ISTANBUL

Japan-based air conditioning firm Daikin plans to make a new investment of €100 million ($114.8 million) in Türkiye, deeming the country as a regional hub for its Middle East and Africa operations due to its production capacity and engineering infrastructure.

Daikin entered the Turkish market after it acquired Airfel, and the firm has been boosting its local production with special products.

Hasan Onder, CEO of Daikin Türkiye, told Anadolu that the air conditioning sector performed well in 2024 due to global warming and inflation-led demand, and this year has seen a similar trend, as the firm has been 22% ahead of its targets for the 10-month period since the start of the year.

Onder stated that while there’s a slowdown in the European market, Türkiye’s air conditioning ownership is around 15-20%, which shows significant potential for the sector. He noted that split air conditioner (AC) sales in Türkiye will reach 2.2 million units by the end of the year, while the market for “combi” units (air conditioner/heater combo devices) is experiencing a downturn due to the rise of heat pumps and more environmentally friendly alternatives.

He mentioned that the market for central system remains lively, which includes products like variable refrigerant volume conditioners (VRV) and applied chiller products. He noted such have already begun production in Türkiye, while some of the products in the Middle East, the Gulf, and Africa regions are exported from the country.

Onder estimated that a large portion of the products used in these regions over the next five years will be exported from Türkiye.

He stated that Daikin Türkiye has been the top AC firm in the country for seven consecutive years, closing last year with $803.8 million, $459.4 million of which was exports.

“This year, we set an aggressive target of $503 million and I think we will close this year with a turnover of around $941.7 million, $516.7 million of which will be exports,” he said.

Onder stated that the firm established a split AC plant with a production capacity of 1 million units — this plant is primarily exporting to Europe — and the firm shifted its production to Türkiye with significant investments to date due to the country’s logistical advantages and strategic geographical location.

He said Daikin Türkiye launched a new investment to develop an energy-efficient device under the Airfel brand for Africa and certain regions in Türkiye. He noted that this production will be under a different brand name that is not part of Daikin globally, and that it is an initiative of Daikin Türkiye, expecting to achieve $100 million in exports in the coming days.

Onder stated that Türkiye offers great advantages compared to other regions but countries want products to be made in their own country and that is pushing competition. “We can still find highly skilled workers more easily in Türkiye, but rising worker wages may affect investments to some degree — though that is only temporary,” he said.

In terms of Daikin Türkiye’s new products, the Airfel Vibe series was developed entirely through domestic production in the country. The low-cost split AC will play a key role in the domestic market and in exports.

He mentioned that the firm recently made a capital transfer of $102.1 million.

He added that Daikin Türkiye employs some 2,000 workers in the country and they aim to raise this figure to 2,500 by 2030. The current share of women workers is 38% but they also aim to increase this to 50% by the 2030s.

Onder said that the AC sector is growing steadily and it will continue to do so over the next five years regardless of geopolitical risks. The firm has acquired many companies around the world, both in its own sector and related sectors, and continues to grow with a global turnover of around $30 billion.

He noted that the developments in the Middle East, with countries like Saudi Arabia and the United Arab Emirates focusing on their 2030 strategy plans, Türkiye could meet the demands in the region with Daikin Türkiye’s investments. He said Türkiye is far ahead in human resources, systems, and factory technology.

“It appears Türkiye will be Daikin’s regional export center — this means new investments will come to Türkiye in the next five years and at least $114.8 million can be invested in the country,” he added.