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Daikin is spearheading the global sustainable cooling agenda

The Japanese air-conditioning giant aims to implement a strategy to provide new value for the environment and air and realise contributions to a sustainable society and group growth, excerpts from an interview with Tuna Gulenc, Vice-President of Daikin Middle East and Africa

Daikin is actively involved in developing and producing energy-efficient and sustainable heating solutions to achieve its Net Zero commitment by 2050, its senior official says.

Tuna Gulenc, Vice-President of Daikin Middle East and Africa, is of the opinion that his company has a strong trust in Research and Development (R&D) and innovation and it spends approximately $700 million every year on R&D to realise contributions to a sustainable society and group growth in coming years.

“At Daikin, we are deeply committed to achieving net-zero carbon emissions. With our Environmental Vision 2050, we aim to reduce greenhouse gas emissions to net zero across the full value chain of our business,” Gulenc said during an interview.

He said the company has laid a strategic management plan ‘Fusion 25’, that aims to implement a strategy to provide new value for the environment and air and realise contributions to a sustainable society and group growth.

“With 2019 as the base year, our goal is to reduce net greenhouse gas emissions by 30 per cent or more in 2025 and by 50 per cent or more in 2030 compared to emissions without measures.”

With global demand for cooling expected to triple by 2050, he said air conditioners will consume more power and continue contributing to carbon emissions and global warming. “Daikin’s main contribution is how to make air conditioners more efficient. By using high-efficiency inverter air conditioners and lower global warming refrigerants, the environmental impact of air conditioning can be reduced by as much as 50 per cent through reduced power consumption.”

R&D spend, innovation

Daikin accords high priority to Research & Development (R&D) and innovation to sustain steady growth and stay ahead of its competitors.

“We have invested $300 million in our Technology and Innovation Centre in Japan, which serves as the hub for technological innovation in the Daikin Group, where we have assembled the best and brightest from around the world, both inside and outside the group, and provide them with the latest in research and testing facilities,” he said. “By converging diverse technologies and knowledge in one place, we hope to create an environment that gives birth to new value. At present, we have more than 700 engineers working in the Technology and Innovation Centre.”

“We are spending approximately $700 million every year on R&D. At Daikin, innovation is part of our DNA and is a factor that helps us not only to create and develop the best products in the HVAC-R market but also to be a leader in delivering future air solutions,” he said.

Air conditioners demand

The energy consumption levels are at an all-time high, according to the Daikin executive. “With the increasing use of air conditioners (ACs), energy-efficient cooling solutions are critical in the battle to reduce the environmental and climate impacts of refrigerants. To address these challenges, Daikin is constantly focused on providing energy-efficient, high-quality, and reliable products and innovations that reduce the impact of our solutions on the environment, such as our affordable inverter air conditioners, which are pivotal in increasing the adoption of energy-saving technologies,” he said. “We are pioneering the use of lower global warming potential refrigerants, like R32, to minimise the environmental footprint of our products.”

Daikin is actively involved in developing and producing energy-efficient and sustainable heating solutions. In Europe there is a big shift from fossil-fuelled base heaters which are mainly combustion boilers, using natural gas as a source of heat towards heat pump-based heaters that emit less CO2 and conserve energy.

In reply to a question about the demand for air conditioners in the region, he said it is on the higher side and includes villas and high-rise buildings.

“We conducted a specific study and found that there are around 400K villas in the UAE. The study revealed that replacing air conditioners in 60,000 villas and each villa could reduce energy consumption by 40 per cent to 50 per cent. This is in addition to the high-rise buildings, which represent a significant opportunity to conserve energy,” he said.

Daikin’s pavilion at COP28

Daikin has a presence at the COP28 Japan Pavilion. “In keeping with COP 28’s theme of sustainable cooling and as a leading global provider of air-conditioning solutions, we will be showcasing our high-efficiency inverter air-conditioner technology, which can save up to 50 per cent in energy usage,” he said.

“We will also share our ongoing strategy for reducing the environmental impact of cooling systems as global demand continues to rise. This strategic involvement not only solidifies Daikin's dedication and efforts to sustainability but also underscores the company’s celebration of local citizenship and aligns with the UAE Year of Sustainability, demonstrating Daikin’s strong commitment to both the government and the citizens in the regions where we operate,” he said.

UAE’s sustainability initiatives

The UAE's investments in clean energy, sustainable infrastructure, and green technology innovation are significant steps toward this goal. The country’s vision is supported by concrete actions, such as the deployment of large-scale solar power projects and the adoption of green building standards.

“The UAE and Japan, share a common goal of net zero by 2050 and the need to apply a full suite of technologies to achieve this goal. The longstanding partnership of over five decades between the countries has focused on the adoption of advanced technology to support industrial goals and carbon-reduction targets.”

In July this year, Japan and UAE agreed to cooperate on technology and climate change, to accelerate energy security, as well as a framework for the UAE to cooperate with and invest in Japan's on-chip and battery technology.

“There are several initiatives in the UAE, we signed a pledge to commit to net zero goals. This was an initiative from the UAE government.

