HVAC market of Novosibirsk

DISTINCTIVE FEATURES OF CLIMATE AND ECONOMY OF THE REGION

Novosibirsk is the biggest megapolis in Siberia. Sometimes it is called 'technopolis' and 'city of science'. Novosibirsk is an important transport junction; it is a historical commercial center of Siberia. Unlike many other towns of Eastern Russia, Novosibirsk is not connected with some certain "town-making" enterprise or industry.

Novosibirsk is a rather young city: it is considered to be established in 1893. But in 1921 it was already the administrative center of Siberia. During The Second World War more then 50 industrial enterprises of European part of the country were evacuated to Novosibirsk.Population of Novosibirsk grew intensively. In some 70 years after the city was established, it's population exceeded one million people. Now Novosibirsk is the third biggest city in Russia after Moscow and Saint Petersburg. Today it's population is around 1,4 million people.

Novosibirsk is the center of the Novosibirsk agglomeration, which includes adjacent settlements, closely connected with Novosibirsk economically and socially. Population of the agglomeration is more than 2 million people. It's contribution into GDP of the Novosibirsk region exceeds its ? and practically determines all trends in the regional economy.

Agglomeration also economically includes some rather big local towns like Ob and Berdsk, and some neighboring districts.

In 1957 the Siberian Branch of Russian Academy of Science was established in Novosibirsk. Since that moment, fundamental and applied science became the most important factor of the regional development. More than one fourth of active population of Novosibirsk is now engaged in this field.

Industry has also an important role in development of the city. Now there are in Novosibirsk more than 200 big and middle-size industrial enterprises, more than a dozen business centers for technological innovation and more than one and a half thousand organizations, connected with industrial dissemination of innovations. Machine building, power industry, ferrous and nonferrous metallurgy, construction industry, light and food industries dominate economy of the city. For the last five years industrial production in Novosibirsk grew by 131%.

Novosibirsk is the biggest transit transport junction on the way from Asia to Europe and vice versa. There cross: West-Siberian Railway; federal highways Cheliabinsk-Irkutsk ("The Baikal") and Novosibirsk-Tashanta ("The Route of Chuisk"); international, federal and regional airways; navigable river Ob.

Novosibirsk is situated in the continental climate zone. Average annual temperature is 0,2 C above zero. Very typical is big fluctuation in monthly average (38 C) and absolute (88 C) temperature. Average temperature of January is 18,8 C below zero, of July – 19 C above zero.

CONSTRUCTION ACTIVITY

Residential real estate. Volume of newly constructed residential real estate in Novosibirsk increases every year. In 2006 there were commissioned 829 thousand sq. meters: 105 multistorey blocks of flats with total square 622,5 thousand sq. meters and 2244 private houses. By 2015 it is planned to construct 10 612 thousand sq. meters of residential real estate more.

Commercial real estate. Some top-level hotels are to be constructed in Novosibirsk in nearest future. Four hotels are now under construction, some more is being designed.

Recently increased activity in the segment of administrative, public, cultural, sport, entertainment and trade complexes construction. In 2006 began the construction works of multifunctional family trade and entertainment center "MEGA". The center would include stores "IKEA", "HIPERMARKET", "MEGA", "SDELAY SAM" ("DO IT YOURSELF") and about 100 small shops. All this trading facilities would be connected with the gallery around the zone for entertainment, in the middle of which would be situated big skating ring and restaurants.

Company "Sport-Avto", the official dealer of Porsche in Western Siberia, plans to construct in Novosibirsk a 15-storey multifunctional business center "PORSCHE".

Now there are more than 1,5 million sq. meters of trading facilities with the cost of some USD1,7 billion at the faze of design or under construction in Novosibirsk. About 10 years ago there were 165 sq. meters of trading facilities per one thousand citizens of Novosibirsk.Now this figure increased to 360 sq. meters, by 2010 it is expected to be doubled. Today there are around 30 trading centers and supermarkets with the total square of 833 thousand sq. meters in the city. Within the period between 2005 and 2006 the growth was 232 thousand sq. meters (including reconstruction), for first semester of 2007 the growth was 67 thousand sq. meters.

The year 2007 is good for the construction industry of Novosibirsk. In this year the first business centers of class "A" were commissioned – 127 thousand sq. meters, and some 53 thousand sq. meters more of offices of class "B".

Now within National Projects an active reconstruction of medical, educational and social facilities is under way. It increases demand for HVAC equipment, mainly split systems.

PLAYERS OF THE HVAC MARKET

There are about 100 regular players at the HVAC market of Novosibirsk now. By summer this number significantly increases. At the same time, number of so-called "season" firms is getting less from year to year. There are some big HVAC companies in Novosibirsk, among them are: "Ventcomplex", "Klimat-SVO", "Klimatekhnika-Sibir", "Klimatika", "Lot-komfort", "NE-TA", "Petrospek", "Rival", "Sovplim".

