Fire safety industry burns bright in the Gulf

Posted On: 15-02-2020

Rajat Kharbanda, the senior consultant at 6Wresearch, outlines how rising infrastructure investments, government regulations, and upcoming mega-events are driving the GCC fire safety market

Fire safety equipment is the core building block in modern building infrastructure. The growing number of high-rise buildings, the increasing number of fire incidents, stringent government regulations, and the rise in public and private building infrastructures have spurred the market for fire safety equipment across the Gulf Cooperation Council (GCC).

According to 6Wresearch, the GCC Fire Safety Market touched $1.1 billion in 2015, registering marginal growth over 2014 due to a decline recorded primarily in the Saudi Arabian market.

The market growth previously estimated in 2015 was in double digits, but that was significantly downgraded to single digits in recent updates, due to weak economic conditions. Various projects have been halted in Saudi Arabia, and there was a sharp decline in the number of new construction contracts in the first half of 2016.

This factor has had a significant impact on the growth of the entire GCC fire safety market. The market is forecast to grow at a compound annual growth rate (CAGR) of around 8% during 2016-2022.

Saudi Arabia will maintain its market leadership, followed by the UAE, over the next six years. The UAE and Qatar are anticipated to be the key driving countries for the growth of the GCC region overall, due to upcoming mega-events such as Dubai Expo 2020 and the 2022 World Cup in Qatar. More than $350 billion will be invested to build the supporting infrastructure for these upcoming events.

Apart from infrastructure development activities, the rising number of fire incidents in various chemical plants and residential complexes has led governments to revise the existing fire safety regulations. Significant changes in fire safety norms are expected, especially in the UAE, to replace outdated fire safety equipment.

In the GCC fire safety market, fire protection systems are the leading revenue-generating segment, led by fire extinguishers, fire suppression systems, and fire pumps and controllers. However, key growth is exhibited in the fire detection segment - smoke detectors, gas detectors, heat detectors, and so on.

Among all applications, the residential and industrial sectors have captured the majority of the pie in the overall market. In the coming years, the growth of the fire safety systems market will depend on the construction industry, investment, government regulations, and replacement of existing infrastructure.

Iran meanwhile is one of the most untapped markets in the entire Middle East. The country is the second-largest economy in the Middle East and North Africa (MENA) after Saudi Arabia and has the second largest population.

Over the years, the Iranian economy has been adversely affected due to UN sanctions. Further, since the country's economy depends on the export of hydrocarbons, with the recent oil price turmoil market conditions are expected to remain challenging. However, with the easing of sanctions, the country anticipates new business opportunities due to a flow of fresh investment.

These developments will spur the construction industry in Iran, primarily driving expansion activities in the transportation, energy, residential, and hospitality sectors. According to 6Wresearch, Iran's fire safety market is projected to grow at a CAGR of more than 10% during 2016-22. Over the next six years, with the growth in the construction market, demand for fire safety equipment will increase. Iran's construction market is forecast to grow at a CAGR of 5.9% during the same period.

The rising number of fire incidents in the country is driving the need for the installation of fire detection and suppression equipment. Oil & gas is one of the major sectors where the key deployment of these will register in the coming years. The recent fire incident at a petrochemical facility in the province of Khuzestan is expected to influence safety measures in all major petrochemical facilities across the country.

The fire safety market growth depends on new construction, with fire detection equipment emerging as the key growth segment. Replacement of old fire safety equipment in existing infrastructure will be led by stringent government rules and regulations.

In the coming years, many new players are expected to enter Iran's fire safety market; competition will surge, leading to a decline in the price of fire safety equipment.

Other Key Reports Available:

Media Courtesy : ME Construction NEWS