Russian Fan Coil Market

Russian fan coil market is growing very fast (see Chart 1). There were 48200 units sold for the total sum of 27.6 million euro in 2004.The average growth rate in the last few years was 25-27%.This rate is expected to stay that high for about 5 to 7 years but later on it will gradually diminish. Office-construction boom will last that long, in the opinion of real estate analysts.

Specific Features of National Market

Unlike in most European countries the share of four-pipe fan coils on the Russian market is very low: 5.3% of all fan coils sold in 2004 with a slight tendency of growth (the expectation for 2005 was about 5.8%) Four-pipe fan coils are mainly used in higher-class offices especially those ones in multi-storey buildings with ample glazing where a situation often arise when “sunny” side needs cooling while “shady” one – heating

The second important feature is the low share of fan coils with electric heaters (only 11.6% in 2004 with downward tendency). The explanation lies in the climate of the country: with the 6 to 9 months long heating season (on the most part of the territory) running costs of water heated systems are 8-12 times (depending on the area) lower than they could be with direct electric heaters.

Fan coil sales in Russia in 1999-2004, 2005 – estimate, 2006-07 prognosis

Traditional design Split-type design Chart 1. Source: «Litvinchuk Marketing»

The third feature of the market is the prevailing use of fan coils for heating (82% in 2004). While in many countries water is heated by reverse-cycle chillers, in Russia boilers of water-water type are added to fan coil systems. Hot water from the central heating is used as source of heat because of its relatively low price. In accordance with the existing norms, its temperature should be 90° Ñ, but it is usually 65-80°Ñ, which is still sufficient for use in fan coil systems. The water from central heating cannot be supplied directly to fan coils because of its typically poor quality.

It should be stressed that fan coils are practically always used as additional heating systems. When they are used as the main heating systems, the Russian construction norms demand their duplication. It is reasonable in cold-climate conditions. In case of fan failure convection heat will not suffise to save the room from freezing.

It is interesting to compare the numbers of chillers and fan coils sold (see Chart 2). The difference is substantial and is evidently getting more pronounced, which reflects the growing average capacity of chillers.

Demand for Different Types of Fan Coils

One can notice a number of tendencies as far as demand for different construction types of fan coils is concerned.Popularity of traditional design – “concealed type” fan coils – gradually diminishes. Growth rate in this segment is 1.5 times lower than that of- “split style” fan coils. The reason is the more attractive design of the latter type. And indeed, the market share of “split style” fan coils was about 30,7% in 2003, 32,8% in 2004, and expected to reach 35,3% in 2005. The fastest growing sales are of cassette and floor mounted fan coils.

Russia. Number of fan coils sold per one sold chiller unit. 2005 – estimate, 2006-07 – prognosis

*Around 200 chillers were used as cold sources for Close control systems in 2004, that is why the ratio was somewhat lower than expected Chart 2. Source: «Litvinchuk Marketing»

When considering traditional-design fan coils alone one can note a very important regularity. Although 90% of traditional-design fan coils sold in Russia can be mounted both horizontally and vertically, non-cabinet ones are almost usually mounted horizontally above suspended ceiling while cabinet fan coils are mounted on the floor or on the wall close to the floor.

It is noticable that the share of cabinet models of traditional design is going down, though they are still the most demanded ones. It was 42.8% in 2003, 39.6% in 2004 and was predicted to be 37.3% in 2005. At the same time the share of non-cabinet models does not go down and even shows a moderate upward tendency.

This review is prepared on the basis of the survey “The Russian Market of Central Air Conditioning Systems in 2004”