The Kingdom of Saudi Arabia is widely regarded by industry players to be one of the countries that have tenaciously weathered the economic downturn. Despite the crisis that crippled most of the world’s economies, the country has been continuously enjoying economic growth and expansion, and increased government investment in infrastructure projects. The development in the country’s construction sector bodes well for the HVACR industry in the Kingdom, as many industry players regard the parallel between the two as a given.

As Imad Kaba, Sales Director, Middle East and Africa Distributors, Trane, explains, “Saudi Arabia was surely in a better position to face the downturn during the economic crisis than anywhere in the region, thanks to its vast oil and financial reserves.” He points out that the government had billions of dollars of budget surplus that it used for investing in many infrastructure projects, particularly in the housing, education, health, transportation, construction, municipality and water sectors. “These new projects will also generate more jobs, hence better for the economy,” says Kaba.

He reveals that as per the information received by his company, several government-backed projects have been initiated, though a large number of these projects are currently on hold. He believes that the Government of Saudi Arabia needs to build more residential units over the next five years to meet the demands. “Saudi Arabia’s population has quadrupled over the last 40 years, creating a growing housing shortage,” he qualifies.

Altaf Khan, Business Development Manager, Johnson Controls, Saudi Arabia, endorses this view, and elaborates: “Saudi Arabia was able to withstand the effects of the crisis due to huge government spending in infrastructure projects like roads, rails, metros, airport expansion and mosques, the Makkah Haram, in particular. The government also spent in new universities, hospitals, technical colleges and housing projects.”

Mohamed Zackariah, Chief Consultant, Suhaimi Design – Protecooling, says that in his opinion, the most important reason why Saudi Arabia continued to thrive despite the economic crisis was that the developments in the country were based in a reasonable and realistic approach towards the market. “The reality component in the assessment of the market needs for developments was much higher than in other areas,” he explains, and adds that the heightened focus on development in essential sectors, like education, healthcare, industry and housing, “protected” Saudi Arabia from the effects of the economic downturn.

HVACR industry in Saudi Arabia

Tawfiq M Attari, Global Sales and Technical Director, DuctSox, provides a more HVACR industry-centric evaluation of the situation when he points out that the continuing dependency on efficient air distribution remains to be the main support for the HVACR market in Saudi Arabia: “Though some companies have faced a harsh downturn due to the economic crisis, the HVACR industry has, to some extent, been protected, and did better than most other industries,” he says.

When asked about how the construction boom in the Kingdom affects the HVACR industry, Kaba, Khan and Attari are all of the opinion that the continuous increase in infrastructure projects is a welcome driver for growth of the sector.

“The infrastructure projects, like the Makkah Haram expansion, the Harmain railways, universities and hospitals improve the HVAC equipment business,” says Khan. He thinks that the new mortgage law in Saudi Arabia can also boost the demand for HVACR equipment in the residential sector.

“Both of the industries are very closely linked with each other,” explains Attari. “Once the property and infrastructure sector grows, so does the demand for cooling.”

The HVACR industry in Saudi Arabia is estimated by the industry players to be around USD 2 billion. They are also unanimous in predicting a seven to 10% growth for the sector in the next five years. “With the Saudi Arabian Government’s continued efforts to diversify its economy, the outlook of the construction industry and, therefore, the HVACR industry, seems to be very positive,” affirms Kaba.

“The outlook of the HVACR industry in Saudi Arabia, based on the current trend of growth is very promising, considering the large developments slated for the upcoming years…. A few million TR of cooling capacity will be added within the next decade,” Zackariah confirms.

Attari endorses the prediction of continuous growth for the sector in the Kingdom and adds that due to the country’s climate, he expects that there will still be a growing demand and dependency on air conditioning products, which will ensure the upward trend for the HVACR sector in the region.

Khan, on the other hand, observes that though the outlook for the HVACR industry is generally positive, the mega construction projects have started shrinking and that government and private projects have increasingly been energy conscious, as they are now going for more energy-efficient equipment, like variable frequency drives for HVAC equipment.

Kaba seconds this observation, as he shares the view that there is a growing interest in energy efficiency and in the improvement of Indoor Air Quality in the Kingdom. “To achieve more energy efficiency and better Indoor Air Quality, there is also a trend towards more environmentally sustainable solutions, like Green Buildings,” he says. “This is partly due to the government’s concern over the rapidly increasing demand for [electricity] which translates to a reduction in the quantity of oil to sell on the world market.”

Khan, too, speaks about the growing concern over the increasing demand for electricity in Saudi Arabia: “Semi-government and private projects are cautious about energy usage for HVAC equipment. So, they are going for variable frequency drive equipment and big capacity plants are preferring water cooled chillers – either sea water or sewage water – which we have technology to cover the extreme condition requirements in Saudi Arabia.”

In addition, he also shares his insights about the announcement of the Saudi Metrology Department regarding the banning of HCFC refrigerants, like R22 and R123, effective January 1, 2015. “Due to the ban of HCFC refrigerants, semi-government and private projects are interested in HCFC-free equipment,” he says. “There is now a ban on HCFC refrigerants; so, products will move towards HCFC-free refrigerants like R134A, R410A and others.” He points out that current need for more energy-efficient equipment can drive the growth of the replacement and retrofit sector and that bodes well for the segment.

Kaba supports this view. In his opinion, replacement of equipment is taking precedence over a simple refrigerant retrofit. “We noticed that many of the existing buildings with HVAC equipment over 20 years old prefer to opt for replacement of equipment rather than refrigerant retrofit,” he reveals.

Though Attari considers the retrofit market to be “booming” at present, as many retail centres are currently under construction, he believes that it cannot be considered as a sustainable market, as it fluctuates every three or four years.

The power crisis in the Kingdom

Industry players believe that with the continuous growth and expansion of the economy of the Kingdom, energy security is fast becoming a concern that calls for urgent and heightened attention.

In his presentation during The Climate Control Conference (C3) in November 2012 in Riyadh, Eng Nasser Al-Qahtani, Vice Governor of the Electricity and Cogeneration Regulatory Authority (ECRA) in Saudi Arabia, gave valuable information regarding the country’s current energy demands. He pointed out that with the growth in population and improvement in the standards of living in the country, per capita consumption is increasing at an average growth rate of three per cent per annum from 2007.

Speaking to Climate Control Middle East, H.E. Dr Abdullah M Al Shehri, Governor, ECRA, gives additional insights into the continuously increasing per capita consumption in Saudi Arabia: “The increase in consumption is due to four factors. These factors are mainly population growth, growing per capita consumption, economic development in the country and low prices of fuel and electricity.”

In 20 years, the Kingdom’s peak electricity demand is projected to be 120 GW. The growth in demand is said to be mainly driven by the increase in the country’s GDP and the rise in investments from both government and private sectors. Al-Qahtani highlighted in his presentation that inefficiency was also a factor contributing to the spike in power demand. Al Shehri shares his thoughts and explains what, in his opinion, were the drivers to inefficiency: “Inefficiency is driven by fast economic development, lack of equipment standards that promote efficiency, lack of regulations to mandate efficiency measures, and prices that do not reflect the real cost,” he says.

In the light of the increasing concern over Saudi Arabia’s energy security, the country’s government has introduced several measures that are expected to impact the growth in energy demands. Al Shehri shares the following policies:

• Mandating insulation for buildings
• Introducing high-efficiency standards for electrical equipment
• Establishing a high-level centre (Saudi Energy Efficiency Centre – SEEC) for developing policies and implementing programmes for energy efficiency in buildings, transportation, and industry
• Establishing strong electrical grid interconnection internally and to other countries such as those in the GCC and Egypt
• Enhancing the efficiency of the electricity supply system by using high-efficiency units and encouraging cogeneration
• Embarking upon an ambitious programme for developing renewable and nuclear power

In addition to the above-mentioned measures, privatisation is also seen by the Saudi government as a key policy to increase competition in the market, and, consequently, enhance energy efficiency. In line with this, ECRA has approved the Electricity Industry Restructuring Plan (EIRP), which moves towards a competitive wholesale market. Al Shehri explains more about the objectives of the EIRP:

• Enhance competition in the supply side and demand side: This is expected to introduce smart practices to enhance efficiency, reduce cost and provide better quality services
• Encourage private sector participation in building and operating various electricity activities: This will reduce the need for government support
• Offer attractive investment opportunities for the private sector
• Focus on government subsidy to the targeted groups: This will reduce the subsidy and make it more effective

Furthermore, integration with other countries and regions is also considered by the Saudi Government as an integral component of its energy policies. Al Shehri enumerates its myriad advantages:

• Improvement of electric system reliability
• Opportunity for electric energy trading on long-term and short-term bases
• Improvement of system efficiency by exchanging power capacity during peak and off-peak periods
• Creation of stronger systems that can cater to intermittent renewable energy systems
• Enhancement of the interconnected systems to build larger power plants and benefit from economy of scale

On the ground, industry players also share their insights on how the government of Saudi Arabia is addressing the current energy crisis. Kaba points out that the government has instructed all air conditioner manufacturing companies to incorporate higher Energy Efficient Ratio (EER) in the equipment they manufacture. “There is a ‘star’ rating system currently in place, set up by Saudi Arabian Standards Organisation (SASO), where a higher number of stars indicates more efficient products,” says Kaba. He adds that new regulations also restrict the maximum power usage per square metre of space.

He points out that there currently exists a policy where the utility company exerts direct control over chiller plants in large government facilities during peak hours. “By reducing demand in this way, the utility company is able to reduce the risk of overloading the system. Trane is currently working on a number of these projects in the Kingdom and elsewhere in the Gulf,” he says.

