HVAC Market of Krasnoyarsk
Distinctive features of the region, which influence the development of HVAC market
Krasnoyarsk was established in XVII century by Cossacks as a fortress. Now it is one of the most rapidly developing city not only in Siberia, but also in Russia.
Population of Krasnoyarsk in 2007 was of about 927 thousand people. It is expected to exceed one million by 2010. Local authorities take this forecast into consideration and developed special program of development of the city, which includes accelerated residential construction and rapid development of local infrastructure.
Krasnoyarsk has two satellite towns on the right bank of the river Enisey: Divnogorsk and Sosnovoborsk. Altogether they make an agglomeration with total population of 1,13 million people.
Krasnoyarsk region has a sharp continental climate. Average temperature of January is minus 16 C, temperature low than minus 20 C is a common thing. Summer is rather warm, average temperature of July is about 18 C.
Krasnoyarsk is a well-developed industrial center. More than 17 thousand industrial enterprises and organizations are situated there. Geographical situation and natural resources determine the leading fields of industry: non-ferrous metallurgy, machine-building, woodworking, transportation, chemical and food industry. Some of the most significant elements of industry and infrastructure of Krasnoyarsk are: “Bamtonnelstroy”, two airports, three air strips (two of them are private), river port, Enisey river steamship company, city subway under construction. Local authorities say, that industry develops along with the city: “First of all grow big enterprises of aluminum group. At the same time, small and medium size business demonstrates very high rate of growth, production volume in this sector doubled or even tripled as compared with 2006”. Average monthly salary in Krasnoyarsk is more than 17 thousand roubles, recent years it grows steadily.
Construction activity in Krasnoyarsk
There is a real construction boom in Krasnoyarsk nowadays. Experts say, that the most active field is construction of trade and office complexes. Very active is also construction in residential sector within national project “Available residential facilities”: under construction are not only separate buildings, but entire microdistricts. This activity will inevitably by followed by construction of new schools, kindergartens, shops and medical centers.
Residential real estate
Around 698 thousand square meters of residential facilities were commissioned in Krasnoyarsk in 2007. It puts Krasnoyarsk into the highest positions of the Russian rating. The main customers of residential construction are local authorities and private developers.
Anatoliy Grigorenko, Deputy Mayor of Krasnoyarsk and Director of the Construction Department of local administration, says that residential construction has outrun social public construction. Krasnoyarsk is the first city in Russia, which has already passed the level of one square meter of constructed residential facilities per one citizen. At the same time Krasnoyarsk is also among the leaders according to the rate of price rise for residential square: it has the second position after Sochi.
In 2008 at least one residential microdistrict is to be constructed. It would have total square 24,5 hectare, the majority of buildings would be ten-storeyed, some – sixteen-storeyed. For 2008 it is planned to commission totally not less than 500 thousand sq. meters of residential facilities.
Commercial real estate
Experts say that the market of commercial real estate grows fast. The total volume of the market is rather big (more than 1 million sq. meters), but the share of quality real estate (separate capital buildings) in 2006 did not exceed one third. Market of commercial real estate in Krasnoyarsk develops in the way, traditional for the majority of Russian cities. It gradually passes to civilized forms of trade organization: the number of trading pavilions, booths, stalls, counters and container markets reduces; the share of quality trading facilities increases.
Some experts express the opinion, that the period of 2007 – 2008 is the peak of construction of new trading centers: their number would increase almost twice as compared with 2006 and four times as compared with 2003.
Svetlana Mikheeva, Commercial Director of the company Chistiy Vozdukh, says that it is the active construction of trading and entertainment centers that caused a serious growth of sales volumes of ventilation equipment in Krasnoyarsk nowadays. The growth was of about 30-40% in 2007.
She also says, that it has a down side. The main reason for choice of supplier of ventilation system is still the price. Customers usually try to save on HVAC systems and invest money into the finishing of premises. As a result the quality of air inside big office or trading centers remains poor.
