LG Electronics has today announced that the region's annual commercial air conditioning market volume is expected to reach approximately US$ 4 billion, a 35 percent growth from 2010.
In 2010, the region's annual CAC market volume reached US$ 2.95 billion, a figure which is expected to increase to US$ 3.21 billion for 2011. The importance and size of the global commercial air conditioning (CAC) market has grown to prominence in recent years, gradually evading the shadow of the residential air conditioning (RAC) market. Such growth has not been limited by tempering market conditions in the traditional CAC strongholds of North America, Europe, and Middle East. With demand for CAC products accelerating in other parts of the world, other regions have now entered the fray.
Regional construction boom and increasing investments from China have boosted the growth. Another factor is the 2022 Qatar World Cup, which has greatly increased construction in Qatar in preparation for the mega event in the region. This directly translates to a need for CAC in a region that experiences hot and humid conditions for most of the year.
LG, a relatively new player in this emerging market, has engaged in a heated competition for a piece of this pie. The company's advanced technologies and aggressive marketing initiatives have strategically placed it in a position primed for future growth.
VRF Systems and Multi V III
The heating, ventilation and air conditioning (HVAC) industry has moved steadily beyond simple air conditioning units for households and into more intricate and sustainable systems that cover entire buildings. Riding the wave of this trend, variable refrigerant flow (VRF) air-conditioning systems have proliferated widely. Despite their humble beginnings more than 20 years ago, VRF systems have now evolved into advanced air conditioning systems that provide customizable temperature control for all occupants within a building or building complex.
Speaking at the launch of LG's VRF system Multi V III commercial air-conditioner earlier this year, H.S. Paik, President of LG Electronics Gulf FZE said, "As a company with a strong focus on producing energy-efficient products, we feel that the MULTI V III addresses all the major HVAC requirements of businesses in the Gulf. With this product, we are in a strong position to work with our dealers and business partners in the region to make LG the leading provider of smart and efficient HVAC solutions. And, this has definitely proved to be the case as the Multi V III has earned US$15 million so far since it was released in the Middle East.
VRF sales in 2011 grew 500% compared to the overall single air conditioning market's 21 per cent growth. The sales of this system continue to grow steadily as the expansion of the Middle East CAC market.
Advances in technology and growth in the HVAC market have gone hand in hand as greater demands have necessitated bright ideas and the effective implementation of those ideas. This is reflected in the growth of VRF systems worldwide. The VRF systems market globally averaged an annual growth of 15% over the last five years and reached an impressive US$4.3 billion in 2010. Much of the initial growth was seen in major markets, but there has been a noticeable shift to emerging markets. This trend has led a growing number of industry observers to predict considerable growth in the future. According to research conducted by LG Air Conditioning and Energy Solution Company, the VRF systems market will reach a staggering US$7.3 billion by 2013, a 40% jump from last year's total.
Energy Efficient, Eco-Friendly and Low Cost Maintenance
It is evident that VRF systems are likely to be a major segment of the HVAC market for the immediate to mid-term future. The reason that VRF systems have gained in popularity is their more efficient use of energy, particularly when compared to conventional duct ventilation systems. Using VRF essentially eliminates the airflow losses that occur within ducts, usually estimated to be between 10 and 20% of total airflow. The following comparison is immediately illuminating: if one considers a generic commercial building with a 200-ton cooling system, a properly installed and regularly operating standard VRF system would use somewhere between 30 and 40% less energy than a conventional system.
Even greater savings are certainly possible. LG's latest VRF system, the Multi V III achieves a sparkling energy efficiency that outshines its rivals. Measured using a rating system known as coefficient of performance (COP), the Multi V III's COP comes in at a sharp 4.3, which translates into an extra 14% in energy consumption reductions. LG was able to squeeze this extra efficiency out of its VRF system by incorporating a new technology called high pressure oil return (HIPORTM), LG's unique technology. It is used directly with the system's inverter compressor, called the V-Scroll.
But despite its late entry in the Middle East CAC market LG remains on top of its game and is bringing products that offer its customers greater energy efficient, eco-friendly, easy to install and lower maintenance cost products. LG registered US$125 million in sales in 2010 and is expected to register US$ 175.6 million this year, a 38% growth relative to last year.
"We have enabled an impressive growth through collaboration with top-tier sales partners throughout the Middle East and our VRF systems offering have greater potential for future growth compared to conventional single commercial air conditioning products," added Paik.
