This report provides an analysis and evaluation of the fire safety market in the GCC and includes a case study on fire safety in high-rise buildings. It looks at the current market trends, challenges and opportunities and highlights how the fire safety market in the GCC has evolved in recent years.
The report summarises data and market insights provided by Intersec’s research providers Frost & Sullivan. The reports suggest that there have been oversights in fire safety in critical infrastructure in the past, but that new regulations are now enforcing stringent guidelines to protect buildings and the people living and working in them. This points to ample opportunity for businesses in the fire safety market in the GCC and the report concludes that now is the time for companies with fire-related products and services to strengthen their market presence.
However, further investigations reveal there are still key issues stifling the evolution of the sector which need to be addressed – existing regulations are not always implemented, there is still limited awareness about new solutions and where there is awareness, budget restrictions slow down its adoption.
While new regulations will have a positive impact on market growth, there could still be a tendency to only meet the basic minimum requirements – the end users cannot see an obvious return on investment (ROI) in this area. Furthermore, until now, different markets use different fire safety codes, which manufacturers find difficult to deal with as it causes an unstable demand for similar fire and safety solutions that can work seamlessly across the region. Having a set of uniform and ratified regulations across the region would really open the market.
THE FIGURES
According to the figures from Frost & Sullivan (2013), the global fire and safety market was worth USD 7600 mn in 2013, of which the GCC market consisted approximately 16 per cent. By 2014 Frost & Sullivan estimated the GCC market would reach USD 1,400 mn, with the Kingdom of Saudi Arabia (KSA) representing the lion’s share at 46 per cent and the UAE another 34 per cent.
Compound annual growth rate between 2014 and 2020 is estimated at between 14 and 15 per cent, with forecasts predicting the market could be worth USD 3,150 mn by 2020, with Qatar surpassing the UAE in terms of CAGR. While currently price determines competitiveness, this is beginning to change and end users could be increasingly willing to adopt advanced safety measures at higher costs.
It is expected that commercial retail, industrial, and hotels and hospitals will be the strongest growth drivers for the sector during the forecast period (2013 – 2020), but residential and other infrastructure could also contribute new demand. It is estimated that only between one and two per cent of the total construction cost in a project is invested in fire safety.
MARKET DRIVERS AND RESTRAINTS
The many upcoming high profile international events in the GCC (e.g. Expo 2020, UAE; FIFA World Cup 2022, Qatar; Annual Haj Pilgrimage, Saudi Arabia), means growth is the buzz word across all sectors and this could not be more true than for the fire safety market. Companies are repositioning their offerings to suit local market requirements and this has meant an increase in fire safety products and services that are customised to the region’s unique requirements.
Other market drives include:
• Constant need for fire protection and life safety.
• Economic growth and ongoing construction boom in the region.
• Improvements in the enforcement of fire codes in building construction.
At the time of research it was expected that government investment in the industrial sector, particularly in the oil and gas and petrochemical industries, would also bolster the continuing dominance in demand. It is now likely that these investments could be delayed due to the unstable oil prices since 2015.
The inconsistency in the use of fire codes across the GCC remains one of the biggest challenges for the fire and safety sector. The development of high-rise structures has led to the enforcement of fire regulations in the GCC. The UAE, Qatar and Kuwait have already passed global guidelines and standards into law and the Directorate of Civil Defence Authorities (DCDA) implements the enforcement of these regulations. However, KSA, Bahrain and Oman use the code as a basis for their law, but have not enforced it strictly
Other market restraints include:
• Low attractiveness of the replacement market due to long product life.
• Negligence in investing in fire safety systems by end users.
• Intense competition leading to low margins.
MARKET DOMINANCE
While there are a few major local players, the majority of fire and safety systems in the GCC are imported and there is little local manufacturing. Due to the increasing costs of import tariffs in the region and of fire suppression agents such as FM200, the costs of fire safety products and related services are increasing.
HIGH-RISE BUILDINGS
According to the Council on Tall Buildings and Urban Habitat (CTBUH), 26 out of the 100 tallest completed buildings in the world are in the GCC. In recent years it has been made mandatory to install fire alarm systems in new buildings. However, the report draws attention to the fact that older buildings are built on past codes, many of which are not in adherence to the new requirements. This is another potential opportunity for the fire and safety systems market, as these buildings will need to undergo retrofit.
CASE STUDY: BURJ KHALIFA, DUBAI, UAE.
Burj Khalifa in Dubai, currently the tallest building in the world, has the most advanced fire detection and suppression system. The fire and safety systems that comprise gas suppression (HFC-FM200), pre-action sprinkler, and foam deluge are installed and monitored by the main fire alarm control panel. The building also uses Fike’s advanced detection and control system, one of the fastest detection systems available that can be easily programmed to handle a multitude of process management and life safety fire protection needs.
CONCLUSION
After evaluating the opportunities and market potential in the GCC fire safety market, the report concludes that while challenges abound, demand drivers and growth are intact in the GCC Fire Safety Market and it represents a robust market for players in the field to build their presence.
This article was provided by Intersec which takes place in Dubai in January.
