To meet the growing demand, Daikin announced that it has invested 13 million euros to start 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 VRV HVAC market size was valued at USD 12.2 billion. in 2020 and is expected to reach USD 29.2 billion. by 2027 at a CAGR of 11.5%.
The decision is based on Daikin’s strategy to manufacture closer to regional markets, which shortens lead times and further allows the company to respond to demand flexibly.
The EMEA (Europe, Middle East and Africa) market for HVAC-R (heating, ventilation, air conditioning and refrigeration) systems is expected to witness strong growth over the next few years. The strong increase in demand is mainly driven by the need for durable solutions that comply with changes in the legislations of the region.
This is particularly the case with heat pumps, which are one of the effective solutions for decarbonizing buildings. Daikin is expanding its current production capacity to meet this growing demand.
VRV systems are air conditioning units that can heat or cool medium to large commercial buildings. These systems use heat pump technology to allow multiple indoor units to be connected to one outdoor unit.
Daikin introduced VRV systems in 1982, as an innovative technology that allows each room in a building to be heated or cooled individually rather than the whole unit at once, achieving significantly higher energy efficiencies. Daikin has been the leader in VRV technology ever since, making them more energy efficient, compact, quiet and easier to install.
Tuna Gulenc, Vice President of Daikin MEA, said: “VRV is one of our main strategic business pillars in the MEA region. Over the years, and thanks to our unique and differentiated product specifications, seasonal efficiency and system flexibility, we have secured several mega-projects in residential complexes, schools and other commercial spaces. With the additional plant 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 state-of-the-art technology to optimize durability, efficiency and quality control. The plant has also been equipped with an energy efficient exhaust heat recovery system. With the introduction of the new factory, Daikin reinforces the company’s vision of producing 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 supply high-quality and energy-efficient products to Middle Eastern markets. The VRV market in the region is expected to grow further in the future. We will supply the products that meet this growing demand and that are perfectly adapted to the needs of our climate.’
In addition, Daikin’s plant in Belgium, which has so far focused its production on VRV systems, will increase its production of heat pumps, which are rapidly gaining popularity in the region. These initiatives will enable Daikin to strengthen its manufacturing capacity in the EMEA region and achieve the objectives of the company’s strategic management plan “FUSION 25”.