The air conditioning market is becoming more environmentally conscious and interested in life cycle costs, but in most cases it is still focused on first-cost. A case of wanting your cake and eating it too
THE pressure brought to bear by end-users and professional teams working on their behalf means those competent specifications more often than not carry the postscript: or equal and approved.

'It continues to be a very cost driven market place,' says Jez Smith of LG Comfort Cooling. 'Consultants remain a valid route to market for suppliers; however they struggle to optimise designs given their need to maintain competitive fees while endeavouring to balance the carbon footprint and value engineering equation and still specify the best first cost option.'

The decision from a supplier's perspective therefore is between spending time with consultants and going after speculative tenders with contractors that carry the equal or approved rider, and offering alternative schemes.

Given a spec that seems to have been designed for an air conditioning system from one of the majors, the client is likely to obtain a price for that kit and then seek bids from other air conditioning suppliers. Those companies then tend to quote competitive prices for obvious reasons.
LG believes it has the resources to develop an advanced product range, but at the same time, with distributors like LG Comfort Cooling, is agile and able to go the extra mile to offer customers first class service.

'The UK market is a little bit odd when you compare us to the rest of the world,' says Smith. 'We are a very sophisticated market. We like certain niceties of control.'

'It's a little bit more of a high-spec market than it is in some parts of Europe. History and culture clearly play a big part in determining specifying decisions.

'In the UK, consultants have tended to apply VRF products to the market,' says Smith. 'You have still got consultants around that were doing the job 15-20 years ago, and they tend to call VRF products air conditioning, which, of course, they are not. It's a comfort cooling product.'

At the same time, the majors appear to have to fight harder to hold on to market share. We have seen major companies that have recently indulged in a de-franchising operation.

'Selling direct, some are struggling to accommodate the logistics, and the nitty-gritty sales efforts that are required to keep contractors happy,' says Smith.

Cutting out the middle operator seems to make sense in a price-driven market but when you are a big corporate animal it's difficult to offer the same level of attention when looking after a small to medium sized contractor. He may want his kit quoted today, ordered tomorrow and delivered the day after when perhaps the infrastructure of such a corporation does not work like that.

'We're winning work because contractors are tired of having the wrong kit delivered, or not at all, or quotes being sent in late, or stock not being available, because we can do it better at ground level.'
Since the replacement market continues to grow steadily, and new building schemes are broken up and redesigned many times during the design phase, successful equipment supply development and growth seems to be with the more agile suppliers.

As the market strives to be more environmentally conscious and to comply with part L, there is an ever-increasing need for all manufacturers to get it right at the factory; in the design/manufacturing end of the supply chain.

The need to be green is being driven by a government website dedicated to enhanced capital allowance.

'All the manufacturers are trying to get products on this because it means that commercial businesses can claim back capital expenditure in the first tax year.'

The only way to get a listing is to make it clear that you have signed up to the environmental message.

'On the domestic side, if people buy equipment on the ECA list, they only need to pay 5% VAT,' Smith continues.

This is good news for the air conditioning industry, according to Smith. 'It needs to happen quickly because it will stop some of the lesser manufacturers that have been bringing units in from China from stealing the air conditioning work.

'LG already has a green VRF product range, and some of the new inverter products that are being introduced to the market for residential properties also score well.'

But there is plenty more to come. 'The guys in Slough [LG's UK base] are telling me that round the corner, next year or the year after, they are making the mid-range systems a lot greener.'

www.eca.gov.uk