VIETNAMEconomy and ConstructionWith a growing economy and favourable climate conditions for air-conditioning applications, Vietnam has evolved as a new attractive market. Vietnam has a population of nearly 82.0 million and still a very low market penetration estimated at as low as 4% in the residential segment.In 2006, the Vietnamese market for air-conditioning was estimated at 137.0 US million dollars. This represents a 20% increase in value compared to 2005.In 2006, the Vietnamese economy achieved 7.8%GDP growth. The Ho Chi Minh City has shown a 12.5% economic growth over the past six years that is due to increasing investments, growing employment as well as growing service and ITC sectors.The consumer and investors confidence are also improving supported by the Vietnamese Government commitments to improve the economy and support growth. A stable political situation is also having a positive impact on the economy. However, a poor infrastructure still affects the country’s competitiveness but changes and investments in this area are expected in the near future.On the one hand, the country’s economic growth is stable and market drivers for the air-conditioning industry are strong, but on the other hand the purchasing power of the population is weak. As such, the average salary in Ho Chi Minh City is around 100USD per month and overall in the country it is around 50USD per month. Thus, despite a large population, air-conditioning companies target only population segments with medium and high incomes.The US embargo had a strong impact on the formation of the market in Vietnam. During this period, before1994, there was a strong second-hand market for air-conditioning equipment illegally imported from abroad. This was often National (Panasonic) and Toshiba equipment. Second- hand air-conditioning was quite popular as it was affordable compared to the new equipment. The second hand market for air-conditioning has disappeared in the recent years.There is a growing building and construction output for commercial and residential buildings, which allows predicting a stable demand for room air-conditioning equipment, single splits in particular.The residential market for air-conditioning is represented by single splits that account for more than 90% market share. The share of advanced products such as inverters and multisplits is still low.The share of windows is about 4% and will continue to decrease. Future sales are expected to target the replacement market and not first –time buyers. In 2006, the windows market reached 7,350 units and 1.9US$ million.In 2006, the chiller market in Vietnam reached 347 units and is estimated at 19.1US$ million. The scroll chillers segment for comfort cooling is very small, as VRF has emerged as a strong competitor for commercial projects.In 2006, the airside market is estimated at 5.4US$ million that includes 1.7US$ million of air-handling units and 3.8US$ million of fan coils.Panasonic, formerly known to customer as National, has established itself as the strongest brand on the market. Having a strong portfolio of home appliances, including TV and air-conditioning, Panasonic has become the market leader and has very strong customer loyalty. Thus, despite it relative high prices Panasonic managed to sustain a first place in the minisplits segment in terms of value. LG is holding first place in terms of volume and is a strong competitor to Panasonic. Japanese brands have stronger chances to succeed on the market as Vietnamese customers value the Japanese quality the most, despite the high price. It is noticeable that some local brands market their products under Japanese-like names such as Nagakawa, Funiki and Mitsu Star.Korean products are also popular due to competitive prices and are perceived as good quality products. LG is particularly strong in the north of the country and holds a second place in