Why Does Dubai Witness Most Chiller Sales in U.A.E.?

Situated on the eastern edge of the Arabian Desert, the U.A.E. is no stranger to blistering-hot summers and warm winters. Therefore, the need for cooling apparatus, including air conditioners and chillers, has always been high here. Moreover, since the 1950s, the booming oil trade, which led to the country’s economic boom, has been bringing in immigrants from around the world. As a result, infrastructure development continues to progress rapidly, being reflected in the rising number of hotels, houses, shopping malls, and other facilities.

P&S Intelligence credits this construction boom while forecasting that the U.A.E. chiller market will grow from $134.7 million in 2018 to $186.4 million by 2024, at a 5.9% CAGR between 2019 and 2024 (forecast period). Chillers are a popular choice of cooling systems in large settings, such as factories, hotels, office complexes, and shopping malls. In 2019, Dubai alone had over 3,000 under-construction projects valued at around $245 million, with many more under various stages of implementation.

One of the major projects underway in the city is the Dubai Metro Red Line extension, which is being carried out in part under the preparations for the Dubai Expo to be held this year. Chillers are expected to be procured in substantial numbers for the seven stations that are to be built on the extended line. Another major sector in the country that is witnessing rampant construction is hospitality. On account of its rich Arabian culture, lavish lifestyle, scenic beauty, and themed attractions, the arrival of tourists in Abu Dhabi and Dubai is increasing constantly.

As per to the World Travel and Tourism Council, the tourism and hospitality sector generated 11.3% of the U.A.E.’s gross domestic product (GDP) in 2017. Moreover, government initiatives, including the Sharjah Tourism Vision 2021, Dubai Tourism Strategy 2020, and Ajman Tourism Plan for Tourism 2015-2021, were launched to give this sector a further boost. By 2025, Ras Al Khaimah is expected to receive 3 million tourists every year, for which hotels and resorts are being rapidly constructed. On account of all such factors, the country had 233 hotels, equaling 63,734 rooms, under construction in November 2018.

Under the type segment, the categories of the U.A.E. chiller market are centrifugal, screw, absorption, scroll, and reciprocating. Among these, the highest revenue during the historical period (2014–2018) was generated by the screw category. This is attributed to the rising adoption of district cooling systems to achieve energy savings, while boosting efficiency. The absorption category is expected to witness the fastest growth during the forecast period on account of the rising demand for solar-powered absorption chillers.

Presently, most chiller sales in the country take place in Dubai, which is a major financial and tourist hub in the Middle East. In addition, with the government trying to reduce its oil dependence, it is giving a boost to other sectors, such as tourism, manufacturing, and education. Apart from the metro red line extension, other important construction projects underway in the metropolis are the Jebel Ali Port Container Terminal 4 expansion, Museum of the Future, Royal Atlantis Resort and Residences, MBR City – District One, and Jewel of the Creek.

Till 2024, the highest CAGR in the U.A.E. chiller market is expected to be seen in the Abu Dhabi & Al Ain category, under segmentation by region. Under the Abu Dhabi 2030 program, the city government is planning to cater to 7.9 million tourists each year, for which massive infrastructure development is underway. For instance, the Midfield Terminal Complex is under-construction at Abu Dhabi International Airport, which, upon completion, will increase the airport’s annual passenger handling capacity by 30 million.

Thus, to cater to the increasing number of people coming to the country on business and holidays, the booming construction sector will propel the demand for chillers.

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