Air-Conditioning & Refrigeration Equipment in Saudi Arabia

A Hot Tip about Plumbing, Heat and Air-Conditioning Installation in Saudi Arabia

Posted on: 27 May 2010

Overview

The air-conditioning market in Saudi Arabia is considered one of the largest markets in the world. The geographical fact remains that it is a very hot country especially during the summer season. The overall value of air conditioners sold in the Kingdom is estimated at around $1 billion.

 

Four factors are currently shaping market size and growth:

• the growing population, including expatriates,

• high per capita income,

• the harsh climatic conditions in Saudi Arabia (hot climate year-round),

• the construction boom in the Kingdom.

 

Saudi Arabia’s population is growing at more than 3% a year and enjoys steadily rising disposable income. Together, these two factors have spurred an unsurpassed construction boom in the kingdom. Over the next few years, more than half a million housing units are going to be constructed in the Saudi capital Riyadh alone, not to mention innumerable shopping malls, business and leisure centers, hotels, supermarkets, schools and restaurants. Saudi Arabia’s hot, arid climate is of course helping to propel the trend.

 

Best Prospects/Services

Saudi Arabia boasts the biggest air-conditioning market in the world, growing at 10% annually, and the fast-paced construction sector thrives at an impressive 7%. This creates an array of lucrative investment opportunities for companies from across the world. The Saudi Arabian market remains receptive to high quality U.S. products and services.

 

The growth in Saudi Arabia’s air-conditioning and refrigeration sector has created a massive subsidiary market for components and spare parts. As time passes, these units naturally need more and more maintenance and repair. This in turn fuels the components and spare parts market.

 

The Saudi market for air-conditioning spare parts and components has grown 7-8 per cent annually over the last several years. The underlying factors supporting this growth are surge in local manufacturing (28 local factories) which has created additional demand for original equipment manufacturers (OEM) parts and accessories, and a growing awareness of preventive maintenance which increases the demand for spare parts.

 

During the Ramadan and Hajj religious holidays, over 3 million pilgrims gather in Mecca and Medina to perform the Hajj and Umrah pilgrimages. As the number of pilgrims is increasing every year, construction activity in both cities is picking up to provide accommodation. This will increase the demand for air-conditioning and A/C spare parts.

 

Opportunities

Across the Kingdom, a variety of food and beverage outlets and cold-storage centers, including hotels, restaurants, supermarkets, malls, and catering service centers are being constructed. This adds further impetus to the already thriving air-conditioning ventilation and heating sector. Meanwhile, cold nights in some parts of Saudi Arabia are driving demand for a board variety of international-standard, high performance heating equipment.

 

The Air conditioning market is expected to increase with the uninterrupted growth of non-oil GDP through government expenditure on infra-structure and economic cities as well as mosques and government buildings. With continuously growing Saudi population and the expatriates arriving for work, by 2020, the population is estimated to be 36.74 million, with 7.1 million households occupied, using approximately 35 million air-conditioning units.

 

In addition to the new construction market, the growing replacement market will generate opportunities for U.S. companies. A key factor that has also boosted the demand for U.S. parts and components in recent years is the relatively weak and stable dollar against the Japanese yen and major European currencies. The prices in Saudi riyals of Japanese air-conditioning spare parts and components have risen significantly, and in many cases Japanese and European products are far more expensive than American products.

 

 

Read the full market research report

 


Posted: 27 May 2010