overall sales in Vietnam.Chinese brands have just recently entered the market. Midea is also planning to establish local production from 2007.Currently, the level of locally produced air-conditioning products is low. This may be changed in the future when foreign investors establish local production of compressors, fans and other spare parts. Currently most of equipment is imported as it is not economically feasible to manufacture air-conditioning products locally due to the lack of tax incentives.Current foreign investors activities may boost the central plant market value in Vietnam in the next few years. As such, Intel plans to build its largest chip assembly and test factory in Vietnam with total investments of $1 US billion dollars. A planned cooling capacity for this factory is 2,500 cooling tonnes.Table 1 Background data economy and construction, 2005-2009Indicator Units 2005 2006 2007 (e) 2008 (f) 2009 (f)Population Million 84.4 84.4 N/a N/a N/a GDP per capita US$ 655 655 N/a N/a N/a GDP real growth % 7.8 7.8 N/a N/a N/aInflation % 7.6 7.6 N/a N/a N/a Unemployment % N/a N/a N/a N/a N/a Source: BSRIA based on various sourcesTable 2 Percentage of sales to residential marketIndicator 2005% sales to residential marketWindow/wall 75%Single and multi splits 70%VRF NegUnitary products NegChillers 2%Source: BSRIA based on various sourcesTable 3 Current and future AC penetration into the residential and commercial marketIndicator 2005 2010PENETRATION into commercial (approx) 10% 15%PENETRATION into residential (approx) 4% 12%Source: BSRIA based on various sourcesTable A1 Residential/light commercial market, volume of outdoor units20052006 200720082009 2010Annual % change 2005-2010Window7,0007,350 7,2006,4005,900 5,100-6.1% Portable/Moveable neg neg neg neg neg neg n/a Minisplits/ductless splits -<5kW/RAC 164,050191,118 220,962255,493295,450 341,68915.8% Cooling only 147,645172,745 200,384232,445269,636 312,77816.2%Heat pump 16,40518,374 20,57823,04825,814 28,91112.0% >5kW/PAC 28,95034,074 40,72346,09352,173 59,05715.3% Cooling only 26,05530,745 36,89441,69047,110 53,23415.4%Heat pump 2,8953,329 3,8294,4035,063 5,82315.0% Total ductless splits193,000225,192 261,685301,586347,623 400,74615.7%Grand Total 200,000232,542 268,885307,986353,523 405,84615.2% Source: BSRIANote: 1. Minisplits include single/multi splits and VRF systemsTable A2 Residential/light commercial market, value, US$ million20052006200720082009 2010Annual % change 2005-2010Window 1.8 1.9 1.9 1.8 1.7 1.5-4.3% Portable/Moveable 0.0*0.0*0.0*0.0*0.0* 0.0*n/a Minisplits/ductless splits -<5kW/RAC 58.269.983.299.1118.1 140.719.3% Cooling only52.062.674.889.4106.8 127.619.7%Heat pump 6.27.28.49.711.3 13.015.9% >5kW/PAC 29.936.445.052.761.8 72.419.4% Cooling only26.432.240.046.854.7 64.019.4%Heat pump 3.5 4.2 5.0 5.97.1 8.419.1% Total ductless splits88.1106.2128.2151.8179.9 213.119.3%Grand Total 89.9108.2130.1153.6181.5 214.619.0% Source: BSRIANote: 1.Value figures are related to systems (indoor and outdoor units together)2. * represent low, but not necessary zero sales3. 1US$=16,436VNDTable A3 Residential/light commercial, average selling price, US$200520062007200820092010Annual % change 2005-2010Window 260265270275281287 2.0% Portable/Moveable n/a n/a n/a n/a n/a n/a n/a Minisplits/ductless splits -<5kW/RAC 355366377388400412 3.0% Cooling only352363373385396408 3.0%Heat pump380393407421436451 3.5% >5kW/PAC 1,0321,0681,1051,1441,1841,226 3.5% Cooling only1,0121,0471,0841,1221,1611,202 3.5%Heat pump1,2151,2581,3031,3491,3971,447 3.6% Source: BSRIANote: 1.Average selling price from manufacturer/importer to first point of distribution.2.Current prices 2005 and 2006. Constant prices from 2007 onwards.3. 