Chillventa country report: RUSSIA
- Refrigeration: firmly in foreign hands
- Air conditioning: from luxury to consumer goods
- Refrigerants: fluorinated dominate
- Outlook: potential despite crisis
Russia is often described as the growth market for refrigeration and air conditioning. In the refrigeration segment, this applies particularly to imports of components from manufacturers in Europe, and in the air conditioning segment to imports of equipment from Asia and from Europe and the USA. For Russian producers, however, growth tends to be on the decline.
Refrigeration: firmly in foreign hands
Accurate and especially up-to-date figures for the refrigeration market in Russia are hardly available at present – and those that are don’t necessarily agree with each other. Nevertheless, some clear trends can be derived from them, with which the experts basically agree. Although the market for refrigeration equipment in Russia in terms of the number of plants installed is dominated by commercial refrigeration in addition to domestic refrigeration, the largest growth of sales in the past years has been achieved for industrial refrigeration and plants with a refrigerating power above 100 kW. This is attributed to two main factors. First the Russian food industry has grown strongly with the increasing spending power in Russia and with it the demand for refrigeration equipment
Second most of the refrigeration plants installed in the industrial refrigeration segment are meanwhile outdated and must be modernized or replaced. With regard to the market structure, all the market analyses also agree that the domestic manufacturers are losing more and more market shares to manufacturers from abroad, especially from Europe. Professor Baranenko from the University of St. Petersburg assumes that only 10 % of the refrigeration equipment installed in Russia is assembled with components from domestic manufacturers – an analysis that agrees with that of the German Chamber of Foreign Trade, which reports a drop in the market share of Russian producers from 34 to 17 % in 2006 and expects a further decline to 10 % in 2010. The reasons stated for this decline are inadequate quality and service, but also the high pressure on prices from outside, with which the national producers often cannot compete. The share of imports grew substantially in the past years parallel to the decline of domestic market shares and, according to a survey of 2006 by the German Chamber of Foreign Trade, achieved 48 % growth compared with the previous year.
Air conditioning: from luxury to consumer goods
The Russian air conditioning market is also dominated by imports, which accounted for a share of some 97 % in 2002, according to a study by the Federal Office for Foreign Trade (bfai). At that time, experts assumed that local processing would play an increasingly important role, which has proved to be true in the meantime. Market analysts state basically four main segments: reliable, prestigious products from Japan and Europe, high-quality equipment with a slightly weaker image also mainly from Japan and Europe, equipment of a relatively stable quality mainly from South Korea, and lower standard, cheap products mainly from China and Russia. As far as the types of equipment are concerned, split systems for home air conditioning accounted for the majority in 2007, followed by window units. Multi-split systems and larger commercial plants seem to be in a minority until now, whereas inverter systems are also increasing due to the growing demand for energy efficiency. The total market in 2007 was estimated at some 1.5 million units with continuous growth, which is primarily attributed to the increased building activity in the past years and the greater spending power of the population.
Refrigerants: fluorinated dominate
Various surveys show that fluorinated refrigerants currently hold top place in the Russian refrigeration and air conditioning market, with figures fluctuating from 70 % up to 90 %. It can therefore be assumed that a good three-quarters of all plants operate with synthetic refrigerants and – in view of the outdated machine park – many of them certainly with HCFC R-22. The rest of the plants operate mainly with ammonia and a minimal share with CO2.
Outlook: potential despite crisis
The global economic crisis will probably also leave its mark on the Russian market for refrigeration and air conditioning. The air conditioning market is sure to react, as especially the home air conditioning segment with its direct link to the purchasing habits of consumers was marked by strong growth. The decreased spending power and the drop in building activity will also impact the air conditioning market. Things should look somewhat better in the refrigeration segment, as plants that are about to break down for age reasons must be modernized or replaced in any case. There is a clear potential here for Russian and foreign manufacturers. The trend to more energy efficiency should also have a positive effect on the market despite the crisis, especially on applications such as supermarkets, in which refrigeration and air conditioning represent a large cost factor.
Contact for press and media:
Petra Wolf, Isabelle Wagner
Tel +49 (0) 9 11. 86 06-86 46
Fax +49 (0) 9 11. 86 06-86 40
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