“The power crisis is a major issue,” agrees Zackariah. He reveals that many discussions have started in the country in order to meet the growing energy demand. And to ensure energy security, government authorities may be heading in the direction of differential tariffs or some regulations mandating certain technologies like district cooling. “The power crisis is probably the single powerful factor that could shake the entire industry to clean up its act,” he observes.

Khan points out that in addition to the EER star rating system, the Saudi Government is also putting a lot of effort into creating awareness among the end-users to choose and use energy-efficient equipment. He adds that the government is increasing its efforts to find alternative sources of energy, like solar energy.

New demands, new sources

As was pointed out by the industry players and representatives from the Saudi Arabian Government, the country is currently witnessing increasing growth with high rates of demand for electricity due to the growing population and the subsidised supply of water and electricity. According to The Minister of Petroleum and Mineral Resources, reported by Clint Steyn and Marc Norman in a document from Chadbourne & Parke, released in November 2012, the increasing demand for electricity and water results in an equally increasing requirement for the non-renewable hydrocarbon resources to be used in generating power and desalinating water, which, it adds, is projected to continually rise.

The Minister, therefore, considers the use of alternative sustainable and reliable resources for generating power and producing desalinated water as a means of reducing dependency on hydrocarbon resources. The Minister, furthermore, believes that the use of alternative resources can serve as a guarantee for continuous production of water and generation of power in the future.

The Minister also highlights the economic relevance of saving hydrocarbon resources, saying that the conservation of the same can ensure that they will continue to be a source of income for the country for a longer period of time.

A Chatham House report in 2011, cited by Steyn and Norman in the same document, endorses the view that the current patterns of energy demand in the Kingdom are not only wasting valuable resources and causing excessive pollution but also rendering the country vulnerable to economic and social crises. It observes: “Saudi Arabia’s place in the world market is threatened by unrestrained domestic fuel consumption…. Its domestic energy consumption could limit its exports of oil within a decade.”

Given the current trajectory of Saudi Arabia’s energy demands, a Citigroup report in 2012 concluded that the country could cease to be an oil exporter by 2030. Considering that over 80% of the Kingdom’s government spending is dependent on oil, a shift in Saudi Arabia’s energy policy is, therefore, inevitable, it predicts.

To respond to the pressing need to find alternative sources of energy, Steyn and Norman report that the Kingdom is to launch a renewable energy programme that could see the procurement of 54,000 MW of renewable energy capacity over the next 20 years.

At a trade conference, the report continues, the Saudi Government announced plans to issue a draft request for proposals for an introductory procurement round of up to 600 MW of utility-scale solar projects in the second quarter of 2013.

The report explains that the introductory round is reported to be succeeded by two full-scale rounds. The three procurement rounds are expected to lead to the procurement of approximately 5,000 MW of solar facilities. The capacity, adds the report, is expected to split equally between photovoltaic and solar thermal projects.

The renewable energy programme to be deployed by the Saudi Government is placed under the stewardship of the King Abdullah City for Atomic and Renewable Energy (K.A. CARE), whose renewable programme’s main objective is reportedly to limit domestic oil consumption in order to boost lucrative oil exports.

Steyn and Norman add that K.A. CARE’s overall target is to generate a third of its electricity from renewable energy by 2030, which translates into around 54,000 MW of renewable facilities. Though multiple sources of renewable energy is envisaged, most of the target is expected to be reached through solar projects, with 16,000 MW in photovoltaic projects and 25,000 MW in solar thermal projects.

As of February 21, 2013, a communiqué from the Emirates Solar Industry Association (ESIA) reported that K.A. CARE has announced the launch of its Renewable Energy Competitive Procurement Portal and released a White Paper outlining how the procurement process will proceed.

This announcement, said the news release, marks the launch of a registration process for interested companies to submit feedback and obtain important information in connection with the Renewable Energy Program. It is envisaged to pave the way towards the launch of the introductory procurement round, which will consist of five to seven projects with a combined capacity of up to 800 MW.

Conclusion

Weathering the economic crisis of recent years is definitely a feat for any economy. Saudi Arabia has managed to continue its growth story despite the downturn that plagued a majority of the world’s economies. The rapid and continuous growth of the economy and the population of the Kingdom have resulted in a spike in its energy demand, which requires urgent attention and solution.

It has been reported that approximately 70% of all energy consumed within the built-environment is attributed to air conditioning. With the projected continuous growth of the construction industry and, consequently, the HVACR industry, industry players were unanimous in pointing out that the current drive of research and development in the industry is towards energy efficiency and cost savings.

The Saudi Government has introduced various energy policies with the aim of addressing the current power crisis. At present, Saudi Arabia has embarked upon an “ambitious” programme to tap alternative sources of energy, with particular interest in solar energy. The potential opportunities for solar power in Saudi Arabia is said to be great, and the Kingdom as a significant solar power market appears promising.

Though still facing challenges like the observed general lack of regulations and concerns for the environment, the projects envisaged by Saudi Arabia is widely considered to have the potential to change the nature of the global solar industry.

The 2013 International Air-Conditioning, Heating and Refrigeration Expo (2013 AHR Expo), held from January 28 to 30 at the Dallas Convention Center, Texas, USA, reportedly attracted more than 51,000 attendees, 33,891 of whom were visitors, who witnessed more than 1,900 exhibitors showcase their latest products and technologies.

In an official communiqué, the show’s organisers revealed that the reported figures set new all-time records for Southwest shows. “We were very pleased with the attendance and the enthusiasm on the show floor … the aisles were packed for almost all three days of the show,” said Clay Stevens, President, International Exposition Company, the producer and manager of the 2013 AHR Expo.

In addition to being an opportunity for companies to throw the spotlight on their latest products, software, building automation systems, controls and services, the 2013 AHR Expo also served as a venue for association meetings, educational seminars and networking. Dozens of associations and publications reportedly put up their respective booths at the event, providing business services and network for professional colleagues.

New Product and Technology Theatres were also set up during the event, where participants could attend brief presentations from over 70 exhibitors on their latest products and technologies. Presentations were said to be free of charge and were held throughout each day of the expo.

The 2013 AHR Expo was also reported to have sponsored sessions on the trends and direction of smart green building automation. The organisers revealed in an official programme that the seminars covered various topics, including market trends for integrated and intelligent building systems; community, convergence and collaboration from cloud data for BAS; and an overview on existing connection communities and the advantages of being part of various communities.

The sessions were organised in association with www.automatedbuildings.com, added the programme from the event organisers. The organisers added that other free sessions were also held during the event, including those sponsored by ASHRAE, BACnet, LonMark, and other endorsing associations of the expo.

Paid seminars and programmes were also on offer during the event, including ASHRAE Learning Institute Continuing Education Courses, PM Live Symposium and certification reviews and exams.

According to the programme, ASHRAE offered all-day and half-day courses to help HVACR professionals stay in touch with current HVACR trends and to earn continuing credits. Some of the topics covered included Air-to-air recovery fundamentals, energy modelling best practices and application, introduction to ultraviolet germicidal irradiation systems, understanding and designing dedicated outdoor air systems, and evaluating the performance of LEED-certified buildings.

PM Live Symposium topics included small-scale hydronic cooling options and understanding many types of old steam heating systems for familiarisation and troubleshooting, the organisers said.

With the reported statistics on the number of exhibitors and participants at the 2013 AHR Expo, the event is said to be the biggest in the HVACR industry. It is claimed that HVACR companies, new and established alike, choose the event to meet buyers, generate leads, build personal relationships with prospects and customers, and introduce their new products and technology. Many of them, though, hoped that the enthusiasm would not end at the show floor and that the record-breaking numbers was a precursor to a market surge.

Trane celebrates a century

Introduces seven new products at the Expo

Trane, a global provider of indoor comfort solutions, and a brand of Ingersoll Rand, celebrated its 100th year anniversary at the 2013 AHR Expo. In line with the celebration, the company showcased new products, systems and services and conducted on-site demonstrations, technology-based presentations and special anniversary activities during the event.

In an official communiqué, Trane reported that at the 2013 AHR Expo, it introduced seven new products that it claimed would benefit healthcare, education, hospitality, retail, commercial, industrial, and data centre markets to create comfortable, efficient and productive environments.

According to Trane, the products it introduced were Advantage VRF variable refrigerant systems, Intelligent Variable Air systems, IntelliPak I unitary rooftop systems, Series S CenTraVac chiller, Axiom variable-speed water-source heat pumps, Wireless Comm, and terminal devices.

Speaking against the backdrop of the celebration, Dave Regnery, President, Trane North America, said: “For 100 years, Trane has defined the industry by providing heating and air conditioning solutions to help people live, work and play in comfortable environments. As we move into our second century, we are excited to play a leadership role in energy efficiency, as we drive the advancement of energy management services and energy conservation.”

The Spanish HVACR industry reportedly experienced considerable growth in the first half of the last decade. Formerly regarded as objects of luxury and privilege, air conditioning and heating equipment have now become common in households, buildings and facilities in the country.

Beginning in 2008, however, the industry started experiencing a downturn owing to the economic recession plaguing, not only Spain, but also the entire world. Reports cite that the precarious situation of the Spanish economy, combined with the housing mortgage crisis resulted in a decline in the sectors of air conditioning and heating, as a result of the decrease in spending and industrial activities.