"We see UAE also in terms of energy efficiency providing a lot of incentives towards having more efficient air conditioning products. All the existing stock of air conditioners is replaced by more efficient systems," he said.

“The products used are now outdated, so if you look at each building, there is a possibility to reduce energy consumption, by updating the key equipment, and mainly air conditioning, the biggest contributor to energy consumption, UAE is putting efforts to update the existing buildings in the country,” he added.

Growth plans

The UAE has emerged as an international business hub because of its strategic location and Daikin has expanded its presence in the Middle East and North Africa through the emirates.

“As a Japanese company, we have found the UAE to be an attractive business hub, which has led to us not only conducting business in the country but also establishing our regional headquarters here. We started in 2006 with less than 10 people and are now more than 700 employees working in the Middle East and Africa (MEA).

“We began with managing just the GCC countries from here, which has today grown to a vast network of 54 countries with a diverse workforce of more than 40 nationalities,” he said.

“We manage Daikin in a territory that speaks multiple languages, which gives us access to a wide range of talents and a well-connected transport network which has helped us grow our business by more than 10 times in the last 15 years. Our presence in the UAE gives us access to all the resources and capabilities to manage and expand our business across the region,” he added.

Daikin’s expansion plans

Daikin is positive about the industry outlook and expected to sustain an upward growth trend in the coming years.

“As a Japanese company, we have a global footprint of a $30 billion operation comprising over 115 production bases and employing over 96,000 employees, which contribute to our product presence in over 160 countries,” he said.

“As we expect demand will triple in the next three years, the number of our manufacturing bases is increasing. We established our first factory in Saudi Arabia last year and have plans to establish many more factories everywhere. As the demand is expected to increase, this would further require manufacturing investments in the region,” he added.

Daikin's sustainability policy

The Daikin executive strongly backed the company’s sustainability initiatives and said it is a 24/7 role for every government, company, and individual.

“Yes, and at Daikin, the leadership has created an inclusive culture. Our efforts are not only made towards following society’s challenges and international frameworks but also extend to dialogues with our stakeholders for their opinions around environmental, social, and corporate governance within the organisation,” he said.

“We go the extra mile to imbed sustainable development for all.  At Daikin, sustainability is not an add-on, but an integral part of our business. We continuously innovate and improve our products and services to align with sustainability goals and meet the evolving needs of our customers and society,” he added.

To a question about the HVAC industry’s role in decarbonisation and energy efficiency, he said the HVAC sector needs to develop cooling and heating solutions that still meet the needs of demanding HVAC projects while consuming very low amounts of energy, drastically reducing CO2 emissions, and using refrigerants that have the least impact on the environment.

“At Daikin, our innovations in HVAC-R prioritise minimising environmental impact. Starting from product development, our expert team designs products with a limited environmental footprint. We adhere strictly to commercialising products meeting 13 assessment criteria, verified through independent third-party audits,” he said.

New potential markets

In the Middle East, the market characteristics are like each other, in terms of hot climate, big projects, and high-rise buildings.

“But when we look at Africa, there are over 50 countries, each of which has very specific conditions. In the long run, Daikin perceives Africa as a key and core target, considering the population increase, urbanisation, number of cities, and the rising middle class.

“As an industry leader in providing HVAC-R solutions, we have a responsibility to establish the culture. Africa can be seen as a very easy business, but we are trying to develop sustainable and efficient products suitable for the African market. While we are still in the initial stages of conducting business in Africa, we envision that Africa will play a huge part in our global expansion over the next 20 to 30 years,” he said.

After-sales service

After-sales service is an important segment of Daikin’s business and it caters to the needs of its customers to ensure the best services to them.

“As air conditioning is a semi-finished product, we invest heavily in the quality of manufacturing the product. However, if the installation and maintenance are not done properly, these efforts can be rendered ineffective. That's why Daikin prioritises training and development of the installers, to ensure adherence to the strict standards and quality of installation of the product,” he said.

He said training and development programmes are conducted both internally and externally. “For example, we organised service games as an upskilling technique for the engineers and the service team in the Mena region. Earlier this year, for the MEA division we introduced a dedicated call center to cater to our customers in the UAE and Saudi Arabia,” he said.

“This came in line with our long-term roadmap to support customers throughout the lifecycle of their equipment and buildings. The core objective is to provide a standard service level throughout the world irrespective of the region in which the service is delivered,” he added.

Daikin’s CSR initiatives

“Our regional headquarters in Dubai is a testament to our commitment, where we've installed 1,000 solar panels, significantly reducing our reliance on non-renewable energy sources. This initiative propels us toward our Net Zero by 2050 target,” he said, adding that the roof of our Turkey factory is covered with solar panels as well.

“The most important CSR activity is what we are doing currently in Africa. We supported the establishment of training centres in Nigeria, Morocco, and Ivory Coast with the target being to recruit young people who are looking for an opportunity and equip them with the skills and know-how required to succeed.  We also actively support initiatives that foster women's empowerment.”

— muzaffarrizvi@khaleejtimes.com