The decision is based on Daikin’s strategy to manufacture closer to the regional markets
To meet the increasing demand, Daikin announced that it has invested EUR13 million to start the production of VRV systems (a type of multi-split type air conditioners) for the Middle East at its new factory in Turkey which has been operational since May 2022.
The global HVAC VRV market size was valued at USD12.2 Bn. in 2020 and is expected to reach USD29.2 Bn. by 2027 at a CAGR of 11.5%.
The decision is based on Daikin’s strategy to manufacture closer to the regional markets, ultimately shortening supply lead times and furthermore, enabling the company to respond to demand in a flexible manner.
The EMEA (Europe, Middle East, and Africa) market for HVAC-R (heating, ventilation, air conditioning and refrigeration) systems is expected to see strong growth over the next few years. The strong increase in demand is mainly driven by the need for sustainable solutions which are in line with changes across legislations within the region.
This is particularly the case for heat pumps, which are posing to be one of the effective solutions to decarbonize buildings. Daikin is in the process of strengthening its current production capacity to ensure this growing demand can be met.
VRV systems are air conditioning appliances that can heat or cool medium to large commercial buildings. These systems use heat pump technology to connect multiple indoor units to one outdoor unit.
Daikin introduced VRV systems back in 1982, as an innovative technology that enables each room of a building to be heated or cooled individually rather than the entire unit all at once, realizing considerable higher energy efficiencies. Daikin has been the leading company on VRV technology ever since, making them more energy efficient, compact, silent, and easier to install.
Tuna Gulenc, Vice President of Daikin MEA, said: “VRV is one of our key strategic business pillars within the MEA region. Over the years, and with our unique and differentiated product specs, seasonal efficiency, and system flexibility, we have secured several mega projects from residential compounds, schools, and other commercial spaces. With the additional factory closer to our region, we will be able to serve the market faster, accelerate our expansion plans, and further strengthen our VRV leadership.”
The new VRV production lines at the Turkish factory are equipped with the latest cutting-edge technology to optimize sustainability, efficiency, and quality control. The factory has also been equipped with an energy-saving exhaust-heat-recovery system. With the introduction of the new facility, Daikin reinforces the company’s vision to produce high-quality products for the Middle East, while reducing its environmental impact.
Hasan Önder, CEO of Daikin Turkey, added: ‘We are very proud to be able to provide high-quality and energy-efficient products to the Middle Eastern markets. The VRV market across the region is expected to grow further in the future. We will be delivering the products that meet this growing demand and are fully adapted to the needs of our climate.’
In addition, Daikin’s factory in Belgium, which has so far focused its production on VRV systems, will increase its production of heat pumps, which are rapidly gaining popularity across the region. These initiatives will enable Daikin to strengthen the manufacturing capacity across EMEA and achieve the targets of the company’s strategic management plan “FUSION 25”.