As Carlos Merino, Manager, GER, revealed: “We have noticed that enterprises do not invest money in non-vital things owing to the fact that the financial and economic situation need to improve. They only invest in those things that are really important. Say, in a farm. Owners will only heat those zones where heating is needed. They won’t invest in machines to heat the whole area.”

In 2010, numbers from the Asociación de Fabricantes de Equipos de Climatización (AFEC) showed signs of growth. The entire industry had a turnover of EUR 4.3 billion and gave jobs to around 25,000 people. These results represented a humble upturn compared to the past years, when increasing decline was noted. Heating and air conditioning were the primary contributors to the growth of the sector, with turnovers of approximately EUR 1.1 billion each. Refrigeration and industrial refrigeration sectors registered sales of EUR 560 million, with 80% attributed to exports.

Stalled growth

Numbers for 2011, however, showed yet another year of decline for the Spanish air conditioning sector. From an estimated EUR 1.1 billion in turnover in 2010, representing an increase of 1.6% from the figures in 2009, numbers for 2011 showed a decrease of 16.3% at approximately EUR 972.4 million.

Back to the drawing board

To combat the lingering crisis, one of the strategies adopted by the Spanish HVACR companies is to work towards improvement of the energy efficiency of their products. Sources suggest that they are also exploring using renewable energy – solar, geothermic and aerothermal, among others. In line with this, Merino spoke about GER’s new product: “We have a new product named WIN BIO, which works with biomass, and it is rocking the market. It is a symbol of what the market demands – cheaper alternatives to fossil fuels to make equipment work.”

He pointed out that energy efficiency was the main thrust of research of Spanish HVACR companies in the light of the economic downturn. “Harder times need more effectiveness and efficiency to maintain the industry and other different sectors,” said Merino. “GER spends and invests a lot of time researching to make improvements all the time. For us, quality, technology, efficiency and effectiveness are four basic elements in the equation of every single product that we manufacture.”

In terms of designing pieces of equipment with more energy efficiency, Merino emphasised that products by GER had been using IE2 engines since 2010. “IE2 is a classification of the energy efficiency of engines. There exists a directive from the EU that obliges companies to manufacture engines whose real performance [exceeds] approximately 90%,” Merino said. As a result, he added, products manufactured by GER were more efficient and, consequently, contributed to the improvement of energy efficiency of facilities.

Industry players believe that the HVACR industry in Spain has a great roadmap ahead. According to an article by Elena Cano, entitled “El sector de la climatización facturó 4.300 milliones de euros en 2010” that appeared in Mundo Empresarial Europeo, industry experts believed that, though the HVACR sector had already reached its maturity, it was still far from being saturated. In addition, the retrofit and the replacement market could prove to be a beacon of hope for the industry, since the number of obsolete equipment was increasing, and because there was a growing need to update these pieces of equipment, like changing the refrigerants used to more environmentally friendly ones.

A similar point was made by the article entitled “Aire Acondicionado: el mercado vuelve a crecer” that appeared in Protiendas. According to the article, industry players were of the opinion that retrofitting would prove to be relevant to the industry, as the construction of new buildings or facilities had come to a halt in recent years. It added that industry leaders believed that making “retrofitting plans” attractive to end-users was very important, particularly because the economic situation deterred spending by consumers.

In addition, as per the article, industry experts considered the degree of customer experience as an important factor for the retrofitting market. They said that the “retrofitting plans” needed to take into consideration the fact that end-users were beginning to look for new products in the market and that they were fast shifting their attention to products that might provide the least noise, the best indoor air quality, and the best energy efficiency.

Building on the point that the Spanish HVACR market is still far from being saturated, industry leaders estimated the penetration of the sector in Spain to be around 40% to 45%. Based on this estimation, they were of the opinion that there was still much room for development and expansion for the sector.

Innovations to the rescue

Given that the market is becoming more informed and more discerning in its choices of HVACR equipment, and that new standards and regulations concerning the sector have come out in recent years, innovation is considered by industry players to be another important factor that will drive the growth of the HVACR industry in Spain.

According to “Aire Acondicionado: el mercado vuelve a crecer”, the new technologies introduced with HVACR products in Spain mainly concentrated on the improvement of air quality, energy efficiency, reduction of noise and making “intelligent” products.

In terms of the improvement of air quality, companies in Spain were venturing into air purification systems with triple filters and anti-allergy filters that eliminated bad odours and allergens.

In terms of energy efficiency, the emphasis was on manufacturing high-efficiency and environmentally friendly products.

On the subject of reduction of noise, products that have “super silent” modes that only produce little more than 20dB noise were already available in Spain.

Regarding “intelligent” products, the thrust was on developing sensors that not only detected occupants’ presence, but also analysed the level of activity in a particular room. This feature was believed to add to the energy efficiency of the motors by preventing unnecessary energy use.

The export market scenario

According to the article by Cano, the multinational companies were still the largest exporters in Spain. These companies exported from their factories in Spain to France, Portugal, Eastern European countries and Morocco.

Merino shared the information that GER’s products were already being exported to the GCC countries, particularly to the UAE and Qatar. “Some of our products have been sold and are being used in Dubai and in Qatar. An example is the evaporative cooling pad to improve the effectiveness of the condenser,” he said.

However, according to the article mentioned earlier, acquisition of Spanish companies by foreign companies in recent years had not yet affected the manufacturing sector in Spain, as it still continued to be one of the most important manufacturing platforms in Europe. Other industry players, however, were of the opinion that the entry of foreign companies via acquisition of local entities translated into loss in decision-making capacities and innovation in the sector.

Around 80% of sales of large equipment was attributed to imports, particularly from France and Italy. On the other hand, products from China, Korea and Japan were the most favoured when it came to household air conditioning equipment.

Conclusion

If the numbers from 2011 and the opinion of industry players are any indication, it is clear that the global economic crisis still lingers and is still taking its toll on the Spanish economy. On the positive side, Spanish HVACR companies seem to have a good grasp of the present situation and appear to have a clear road map of what needs to be done to thrive and survive. They understand that the market is primarily calling for more energy efficiency and cost savings, and they are ramping up their research and development strategies in this direction. They also recognise that the retrofit and replacement market can prove to be an area where they can concentrate their efforts amidst the slowdown in new construction projects in Spain. They have also increased their efforts in introducing new technologies to their products to address the present needs of the market for better indoor air quality, equipment noise reduction and more intelligent systems.

It was hard to miss the Turkish presence at the 2012 edition of The Big 5 Show. Billboards, roll-up banners, identification tags, lanyards and an array of brochures emphatically announced their presence at the Show. A contingent of reportedly around 180 companies showcased their products and technology from the Land of the Crescent Moon. If their show of strength was any indication, one could conclude that the companies were serious about introducing to the world who they were and what they do.

UNDER CONSTRUCTION

Players from Turkey’s construction industry were unanimous in their opinion that the country, particularly, its capital Istanbul, was currently experiencing a boom, thanks to increased investment from the government and the private sector.

“Istanbul is under construction,” Ibrahim Dursun Akça, Area Manager for Europe and America at Flexiva Ventilation Systems, tersely stated, when asked how he would describe Turkey today.

“An increase in government investment in hospitals, ministry buildings and schools has resulted in more projects we can supply to,” added Ismail Polat, Mechanical Engineer from Üntes, summing up how the current spike in the number of construction projects has positively affected the HVACR industry.

The new boom notwithstanding, companies dealing in HVACR products and services are not new players in the country, as they have been in operation since the 1950s and have been continuously and increasingly developing their production and capacity since their inception. This was revealed by a report from the Ihracatý Geliþtirme Etüd Merkezi (IGEME – Export Promotion Center of Turkey) which pointed out that the increase in production and development of the HVACR products in Turkey had largely been due to an increase in population and improvement in living standards experienced through the years.

However, a point worth noting is that though Turkey is already considered a player in the industry, and was reported to be constantly growing since the 1950s, its market share is still considerably small.

A report from the Ege Soğutma Sanayicileri ve İş Adamları Derneği (ESSIAD – Association of the Aegean Industrialists and Businessmen of Refrigeration), has declared that Turkey’s share in the global HVACR market as of 2011 was 1.5%, which was estimated to be around US$ 3.8 billion. A majority of Turkish HVACR companies is concentrated in three big cities: Istanbul, Ankara and Izmir. The report further stated that 98% of the HVACR companies in the aegean region are small- and medium-scale enterprises.

HVACR companies in the country are organised under various associations. A few of these are the Beyaz Eşya Yan Sanayicileri Derneği (BEYSAD – White Goods Parts Suppliers Association of Turkey); İklimlendirme-Soğutma-Klima İmalatçıları Derneği (ISKID – Turkish Air-Conditioning and Refrigeration Manufacturers’ Association); and the Isıtma Soğutma Klima Araştırma ve Eğitim Vakfı (ISKAV – Turkish Heating/Cooling Research and Education Foundation).

FLOURISHING EXPORT MARKET

Turkish HVACR producers have created their own brands, which not only enjoy a domestic advantage over imported products but are also increasingly being exported to other countries. In fact, according to the ESSIAD report, the commercial HVACR market accounts for 65% of Turkish HVACR volume, and 36% of the output is actually exported from Turkey.

“We export to Iraq, Dubai, Saudi Arabia, and Syria,” said Soner Algin, Export Regional Manager, Siba.

“Other countries are now procuring from Turkey,” seconded Soner Babüroğlu, Process Improvement Director, Imeksan. “Our products’ quality is certified to international standards and shipping and handling cost less than products from Europe or the USA.”

