Russian market of chillers

In the first half of 2016, the Russian market of chillers continued to drop. As it can be clearly seen at the Diagram 1, imports fell down by more than 1.5 times in the first half of 2016. At the same time, domestic production increased.

In order to see more clearly the dynamics of the market (taking into account the last six months), let’s have a look at it with the annual intervals that end on June 30 instead of December 31.

It can be clearly seen that the sales decreased by 32% over the previous year. In the absolute terms, this is less than a half as compared to the peaks of the years 2011 and 2012. More o less the same trend can be seen on the other markets of the industrial air conditioning systems, for example, the markets of VRF and AHU.

If predicting the near future, it is expected the slow down of the drop and gradual stabilization in 2017. In the second and third quarters of 2016, the construction works were resumed over a number of large projects which were started in 2011-2013 and stopped in early 2014. By the end of 2016, some of them would be finished.

The economic situation remains difficult, but in the 3-4 quarter of 2016, is expected the increase of production as compared with the same period of 2015. In annual terms, it would provide the dynamics close to zero, but in 2017 is expected the increase of GDP and gradual, though not so fast, rise.

About such development of events say also the dynamics of the VRF market. At this market, the lag between the announcement of tender and the supply of equipment is significantly shorter. In 2016, this market demonstrated a weak negative trend according to the results of 8 months (-14%), whereas the results of the first 4 months were −20%. This indicates that the final figures for the chillers will be somewhat better than the figures of first half of the year.

In the public sector, dominates the trend to replace imported equipment by the Russian analogues, if any. This trend is enshrined by law in the new edition of the Federal Law on Public Procurement. Since January 1, 2017, at the public procurement tenders the Russian equipment will win even if it has a 15% higher price in comparison with the foreign analogs. Given that Russian equipment is now around 5-10% more expensive than the most affordable imported models, it will give a significant preference to the Russian manufacturers and can radically change the entire structure of the market.

At the same time, the share of Russian products grew rapidly even without these measures, as it can be seen at the Diagram 3. Chillers in Russia are produced successfully for a long time by such companies as Thermocool, Aerocond and Teplosibmash, but the scale of production did not exceed 8-14 MW for many years. In 2009, started the assembling production of the company Geoclima in the Ivanovo region, which specialized initially on the units of small capacity, but gradually developed to assembling the centrifugal equipment. In April, 2014, started the production of chillers at the plant Tehnogrupp (brand NED/KORF), and now they have a stable production of about 20 units per month. At the end of 2014, were produced the first 10 cooling machines brand name Ballu at the production site of the company Rusklimat; now the production volume increased to at least 7 chillers per month. At the end of 2015, company VEZA, the biggest Russian manufacturer of AHU, announced the launch of production in the first half of 2016, the first 4 chillers were produced. Given that VEZA successfully manufactures condenser-compressor units and is ranked the second in the Russian Federation for this product (leads the company Tehnogrupp), this project has a great potential. In 2016, the chiller prototypes were assembled in Russia at the Clivet factory; York launched production of the chillers with scroll compressors at its successful plant of AHU.

Taking into consideration the growth in number and quality of production sites, as well as the fact that 90% of low-temperature cooling machines are manufactured in Russia, we can expect further growth of the share of domestic manufacturers. The preferences for participation in the public procurement will also accelerate this process.

In 2017, it can be expected the increase of the share of Russian made chillers up to 28-30% in volume and 22-23% in value and capacity terms.

This forecast can be safely done in view of the fact that the public procurement is at least 15% of the total consumption of the equipment, and 40%-45% more is the purchasing of the state-owned companies. As practice shows, they follow the government policy in their procurement practice.

So, in the nearest 2-3 years it may occur the situation when the share of Russian made chillers on the market will be limited, first of all, by production capacity of the domestic companies and the Russian plants of foreign manufacturers.

In this article were used the materials of APIC and the company LITVINCHUK MARKETING