Many HVAC companies from Novosibirsk work with objects under construction or develop distribution nets outside the region. They have already got into neighboring Altay Territory, Tomsk Region, Kemerovo and come other regions.

Chain stores like "Aisberg", "M-Video", "MIR", "Sibvez", "Technosila" and "Eldorado" have an influence on activity of retailers of air conditioners, heaters and air humidifiers. But leaders of the market are still professional HVAC companies, for corporative customers prefer to deal with a partner who can provide high quality and guarantees of seller.

Very active in Novosibirsk are representations of the Moscow and Saint-Petersburg based companies: "VTS-clima", "AyaK", "Ventraid", "GSK", "Daichi", "Euroklimat", "Klimat-Prof", "Legitim", "Lissant", "Moven", "Rusklimat", "SuperVent-Holding", "Elita-Sibir" and also representations of the plants "Korf" and "Rosenberg-Sibir". They organize conferences, seminars and joint advertising campaigns to promote brands they work with. Companies "Euroklimat", "Biokond", "Ventraid" and "Rusklimat" have in Novosibirsk their regional warehouses.

There are some designing institutes in the city, for instance, "Novosibgrazhdanproekt". Experts say, that HVAC companies more and more often work with the design of projects themselves. This way is more convenient for both companies and customers, for they can order design, equipment and installation at the same place.

There are also some domestic manufacturers of HVAC equipment in Novosibirsk. They are ZAO "Tayra" and OOO "BVK" ("Klimat SVO"), who manufacture ventilators and extract-and-input boxes. "Voskhod", "Delo", "Klimat SVO", "Sibmaster", "Tayra" and some medium-size workshops produce ventilation equipment and air ducts.

Big HVAC companies of Novosibirsk are united in "Association of Climate Firms". Members of the Association come together each year before the active season, and try to come to an agreement about their activity, for not to undermine the business of each other. Preparation of opening the Regional Branch of APIC is under way. Many local companies, first of all serious players of the HVAC market, are ready to become members of it.

MAIN BRANDS OF HVAC EQUIPMENT

There is a great variety of the climate equipment represented in Novosibirsk. All well-known brands are represented. Each year appear some new ones, unknown before.

• RAC – Ballu, Daikin, Fuji, Fujitsu, Gree, Haier, Hualing, Kentatsu, LG, McQuay, Midea, Mitsubishi Electric, Mitsubishi Heavy Industry, Panasonic;
• PAC – Daikin, DeLonghi, Gree, LG, Liebert, Mitsubishi Electric, Mitsubishi Heavy Industry, Panasonic, Rosenberg, Remak, Weger, Wesper, Wolf;
• Multizonal Systems – Daikin, Fujitsu, Gree, Haier, Midea, Mitsubishi Electric, Mitsubishi Heavy Industry, Sanyo;
• Chillers and Fan Coils – Bluebox, Carrier, Daikin, McQuay, R.H.O.S.S, Royal clima, Wesper, York;
• Ventilation equipment – 2VV, KORF, O Erre, Ostberg, Polar Bear, Rosenberg, Ruck, Shuft, Silavent, Sistemair, Vents, VTS Klima;
• Heaters, Convectors, Fire-places – Atlantic, Ballu, NOBO, Noirot, Polaris, Timberk, Vitek;
• Heat Curtains – Frico, General, Termoscreens, Vectra, Teplomash, Tropik;
• Air Humidifiers – AEG, Aircomfort, Ballu, Boneco AIR-OSWISS, Bork, Polaris, Vectra;
• Air Dehumidifiers – Aerial, Danterm, Vectra.

ADVERTISING ACTIVITY AND MARKETING

Practically all big local companies, and also Moscow and Saint Petersburg based ones, who have their representations in the region, regularly organize in Novosibirsk seminars and presentations. Sometimes it's just pure advertising events, sometimes – specialized seminars and master-classes for designers and customers.

Serious annual construction exhibition "Stroysib" is hold for more than 16 years in exhibition pavilion "Sibirskaya Yarmarka" ("Siberian Fair"). There is a big section of heating, air conditioning and ventilation systems.

SPECIFIC FEATURES OF THE HVAC MARKET

The common opinion of all experts is that the main problem of the HVAC business in Novosibirsk is the lack of qualified specialists. Each company has to resolve this problem itself.

Novosibirsk developed as an administrative, trade and transportation center. Because of it there are many (from percentage point of view) small and medium-size companies, who are the main customers for HVAC equipment.

When customers choose equipment, their choice is often based not only on the price, but also on its quality and reliability. Very important role plays the reputation of supplier and manufacturer. In the segment of split systems, for instance, the leader is equipment of Japanese brands, which makes up about 70% of total sales.