Ali Can Göncü, Mechanical Engineer from Gonka, said: “Customers are now looking for alternative companies; they are not just looking for big players anymore. Our products’ prices are lesser, but the quality is the same as the European products.”

“The Turkish Standard Institution (TSE), the official certification organisation in Turkey, uses international standards, like that of the European Community and ISO,” said Akça, speaking about the testing parameters Turkish companies use for their products.

“The HVACR industry in Turkey is good; in fact, Turkey is now the centre of AHU manufacturing in Europe,” Polat revealed.

The IGEME report (where figures for 2009 show that exports exceeded US$ 2.5 billion) supports the claims made by the industry players when it says that in the last decade, the Turkish HVACR industry has seen continuous growth in exports. This, it said, could largely be attributed to the following reasons:

• Advanced technology used in the production process
• Priority given to research and development
• The rising number of Turkish firms with ISO certificates and quality standards
• Consideration given to customer preference during the designing phase
• Consideration of priorities to foreign end-users
• Improved marketing techniques and well-established after-sales service

The ESSIAD report says that in addition, regional and national authorities are actively supporting the region’s industry with various initiatives, including special financial schemes for new investment, research and development incentives and marketing-related support.

In fact, according to the IGEME report, companies in the sector have begun to form joint ventures with global firms, thus creating technology transfer opportunities for both Turkey and the HVACR sector. Recent acquisitions of Turkish HVACR companies by global firms confirm this trend.

“We have acquired HSK, a Turkish company manufacturing Air Handling Units,” said Aboobaker Aslam, Sales and Marketing Manager at Systemair, Middle East FZE. “HSK products are as good as Danish products, and transporting from Turkey to Dubai costs lesser, and our market in Egypt and Libya like Turkish products. We are keeping products manufactured by HSK and we will be introducing products to only selected markets, like Turkey and the GCC.” (For details, see Box: Systemair talks Turkey.)

In addition, in a press release from Systemair, Svein Neilsen, Marketing Director affirmed: “Turkey is an interesting market with great potential and Turkish construction companies are also very active in the surrounding markets.”

DUBAI – A WINDOW OF OPPORTUNITY

The contingent of Turkish HVACR companies was unanimous in its opinion that the Dubai market was slowly picking up again. Breaking through the Dubai market, according to the companies, still continued to be an advantageous strategy, especially for those looking to expand to other countries in the Middle East and Africa. As Algin put it, “We are looking to expand to Jordan, Libya, Egypt, Senegal, Ghana, Algeria and Tunisia. “Dubai is like a port for different countries, and it remains to be a strategic point for us,” Algin said.

Babüroğlu, endorsing this view, said, “There is no better advertisement than Dubai, and we are here to land government projects.”

A high-performing HVAC system delivers clean, fresh, conditioned air that keeps out minimal pollutants, allergens, irritants, and unpleasant odours, and delivers the air at a comfortable, consistent temperature throughout the building. However, in order to perform at optimal efficiency, the ductwork system must be well sealed.

Until recently, the standard method of sealing ductwork involved buckets, brushes, and a crew of workers. But now, spray sealants enable application from outside the ductwork, which makes the job quicker, less labour-intensive and more effective. Spray sealing fills up a joint, rather than “floating” the sealant over the joint, as a brush application would. Further, spray sealing in tight spaces or crevices is not only possible but easy. A sealing job that formerly required a crew of workers can be accomplished quickly, easily, and more effectively by an individual using an airless sprayer.

The sealant is applied at an increased rate, at a consistently high pressure, resulting in better coverage and tighter sealing. The need for re-working is virtually eliminated when spray sealing is used. Total labour and cost savings of up to 50% can be realised from the use of the spray application method to seal ductwork.

Effective sealing of an HVAC ductwork system readily translates into better IAQ in the building the system serves. This is because a well-sealed, leak-free ductwork system excludes undesirable elements like pollutants, irritants, and allergens, and can better maintain at a comfortable more uniform temperature the air it delivers throughout the building. The delivery of clean, fresh, well-conditioned air in a building means a healthier, more comfortable indoor environment, which can readily translate into IAQ credits. Low-VOC spray sealants can also contribute to LEED credits.

The writer is Marketing Manager, Carlisle HVAC. He can be contacted at Billy.Prewitt@CarlisleHVAC.com

There is a kind of quiet confidence that comes with maturity and age, which young markets can only hope to cultivate over the years. Canada’s HVACR sector is in that self-assured space. Relatively unruffled by the recent – and in some cases ongoing – global economic crisis, the Canadian market continues to grow. But it has its ear to the ground – alert to sudden upheavals. Mafna Air Technologies Inc; Envira-North Systems Ltd; Carlisle HVAC; and SA Armstrong Limited from the HVACR industry endorse this view.

Describing the post-recession ethos, Sal Fasanella, Products General Manager, Carlisle HVAC, says, “The scenario is quite encouraging, particularly with regards to HVAC.” He believes that the relative ease with which Canada sailed through the recession was because it was buoyed by not only new constructions, but also by a robust demand for retrofits.

Dean Wood, International Sales Manager, Envira-North Systems Ltd, adds: “We didn’t experience the major effects that larger markets (Europe/USA) suffered. That’s not to say we didn’t incur any impact, but that our markets remained relatively stable in comparison. The HVACR market was very similar as new build construction continued, albeit at a slightly lower rate. Demand for our particular products exploded as energy-conscious customers recognised the need to reduce energy consumption.”

Highlighting the positive impact of the downturn, he observes: “Traditionally, large markets in Europe and the United States (that consume Canadian products) contracted heavily in the global downturn. This provided the much-needed ‘kick’ for Canadian companies to look to other non-traditional markets, such as China, India and South East Asia. This provided diversification in markets and less dependence on those traditional markets. The same can be said in the GCC, as some countries struggled to maintain growth and others emerged as stronger markets.”

Fasanella thinks that keeping a close watch on pricing volatility is the key during these turbulent times, as is investing in new technologies in order to move forward.

THE MIDDLE EAST CONNECT

Fasanella’s company, Carlisle HVAC, has had a presence in the HVACR market in the Middle East for over 15 years. It primarily sells through distributors in the UAE and Lebanon. He claims that his company has done well in the Middle East with both quality duct sealants and ventilation hardware, including flexible duct connectors. According to him, usually, customers/clients in the region do not ask for additional standards for Canadian HVACR products, although in some cases, he has seen requests for British standards on some products.

Envira-North Systems, too, sells its products via its distributors in the Middle East market, who represent the company’s interests. “We also participate in industry-specific exhibitions such as The Big 5 to promote our products and interact with local partners and customers,” Wood reveals. “Our specifications meet or exceed requirements in the GCC countries.”

Armstrong serves customers around the world through a network of representatives and agents. In the Middle East region, the company has supplied to Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iran, Jordan, Yemen, Lebanon, and Syria, and as far as Morocco and Turkey. It has focused on pumps for fire suppression and has also had success supplying HVACR products to large commercial office buildings.

What does massive government spending in countries like Saudi Arabia and Qatar translate into for Canada’s HVACR industry? Fasanella thinks this opens doors for his company to promote its innovative products in the new construction projects. Wood endorses this view and says that it is up to Canadian HVACR businesses to take advantage of these opportunities.

Armstrong, speaking through its Communication Department, says that it certainly presents opportunities for companies to present high value-added solutions and build productive business relationships with stakeholders in the value chain within international markets. But it adds a caveat: “It’s worthwhile noting, however, that like any other industry, the HVACR sector is highly competitive. Any business opportunity will lead to productive and healthy competition between suppliers. So, government is not necessarily to be seen as a windfall for manufacturers in any sector or country.”

Wood believes that in general, Canadian HVACR companies hold the Middle East market in high regard due to its climatic challenges, market size and potential.

“We think this market is still price-driven and not technology-driven,” observes Andy Beltrame, Sales and Marketing coordinator, Mafna Air Technologies Inc.

ADVANTAGE CANADA

The industry insiders think that innovation is the key business strategy that works in the post-recession world – an area where Canada scores. They attribute this to a highly encouraging milieu of best practices, customer service, logistics, a vibrant R&D culture, a pro-active government enforcing regulations for sustainable products and services and a highly educated customer base, aware of its societal and environmental obligations. To this list Beltrame adds immigration, which he points out attracts the best minds from the world over to Canada. “And the rest is looked after by itself,” he says.

Needless to say, all these factors have had both a cumulative and incremental effect on the country’s HVACR sector.

CUSTOMER IS KING

Wood believes that of all the factors, best practices and excellent customer service top the list of priorities as a company’s reputation in the market dictates future sales.

Beltrame concurs and adds that customisation is vital, as customers in Canada tend to buy what they need and not what manufactures have. “Mafna is an R&D-based manufacturing firm, and is riding this trend,” he says.

Fasanella, too, stresses that best practices and customer service are fundamental values in which his company continuously invests. “It’s all about long-term added value to the customer and investing in our people is also something we strongly believe in,” he says.

Armstrong elaborates on this: “The history of ‘change’ in Canada and elsewhere suggests that the most effective lever for effecting change is a mature consumer. It would seem that the business strategy of operating as a ‘fast follower’ has many proponents within North America. Businesses are conservative in their approach to un-met customer needs but are quick to innovate as required, to take advantage of an obvious, growing opportunity. At the same time, perhaps, nothing is more motivating to a business operation than a sharp drop in sales, as customers ‘vote with their feet’ to purchase products and services that provide greater utility.”

