the market of this segment will remain quite stable. Single US style splits (ducted) There are no sales of US style ducted splits in Croatia. This segment is almost unknown in the country as its installation does not meet Croatian construction standards. There are no players active on this market. Page 22 of 34 Report 57308/3

26 VRF The VRF market was estimated to be around 500 units in 2012 with a corresponding value figure of US$ 5.9 million. In 2013, the VRF market was estimated to be around 510 units with a corresponding value figure of US$ 6.1 million. The market is expected to increase in the forecast period due to its enhanced performance. VRF are usually sold through professional channel (installers of air conditioning and heating systems). The average selling price of VRF systems has been relatively stable in the last couple of years and it is expected that manufacturers will try to keep them competitive. The VRF units are mainly installed in the non-residential sector. They are very common for new office buildings that could be rented to different clients, so client s areas can be different controlled. The demand came mainly from the largest cities in the country Zagreb, Split, Rijeka. VRF systems are used on the refurbishment market, for replacement of central plant systems, such as mini chillers and multi-splits. They are also a good solution for older buildings with no air conditioning where duct installation would be difficult or expensive. VRFs are mainly installed in offices and luxury residential buildings. VRF are a preferable choice by owners and building contractors as their maintenance is cheaper than the one of water - cooled chillers. The market leader on the VRF market in 2012 and 2013 was Daikin, followed by Mitsubishi Electric, carrier Toshiba, Panasonic, LG and Fujitsu. Currently the companies are promoting smaller VRF systems as these provide much better controls. Page 23 of 34 Report 57308/3

27 SINGLE PACKAGED Table C1 Single packaged market, volume (units) Annual % change Roof top % PTAC % Indoor packaged % Total % Table C2 Single packaged market, value (US$ million) Annual % change Roof top % PTAC % Indoor packaged % Total % Note: 1. Includes indoor and outdoor units Table C3 Single packaged, average selling price (US$) Annual % change Roof top 9,500 9,560 9,610 9,680 9,730 9, % PTAC % Indoor packaged 5,650 5,670 5,690 5,710 5,720 5, % Note: Average selling price from manufacturer/importer to first point of distribution. Current prices Constant prices from 2014 onwards. Figure C1 Single packaged market analysed by volume, Page 24 of 34 Report 57308/3

28 Table C4 Imports-exports, single packaged products, volume, 2013 A B C D E F G Home market Imports (1) Imports as % of home market B/C Production (1) A - B + E Exports (1) Balance of trade (1) E - B Exports as % of production E/D Rooftops % % PTAC 0 0 0% % Indoor packaged % % Total % % Note: 1. Excludes all re-exporting / trading activities 2. Figures should be regarded as more approximate than others in this table Supply structure Table C5 Brand market leaders and other significant companies for single packaged products, by volume, 2013 Market leaders (descending order) Rooftop PTAC Indoor packaged CIAT Lennox Gea Trane Toshiba Carrier LG Their share 96% 68% Other significant companies (descending order) Commentary Rooftop n/a Trane Lennox CIAT Toshiba Carrier Aermec Daikin n/a Climaveneta All of the rooftop and indoor packaged units sold on the Croatian market were imported and there was not a single local manufacturer. The total market is estimated to be 105 units in 2013 with a corresponding value of US$ 1.2 million. It is expected that the market will continue declining in the forecast period due to decrease of indoor packaged units. Rooftops, however, are expected to increase. The increase will be influenced by the current trend of installation of two or three rooftops instead of a chiller as this is seen by contractors and owners as a cheaper and equally energy efficient solution to chillers. Rooftops are usually installed in outlets, sport centres, hyper- and supermarkets, but also in leisure sites with wide open area. Almost 50% of the rooftops are sold in the capacity range 20-70kW. The average selling price of a rooftop in 2013 was US$ 9,560. The market was led by CIAT, Lennox, GEA and Trane. Other important players on the market are Carrier, LG, Daikin and Aermec. There is no local production of rooftops in Croatia. Page 25 of 34 Report 57308/3

29 PTAC There are no sales of PTAC in Croatia. This segment is almost unknown in the country as its installation does not meet Croatian construction standards. There are no players active on this market. Indoor packaged The market of indoor packages declined by 12.5% in 2013 in comparison to The market was estimated at US$ 0.2 million in It is expected that the market will continue decreasing the timeframe of this study. Trane, Lennox, CIAT and Toshiba Carrier led sales of indoor packaged units. Climaveneta was also among the important players on the market. In the past, large packaged systems were installed in light commercial sectors, in particular in restaurants. However, their market shares were taken by multisplit systems and VRF, and in some cases by chiller systems. Page 26 of 34 Report 57308/3

