Pump Demand Increases as MENA Region Continues to Grow

The World Bank reports that Iran, Iraq, Saudi Arabia and Egypt are among the most populated countries in the Middle East and North Africa (MENA). While population growth in the MENA region is around 2 percent per year, Egypt, Iran, Iraq, Saudi Arabia, Oman and UAE added more to the population in absolute numbers during the last five years. According to the World Bank, the urban population in the MENA region has been growing—primarily because of labor migration—at a compound annual growth rate (CAGR) of 2.3 percent during the last five years. The urban population in Oman grew at 9.5 percent, in Qatar at 6.8 percent, in Kuwait at 4.0 percent and in the UAE at 3.2 percent. For the remaining countries, urban population grew at less than 3 percent, closer to the MENA average. Better employment opportunities, infrastructure (which includes education) and quality of life, especially in the Gulf Cooperation Council (GCC) countries, continue to attract settlers, which translates to a growing urban populace. During the next five years, the projected population growth in cities in the MENA region is expected to grow at a CAGR of 2.0-2.5 percent.

Effects on Construction from Other Markets

Banking on the surge in oil prices before 2014 and the subsequent bullish investment/growth scenario, the region had witnessed steady increase in capital investment in residential, commercial and infrastructure projects. Major cities that have attracted the most investments are Dubai, Abu Dhabi, Doha, Riyadh, Cairo, Sharjah, Manama and Kuwait City. Most of these cities, primarily in the GCC countries, have served as business hubs and house most of the urban populace. But since 2014, the extended volatility in oil prices and pertinent downward trend translated to curtailed or delayed investments. While the overall investment scenario is conservative at best, the recent months have seen few stalled or shelved projects being reinstated and few new projects. The awarding of international events, such as FIFA 2020 and Expo 2020, and the need for continued development of pertinent facilities have coerced these investments. While oil prices will continue to influence the scale of investments, the local governments are expected to continue to invest in infrastructure deemed vital. According to MEED, an investment of more than US$400 billion is envisaged across the residential, commercial and infrastructure projects segments in the MENA region in the next five years.

Building Services Pumps in the MENA Region

Users choose pumps for building services applications based on power rating and by the nature of the fluid to be handled. Parameters such as the discharge rate and head required also influence the choice of pump. Flowserve, KSB, Ebara and ITT are among the major suppliers catering to the building services and heating, ventilation and air conditioning (HVAC) segments. Xylem (ITT) and Grundfos, worldwide providers of water and wastewater-handling solutions, are prominent suppliers in the MENA region. Other suppliers include Pentair and Wilo.

Green Building

The move toward green buildings and sustainability is aimed at reducing carbon emissions and waste generation through eco-friendly principles. Most of the green buildings are built in accordance with the Leadership in Energy and Environmental Design (LEED) green building ratings that take into consideration the energy efficiency of equipment such as pumps and fans. These concepts have been embraced globally, and countries in the MENA region have begun to adopt them as well. There is certainly more emphasis on both environmentally friendly models and configurations that contribute to the overall objective of achieving green building ratings. Some of the key MENA projects that employ these solutions are Masdar City in Abu Dhabi and Dubai Sustainable City. Although adoption of these eco-friendly solutions in the MENA countries is relatively lower compared with that of developed countries, it is progressing to achieve the scale to cater to the region's growing needs. In the MENA region, more than 50 percent of energy consumed is used for cooling and climate-control requirements in the residential and commercial segments. To align with the standards of green buildings, pumps are designed or reengineered with energy efficient materials and are packaged with either energy efficient motors or with variable frequency drives or both, which lowers energy consumption. Pump manufacturers also offer integrated solutions to the construction sector that include heat recovery ventilators and geothermal heat pumps, enabling energy consumption that is up to 40 percent lower.

Expo 2020

The Expo 2020 is expected to have a positive effect on the MENA region overall. Local economies are expected to benefit directly or indirectly. While Dubai and its immediate surroundings should directly benefit, many other surrounding MENA countries (specifically those in the GCC) are expected to become a supply or sourcing hub for construction materials and other resources. The Expo has brought a transformation in Dubai's landscape. Numerous construction projects have mushroomed, and this is expected to translate to opportunities for the building services segment. Large commercial complexes, hotels, malls, hospitals and recreational areas are expected to be built. The subsequent requirements for the necessary components—such as HVAC, water treatment, wastewater discharge and firefighting systems—are expected to boost the demand for pumps.