Russian market of chillers in 2013

After financial crisis of 2008 Russian construction market recovered faster than analysts had expected. As a result the sales of chillers in Russia in the end of 2011 reached the pre-crisis level and showed 2.6 % growth over sales of 2008 in 2012. In the 2013 a growth continues but not so fast. According to preliminary estimates, market increased by 5% in volume. And forecast to 2014 is cautious, because of country’s economic situation goes bad.

DIAGRAM 1. Dynamics of the Russian market of chillers by semester, mW, 2007-2013.

Source: Litvinchuk Marketing

At the construction market in 2009 and 2010 were mainly presented facilities, the construction of which had been suspended during the crisis of 2008 (the share of new facilities was only 32% and 46% respectively). In 2011 the share of suspended facilities fell to 13%. Thus, in 2009 and 2010 took place the realization of the projects which had been started before the crisis, and in 2011-2013 – of the new projects, developed after the crisis. In this regard, the market has seen structural changes with some delay.

First, before 2009 most of projects financed by the bank. At the crisis a value of the bank loans jumped too high (to the 12%-15% level). Companies were forced to use its own money. Because of it at the market dominate rather small facilities. Because of it subsequently average power of chiller decreased. After the 2010’s minimum average power of chiller started to rise slowly.

DIAGRAM 2. Average power of chiller in 2009-2013, kW

Source: Litvinchuk Marketing

Second, the crisis has forced customers to save. Therefore, the share of expensive equipment is being reduced right until 2013. So, if we estimate the share of the “Big Three» – Carrier, York and Trane in mW, then in 2008-2009 it was equal to 45-46%, in 2010 – 36%, in 2011 – 34%, in 2012 – 27,3%, and in the first half of 2013 rose to 31,4%.

In contrast, the inexpensive brands appear at the leading group. As a result, the top ten list of the first half of 2012 is as follows: Carrier, Clint, Aermec, Clivet, York, Trane, Daikin, Ciat, McQuay, and Emerson. As you can see, top five has three Italian manufacturers.

Third, the purely economic considerations force the designers to use the Freon cooling devises – CCU (Compressor condenser units), as a source of cold for small AHU. In 2009-2010, for the sake of saving funds, they were used in a number of projects where originally chillers were to be installed. In 2011-2012 the Freon cooling devises already dominate the projects where the need of AHU in cold is within the range of 5-70 kW. As a consequence, the share of mini-chillers was reduced.

Among the apparent trends, the increase in sales of modular chillers made in China should also be noted. This equipment is presented mainly by OEM brands, produced by Midea – Lessar, MDV, Aerotek, Dantex, and Venterra. A number of Russian companies have this type of equipment at their warehouses as a special position.

DIAGRAM 3. Average price of the chiller (for installer, including VAT) in 2009-2013, USD

Source: Litvinchuk Marketing

It is logical, that the average price of the chiller in 2011 also went up, which clearly reflects the Diagram 3. However, if counting the price of 1 kW of cold, trend in prices was downward till the middle of 2012, after that rises slowly.

DIAGRAM 4. The Russian market of chillers in terms of the price of 1 kW (price for installer, including VAT) in 2009-2013, USD

Source: Litvinchuk Marketing

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