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CHINA

CHINA

When VRFs entered China in the1990s, they were classified as central air conditioners together with unitary air conditioners and chillers. Since then, the VRF market has grown, and accounted for 52% of the total central air conditioning market in 2017, 4% higher than the previous year. Now, China has become the largest VRF market and the largest VRF production base in the world.

Latest headlines

MHI Enhancing the Versatility, Energy Efficiency and Comfort of PACs

Mitsubishi Heavy Industries (MHI) Thermal Systems recently released small and light weight outdoor units for 4, 5, and 6 hp high efficiency packaged air conditioners (PACs) in the HyperInverter series. Addition-ally the company released five types of indoor unit, in both the HyperInverter and the Exceedhyper series ultra high efficiency PACs, which incorporate the human sensor function.


Ebara Unveils Type RHD Absorption Chiller Heaters

Type RHD absorption chillers heaters has realized energy savings 40% more than its predecessors, while pursuing the utmost customer satisfaction. By incorporating a quick start characteristic, an energy saving mode of operation, a wide range of operational variations, and by realizing a reduction in the quantity of solution used, the RHD series has made energy savings compatible with environment load reduction.


Regal Promotes Efficiency and Cost Savings with Genteq Evergreen ECMs

Regal Beloit Corporation, a leading manufacturer of electric motors, electrical motion controls, power generation and power transmission components, announced its ECM Made Easy™ campaign to educate wholesalers, contractors and homeowners about the benefits of upgrading to Regal’s Genteq Evergreen line of motors.


FLIR Announces New TRMS Digital Multimeter with Temperature Measurement

FLIR TRMS Digital MultimeterFLIR Systems (NASDAQ: FLIR) announced today the release of its new DM64 HVAC True Root Mean Square (TRMS) Digital Multimeter with Temperature. Designed for professionals who install, inspect, and maintain HVAC/R systems, the DM64 helps you diagnose complex electrical systems, test flame sensors, and measure temperatures—all with one, affordable tool.

IFS to Upgrade HVAC System at the Historic Cathedral Basilica of Saint Louis

The Archdiocese of Saint Louis has contracted with Integrated Facility Services (IFS) to upgrade portions of the HVAC system at the historic Cathedral Basilica of Saint Louis based on design concept documents by SSC Engineering.

Armstrong Introduces the Stainless Steel COMPASS R High-Efficiency Circulator

Armstrong Fluid Technology has announced that its next technology evolution COMPASS R20-75 circulator is available in a stainless steel construction. The COMPASS R is a direct performance replacement for nine competing circulator models and a bolt-to-bolt match for many installed circulators.

Emerson Announces Key Leadership Change to Air Conditioning Business

Emerson has announced leadership changes to its air conditioning business, naming Shane Angle as vice president, sales & technical services for its Commercial and Residential Solutions platform, effective immediately. Angle had previously served as Emersons vice president and general manager for the commercial air conditioning group.

Cover Story

Qingdao Hisense Hitachi Kicks off Sales of YORK-brand VRFs in China

On April 11, a press conference on new YORK variable refrigerant flow (VRF) systems was held in Beijing during the China Refrigeration expo (CRH 2018). JARN was honored to witness this historic moment. Johnson Controls (JCI) and Qingdao Hisense Hitachi Air Conditioning Systems (Qingdao Hisense Hitachi) jointly released an announcement on February 1 indicating that the two parties had finished a business transition of YORK VRFs in China, which would become the business of Qingdao Hisense Hitachi.

Southern Hemisphere AC Market Gradually Recovers in 2017

In the Northern Hemisphere, the air conditioner sales season will begin soon, while in the Southern Hemisphere the sales season will soon be over. JARN carried out questionnaire and interview surveys of global leading air conditioner manufacturers and asked about the Southern Hemisphere market situation in 2017 and 2018.
 
After a stagnant situation, there is now a silver lining in the Southern Hemisphere air conditioner market. Australia showed favorable growth and acted as a driving force in 2017. The Brazilian market has been showing signs of recovery recently. In Africa, several markets have growing potential, and these markets expected to bring business opportunities for air conditioner manufacturers.
 
Oceania
 
In Australia and New Zealand, the number of immigrants has been increasing since 2015, but the increasing pace has now slowed, mainly due to regulatory policies. With Fujitsu General split air conditioners displayed at a shopping center in Springvale, Australia higher populations, the construction industry achieved steady results in 2017. The region as a whole experienced a milder winter and a milder summer compared with 2016.
 