30 CHILLERS Table D1 Chiller market, volume (units) Chillers Annual % change Reciprocating, screw, scroll % Centrifugal % Absorption % Air cooled % Water cooled % <100kW % >100kW % Total % Table D2 Chiller market, value (US$ million) Chillers Annual % change Reciprocating, screw, scroll % Centrifugal % Absorption % Air cooled % Water cooled % <100kW % >100kW % Total % Table D3 Chiller market, average selling price (US$) Chillers Annual % change Reciprocating, screw, scroll 12,308 14,657 17,375 17,667 17,688 17, % Centrifugal 106, , , , , , % Absorption 125, , , , , , % Air cooled 17,986 18,552 18,870 18,907 20,256 23, % Water cooled 26,667 27,828 29,216 29,319 33,627 36, % <100kW 11,111 11,645 11,818 11,967 14,394 15, % >100kW 28,226 28,378 28,800 28,617 30,735 34, % Note: Average selling price from manufacturer/importer to first point of distribution. Current prices Constant prices from 2014 onwards. Page 27 of 34 Report 57308/3

31 Figure D1 Chillers analysed by type of cooling, value (US$ million), Table D4 Imports-exports, chiller products, value, 2013 A B C D E F G Home market Imports (1) Imports as % of home market B/C Production (1) A - B + E Exports (1) Balance of trade (1) E - B Exports as % of production E/D Chillers % % Note: 1. Excludes all re-exporting / trading activities 2. Figures should be regarded as more approximate than others in this table Supply structure Table D5 Brand market leaders and other significant companies for chiller products, by value, 2013 Market leaders (descending order) All chillers <350kW >350kW Carrier Toshiba Trane Climaveneta Daikin Carrier Toshiba Trane CIAT Daikin Their share 78% 85% 89% Other significant companies (descending order) Acson, Lennox JCI CIAT Hitachi Climaveneta Lennox JCI Midea Carrier Toshiba Trane CIAT Climaveneta Daikin Acson Hitachi Page 28 of 34 Report 57308/3

32 Commentary 100% of the chillers market is imported and there were no local manufacturers in Croatia in Sales of centrifugal and absorption chillers were recorded on the Croatian market in 2013; however, the most common types of chillers sold were reciprocating, screw and scroll. There is a trend of replacing reciprocating compressors with scroll or screw, depending on the application. Scroll compressors are installed usually in smaller chillers; screw compressors are installed in chillers with larger capacity. Scroll chillers continue to take market share from screw chillers mainly in the smaller capacity. Centrifugal and absorption chillers are used only for certain projects because of their large size and expensive price. The number of installed systems largely depends on the Government s investments in the construction sector. Centrifugal chillers are usually of a large size and sometimes require cranes for installation. The average price of chillers is expected to increase in the forecast period, which will result in increasing value of the chillers market in the timeframe of this report. The majority of the chillers use R410A refrigerant. Variable speed compressors are common. The total market size of chillers was estimated to be 187 units in 2013 with a corresponding value figure of US$ 4.0 million. The market has been decreasing in comparison to It is expected that the sales will remain declining until 2017 due to high initial capital costs. Capacity chillers above 100kW continue to gain market shares and it is expected that this trend will be kept in the forecast period. However, the proportion of chillers above and below 100kW will remain constant and it is not expected to change significantly in the next few years. Small capacity chillers have been affected by the growing VRF market mainly due to the easier and quicker installation of the VRFs. Contractors also tend to install two or three rooftops in new building instead of a chiller as this is cheaper solution. However, as VRF and rooftops are not suitable for all type of commercial buildings, there will be still scope and demand for chillers. The Croatian market is very competitive and fragmented on the supplier side. Carrier/Toshiba has been the market leader in the last two years, followed by Trane. Other significant players on the market are CIAT, Climaveneta and Daikin. In the replacement and refurbishment sector, replacing old chillers with existing water piping is still less expensive than installing VRF or rooftops. This is due to the fact that VRF will need new refrigerant piping. Chillers with heat pump account for a small share and it is not expected that their share will increase significantly in the forecasted period. Page 29 of 34 Report 57308/3

33 AHU AND FAN COILS Table E1 AHU and fan coil market, volume (units) Annual % change AHU % Fan coil Concealed 4,400 4,050 3,800 3,500 3,350 3, % Cased 2,250 2,100 1,950 1,700 1,500 1, % Total 6,650 6,150 5,750 5,200 4,850 4, % Total 7,350 6,705 6,290 5,730 5,410 4, % Table E2 AHU and fan coil market, value (US$ million) Annual % change AHU % Fan coil Concealed % Cased % Total % Total % Table E3 AHU and fan coil market, average selling price (US$) Annual % change AHU 9,500 9,700 9,000 9,300 9,600 10, % Fan coil Note: Concealed % Cased % Average selling price from manufacturer/importer to first point of distribution. Current prices Constant prices from 2014 onwards. Page 30 of 34 Report 57308/3

34 Figure E1 AHU market analysed by value (US$ million), Figure E2 Fan coil market analysed by volume, Table E4 Imports-exports, AHU and fan coil products, value (US$ million), 2013 Home market A B C D E F G Imports Production Exports Balance Exports as (1) (2) (2) (1) (2) of trade (2) % of A - B + E E - B production E/D Imports as % of home market B/C AHU % % Fan coil % % Total % % Note: 1. Excludes all re-exporting / trading activities 2. Figures should be regarded as more approximate than others in this table Page 31 of 34 Report 57308/3