1US$=16,436VNDFigure A1 Residential/light commercial market analysed by product type, outdoor unitsSource: BSRIAMinisplitsTable A4 Sales of single/multi/VRF split systems, 2006Value Volume Average marketprice for systems /outdoor unit(US$ million) (1)Outdoor units Indoor units US$Single split (one-to-one) 95.9 223,122 223,122 430Multisplit 1.0 1,020 2,040 980VRF 9.3 1,050 12,600 8,900Total 106.2 225,192 237,762 472Source: BSRIANote: 1. Manufacturer / importer prices to first point of distribution excluding installationTable A5 Imports-exports, residential/light commercial products, volume, 2006A B C D E F GHome market Imports(1) (2)Imports as% of homemarketB/CProduction(2)A -B + EExports(1) (2)Balance oftrade (2)E - BExports as% ofproductionE/DWindow/through the wall 7,350 7,000 95% 350 0 -7,000 0% Mobile (portable) neg neg n/a 0 0 n/a n/a Single splits (ductlesssplits)223,122 156,122 70% 67,000 0 -156,122 0% Conventional multisplits 1,020 1,020 100% 0 0 -1,020 0% VRF 1,050 1,050 100% 0 0 -1,050 0% Total 232,542 165,192 71% 67,350 0 -165,192 0% Source: BSRIANote: 1. Excludes all re-exporting / trading activities2. Figures should be regarded as more approximate than others in this tableSupply structureTable A6 Brand market leaders and local producers for window, mobile and minisplit products, by volume, 2006Room units MinisplitsWindow / wall Portable /moveableSmaller splits(<5kW or RAC)Larger splits –non-VRF(>5kW or PAC)VRFBrand market leaders (descending order)PanasonicToshiba CarrierSharpneg LGPanasonicToshiba CarrierMHIMitsubishi ElectricSanyoHitachiSamsungSharpFunikiYorkTCLReetechNagakawaLGPanasonicToshiba CarrierMHIMitsubishi ElectricSanyoHitachiSamsungFunikiNagakawaGeneralFujitsuDaikinCarrier ToshibaMHILGMitsubishi ElectricTheir share 80% N/a >95% >95% >95%Local producers (descending order)none none LGCarrierLGCarriernoneSource: BSRIAWindowsWindows are not very popular in Vietnam. It is interesting to note that despite the fact that consumers are very price sensitive, the share of windows, traditionally perceived as the cheapest product, is very small in Vietnam. This is due to the fact that the Vietnamese air-conditioning market has emerged much later than other Asian markets and by the time the market started growing minisplits already became a preferred product. Hence, first time customers are choosing minisplits that have better characteristics than windows and a better price.It is expected that the majority of windows sold in Vietnam from 2006 onwards will be for the replacement market. This is also supported by the fact that some units were installed through-the-wall and if a unit needs to be replaced, another through-the-wall unit is chosen. A substantial part of windows also goes for production facilities.MinisplitsSingle splitsThe single splits segment is the largest segment in the room and packaged air-conditioning segment. 9,000BTU and 11,000BTU models are the best selling capacities.In 2006, the single splits segment is estimated at 223,122 systems and 95.9US$ million.The commercial segments including cassettes, floor standing type and ceiling concealed type account for less than 5% of the minisplit market volume. A floor standing type is the most popular commercial application and has shown the fastest growth during 2004-2006.Heat pumps are quite popular in the Hanoi region. This is due to the fact that the Northern region has four weather seasons including winter whereas the Southern regions have only two seasons – dry season and monsoon. Heat pumps comprise approximately 10% of the total market volume. The price difference between heat pumps and cooling only splits is about 15-20%.MultisplitsThe Vietnamese market for multisplits is relatively small. LG is a leader in the multi split segment. In 2006, the multisplit segment is estimated at 1,020 units. Toshiba Carrier and Daikin also sell a small number of multisplits.It is expected that the multisplits market will remain relatively small. The growth in this segment will depend on the purchasing power of middle and high- income