Australia
 
In Australia, the air conditioner market scale has been expanding in recent years. Also in 2017, both room air conditioners (RACs) and packaged air conditioners (PACs) recorded about a 20% growth. Air conditioners sold in Australia are mainly imported from Southeast Asian countries.

The RAC market in 2017 showed healthy growth during heating season from April to September. For cooling demand, RAC sales got off to an early start in September. In the previous 2016 –2017 summer, heat waves hit Australia and many users couldn’t get their air conditioners quickly due to lagging installation services. Users rushed to buy RACs earlier in 2017, leading to the early start in sales. However, in the middle of the summer, from December 2017 to February 2018, the weather became unstable and the growth of RAC demand slowed.
 
It is estimated that housing construction is decreasing, which will shift the air conditioner demand from new installation to replacement demand in Australia.
 
In Australia, almost all air conditioners excluding window type RACs are of an inverter type. For indoor units, the ducted type is popular for both residential and commercial use PACs. Wall-mounted type RACs and ceiling cassette and ceiling concealed types PACs are also popular.
 
Japanese manufacturers lead the Australian RAC market and include Daikin, Fujitsu General, Panasonic, Mitsubishi Electric, and Mitsubishi Heavy Industries (MHI). They focused on the Australian market, especially in 2017 when the Southeast Asian market was stagnant, in order to increase their sales. Local manufacturers including ActronAir and Kelvinator are also increasing their market share with price-competitive products in mass retailer channels.

Daikin utilizes dealer and professional shop channels in Australia and has been focusing on replacement demand with them. Its ducted type Sky Air PACs for single-family and multi-family dwellings showed strong sales in 2017.
 
In February 2018, Fujitsu General Australia started the construction of its head office comprising an 11,093 m2 building and an 8,500 m2 distribution warehouse. The new offices and warehouse will improve operational and distribution efficiency across the
 
Fujitsu General network, nationally. The company also opened the first Fujitsu General Air Conditioning Centre in the Asia Pacific region on March 10, 2018 in Australia. The store will feature multiple zones for consumers to experience different Fujitsu General air conditioning systems, from wall-mounted units, to multi-split systems and ducted solutions.
 
MHI adopts a direct selling sys-tem through its subsidiary MHI Air-Conditioning Australia (MHIAA). The company is expanding its product line up imported from its Thai factory.

Led by Japanese manufacturers, the number of R32 RACs is increasing in Australia. Daikin has adopted R32 refrigerant for all of its newly released single - split models. The company is also shifting its multi-split RACs to R32 models. For PACs, R410A models remain, but a switch to R32 is planned within a year.
 
With various R32 models, Fujitsu General plans to expand R32 RACs incorporating a Wi-Fi control function. Mitsubishi Electric started to sell cooling-only R32 RACs from August 2017. MHI is proceeding with Minimum Energy Performance Standard (MEPS) registration for R32 models.
 
The Australian government plans to put in force the new MEPS for air conditioners from April 2019. According to the plan, the new MEPS will adopt the Seasonal Energy Efficiency Ratio (SEER) for rating air conditioner energy efficiency. The current Energy Rating Label will be replaced with the Zoned Energy Rating Label.
 
New Zealand
 
New Zealand RAC market remained mostly the same in 2017 compared with 2016, while PACs increased thanks to a stable construction market. The house builder sales channel is expanding in the country.

As in Australia, almost all RACs and PACs are of an inverter type. For RACs, R410A models are popular. For PACs, ceiling-concealed type R410A units are the main sellers. The New Zealand government has developed the New Zealand Emissions Trading Scheme (NZ ETS) as principal policy in response to cli-mate change. Backed by this policy, R410A refrigerant is being replaced by R32.
 
Japanese manufacturers dominate the market and include Daikin, Fujitsu General, Panasonic, Mitsubishi Electric, and Toshiba Carrier.
 
I n November 2016, Daikin opened its sales subsidiary Daikin Air Conditioning New Zealand (DNZ) to offer air conditioning products and maintenance services.
 
Latin America
 
Air conditioners sold in Latin America are mainly imported from Asian countries centering on China. The market scale of each country on a unit basis is not very large, so manufacturers are not aggressively investing in development. Against this backdrop, many manufacturers purchase products from Chinese manufacturers on an original equipment manufacturing (OEM) basis.
 