More and more customers in Novosibirsk prefer to deal with the same company when solve different engineering tasks. So, the complex approach is very prospective.

In 2006 about 10 thousand split systems were sold in the Novosibirsk Region. According to different estimations, HVAC market of Siberian region grows by 20-25% annually.

Editors of the magazine "The World of Climate" sincerely acknowledge the help and assistance of experts of the Specialized Information Project HVACNEWS.RU and of the top managers of the Novosibirsk based HVAC companies:

Aleksandr Yarosh, OOO Russian-Swedish Joint Enterprise SovPlim-Holding, Executive Director:

As the climate market developed, there appeared the necessity of the complex approach to design of ventilation and air conditioning systems. That's why customers demonstrate special interest in such companies as OOO "SovPlim-Holding", i.e. engineering enterprises, who can offer a complex solution for task of ventilation and air conditioning.

Our company offers to the customers not only to deliver and install the climate equipment of any complexity, but also to carry out the whole range of connected service, starting from technical inspection of the object and design of the project, and to maintenance of installed equipment during its operating life.

This year the number of our partners exceeded 8 thousand. We always try to find an individual approach to each of them. We are always happy when our customers ask us about complex and nonstandard solution. We believe that our mission is to take care of the health of people, or, to be more precise, to take care of air people breathe, regardless of all technogeneous impacts of the modern world.

Serguey Permiakov, Separate Division of OAO NETA in Novosibirsk, Director, and Dmitry Boldyrev, Company NETA, Department of System Integration, Commercial Director:

Serguey Permiakov: Last year we organized at the company NETA the Department of System Integration. This department offers to our customers a wide range of services within 14 issues of engineering trade, including ventilation, air conditioning and heating systems. By today our company has already carried out several complex projects. In each of them NETA rendered service in eight issues of system integration. Our customers, for instance, were the Novosibirsk Division of Pension Fund of Russian Federation and the Novosibirsk Plant of Chemical Concentrates. In 2006 turnover of the climate divisions of the Department of System Integration of the company NETA was USD13,0 million. The same figure for Novosibirsk is USD5,3 million.

Dmitry Boldyrev: Novosibirsk developed as an administrative, trade and transportation center. Because of it there are many small and medium-size companies, who are the main customers for HVAC equipment. The success of HVAC company mainly depends on how well it is represented in these segments.

The main difficulty is the lack of qualified personnel. In order to solve this problem, we organized in our company regular training for all our people, both young and experienced. They are trained in the sale technology, design, installation and preparation for exploitation. All our young employees have experienced tutors.

Dmitry Shutov, Rusklimat Novosibirsk, General Director:

Novosibirsk is the biggest economical and industrial center of Siberia. We have already told that in Novosibirsk were opened representations of companies from Moscow and Saint Petersburg. At the same time we should also notice that that our "native" companies from Novosibirsk open their representatives in other regional centers. Company "Rusklimat Novosibirsk", having regional warehouse, as a dealer develops sales in neighboring Tomsk and Kemerovo regions. Now the volume of the market is increasing, and I believe, it's just the time for the quality growth. One of the most important criteria of the work of HVAC company is the growth of the quality of service rendered. I would like to note that HVAC market is a market of service first of all. Quality of service has become an important instrumentation of sales long ago. We don't work with approach "sell and forget". Client is exacting nowadays, and the main current and prospective task of any company at the HVAC market is to become exacting in issue of quality of rendered service. So, any regional market determines the goal to strive for.

Serguey Pobedennyi, OOO Daichi-Sibir, Director:

I believe, we could identify two main problems of HVAC business. The first one is preparation of installation specialists. There is no educational institution, which teaches installers of HVAC equipment. Company "Daichi-Sibir" solves this problem, holding regular seminars for installers and service people of its dealers.

The second problem is connected with competence, or, to be precise, with incompetence of customers in the issues of choice of equipment. Sometimes it's not so easy to understand people who spend lots of money for construction, finishing and furniture (finishing, furniture and expensive gadgets are important to keep status and image of a customer), but at the same time buy cheap and low quality climate equipment.

Dmitry Sergueev, Separate Division of Ventreid in Novosibirsk, Director:

We, fortunately, can say that HVAC market of Novosibirsk is a civilized one. Stable and looking into the future companies are able to get to agreement about common rules of the game. It is really important in order to keep the business commercially attractive. There are, sure, some companies with completely different approach to business. But, in general, there is no serious confrontation between them.

At the same time, the list of leading companies-installers in Novosibirsk is actually some kind of a closed club, which rules the game. It determines who wins the lucky lottery-ticket. And the subjects of this lottery are big orders for serious administrative and industrial objects of the regional scale.