segments of population.The majority of multisplits sold in Vietnam are commercial application although some systems are sold to up-market residences. The majority of multisplits sold in Vietnam are two indoor units type. VRFDaikin is a leader in the VRF market in Vietnam. The market is estimated at 1,050 systems and valued at 9.2 US$ million. Systems can consist of several outdoor units and market volume in this report is calculated on the basis of complete system installations.Toshiba Carrier is the second strongest company in this segment.It is worth noting that currently there is a strong preference for VRF instead of scroll chillers. This is due to the fact that VRF units are perceived as more flexible. It is possible to serve only part of a new building (if for example not all tenants have moved in to the building). Strong promotion from companies such as Daikin also plays an important role and often VRF systems are considered for large cooling capacity projects.At least a 40% annual increase in the VRF market volume is expected during 2007-2009 (this is also supported by the historical trend and the growth of the segment during 2004-2006).Although sizes of projects vary, a typical VRF system consists of 12-14 indoor units and two outdoor units combined in one module to achieve a required cooling capacity. Mini-VRF systems are not popular in Vietnam as these are considered to be expensive.Only LG is manufacturing all of its RAC units in Vietnam. Carrier also produces some in Vietnam but in insignificant quantities. Local companies such as Reetech and Nagakawa source spare parts from China and assemble units in Vietnam. Midea is about to start manufacturing split units in Vietnam in 2007.Residential air-conditioning products are sold through three main routes – air-conditioning specialists, the “directly to the end-user” channel and through wholesalers. The wholesalers (big electronic appliances shops) channel is very important.Table B1 Unitary market volume of outdoor units2005 2006 2007 2008 2009 2010Annual % change 2005-2010Roof top0* 0* 0* 0* 0* 0* 0.0% Indoor packaged 95 105 115 126 139 153 10.0% Ducted splits (US type) -<17.58kW 60 67 75 84 94 106 12.0%>17.58kW 1,095 1,259 1,448 1,665 1,915 2,202 15.0%Cooling only 924 1,061 1,219 1,400 1,608 1,847 14.9%Heat pump 231 265 305 350 402 462 14.9% Total 1,155 1,326 1,523 1,750 2,010 2,308 14.9%Grand Total 1,250 1,431 1,638 1,876 2,149 2,461 14.5% Source: BSRIANote: 1. *represent low, but not necessary zero salesTable B2 Unitary market value, US$ million2005 20062007200820092010Annual % change 2005-2010Roof top 0.0 0.0 0.0 0.0 0.0 0.0 n/a Indoor packaged 1.0 1.2 1.3 1.5 1.7 1.9 12.8% Ducted splits (US type) -<17.58kW0.1 0.1 0.1 0.1 0.1 0.2 15.9%>17.58kW 2.5 3.0 3.5 4.2 5.0 5.9 18.7%Cooling only 2.1 2.5 2.9 3.5 4.1 4.9 18.9%Heat pump0.5 0.6 0.7 0.8 1.0 1.2 18.9% Total 2.6 3.1 3.6 4.3 5.1 6.1 18.9%Grand Total 3.6 4.2 4.9 5.8 6.8 8.0 17.2% Source: BSRIANote: 1. Includes indoor and outdoor units2. * represent low, but not necessary zero sales3. 1US$=16,436VNDTable B3 Unitary, average selling price, US$2005 2006 2007 2008 2009 2010Annual % change 2005-2010Roof topN/a N/a N/a N/a N/a N/a N/a Indoor packaged 10,800 10,800 11,070 11,347 11,630 11,921 12,219 Ducted splits (US type) -<17.58kW 1,200 1,242 1,270 1,330 1,377 1,425 3.5%>17.58kW 2,300 2,381 2,450 2,500 2,630 2,700 3.3%Cooling only 2,250 2,360 2,410 2,495 2,540 2,672 3.5%Heat pump 2,100 2,174 2,250 2,328 2,410 2,494 3.5% Source: BSRIANote: 1.Average selling price from manufacturer/importer to first point of distribution.2.Current prices 2005 and 2006. Constant prices from 2007 onwards.3. 