In countries like Panama and Columbia, leading professional air conditioner stores, namely air conditioner distributors, are selling products under their original brands, most of which are also OEM products from China.
Chinese manufacturers such as TCL and AUX are active in Argentina and other countries in Central and South America.
 
Brazil
 
The Brazilian economy is showing signs of a gradual recovery. The Brazilian RAC market increased to 2.5 million units in 2017. RAC imports from China also increased, driven by OEM products from local private brands.
 
The first quarter of 2018 is estimated to have increased by about 5% compared with the previous year. Many manufacturers expressed that they are fully confident that 2018 will be a good year.
 
In Brazil, non-inverter wall-mounted single- split RACs are mainstream in the market. Of them, the cooling-only type is estimated to have a 60% share, and heat pump type a 40% share. Low-priced RAC and PAC models are popular. The northeast area and Rio de Janeiro zone are cost-competitive markets.
 
To gain tax benefits from local production, Daikin, Gree, Midea-Carrier, Whirlpool, Electrolux, LG, and Samsung all have air conditioning plants in the Free Economic Zone of Manaus, Brazil. Fujitsu General partnered with a local manufacturer and started local assembly of air conditioners in fiscal year 2016 (end of March 2017) and plans to expand locally produced models.
 
Online sales of air conditioners in Brazil are about 10% of total sales. As the installation service system has not yet been established, at this stage online sales in the country are unlikely to grow to the same level as in China that has a big online sales scale. Many manufacturers are accelerating acquisitions of distribution channels to promote products and improve service quality.
 
Chinese and South Korean manufacturers lead the market and include Midea Carrier, Gree, Samsung, and LG. Electrolux from Europe is also active in the market. Gree is expanding its air conditioner sales in Brazil. Haier has increased promotion of its own brand in Brazil.
 
Midea Carrier is a joint venture (JV) of Midea and Carrier. It re-leased energy efficient Comfee series new split air conditioners in the Brazilian market in October 2017.

LG shifted all air conditioners to inverter models, and this move has expanded its sales and also expanded the inverter market.
 
Fujitsu General focuses on promoting larger capacity models including wall-mounted single- splits, multi-splits, and PACs. From fiscal year 2018, the company will bring new wall-mounted models of 36,000 BTU and 45,000 BTU multi-splits that connect to up to six indoor units to the local market.
 
The Brazilian government plans to enforce new MEPS for single-split RACs and PACs during fiscal year 2018. According to the new MEPS, the threshold value will increase to an energy efficiency ratio (EER) of 2.81.
 
Africa

South Africa
 
In South Africa, the construction market is active. Large shopping malls are being constructed and there are increasing numbers of commercial buildings in the Sand-ton area in Johannesburg, the largest city and business center of the country. Johannesburg is located in a highland region and in the past, there was no need to use air conditioners. However, there have been more hot days in summer around Johannesburg in recent years, and air conditioner demand has been increasing.
 
The RAC market in South Africa reached 167,000 units in 2017.
 
For RACs, heat pump type inverter models are mainly sold. The share of inverter RAC models is estimated at three-quarters of the market. For PACs, the inverter rate increased to about 95%. Both RAC and PAC markets have already shifted from R22 to R410A refrigerant.
 
Daikin, Samsung, LG, Mitsubishi Electric, Midea, and Carrier lead the market. Panasonic entered the market and is gradually expanding its product range. Fujitsu General offers products mainly through contractor and professional routes.
 
Algeria
 
The Algerian RAC and PAC markets in 2017 both grew by around 15%, respectively.
 
From 2018, the Algerian government banned imports of RACs in order to nurture local production and local brands. Accordingly, localbrands have been expanding their market share, especially in the wall-mounted type RAC segment. Several foreign manufacturers are setting up RAC production bases in Algeria. France -based Brandt set up a new factory covering an area of about 1 million m2. Samsung has partnered with a local manufacturer and will start local production.
 
Condor, a local giant, is leading the market, followed by Midea, Brandt, LG, and Starlight. Condor has over 100 showrooms and opened the latest one in Benin in West Africa in March 2018. Condor started direct sales, skipping the usual intermediate players from dealers and mass retailers, to in-stallers. Fujitsu General focuses on PAC sales through distributors, by setting up showrooms on a brand basis.
 
