HVAC markets market of Surgut

DISTINCTIVE FEATURES OF CLIMATE AND ECONOMY OF THE REGION

Surgut is a rather small and closed town. Surgut sharply differs from the towns of not only the European part of Russia, but also from other towns of the Tyumen Region where it is situated. Surgut is a quiet and reach town, its wealth comes out mainly of oil-processing and manufacturing industry. Only recent years Surgut becomes more open for "aliens".

Surgut is situated on the right bank of a Siberian river Ob, in its middle course. Population of the town is around 300 thousand people. Average temperature of January is 22 C below zero, of July – 18 C above zero. At the same time these formal figures do not say a lot about the real climate of the town. To imagine it you should understand the specific character of its location: high northern latitudes, sharp continental climate, great river and complete absence of any hills and mountains around. As a consequence there are strong and shrill winds, sharp leaps of temperature even during a day, long and cold winter, short but very hot summer. These factors, as well as high revenues of population, explain high demand for room air conditioners in the town. It's not easy to stand 37 C heat, even for only two weeks in a year.

It is accustomed to examine Surgut either independently, or in connection with the group of neighboring towns of the Khanty-Mansy Autonomous Region (now it is a part of the Tyumen Region). There is no sense to speak about the Tyumen Region as a whole, the situation in its different parts differs a lot.

Surgut is one of the leaders in Russia according to the level of revenue of population. In the first semester of 2007 average monthly salary was 31,3 thousand roubles and exceeded cost of living 5,1 times. For comparison, the same indicator in Tyumen and Ekaterinburg is two times less. The fleet of cars in Surgut is one of the biggest in Russia: 369 cars per one thousand citizens.

Fuel and energy complex is the base of regional economy. It includes different enterprises engaged in geological exploration, oil and gas extraction, pipeline construction and operating, oil processing. The evident leader in oil extraction and exploration drilling in the Surgut region is OAO Surgutneftegaz. It is one of the biggest and the most efficient company not only in the region, but also in Russia. Among other big enterprises are: OOO Surgutgazprom, who realize processing and transportation of dozens of trillions of cubic meters of gas per year; the Gas Condensate Processing Plant, the main gas supplier for the Surgut Power Stations and for residential sector. The both Surgut Power Stations, new and old one, are another subject of the citizens' pride. Big part of population of the town work there. Heat supply is rather cheap in Surgut, and it makes it a unique place in the region.

In Surgut is also noticeable the influence of big companies from the Tyumen Region, such as TNK, Tyumen-Energo, Yuganskneftegaz, Kogalym-neftegaz, Noyabrskneftegaz, Megionneftegaz, Lanfepasneftegaz, Tomskneftegaz and others.

CONSTRUCTION ACTIVITY IN SURGUT

Surgut is a rather young town, new construction is a necessity there. Vladimir Zayev, the General Director of the company Sibkonvekt, says: "There is a big activity in construction of trade and entertainment complexes, hotels, restaurants. Actively develops the cottage construction".

Residential construction. According to the official data, in the first semester of 2007 around 39,3 thousand sq. meters were commissioned (23,2 thousand sq. meters in the same period of 2006). At the same time the situation with the provision of dwelling space is not always equal. Surgut is very attractive because of its high revenues, so many people would like to move there. It produces some problems, and access of nonresidents to Surgut was significantly restricted recent years.

Commercial and public construction. During the first semester of 2007 the following objects were commissioned: Ski Center of the United Trade Union of OAO Surgutneftegaz with total square of facilities 1389 sq. meters; Bowling Center (6342 sq. m); eleven standard shops with total commercial square of 7600 sq. meters; ninety public catering establishments for 940 persons and some other.

Activity in construction of new hotels is the most noticeable. During the first semester of 2007 there appeared in the town: new hotel complex with total square of 19637 sq. meters within residential complex "Vozrozhdenie", there is installed modern air conditioning system of the third generation with variable refrigerant flow; hotel "Geolog" with outhouse shop and caf?-bar for 25 persons, with total square of 706 sq. meters; extension of existing hotel "Medvezhiy Ugol" with the square of 473 sq. meters; hotel for 8 persons with the square of 796 sq. meters.

DISTINCTIVE FEATURES OF HVAC MARKET IN SURGUT

One of the most remarkable things about HVAC market of Surgut is that there is no hostility between players of the market. The town is relatively closed, the biggest part of its everyday life is connected with the only one field of industry – a fuel-energy one. Because of this it's very difficult for newcomers to penetrate the market: all spheres of activity are already more or less distributed. Companies traditionally work with their customers for 5 – 10 years. Significant role plays also the oil and gas 'specialization' of the town: if the head-company prefers some distinctive brand of equipment to install in its buildings, all its branches and affiliated companies, no doubt, would order the same brand for many years.

Main customers of HVAC equipment are big companies, who are main employers for population and the biggest contributors into local budget, and also the administration of the town. There exists in Surgut a so-called 'Moscow tendency': owners of newly constructed trading centers try to install the most advanced ventilation systems from the very beginning. At the same time, experts traditionally say that the major part of the customers is not prepared psychologically to pay for sophisticated and high quality equipment.