1US$=16,436VNDFigure B1 Unitary market analysed by volume, outdoor unitsSource: BSRIATable B4 Imports-exports, unitary products, volume, 2006A B C D E F GHome market Imports(1) (2)Imports as% of homemarketB/CProduction(2)A -B + EExports(1) (2)Balance oftrade (2)E - BExports as% ofproductionE/DRooftops neg neg n/a n/a 0 n/a n/a US-style ducted splits 1,326 1,326 100% 0 0 -1,326 0% Other large packaged 105 65 62% 40 0 -65 0% Total 1,431 1,391 97% 40 0 -1,391 0% Source: BSRIANote: 1. Excludes all re-exporting / trading activities2. Figures should be regarded as more approximate than others in this tableTable B5 Brand market leaders and local producers for unitary products, by volume, 2006Rooftop US-style ducted Other large packagedMarket leaders (descending order)neg TraneCarrierJCI (York)DaikinDaikinCarrierTraneJCI (York)ReetechTheir share N/a >90% >90%Local producers (descending order)none ReetechMcQuayOthersnegSource: BSRIAIn 2006, the US-style ducted splits segment was estimated at 1,326 units and valued at 3.1US$ million dollars. 10 cooling tonne is the most sold capacity, this segment accounts for more than half of the total market volume. Trane mostly sells US-ducted splits in the >17.58 kW (>5 cooling tonnes) capacity range and is a market leader in this segment.The rooftops market in Vietnam is negligible. Firstly, these units are perceived as very expensive. Secondly, this application is limited in Vietnam due to monsoons and to the roof construction that is typically not flat. The few rooftops sold were in the 30-40 cooling tonne capacity range but the market is too small to be presented.The indoor packaged market is represented by large water-cooled units sold by Trane, Carrier and Daikin. However in this category, Daikin and Carrier are more competitive on price and, hence, stronger. In 2006, the indoor packaged market is estimated at 105 units and valued at 1.2US$ million. Factories are the main application for indoor packaged products. Very few units are going for office applications.Recently, Reetech has increased their market share in the unitary segment due to competitive pricing.Table C1 Chiller market, volume of units2005 2006 2007 2008 2009 2010Annual % change 2005-2010ChillersReciprocating, screw, scroll 275 325 361 400 444 493 12.4% Centrifugal 25 22 35 28 31 34 6.3% Absorption>350kW neg neg neg neg neg neg n/a Air cooled 153 170 189 209 232 258 11.0% Water cooled 147 177 207 219 243 270 12.9% <100kW 75 85 96 108 122 138 13.0%>100kW 225 262 300 320 353 389 11.6% Total Chillers 300 347 396 428 475 527 11.9% Source: BSRIANote: 1. * implies very low but not necessarily zero salesTable C2 Chiller market value, US$ million2005 2006 2007 2008 2009 2010Annual % change 2005-2010ChillersReciprocating, screw, scroll 13.1 16.8 19.0 21.5 24.2 27.4 15.9% Centrifugal 2.5 2.3 3.6 2.9 3.2 3.6 7.0% Absorption>350kW 0.0 0.0 0.0 0.0 0.0 0.0 n/a Air cooled 6.1 7.0 8.4 9.0 10.2 11.4 13.4% Water cooled 9.5 12.0 14.2 15.3 17.3 19.5 15.4% <100kW 0.4 0.5 0.6 0.7 0.8 0.9 17.2%>100kW 15.2 18.5 22.0 23.7 26.7 30.1 14.6% Total Chillers 15.6 19.1 22.6 24.3 27.5 30.9 14.6% Source: BSRIANote: 1. * implies very low but not necessarily zero sales2. 1US$=16,436VNDTable C3 Chiller, average selling price, US$2005 2006 2007 2008 2009 2010Annual % change 2005-2010ChillersR eciprocating, screw, scroll 47,636 51,692 52,624 53,572 54,537 55,520 3.1% Centrifugal 101,200 102,273 102,857 103,036 103,871 104,412 0.6% Absorption>350kW n/a n/a n/a n/a n/a n/a n/a Air cooled 39,841 41,503 44,327 43,034 43,745 44,406 2.2% Water cooled 64,859 67,740 68,655 69,951 71,131 72,316 2.2% <100kW 5,333 6,100 6,230 6,310 6,380 6,400 3.7%>100kW 67,689 70,669 73,296 73,869 75,540 77,231 2.7% Source: BSRIANote: 1. Average selling price from manufacturer/importer to first point of distribution.2.Current prices 2005 and 2006. Constant prices from 2007 onwards.3. 