The Algerian government plans to introduce a new energy law that is expected to impose a tax from 5 to 30% on air conditioners according to their energy efficiency. Accordingly, highly efficient inverter air conditioners are expected to expand their share from the current penetration rate of about 70%. In Algeria, RACs and PACs commonly use R410A refrigerant.
 
Egypt
 
The air conditioner market scale in Egypt amounted to about 523,000 units in 2017.
 
Heat pump type low-end air conditioners are popular in the market. Foreign manufacturers including
 
Carrier, Sharp, and Gree, and local manufacturers including Unionair and Power lead the market.
 
In addition to local players, Carrier, LG, Samsung, and Gree own production bases in the country. In 2004, Sharp started technical co-1laboration with a local manufacturer ElAraby to assemble RACs for Egypt and surrounding countries. Unionair and Power also aggressively export their air conditioners to other countries in Africa.
 
Unionair is a local home appliances company and offers split type, window type, floor-standing type, and ducted type RACs. Daikin Europe established its sales subsidiary Daikin Air-conditioning Egypt (DAEG), a JV with BPE partners, and started operations in August 2016. Fujitsu General sells its air conditioners mainly through directly managed shops, dealers, and super markets. Midea sells its RACs using the Fresh brand.
 
Nigeria
 
The Nigerian air conditioner market was 596,000 units in 2017, and RACs accounted for 557,000 units.
 
Cooling-only low-end models are the biggest sellers. Price competition is fierce, especially for floor-standing types.
 
LG, Samsung, Panasonic, Haier, and Midea lead the market.

Interview

Mitsubishi Electric Strengthening Its Presence in Europe with Specializing Brand Strategy

In February 2018, Mitsubishi Electric Hydronics & IT Cooling Systems (MEHITS) announced its brand strategy of Climaveneta and RC: Climaveneta is specialized brand for comfort and process applications and RC is specialized brand for information technology (IT) cooling. During Mostra Convegno Expocomfort (MCE) 2018 held in March, JARN interviewed Carlo Grossi, CEO and general manager of MEHITS, Hidekazu Tani, vice president Technology and deputy chief operating officer of MEHITS, and Marcello Malavasi, executive director of Mitsubishi Electric Italian Branch.
 

SWEP BPHEs Generate Strong Business in Asia

During HVAC&R JAPAN 2018 held in February in Chiba Prefecture, JARN interviewed Tommy Simonsen, vice president marketing of SWEP International, and Joakim Fahlstedt, representative director of SWEP JAPAN, to gain an insight into SWEP’s business in Asia.

JARN (J): First of all, could you briefly introduce SWEP’s heat exchanger business?
SWEP (S): SWEP is a world-leading supplier of brazed plate heat exchangers (BPHEs) for heating, ventilation, and air conditioning (HVAC) and industrial applications. Designed to make the most efficient use of energy, materials, and space, the technology is quickly gaining ground around the world, with SWEP at the forefront of developments.
 SWEP is known for providing market-leading technology within our core markets. This is the result of more than 30 years of close collaboration with customers around the world. They have played an essential part in driving our development and efficiency, and in building up the application expertise that has allowed us to achieve leadership.
 
J: Could you please tell us the result for SWEP’s Position in Asia including China, India, Japan, and South Korea in 2017?
S: SWEP is in the leading position in these markets and some recent surveys verify such a leading position in China. In 2017, SWEP had growth in line with or above the market and industries it serves, such as in the HVAC sector’s air conditioning and heat pump markets in China. Both Japan and South Korea were showing double -digit growth in 2017 and especially in South Korea the results were outstanding among our major global accounts.


SWEP representatives at its booth during HVAC&R JAPAN 2018

J: How do you see market growth in Asia in 2018?
S: Asia is expecting moderately slower growth than in 2017 from the softening demand in China driven by Coalto-Electricity and air conditioning products. However, India is expected to grow faster after 2017, a year negatively impacted by demonetization and new Goods and Services Tax. Japan and South Korea are expected to grow at the same or at a faster pace than in 2017 thanks to the continuing positive general development in their economies. Above all, our export-driven accounts will lead the growth path.

J: SWEP has operations around the world. What percentage of your business does Asia account for?
S: Over a quarter of our total business is located in Asia, in which the biggest markets are in China followed by Japan, South Korea, and India.