SUSTAINABILITY – INNOVATION AND TRENDS

Sustainability and innovation, as always, thrive on each other. Canada has witnessed a two-pronged approach in this regard – the government’s aggressive push for stringent regulations and enforcement and customer demand for cost and energy-efficient products. Therefore, as with nearly all developed markets, energy-efficient alternatives to traditional products and methods have become the growing trend in Canada. This has created a competitive landscape in the country’s HVACR sector. The industry has been quick to respond to this.

“Environmental awareness and sustainability have completely shifted the culture of the industry by bringing attention to historically atrocious energy consumption by end-users, both industrial and residential,” Wood confirms. “These are key components, as they lead to quality designed and developed products. Our company is continually looking to enhance or complement our existing energy-efficient products while developing new technologies that can improve on existing techniques.”

The other experts echo this view. Fasanella believes that energy efficiency, not only of the equipment, but also of the complete system is becoming a trend. “It is becoming a systems approach or even a building approach to energy efficiency,” he observes. “Sealing ductwork quickly and efficiently with little or no product waste is also a trend. Carlisle HVAC has introduced ISAAC – the Inspecting, Sealing and Advanced Cleaning Robotic Solution. It enables the efficient remediation of existing HVAC systems. ISAAC can inspect, clean and seal ductwork from the inside, reaching hard-to-reach places that are otherwise inaccessible. Also, the Hardcast Mobile Sealant Delivery System and Spray-Seal are specially formulated for spray applications on the job site and are the best method for sealing ductwork in new construction remediation projects. Targeted precision equals uniform duct sealant coverage, no overspray or reduced job site trash and less product waste. Improving indoor air quality and decreasing heating and cooling costs are other top priorities.”

Armstrong on its part has focused on making its HVAC solutions more energy-efficient through the application of variable speed technology. “Initially, our product development efforts had been focused on the simplification of variable speed. More recently, Armstrong has focused on energy on leveraging all the capabilities of variable speed to maximise energy efficiency,” the company says.

Armstrong seconds the view that research and product information inevitably lead companies to create improved solutions with greater customer utility. “Regulation serves in many instances at the ‘trailing edge’ to ensure that customers embrace new solutions,” the company says, and adds: “In advance of the enactment of regulation, the responsibility lies with companies to promote their own innovations. Collectively, these activities drive business growth. The trajectory of that growth – steady or unsteady – depends on the spirit of entrepreneurialism that exists within the individuals serving customers and competing to serve more customers in more distant markets.”

Amidst the euphoria about innovation, Beltrame cautions that innovation cannot be forced, but adds that when it emerges naturally, based on an existing need, there is generally a high level of support for it in the industry, as is the case with sustainability and environmental awareness spurring innovation. “Canada is working to be in the top level with respect to energy conservation,” he adds.

It is difficult to ascertain if the Canadian model of energy-efficiency, sustainability and best practices and the specific measures the country has used have had a positive influence on the Middle East HVACR market. “The world, in general, has recognised the need to reduce energy consumption,” says Wood. “The Middle East is no different from any other region (including Canada) in that it takes time for widespread acceptance.”

DISTRICT COOLING

Interestingly, district cooling, which found acceptance in the GCC states, but became an unwitting casualty of the double dip, appears to elicit a lukewarm response from the industry insiders in Canada. District cooling/district heating is not a viable option, and, hence, there has not been much focus on it, Beltrame reveals.

Armstrong agrees and adds: “Despite the strength of the concept, district cooling has not grown as quickly as expected. Given the positive reviews and strong support for the technology within the HVAC industry, it seems inevitable that district cooling will grow, as more communities are made aware of the potential for energy efficiencies and cost savings.”

THE RETROFIT SCENE

By all accounts, renovating buildings to make them more energy efficient than before has now become the norm rather than a trend in Canada. Beltrame pegs the retrofit market in Canada at 50% – a healthy figure. Wood explains why: “As our climate dictates, energy-efficient heating has always been imperative. Government rebate programmes on new build construction and building retrofits provide incentives for building owners/operators to install energy-efficient equipment. These financial incentives help offset the additional cost of high-efficiency products, while minimising the demand for energy.” Speaking about his company, he says, “As our technology is relatively new to the market (less than 15 years) and a vast majority of buildings being built before that time, retrofitting makes up well over half of our projects in Canada.”

Retrofit proves to be a less expensive exercise than new constructions in most cases, says Fasanella “If you remediate correctly, the labour and material cost can pay for itself quickly by energy saved in old, leaky, outdated buildings,” he points out. “And LEED is becoming a standard for almost every building going up.”

Armstrong adds that in many instances, building owners and operators focus on the near-term competitive issues that demand attention in order to adequately serve customers and remain viable as a business. “In a small percentage of instances, building owners are more secure with their finances or their competitive stance and are willing to make investments in a retrofit installation that involves a longer payback term,” the company says.

CONCLUSION

Riding on the crest of world-class products and best practices, aided by industry regulations, Canada is at the vanguard of nations driving sustainability in the HVACR sector. The market has responded favourably to both industry and government-driven initiatives. But it is work in progress, as the country believes in constantly striving to cut costs and energy consumption.

“Within the Canadian economy, the most frequently used vehicle is industry regulation,” says Armstrong. “Organisations operating in the Canadian economy generally recognise the need to incorporate best practices, including focused research and development into their everyday operations.” But the company adds, “Examining the practices we see in the HVAC industry reveals that as much as Canadians understand these requirements, we still have room for improvement.”

When it comes to the Middle East, like any vibrant economy operating in a globally connected market, it can be expected that the region will experience strong growth over the next five to seven years, driven by the opportunities created by a growing population, Armstrong predicts.

Since it was environmental concerns which led to societal pressure, which in turn spurred reduction in energy consumption in Canada, the same model might get replicated in the Middle East, believes Wood. “‘Newer’ technology, acceptance in the Middle East has been relatively straightforward, as the customer base is well-versed and highly educated,” he says. “However, as with most markets, the higher capital cost to implement our products deters customers initially.”

In Fasanella’s view, in the final analysis, although regulation and enforcement can certainly help the cause, it is products that get bought and sold. It is their ability to demonstrate long-term added value to the customers which ultimately drives best practices.

It is therefore, a good product which can act as a harbinger of positive change.

DEEP LAKE WATER COOLING – A NEW WAY OF TAPPING NATUREA strategic collaboration between enwave corporation and the city of Toronto has enabled downtown Toronto to tap the renewable source of energy for district cooling from Lake Ontario, using 90% less electricity than chillers would consume.A natural and excellent alternative to conventional, energy-intensive air conditioning, enwave’s Deep Lake Water cooling (DLWc), which uses icy water from the depth of the lake, is regarded as the world’s largest lake-source cooling system.This is how the system works: In winter, the surface of Lake Ontario cools to about 4°c (41°F). The density of the cold water increases, causing it to sink. conversely, during the summer, the surface water heats up and remains at the surface because it is warm, as it is not dense enough to sink. consequently, no matter how hot the summer, the water in the deep recesses of the lake remains very cold. Over millennia, this natural phenomenon has created a permanent reservoir of cold water at the bottom of the lake.Enwave has installed three high-density polyethylene (HDPe) pipes along the natural slope of the lake bottom, which pump water from a depth of 83 metres. This water is transported to the Toronto Island Filtration Plant. The cold water is processed there and channelised to enwave’s energy Transfer Station at its pumping station.Heat exchangers then enable energy transfer between the cold lake water and enwave’s closed chilled water supply loop. When this process is complete, the lake water fl ows to the city’s potable water system. It is not the water itself, but its coldness which is harnessed.

Regulation, awareness, innovation and conservation form the firm foundation on which Sweden’s HVACR industry has been built, and built to weather occasional storms like the recent economic downturn.

The market’s optimism is palpable. Lars Hargö, Vice President International Operations, Capital Cooling Energy Service, Sweden; Jesper Olsen, Market Manager, Industrial Refrigeration, Alfa Laval; and Lars-Olof Johansson, Technical Manager and Director, DEW-Kylsystem, Dubai and Sweden, represent this spirit, which they believe has emerged from the carefully nurtured culture of best practices across the HVACR spectrum. Their companies have a presence in the region, and juxtaposed against the Middle East conditions, they find the contrast, perhaps, hard to miss.

Johansson echoes this when he stresses that it is business as usual in the post-global downturn scenario in Sweden, as the HVACR market has emerged relatively unscathed, while the GCC states are still experiencing its aftershocks “The investors and the industry took the chance to retrofit and replace/upgrade the systems to more energy-saving systems to reduce operating costs,” he explains, and adds that unfortunately, this was not the case in the Middle East. He also points to the fact that Sweden has had a 20-year head start in the production of green energy and wind power, which makes it one of the market leaders in sustainable solutions in the HVACR sector. However, he astutely observes that the spectrum for investment and energy-saving concepts/installations in the EU and Sweden has a lifespan of 20 to 50 years, whereas in the UAE and the region, the stakeholders look at a very short investment span. “Since a lot of people/decision makers are here only for a short time of three to eight years, there is no interest,” he says.

The condition in the Middle East is improving, says Hargö, both from the fiscal and environmental perspective. Things are looking up at least in the refrigeration sector, which his company is involved in, with its regional head office in Dubai, believes Olsen. But Johansson sounds less sanguine. His company has a full-fledged presence in the region in design, installation and service of HVACR installations, and specialises in sustainable products with low-energy consumption and low-carbon emissions.