1US$=16,436VNDFigure C1 Chillers analysed by type of cooling, by value, US$ millionSource: BSRIATable C4 Imports-exports, chiller products, value (US$), 2006A B C D E F GHome market Imports(1) (2)Imports as% of homemarketB/CProduction(2)A -B + EExports(1) (2)Balance oftrade (2)E - BExports as% ofproductionE/DChillers 19.1 19.1 100% 0.0 0.0 -19.1 0% Source: BSRIANote: 1. Excludes all re-exporting / trading activities2. Figures should be regarded as more approximate than others in this tableTable C5 Brand market leaders and local producers for chiller products, by value, 2006All chillers <350kW >350kWMarket leaders (descending order)TraneCarrierJCI (York)HitachiFushenKhon LinhHstarsDailinTeccoTraneCarrierJCI (York)HitachiFushenKhon LinhHstarsDailinTeccoTraneCarrierJCI (York)HitachiFushenKhon LinhHstarsDailinTeccoTheir share 90% >90% >90%Local manufacturers(descending order)None significant None significant None significantSource: BSRIAIn 2006 the Vietnamese chiller market reached 347 units and is estimated at 19.1US$ million.In terms of cooling, water-cooled chillers slightly prevail in volume terms. 60% of screw chillers and 10% of scroll chillers are water-cooled. Overall, water-cooled type accounts for 51% of the total market.Small scroll chillers for comfort cooling are losing market share to VRF units. Customers prefer VRF systems as they are more flexible. In 2005, the small scroll chillers segment is estimated at approximately 250 units, and only 70 of them are for comfort cooling. The rest of the small scroll chillers are for industrial and process applications. Screw chillers are going for office and large commercial applications.The market for centrifugal chillers is relatively small. This is due to the still small number of high-rise buildings in Vietnam. Centrifugal chillers are typically sold for combined industrial/comfort cooling applications (factories) and large shopping malls. It is estimated that the market reached 22 units in 2006 and was valued at 2.3US$ million. However, the demand for centrifugal chillers is expected to grow within the next five years as foreign investments are slowly increasing and the economy is getting stronger.Intel has announced the building of a large factory near Ho Chi Minh City that will require 2,500 tonnes of cooling capacity. It is expected that this will boost the centrifugal segment in 2007. Reciprocating chillers are still present on the Vietnamese market, however, their share is slowly decreasing. Customers realised advantages of screw and scroll chillers so reciprocating chiller are expected to become a niche market. Trane does not produce reciprocating chillers, but Carrier, Hitachi and York still sell some small quantities. This market is dominated by such companies as Dalian (China). Reciprocating chillers are mostly used for process and industrial applications. In 2006 the total reciprocating segment was estimated at around 15 $US million and around 300 pieces. However only a small number of reciprocating chillers are going for comfort cooling.Overall, American companies are dominating the chillers and airside products markets. McQuay established its operations in Vietnam in 2006 although hasn’t achieved substantial sales yet.The market for absorption chillers in Vietnam is negligible. The pharmaceutical industry is one of the possible applications for absorption chillers.Currently nearly 100% of the central plant products sold in Vietnam are imported. It is expected that local production may strengthen in the future. This process can be facilitated by local production of compressors, fans and other parts, however, there is no information that such facilities are about to be open in Vietnam.The contractors route is a main distribution channel for central plant products in Vietnam. 