LG's Multi V III covers more space with a single pipe than traditional systems. The use of inverter control and sub-cooling control circuit technologies allows the Multi V III to use longer piping. This can also be done vertically over long distances, and elevation is not a significant factor. The larger capacity per unit and the extended piping lengths of up to 1,000m, as well as free four-way piping connections, all combine to make the Multi V III easy and convenient to install and operate. Also, VRF systems are easier to design than conventional duct systems with respect to space restrictions and fitting the systems components into the building seamlessly. Because they are easier to install, installation costs are obviously reduced, and the modular format of the system also results in reduced maintenance costs. The gap in installation costs becomes more pronounced when one compares conventional VRF systems, which often require cranes to install them on the top of buildings. Again, the modular format delivers benefits, this time because multiple lightweight outdoor units can be transported easily in the building's elevators, and then fitted together to achieve the same cooling capacities (often in the hundreds of tons) as oversized conventional systems. The indoor units can be designed in various types, including wall mounted, ceiling cassette, ceiling suspended, floor standing and ceiling concealed.
Though each module represents and independent refrigerant loop, all modules together can be managed simultaneously with a single common control system. This has big advantages for architects when working on construction projects that proceed in stages. For instance, if a building is only partly occupied, the modular system allows a VRF system to be installed floor-by-floor, with additional modules added later as required. Also important for building designers is the maximum weight load of the building's roof. VRF systems are relatively light, eliminating the need for massive roof reinforcement techniques. VRF also uses supply lines that are smaller than conventional ventilation ducts, so building floor heights, as well as associated construction costs, can be reduced.
In addition, the Multi V III has a mode called automatic test, which enables the unit to automatically perform a test run and create a test run report. Previously, installers had to switch on all air conditioning units separately to ensure they were working properly. However, with the auto test run, all the installer has to do is press the trial run button and the test will run automatically before being saved. This greatly reduces the time and effort spent by installation engineers. Another feature is, its "night silent" operation creates a quieter and more comfortable environment.
The Multi V III's previous model, the Multi V II has already enjoyed great success with its advanced functions. It has been installed in the Gems American Academy in Abu Dhabi, one of the region's largest educational institutions. The project's value was $1 million and encompassed 57 outdoor units. Initial design was based on chillers, AHUs and FCUs. However, their cost efficiency proved to be between 25 to 30 percent compared to LG's VRF system. Recent projects also include: Brighton college, Savannah & Flamingo resort in Sir Baniyas island, Villas in Abudhabi shooting club, Retrofit of AC in Musanada schools, Monte carlo branded Beach club in Saadiyat Island and much more.
Opportunities for Further Growth
"LG's overall technological prowess and innovations in CAC products will form the foundation of LG's potential for growth in the Middle Eastern market. In particular, the impressive energy efficiency of LG's CAC products should prove to be central in LG's growth, as the region's governments become increasingly stricter when it comes to government regulations associated with energy consumption. Our Multi V III is a product that is well acclimated to meet the demanding market conditions in the region," added Paik
The introduction of refrigerant R410a, the European standard refrigerant, into the Middle East is placing great demand to meet requirements comparable to Europe. For instance, Kuwait has adopted regulations that have been equated to European regulations. In Iran, a 10 fold increase in electricity costs has spurred the popularity of energy efficient products.
-Ends-
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, mobile communications and home appliances, employing more than 93,000 people working in over 120 operations around the world. With 2010 global sales of KRW 55.8 trillion (USD 48.2 billion), LG comprises four business units - Home Entertainment, Mobile Communications, Home Appliance, and Air Conditioning & Energy Solutions. LG is one of the world's leading producers of flat panel TVs, mobile devices, air conditioners, washing machines and refrigerators. LG has signed a long-term agreement to become both a Global Partner and a Technology Partner of Formula 1™. As part of this top-level association, LG acquires exclusive designations and marketing rights as the official consumer electronics, mobile phone and data processor of this global sporting event. For more information, please visit www.lg.com.
About LG Electronics Air Conditioning and Energy Solution Company
The LG Electronics Air Conditioning and Energy Solution Company is a complete heating, ventilation and air conditioning (HVAC), and energy solution company providing Residential Air Conditioning (RAC), Commercial Air Conditioning (CAC), Solar Energy and Lighting around the world. Bringing technology leadership from the worldwide HVAC market and incorporating technologies from throughout LG, LG AE is increasingly expanding into specialized B2B solutions as an integrated energy solutions company. Through its innovative technology, heavy investments in R&D and effective marketing strategies, LG AE has broken its own sales records every year since 2000.
Media Contact
LG Electronics Gulf FZE
Michelle Sequeira
Tel:+9714-350 9500,
Fax: +9714-334 4304
Email: michelle.sequeira@lge.com
LG-One
Lona Ayoub
Tel 971 4 3344930, fax 971 4 3344923
Email: lona.ayoub@lg-one.com
© Press Release 2011