Another distinctive feature of the town is determined by the climate. 'High season' at the market of room heaters begins already in summer. In August it can be rather hot in the Middle Russia, but in Surgut autumn begins in this month and it becomes cold. Central heating systems are usually switched on in Surgut September 7 – 10.

Serguey Lysenkov, the chief executive of the company Climatland, says "the main difficulty for HVAC companies in the town is absence of specialists. There are task to be solved, but there are no people to do it. For instance, it's almost impossible to find a man to offer the decision on the project and to elaborate the project. All other difficulties are not so noticeable".

PLAYERS OF THE HVAC MARKET

According to different assessments, from 10 to 20 companies work in the HVAC market of Surgut. Not more than 6-7 of them could be considered as big. In the industrial segment of the market work Renome, Ventservice, Sibspetsavtomatika, Ventstroy, Klimat-ProyektService, Climatland, Inzhenernye Sistemy; in the segment of room equipment work Sibkonvent, KomplektService, Er-Lan. There are in Surgut stores of some federal trade chains, M-Video and Eldorado in particular, and regional trade chains, such as KGB-Katchestvo-GarantiyaBlagopoluchiya (bought by DOMO). Local trade chains Kardinal and Nord sell home office appliances. These chains sell among other the equipment of DeLonghi, Elenberg, LG, Panasonic, Polaris and Toshiba.

Chief executives of HVAC companies have different opinions about the influence of trade chains on the local market. Those who work in the industrial segment of the market and with corporative customers, don't see any problem and don't care a lot. Those who are engaged in sales and installation of split systems, traditionally say about negative influence of chains on the climate business.

There are no manufacturers of HVAC equipment in Surgut. The only exclusion is production of some elements of ventilation systems. Company Er-Lan has organized the regional store of air conditioners General. Volume of sales of room air conditioners in Surgut is around 3-4 thousand units (without trade chains). 5-6 biggest companies give the bulk of this volume; the rest is more or less equally dispersed between about a dozen of small firms.

There is an Association of Energy-saving Enterprises of Surgut and Surgut District. The Association successfully coordinates the activity of enterprises, which work in different fields. It assists in realization of projects, helps to satisfy demands of the most exacting customer and to offer to him the complete set of service.

No special HVAC exhibitions are organized in Surgut. HVAC professionals and customers meet during different events of oil and gas complex. The most interesting events for HVAC companies are "Stroitelnaya vesna" ("Construction Spring") in March and "Surgut. Oil and Gas" in the end of September.

MAIN BRANDS OF CLIMATE EQUIPMENT

• Room air conditioners – Airwell, Ballu, Daikin, Haier,Hitachi, Fujitsu, General Climate,Gree, Kentatsu, LG, Midea, Mitsubishi Electric, Panasonic,Samsung, Sanyo, Toshiba;
• Industrial and packaged air conditioners – Carrier, Daikin, General Climate,Gree, Emicon, Fujitsu, Hitachi, Kentatsu, Liebert Hiross, LG, Midea, Mitsubishi Electric, Panasonic,Samsung, Sanyo, Toshiba;
• Multizonal systems – Daikin, Fujitsu, Gree, Hitachi,Kentatsu, LG, Midea, MitsubishiElectric, Toshiba;
• Chillers and fan-coils – Aermec,Carrier, Daikin, Wesper;
• Ventilation equipment – A-clima, Ostberg,Rosenberg, Rover, Shuft, Swegon,Systemair, Veza, Korf;
• Heaters, convectors, fire-places – Ballu, Delongi, Dimplex,Elenberg, Nobo, Noirot, Polaris,Delsot;
• Heat curtains – 2VV, Frico, Olefini, PreVenta, Pyrox, Teplomash, Tropik;
• Air humidifiers – Aircomfort, Ballu, Boneco, Carel,HygroMatic;
• Other wide-spread equipment (gas, diesel and solid fuel generators) – Itm, Kroll, Master.

Editors of the magazine " World of Climate" sincerely acknowledge help and assistance of the top executives of the Surgut based HVAC companies:

Serguey Lysenkov, Climatland, Director:

- We have a young town – that's the first. Dynamic of development is high – that's the second. Rate of growth of construction activity is also high – that's the third. All these characterize the situation in the town. Now we try to realize big projects with high quality and to install central air conditioning systems. At the same time not all customers are prepared for it. In our partners we estimate their capability to resolve issues rapidly, availability of good service and technical support.

Andrey Kravchenko, OOO Er-Lan, Director:

- Our town is a great deal of oil, gas, cold and desire to install air conditioners.

- What serious projects have been realized recently?

- Trade and service center FORD, a number of trade centers.

- What do you think are the distinctive features of HVAK market of Surgut (as compared with the market of Moscow, or other markets)?

- It's impossible to predict sales here.

Vladimir Zayev, OOO Sibkonvent, General Director:

- During the last five years Sibkonvent is, as a matter of fact, a holding company. It has two affiliated companies: Rrenome – design, construction and operating of internal engineering systems; Sibkonvent-Service – installation, maintenance and repair of the climate equipment. For the first nine months of this year we overstepped the number of 500 splits.

- Do your town and your region have some peculiarity, or some distinctive feature, which makes Surgut different from other towns of Russia?

- Yes, we have 9 months of winter.