J: What shares of your business in Asia do refrigeration and air conditioning account for?
S: Over 50% of SWEP’s Asia business is dedicated to these two segments.

J: BPHEs are a key part of your business. Northern European manufacturers are very strong in the heat exchanger industry. Are there any special reasons?
S: It is difficult to mention any particular reason. However, it could be fair to note that Nordic countries are focused on energy efficiency since they have strong demand for heating residences in long winters combined with increased costs of energy. This forms the basis of developing ever more efficient systems, of which heat exchangers are an integral part of.
 

Midea Strongly Promotes R290 ACs Targeting Environmental Challenges

During Mostra Convegno Expocomfort (MCE) 2018 held in Italy in March, Midea Group obtained the Blue Angel Ecolabel for its All Easy series split type residential air conditioners using low global warming potential (GWP) refrigerant propane (R290). The Blue Angel Ecolabel is conferred by the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety. During MCE, JARN interviewed Qiu Xiangwei, general manager assistant and chief product manager, Residential Air Conditioner Division, Midea Group, to hear about Midea’s research and development (R&D) status in the field of environmentally friendly air conditioners, and its global R&D strategy.
 

Market

Bitzer Japan: A Decade of Success

Bitzer has been successful in the Japanese market with its own subsidiary since late 2007, and plans to keep it that way. Bitzer Japan intends to expand over the next few years to become the region’s leading supplier of reciprocating compressors in CO2 compound systems.

Cryogenic testing on the successor of Hubble Telescope

The NASA Hubble Space Telescope (HST) has been orbiting the earth since 1990. It observes the near ultraviolet, visible, and near infrared spectra. It could last until 2030 2040 but a scientific successor, the James Webb Space Telescope (JWST) is scheduled for launch in the spring of 2019, in Kourou, French Guiana.

Humidity Versus Relative Humidity

Please remember as we begin our summer season that the %RH on the thermostat does not directly tell you the amount of Humidity in the home.  Relative Humidity % is the amount of Moisture in the air compared to how much Moisture the air can hold at any given temperature.

Product

Remington College Lafayette Campus Opens HVAC Lab with Ribbon Cutting Ceremony

Remington College Lafayette Campus celebrated the opening of its new Heating, Ventilation and Air Conditioning lab with a ribbon cutting event on Wednesday, April 18, 2018 at its Lafayette Campus located at 303 Rue Louis XIV.

Malcolm Persaud Now Manages Panasonic Commercial VRF ECOi Business

Panasonic Appliance Air-conditioning North America (PAPANA) has appointed Malcolm Persaud to manage the Commercial VRF ECOi ™ Business in the USA, to include National Sales and Product Management. This appointment was effective April 2018.

Baker Hosts Copeland Seminar

On Tuesday March 6, Baker Distributing hosted a seminar on new Copeland technology and recent DOE requirements for our HVACR industry. The seminar was held at Baker’s 1050 Labarre Road location in Metairie.
 
The attendees were treated to Smokey D’s BBQ and then given a wealth of information from the Copeland and Baker Distributing facilitators.

Photo Report

Chinese Manufacturers Exhibit Their Capability to Foreign Buyers at Canton Fair

From April 15 to 19, 2018, Phase 1 of the 123rd Canton Fair for electronics household appliances etc. was held in Guangzhou, China. Covering an exhibition area of about 1.2 million m2, more than 25,000 Chinese and foreign enterprises set up nearly 60,500 booths. Chinese manufacturers displayed their latest products focusing on intelligent functions designed to grab global business opportunities.

Heat Pump Is the Key Word--Photo Report

Midea—introduced its central air conditioner’s booth using big banners at the several places in the venue. At the booth, it splendidly introduced design of MDV VRFs for 2018. Other exhibits included a high efficiency inverter direct drive centrifugal chiller and ATW heat pumps for cold climates. The air-cooled heat pump adopting R32 refrigerant received Innovation Product Award.

Heat Pump Is the Key Word — Report on CRH Expo 2018

The 29th International Exhibition for Refrigeration, Air-conditioning, Heating and Ventilation, Frozen Food Processing, Packaging and Storage (CRH 2018) was held from April 9 to 11, 2018 at New China International Exhibition Center, Beijing, China.

Toshiba GMCC Climaveneta HEPA ACRA JCI

PHOTO REPORT

Daikin Factory in Vietnam Opening Ceremony

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