60-70% of chillers are sold through contractors. Contractors often buy equipment and, hence, are the main specifiers of brands together with HVAC design engineers. Reetech is the largest Vietnamese HVAC contractor.The main route for central plant products is via contractors who usually buy equipment and who are usually main influencers regarding solutions and brands.Table D1 AHU and fan coil market, volume of units2005 2006 2007 2008 2009 2010Annual % change 2005-2010AHU 460 529 608 700 805 925 15.0% Fan coilConcealed 14,474 17,651 20,299 23,343 26,845 30,872 16.4%Cased 1,134 1,361 1,579 1,831 2,124 2,464 16.8%Total 15,608 19,012 21,877 25,175 28,969 33,336 16.4%Grand Total 16,068 19,541 22,486 25,874 29,774 34,261 16.4% Source: BSRIATable D2 AHU and fan coil market value, US$ million2005 2006 2007 2008 2009 2010Annual % change 2005-2010AHU 1.4 1.7 1.9 2.3 2.7 3.1 17.1% Fan coilConcealed 2.8 3.5 4.1 4.8 5.7 6.8 19.8%Cased 0.2 0.3 0.4 0.4 0.5 0.6 20.3%Total 3.0 3.8 4.5 5.3 6.3 7.4 19.9%Grand Total 4.4 5.4 6.4 7.6 8.9 10.6 19.0% Source: BSRIANote: 1. 1US$=16,436VNDTable D3 AHU and fan coil, average selling price, US$2005 2006 2007 2008 2009 2010Annual % change 2005-2010AHU 3,100 3,150 3,200 3,250 3,300 3,400 1.9% Fan coilConcealed 190 196 202 208 214 220 3.0%Cased 220 227 233 240 248 255 3.0% Source: BSRIANote: 1. Average selling price from manufacturer/importer to first point of distribution.2. Current prices 2005 and 2006. Constant prices from 2007 onwards.3. 1US$=16,436VNDFigure D1 AHU market analysed by value, US$ millionSource: BSRIAFigure D2 Fan coil market analysed by volumeSource: BSRIATable D4 Imports-exports, AHU and Fan Coil products, value (US$ million), 2006A B C D E F GHome market Imports(1) (2)Imports as% of homemarketB/CProduction(2)A -B + EExports(1) (2)Balance oftrade (2)E - BExports as% ofproductionE/DAHU 1.7 1.6 94% 0.1 0.0 -1.6 0% Fan Coil 3.8 3.7 97% 0.1 0.0 -3.7 0% Total 5.5 5.3 96% 0.2 0.0 -5.3 0%Source: BSRIANote: 1. Excludes all re-exporting / trading activities2. Figures should be regarded as more approximate than others in this tableTable D5 Brand market leaders and local producers for AHU and fan coil products, 2006AHU Fan coilsMarket leaders (descending order)TraneCarrierDaikinJCI (York)TraneCarrierJCI (York)ReetechDaikinSinkoTheir share >95% >90%Local manufacturers (descending order)ReetechOthersnegSource: BSRIACommentary• The air-handling units market is estimated at 1.7 US$ million and slightly more than 500 units. • Simple air-handling units applications are going to offices and other commercial applications;more complex units (to provide a better indoor air quality) are going for pharmaceutical and other industrial applications.• Local production for air-handling units and fan coils is limited unlike in many other regional markets. This is due to a still low investment level in production facilities. However, there are some tax incentives for local manufacturers, especially those that use local and not imported parts. At the moment, there is a deficit of good quality spare parts and components produced locally and companies that manufacture air-conditioning are importing spare parts from abroad, hence are not able to compete on price. Currently, the import tax for air-handling units from Thailand and Malaysia is 5% which makes importing very attractive.• Reetech is one of the local companies manufacturing air-handing units and other air-conditioning equipment. But the company, in fact, assembles units from parts imported from China, Thailand and Malaysia.• Main applications for fan coils are offices and hotels. In 2005, the Vietnamese fan coils market is estimated at 19,012 units and the majority of units are concealed.• It is expected that the market volume for fan coils will grow by an average 16% per year due to the growing commercial property market. The growth in the air-handling units segment will correlate with the growth in the chiller segment. The market value of the air-handling unitssegment is estimated to increase by approximately 20% in 2007.• Airside products are often sold in a “package” with chillers. Hence the market for air-side products is dominated by chiller companies: Trane, Carrier and JCI (York).。