THE SWEDISH CONNECTION – THE REGIONAL OUTLOOK

Sweden, with its long experience and knowledge in the district energy infrastructure systems and HVACR equipment, has made inroads into the region. Its HVACR products have found favour with regional distributors, installers, contractors and system builders and have a competitive edge. An added advantage is that almost all products from Sweden fulfill the GCC requirements and specifications. The demand is for new system design and cost-effective solutions.

Also, given the climatic conditions in the region, the emphasis is on preserving vegetables at different temperatures and relative humidity. Therefore, a lot of Swedish products have been developed with this focus, believes Johansson. He lists a few of Sweden’s HVACR exports: “Plate exchangers, compressors for natural refrigerants like R717 (Ammonia) and CO2, air coolers with extra surface area for better heat transfer, air sock system in cold stores for natural air movement inside the areas, passive cooling systems with energy storage inside the building construction, smart BMS systems to use natural cooling from ambient air and water for ‘free cooling’, products of high standard and regulation for pressure testing of refrigeration systems to prevent leakage of HFC/HCFC into the atmosphere… There’s a long list!”

The wide gulf:

Hargö estimates that while the massive government spending in housing and infrastructure in Saudi Arabia and Qatar translate into a positive contribution to Sweden’s export industry, the HVACR segment in the region is still relatively small. Says Olsen, “I can only talk about Alfa Laval, and it is definitely very positive for our business.”

Johansson, looking beyond the products and with his gaze set on sustainability, rhetorically asks, “The main issue is, how much are the clients focused on new technology or being in the frontline with green and energy-saving solutions?” He, then, goes on to answer it: “If it’s a ‘normal HVAC-installation’ without any kind of specified targets, the chances for business are 0, as then, only the price of the installations will be the benchmark. Therefore, sorry to say, but this is probably the fact, since there are no signals from any country to improve either regulations or standards for building design – a lot of talking but no action.”

This leads one to take a serious look at implementation of sustainable and energy-efficient measures in the region. While Olsen concedes that the region has been slow to pick up the global green trends, he believes that the ever-soaring energy prices will have an impact on practice and policies. “So, we have to wait and see,” he says cryptically, and adds, “In the end, it is a matter of money.”

Johansson endorses this view, but with a caveat when he says that there has been an increase in awareness to “a moderate extent” in the last few years, and has kept pace with the energy prices. “The Project managers are always looking at the price today,” he says. “Nobody in the UAE will get a chance to present something with the lowest lifecycle costs (LCC). In the EU and Sweden, it’s the LCC that is the main factor for decision makers.” Strong though the criticism may sound, it once again underscores the general perception that the region will take sustainable solutions seriously only when things begins to hurt financially.

On the other hand, Hargö takes a more charitable view when he says that the growing awareness about green issues globally is reflected in a willingness to accept sustainable policies by people in the region and in governmental regulations. He cites the example of the implementation of different kinds of building code systems, such as LEED in the region.

Olsen believes that if Sweden is looking for a long-term presence in the region, it needs to co-opt the GCC states’ support in building awareness about Sweden’s HVACR products and create better channels of communication to strengthen the partnership. “The heat exchangers we have in our installed base will always be a strong tool to use in discussions with consultants, end-users, contractors and installers,” he says, pointing to a possible business strategy.

SWEDEN’S SUSTAINABILITY MANTRA

The key factors that lead to best practices in Sweden’s HVACR sector are the right regulations, legislation enforcement, a mature consumer base, where people and the government are aware of their societal and environmental obligations, leading to the country’s culture of awareness, innovation and conservation. It is, indeed, an ongoing process. Olsen explains the basics: “Sweden is and has always been a very innovative nation and promotes any kind of education that brings the country and the individual to a higher level. And after World War II, this has been a natural part of daily life. As we all see the benefits [of conservation], it does not normally create any conflicts as the availability of raw material and energy are very important for our existence and competitiveness. In Sweden, every public and office building needs to be energy-declared by authorised companies and built to fulfill the demands set by the authorities. It definitely helps bring the technology forward.”

Johansson adds: “The main initiative came after 1973 – the oil crisis –when energy prices were skyrocketing by 400% within a week. The government, the industry, end-users and owners of HVAC installations realised that something drastic had to be done in order to survive and use cooling and heating installations in a smarter way with much lower energy consumption. Since then, the average energy consumption for houses/offices/buildings in kWh/year/m2 has been reduced to less than 50% compared to 1970. The use of the total electrical energy is down to the rate per capita as it was in 1970 and still going down. The target is to come down to the level of 1955.”

Sweden, through the right policies and practices, has ensured that all new buildings comply with strict energy-efficiency measures. “A detailed energy consumption plan and lifetime plan for the systems has to be presented for all new projects before any type of building permits are granted,” Johnson reveals. “There are also different maximum standards for the annual energy consumption in kWh/m2, depending on the use of the building. It is called Energy Warranty.”

When it comes to HVACR equipment, Hargö says that Sweden follows all the EU directives and standards applicable to the Middle East region. “The reliable trends are service and products which are resulting in economic growth with environmental concern; growth and sustainability go hand in hand,” Hargö adds.

Refrigeration:

Sweden’s breakthrough in technology is predicated to energy saving and climatic conditions. With long and cold winters and a single harvest season, apart from warm interiors, the country needs and boasts of high-quality cold stores. “We have to store food for 12 months in order to survive, as we cannot buy fresh vegetables and food on a daily basis,” Johansson explains. “Therefore, we have tried to be the “ice breaker” of new technologies. As far back as 1981, we started to replace R12 with salt and water in food stores – 10 years before anybody else did.”

He lists the new technologies in refrigeration:

• Natural refrigerants with a high COP with very low impact on greenhouse effect
• Full indirect systems with a very low content of refrigerant charges
• Cascade system with CO2 for food stores and supermarkets

“All the countries around the world with similar climatic conditions have developed the best know-how and technology for cold stores and buildings – the closer you come to the equator, the less is the technology for such know-how,” Johansson quips.

IAQ:

Research in IAQ is one of Sweden’s top priorities, reveals Olsen. “The government has put a high premium on indoor temperatures, indoor humidity levels and air freshness by controlling the CO2 content in offices and public buildings,” he says. “Speaking on behalf of his company, he adds: “For Alfa Laval, it is, and has always been, very important to invest a respectable part of the turnover into R&D and competence. Individual competence is very important, not only for the individual but also for the company. Every new product we launch should be either a trend-setter or a mirror of the current trends. Products which create a better day for everyone is on the top.”

District heating:

Swedish district heating, considered one of the best systems in the world, is based on energy that would otherwise have gone to waste. “The number of industries close to the city centres has made it possible from early days to take care of the waste heat in a positive way,” Olsen elucidates. “Low energy cost was a good way to make the country grow.”

Hargö believes that the world-class district heating in Sweden is also largely driven by the country’s ambitious goal of phasing out fossil fuel-dependency. (For details on district heating and cooling see side-bar, titled DH and DC.)

Johansson believes that the climate of good regulations and best practices offer a tremendous opportunity for the HVACR sector for innovations, especially for the HVACR installers, which are in the frontline with new green technology and know-how. “For the standard HVACR companies without any kind of R&D of their own or an innovative concept, it will be a hard lesson,” he warns.

Johansson bemoans the fact that the innovations and the culture of conservation have not percolated to the Middle East. “Sorry to say, but there is very little response to or awareness about what is going on in the world around,” he says. “The most dangerous types of refrigerants are still being allowed to be used in new installations in the UAE. Those types were banned in Sweden from 1991.”

He points out that India has been quick to adapt to new technology. “India has the basic know-how,” he highlights. In his opinion, the key drivers in the refrigeration industry in India have been shortage of energy leading to power cuts, a conducive education system that generates a large pool of HVAC engineers, long-lasting and a wider investment horizon and the political will.

RETROFITTING

Legislation in the European Union encourages retrofitting of existing buildings, just as it ensures that all new buildings comply with strict energy-efficiency norms. In Olsen’s view, Sweden has a good retrofit market, also because a lot of public buildings and offices were built in the last half of the 20th century. “Now we need to freshen up those buildings for new use,” he says.

Hargö estimates the percentage of retrofit projects in Sweden to be about 50%, while Johansson pegs it at 50 to 60% retrofit and 40 to 50% new installations.

However, the experts do not see this reflected in the Middle East. The fact remains that the region and the market are still young and most buildings are relatively new compared to those in Europe. Johansson, speaking from experience, says that the region presents a golden opportunity for the retrofit industry, waiting to be tapped. “If there is a retrofit programme for all buildings, warehouses, shopping malls, with new energy regulations for the future energy consumption, then we can do it,” he offers enthusiastically.

CONCLUSION

Typically, the key factors that nurture best practices in any country are legislation and enforcement and a society acutely aware of its joint responsibility and societal obligations towards the country and the environment. Sweden scores on all these counts. It is, therefore, hardly surprising that the HVACR equipment from the country meet the requirements in the GCC.

Regulation, awareness, innovation and conservation are evidently interlinked and complement one another. Heightened awareness at both public and governmental levels about rising energy and environmental costs has spurred sustainable innovations and strict product and market regulations in Sweden. The industry experts are unanimous in their opinion that these factors have, together, played a pivotal role in helping the sector weather the economic storm to emerge stronger. They also agree that the GCC states lag behind in these very areas, and need to pursue them with the same rigour as Sweden has, if they hope to reinvigorate the market in the region.

Sweden, say the experts, has learnt its lessons the hard way. Increasing energy costs and decreasing energy production due to new environmental demands saw closing down of coal/fossil and nuclear power stations. “We have been through oil/energy crisis – short of demands, skyrocketing prices, power breakdowns… So, we are trying to build a sustainable system based on our experience,” says Johansson.