Specific features of HVAC market of Krasnoyarsk
According to some estimation, there were sold about 8 thousand split-systems, around 15 VRF-systems and some thousand units of small climate consumer equipment (room ionizers, humidifiers, etc.) in Krasnoyarsk in 2007.
Experts believe, that HVAC market of Krasnoyarsk is on the rise today. Each year there appear about 10 new climate companies, many big computer companies has already opened or are planning to open climate branches. According to the forecasts, such active growth would last for 3-5 years more. The natural process of driving out of the weakest players would follow it.
Taking into consideration weather conditions, it’s reasonable to suppose that HVAC business in Krasnoyarsk is sharply seasonable. CEO of companies confirm that it was so for many years. But last years serious changes could be seen, says Svetlana Mikheeva. Some years ago air conditioners were sold only during the hottest months. Now people buy them all year running. The period of the most active sales is from April to July.
Eduard Grinin, Director of Daichi-Krasnoyarsk, assesses the situation a bit differently: in winter prevails the demand for industrial air conditioners and PAC, in spring and summer adds the demand for room equipment.
He also says that the main customers for HVAC equipment are construction organizations. Besides, administrations of different level organize tenders for installation of climate equipment. Than follow, as usual, corporative customers, state organizations and private customers.
Main players of HVAC market of Krasnoyarsk
There are about 50 HVAC companies in Krasnoyarsk. At the same time, as Eduard Grinin says Eduard Grinin says, there are not more than 10 specialized HVAC companies, whose main income is connected with sale and installation of the climate equipment. For the majority of players at the HVAC market of Krasnoyarsk this business is not basic.
In the segment of industrial HVAC equipment the biggest companies are: Intek, Konvent, NTV. In the RAC segment lead Klimat-Kontrol, Konvent, NETA, Chistiy Vozdukh. Company Daichi- Krasnoyarsk is engaged in wholesale of air conditioners only.
Trade chains also sell RAC. They are: Moscow-based Eldorado, Mir; local Alpi, Alternativa Sinitsy, Byttekhnika, Sibvez. Svetlana Mikheeva says, that in the middle of the summer season trade chains sell 35-40% of all RAC of economical class. Directors of HVAC departments of trade nets use to say in their interviews to local newspapers, that they plan to organize after-sale service. In reality almost none of trade nets offer even installation service for splits they sell.
There are no manufacturers of HVAC equipment in Krasnoyarsk. Only some workshops produce air ducts. At the same time, HVAC companies have huge warehouses. The only Moscow based HVAC company, who works in Krasnoyarsk, is Daichi. It has its representation there.
There are also neither professional association, nor special events connected with climate business in Krasnoyarsk. Some HVAC companies take part in the construction exhibition, which is hold twice a year. Eduard Grinin believes that HVAC market of Krasnoyarsk has not grown up yet to create some professional association: “There are many companies of different level in the city. They have practically nothing to negotiate about. They have different experience, aims and targets”.
Main brands of HVAC equipment in Krasnoyarsk
In the segment of RAC, the main brands, represented in Krasnoyarsk, are: Ballu, Daikin, Fuji, General Climate, Hitachi, Hualing, Kentatsu, LG, McQuay, Midea, Mitsubishi Electric, MHI, Panasonic, Polaris, Venterra, Sharp, Toshiba, Wings. In the segment of PAC and industrial equipment they are: Daikin, LG, McQuay, MHI, Wesper. Main brands of multizonal systems are: Daikin, Haier, LG, MHI, Venterra.
Main brands of ventilation equipment, represented in the region are Systemair, VTS-Clima, Arktos, Diafleks; of heat curtains are Ballu, Frico, Master, Teplomash, Tropik; of humidifiers – AirComfort, Boneco Air-O-Swiss, Venta; of heaters, convectors and electric fire-places – Nobo, Noirot.