“We all know that we have to take care of the resources that we borrow from our children,” says Olsen.

Perhaps, it is time for the GCC region to take advantage of the received wisdom from Sweden. But, any positive transformation, if it has to be enduring, has to emerge from the groundswell of the native soil, rather than being transplanted. As Olsen points out, it would be better to see sustainability “grow in a more natural way and without specific demands from the governments”. He disarmingly asks: “It is always a pleasure to see a seed grow, isn’t it?”

Any company that truly wants to make a positive impact on energy efficiency and Indoor Air Quality should consider using a robotic system to clean and maintain its HVAC ductwork system. A robotic system typically consists of a robotic vehicle that can carry various payloads, allowing it to quickly and efficiently complete such tasks as cleaning, inspecting (by means of a video component), testing, and sealing. The robotic vehicle can be easily adapted to allow completion of specific tasks by the addition of specialised components, such as whips, brushes, sprayers, and filters.

A robotic system offers multiple advantages over manual cleaning, inspecting, and sealing. In addition to immediately saving on labour costs, a robotic system can spray sealant at very high pressure, reach very small spaces, perform at a consistent pace over several hours, and requires only two access points, thus eliminating the need to cut potentially damaging access points in ductwork every five to seven feet.

The efficiency of the robotic system in performing cleaning, inspection and maintenance tasks can translate readily into better performance of an HVAC ductwork system, resulting in improved Indoor Air Quality. Air delivered by a clean, well-sealed HVAC system will, therefore, include a minimum of allergens, pollutants and unpleasant odours, and the temperature of the air delivered will be more consistent throughout the space. The latter benefit means less use of appliances, such as space heaters and fans in some areas of a building. This minimising of “plug load” will result in an overall reduction in energy consumption.

A company implementing the use of a robotic system to clean and maintain its HVAC ductwork system will realise multiple economic benefits.

According to Frank Forrest, Efficiency Solutions Product Manager at Carlisle HVAC, a robotic system can typically pay for itself within the first one to two jobs, if used in a larger commercial building.

A well-maintained robotic system can be expected to perform its tasks well for as long as 10 years. Routine maintenance of the robotic system is simple: It requires only a good cleaning following each use. The robotic system is designed to allow easy replacement of worn out parts, such as tyres, brushes, whips, drive belts, and even the video/camera components. Most ductwork technicians can readily learn to perform any routine maintenance a robotic system might require.

A well-maintained ductwork system is the key to getting the right amount of clean, fresh, conditioned air right where it needs to go.

The writer is Marketing Manager, Carlisle HVAC. He can be contacted at Billy.Prewitt@CarlisleHVAC.com

Occupant comfort in a commercial facility plays a critical role in productivity, because productivity goes down if the occupants are not comfortable. Therefore, the onus lies on facility managers to identify the root cause of thermal comfort issues and ensure that repairs are carried out effectively.

Leakage in the ducts affects the HVAC system and, in turn, affects occupant comfort and, therefore, must be addressed immediately. However, the general tendency is to speed up fans, change motors and carry out other similar inconsequential changes to the system when occupants complain of discomfort. These changes are not only ineffective but also costly, as they demand labour and equipment upgrades as well as additional energy. Another factor to be considered is that if leakage issues are not immediately and effectively addressed, occupants might take matters into their own hands and press into service fans or heaters or hijack thermostats.

In the light of this, validation of recommended repairs is especially relevant to thermal comfort issues in a building. Identifying the real problem is the first step towards having a truly efficient comfort system. Testing the HVAC ductwork in both new construction and existing structures can be completed in various ways. One suggested method would be to use a duct leakage tester. This device positively pressurises the ductwork and, then, measures the amount of leakage at the specific pressure. Another option to test for leakage would be to use a smoke machine. This visual confirmation allows leakage to be pinpointed and patched. Some use a soapy solution on areas that are potentially susceptible to leaks. It needs to be noted that duct leakage is a given, and testing will expedite the proper system repair.

Justifying the expense for repairing a leaking duct system is made easier by using standard airflow calculations. There is an online program available which allows users to calculate the energy savings from a one- to 20-year period. The calculations involve multiple inputs, such as building square footage, local utility rates, and leakage before and after sealing. This program allows a facility manager to see the benefits of tightening up the ductwork without extensive mechanical system and airflow. The climate and location of buildings play a big role in the discernible cost and energy savings. The more diverse the temperature changes, the greater the potential cost savings will be.

Many of the comfort issues of occupants can be solved if the root problem of duct leakage is addressed. Testing the ductwork for leakage is the first step in solving this overwhelming system challenge. Once the leakage is detected and evaluated, sealing the ducts and re-balancing the system can be done, which will lead to increased occupant comfort and energy savings.

Taking into consideration the vital role played by ducts, it is important to address complaints promptly and test the ductwork for leakage and completely seal the system. Testing and sealing the ducts in a building will lead to a truly efficient HVAC system.

The writer is Marketing Manager, Carlisle HVAC. He can be contacted at Billy.Prewitt@CarlisleHVAC.com

The present economic scenario in Europe brings to mind an old joke:

Three men met at a park. The first one sighed. The second one sighed in response. The third one said irritably, “Oh, stop discussing the economy!”

The joke may sound cruel, but it is, perhaps, an eloquent comment on Europe’s present mood. And Italy is no exception. It is hard to miss the irony. The 2007 Chillventa country report on Italy said: “The refrigeration and air conditioning market in Italy has strong sales growth to show. A total of 13.4% more units were sold and 22.2% more of turnover achieved in 2007 compared with the previous year.”

Italy was dubbed the “Land of air conditioning” The Italian Association of Manufacturers of Air Conditioning and Ventilation Equipment Co. AER (Associazione construttori di apparecchiature ed impianti aeraulici), which published its statistics in March 2007, gloated that it was a positive year for the Italian HVAC sector with 13.4% more air conditioning units sold and 22.2% more turnover achieved compared with 2006. Although the production figures of the Italian companies had actually dropped overall by 1.4%, the turnover had risen by 13.4%.

There was a hidden subtext here, predicting the events to come. But the general mood of optimism, buoyed by statistics, prevented many from reading the signs of the times. Then came the global economic crisis, and the outlook in Europe changed completely. Michele Paccagnella, Managing Director, MP3 Srl, with its head office in Camposampiero, Padova, Italy, admits as much when he says, “The European/global crisis has been continuing to heavily influence the HVACR sector in the last three years. The market has fallen by no less than 30%.”

Salah El Deeb, MEA Sales Manager, Castel Srl, Milan, agrees. The economic crisis has definitely impacted Europe since late 2008 and early 2009,” he says and adds, “But in the last two years, the stronger companies have had a slight edge.

His company is a supplier of components for refrigeration and air conditioning applications and supplies to big and small OEM customers through distributors.

El Deeb, echoing Castel’s conviction believes that mega projects will continue as planned, the financial fragility of the market notwithstanding. “It’s a case of ‘stop and go’,” he analyses. “Projects that have been injured have suffered slowdowns and a few have seen accelerations. The market outlook is that this is a reality which must be faced.”

Speaking about his company’s game plan, he adds: “Our organisation is based on an Italian network of area managers and agents, and the strategies we use for facing the global slowdown are mainly to focus on our core business and approaching customers through area commercial dealers. We are also looking at a process of internationalisation, which includes opening a subsidiary in China.”

It appears that China is to Europe what Qatar and Saudi Arabia are to the Middle Eastern HVACR markets. Too many hopes are pinned on a growing Chinese market, thus rendering the Italian market vulnerable to the all-too-familiar domino effect.

Paccagnella succinctly sums up the HVACR market outlook when he says: “The growth of the construction sector is directly proportional to the growth of our country. In the absence of new constructions, the (HVACR) market will be in recession, and it is exactly the situation we are in now.”

GENERAL FEATURES

From small distributers to a consolidated market:

Unlike in many other countries in Europe, the wholesale trade in Italy is spread among and organised by many smaller regional distributors. This is true not only of the components and refrigerants segments, but also applies to refrigeration and air conditioning systems. The big companies are represented by many smaller associations, with no single federation. However, the trend is now moving from a fragmented market to a consolidated one, and also towards competing with international players.

“Our strategy is to gradually reduce our sales in the domestic market and increase our exports,” reveals Paccagnella, reflecting this. “The evidence to show this is that in the first five months of 2012, in comparison to 2011, the total sales was about five per cent more with -13% in the Italian market and +38% in exports markets. The main players are our main competitors.”

Hospital sector helps the ailing market:

Another trend is that the largest public investments have been in the hospital sector, though from 2011, there has been a significant reduction in the number of tenders in this sector, too, as a result of the economic crisis.

MP3, a manufacturing company, with distributors, installers and contractors as its customers, has managed to keep afloat with contracts in the healthcare segment, despite the slowdown.

“We are today among the most important companies in the sector, leading in the fire prevention market (fire dampers),” Paccagnella claims. “The most important contracts we have obtained are for the supply of components for new-restructuring of hospitals, UN military bases, as also airports. The value of the contracts range between €200.000,00 and €700.000,00”.

Going clean and green:

With green buildings being the buzzword, the concepts of environmental impact and eco-responsibility have gained greater traction in Italy. The focus has also shifted to Indoor Air Quality. There is a greater realisation, therefore, that cooling tower maintenance can pay good dividends, in terms of both energy efficiency and IAQ. Duct cleaning is also seen as playing a big role in better IAQ.

Environmentally speaking, more efficient compressors and natural refrigerants, which reduce ozone depletion, are fast becoming the norm rather than a fad.

In the AHU sector, the main innovations are linked to energy saving and high efficiency heat recovery.

Ducting and fire safety:

“In the market for ducts, the main innovations seen in the last few years have been polyurethane ducts and antimicrobial treatments for ducts,” says Paccagnella. Apart from this, with tighter fire safety regulations being stringently followed all over the world, Italy has also seen the HVACR sector being co-opted into it with a call for newer technologies in ducting.

“In the fire prevention sector, as a result of the new European directive which is being introduced for all member states of the EU, new products are being developed, which, in addition to stopping the propagation of fire, must also block hot and cold fumes from spreading in buildings as these are one of the main causes of deaths in case of fires,” Paccagnella points out. “It is also necessary for these new products to undergo tests for all possible types of applications and very rigid construction and control systems must be put into effect as a result of the importance of these products.”

POWER STRUGGLE

Salah El Deeb

Mirroring the global predicament, steep energy cost in Italy has brought into sharp focus the need to implement energy-saving initiatives and reducing power bills. This, in turn, has underpinned the need for energy- efficient equipment in the HVACR sector, and highlights the importance of electric drives as advanced and cost-effective solutions for HVACR components.

“For this reason, a new association has now been set up as part of Co.AER, the Italian Heat Pumps Association, which represents the interests of the industry, promotes research projects and developments and is also a member of the European Heat Pump Association (EHPA),” says a Chillventa report. (Chillventa country report: ITALY, 2007)

“Heat pumps are also promoted by the Italian government,” the report continues. “Law number 244 on highly efficient heat pumps has been in force since 24. 12. 2007, under which, 55% of the costs can be deducted direct from tax. This also includes costs associated with the replacement of existing plants with highly efficient heat pumps.”

Maria Calabria, in an analysis of the HVAC sector, vis-à-vis the heat pump market, states that in Italy, energy consumption for civilian use corresponds to approximately 90% of the total consumption, and heating and air conditioning systems absorb about one-third of total energy needs. “The implementation of energy savings programmes in the HVAC area can have a significant impact on Italian energy consumption and allow Italy to reach Kyoto objectives and European Union commitments,” she says. “The use of GHPs alone could bring Italy to meet its renewable energy obligations by 2020.” (Italy: HVAC – Geothermal Heat Pump Market, US Commercial Service, United States of America, Department Of Commerce, September 2009)

Michele Paccagnella

It is interesting that the US Department of Commerce admits that US was once the world leader in GHP technology and market development, but that the European markets now absorb two to three times the number of GHP units annually as do the US domestic markets. According to EPHA, the European heat pump market is growing progressively in most European countries, and the most significant growth is found in the larger markets, including Italy.

In this regard, it needs to be noted that Italy is dependent on imports for 84% of its energy, 50% of which comes from France alone. With changing climate patterns, demand for air conditioning systems has risen in the residential and the industrial sector. Heat pumps are, therefore, increasingly being seen as a possible solution, as they can double up for heating and cooling in view of the Mediterranean climate that prevails in Italy. However, the fact remains that EU, as most of Europe, is tightening legislation affecting building energy performance requirements and renewable energies, to help cut down energy bills and improve sustainability.

TARGET 20/20/20

According to the European Commission: “In March 2007, the European Union (EU) leaders endorsed an integrated approach to climate and energy policy that aims to combat climate change and increase the EU’s energy security, while strengthening its competitiveness.” They committed Europe to transforming itself into a highly energy-efficient, low carbon economy.” (http://ec.europa.eu/clima/policies/package/index_en.htm)

To initiate this process, the EU heads of state and governments have set a series of of demanding climate and energy targets to be met by 2020, known as the “20-20-20” targets. These are:

A reduction in EU greenhouse gas emissions of at least 20% below 1990 levels

20% of EU energy consumption to come from renewable resources

A 20% reduction in primary energy use compared with projected levels, to be achieved by improving energy efficiency

The EU leaders have also offered to increase the EU’s emissions reduction to 30%, on condition that other major emitting countries in the developed and developing worlds commit to do their fair share under a global climate agreement. (http://ec.europa.eu/clima/policies/package/index_en.htm)

In the light of this, reducing carbon emissions, energy consumption, promoting energy efficiency, cost savings and environmental sustainability have become not just a trend, but are mandatory.

Focus on design:

With a view to achieving the goals EU has set for itself, countries in the Union, including Italy have set their gaze on equipment and building design for achieving high energy efficiency. This has had a direct bearing on the country’s and the continent’s HVACR sector. High efficiency, energy saving and renewable technologies will eventually phase out traditional designs and technologies. The sector will, therefore, witness a complete system revamp and integration and incorporation of renewable energy.

This will also see a shift in technology balance of power. The race is on for coming up with innovative product designs which will factor in the cost element. “There is big attention towards this, and the market demands for products that respond to this need for innovation is very strong,” admits El Deeb. Coming to specifics, he adds, “Certainly, in Italy, innovation passes through more efficient products from the point of view of energy savings and possibly with the use of refrigerants as alternatives to the current ones.”

INNOVATION AND PRICING – THE BALANCING ACT

There are many new directives and policies in place in Italy for the construction, energy-saving and energy-efficiency classification of buildings. The government also offers incentives for alternative sources of energy and encourages installations of photovoltaic solar panels and high efficiency systems. In fact, Italy was one of the first EU countries to provide incentives for adopting energy-saving technologies in the construction sector. This is, of course, in line with the 2020 target.

Since 2010, 57.5% of small and medium enterprises in Italy have invested in energy-saving practices. However, the bleak economic scenario has created setbacks to the collective good intentions of the government and the HVACR industry. Paccagnella voices this market sentiment: “Unfortunately, due to the current crisis, subsidies towards research for new technological solutions have been practically nil. Within the R&D help plan, the current government is evaluating whether to restart the support given to the industrial sector for R&D of sustainable solutions. Again, unfortunately, due to the current economic crisis, the policy for incentives faces constant changes and is slowing down significantly in this important sector, which, in the last few years, has had an exponential growth, and which has created many new jobs. With the market facing a significant slowdown, currently, it is not clear what will happen next.”

Speaking about his own company’s sustainable initiatives, Paccagnella claims that towards the end of 2008, MP3 started a new series of projects for the development of new products. “In 2009, 2010 and 2011 we invested over three million Euros and more is still being invested in this current year, 2012,” he reveals. “As a result of these investments, MP3 is able to tackle the recession in the Italian market with new technological products which will allow moving sales from Italy to overseas markets.”

Penetration into the regional markets in Eastern Europe is also being viewed as a strategic response to economic and energy challenges, with manufacturers shifting their bases to Eastern Europe to reduce their production outlays and to cater to the increased automation needs of the countries in this region. But heavy investments made in infrastructure, expansion of industries and production, including the HVACR sector, may not now pay the dividends expected. Moreover, with the entire Europe being in crisis mode, with small pockets as exceptions, moving base now may prove to be a futile exercise.

Against the backdrop of economic uncertainty and turmoil and the balancing act of reaching target 2020 with dwindling R&D funding, the increasing clamour by end users is to keep the prices of HVACR products and services low. Maintaining the price-quality ratio and yet trying to drive an economic advantage has been a real challenge for the country’s HVACR sector. Paccagnella puts the dilemma in a nutshell: “Any new solution becomes interesting for the end user only when the economic saving results from the sum of the initial cost of the new product and the management costs, compared to the previous solution.”

To lure more customers, the sector in Italy probably needs to come up with low-cost, off-the-shelf solutions for specific applications, and put grand designs in cold storage for the present.

CONCLUSION

The HVACR industry in Italy, as in the whole of Europe, is undergoing unprecedented change. But it is a negative change. The dynamics which once drove the positive transformation – technological innovation in building design and energy conservation – which promised to flood the market with equipment and applications, has taken a beating. What dictates terms to the sector now is cost for the end user and maintaining a decent bottom line for the manufacturers and service providers. Factors like spiralling energy costs and mandatory compliance with energy efficiency standards, together with a focus on IAQ and its impact on human health, are the big challenges.

Paccagnella spells out the roadblocks in the path to achieving sustainability in a climate of economic crisis, with an eye on the price tag: “The challenges that the HVACR sector is facing and will face in the coming years are primarily linked to the Research and Development of green products, with low-energy consumption, low environmental impact, low pollution and reduced noise levels. The growth of the HVACR sector in the global economic context will be influenced mainly by the situation in the construction sectors, that is, from construction and economic policies in various countries.”

In an increasingly gloablised market, no country can insulate itself from the trends worldwide, positive or negative. At present, they are negative and these, unfortunately, do not have quick-fix solutions.

El Deeb, voicing his company’s policy, says, “We are optimistic about the ability of HVACR Italian companies for the coming years, thanks to their power to become international, taking advantage of all the opportunities of the international markets.”

“As an enterprise, we must always maintain optimism,” concedes Paccagnella. “But we are also forced to be realistic. Today in Italy, there are no indicators that make us think there can be a quick recovery. In fact, many businesses are closing or are moving their factories abroad.” But he hastens to add: “It is also equally true that things could change very quickly if there was a change in strategy and greater attention paid to economic policy by the current government. Once it realises that Italian companies must be supported even if they are simple and concrete measures, like guaranteeing the circulation of money in short time spans, both between companies and public bodies, like in Germany and France, things will start to improve quickly.”

Probably, that would change sighs of anguish to sighs of relief.