Difficulties and prospects of HVAC market of Krasnoyarsk
The key problem of the HVAC market of Krasnoyarsk is usual for Russia – it is the lack of qualified personnel. CEO of all big climate companies of Krasnoyarsk say it. Some companies try to resolve this problem themselves: they train managers and installers, using their own possibilities. Companies Ventrade and Daichi regularly organize professional seminars for different groups of specialists.
The second problem is that profitability of business goes down. Svetlana Mikheeva tells: ” Our Moscow based partners reduce recommended retail price for HVAC equipment, but the wholesale price remains the same”. There also exist in Krasnoyarsk such typical for developing markets things, as price damping from the part of newcomers, unreasonable price reduction from the part of big companies in order to catch serious customers.
Eduard Grinin says: “We always keep an eye on the discounts for retail buyers. They shouldn’t exceed some determined figure. So we can’t accuse our dealers of price damping. If we see it, we prevent such companies from buying our equipment every possible way”.
All expectations of the development of HVAC market in Krasnoyarsk are connected with the construction boom. The general growth of the volume of sales is expected. Also is expected the growth of the share of heavy technique: central air conditioning systems and multizonal systems. It is expected, that there appear in Krasnoyarsk new HVAC companies. High rate of construction development and relatively low competition at the local market would surely help it.
Editors of magazine “The World of Climate” gratefully acknowledge help and assistance of the Information Project HVACNEWS.RU and the top managers of Krasnoyarsk based HVAC companies:
Eduard Grinin, OOO Daichi-Krasnoyarsk, Director:
HVAC equipment directly depends on the temperature in the region. Important is not only average temperature, but extreme values also.
If temperature below minus 10 C is a rare thing, sales of heat pump air conditioners would prevail. It’s typical of the markets of Southern and Western regions of our country. In our region the temperature could be below minus 20 C for a long time, and sometimes could DROP to minus 40 C. As a consequence, heating devices are more relevant at our market, because heat pumps are not efficient with such temperature. This determines, that a sale of RAC in our region is sharply seasonal, as compared, for instance, with Moscow market.
Svetlana Mikheeva, Chistiy Vozdukh, Commercial Director:
- Citizens of our city are real Siberians. They have a very serious approach to anything, concerning their home in general, and creation of a home comfort in particular. Because of it more and more citizens of Krasnoyarsk choose high quality air conditioners, equipped with efficient system of air cleaning. Citizens more and more often choose multisplit-systems, as they have better appearance and are more attractive from the point of view of not to damage the house façade. Our customers are very fastidious in commissioning installation works; they never fail to look at the smallest things.
Vladimir Alekseev, OOO Konvent Plus, Director:
– Development of HVAC business is directly connected with the level of development of construction business. We have high level of construction development, so the market of climate equipment will grow. I’m sure, it will grow in the segment of industrial systems of ventilation and air conditioning first of all.
Vladimir Smirnov, Holding SIBROSS, Chairman of the Board of Directors:
- Our Krasnoyarsk becomes more beautiful from year to year due to modern architectural decisions of newly constructed buildings. These architectural decisions raise the benchmark of technological demands to engineering systems. Life shows, that not everybody can withstand such a high pace. I cannot help being surprised with modern buildings, whatsoever kind they are: residential, industrial, offices, trading or entertainment centers. Modern buildings amaze me with their aesthetics, with complicated geometry of their contours, with their inside comfort and practicalness of design. So, to equip such modern buildings with engineering systems and infrastructure is not an easy task.
Dmitry Sergueev, Ventrade, Director of Separated Branch in Novosibirsk:
- We opened our Branch in Novosibirsk in 2005 specially to organize our work with the Krasnoyarsk region. According to the volume of HVAC market, Krasnoyarsk can compete with the bigger market of Novosibirsk, the “capital” of Siberia. The Krasnoyarsk region is now very attractive from the investment point of view. This fact is directly reflected in the scale of construction of residential, industrial and public buildings there. In general, HVAC market of Krasnoyarsk could be considered as developed enough. There are no big changes in the positioning of players at the Krasnoyarsk HVAC market nowadays.