While the prevailing recession in the construction sector has negatively impacted the market for housing-dependant industries such as construction materials and equipment, increased concern among consumers for energy efficiency, due mainly to higher energy costs as well as environmental factors, has led to a shift towards modern and efficient air-conditioning systems.
Investing in the production of heating, ventilation and/or air-conditioning (HVAC) systems can be a profitable business option, more so when the construction sector steps out of the current recession, leading to increased demands, suggests an article by Persian economic daily Forsat-e Emruz.
Minimum Investment Costs
While there are many types of HVAC systems available in the market, including the split systems, ductless split systems and packaged systems, the article focuses on the opportunities and challenges in the production of air-conditioning vents.
According to the article, setting up a medium-sized air vent manufacturing unit in Iran requires at least 15 billion rials ($450,500 at market exchange rate) in investment.
The estimated amount excludes the cost of land and building.The area required for setting up the manufacturing equipment is about 300 square meters, with another 200 square meters required for storage of raw material and finished products.
The basic equipment required for manufacturing air vents include machine press, manual hand press machines, CNC (Computer Numerical Control) machine, molds, cutters and dyeing machinery. A medium-scale factory employs some thirty to thity five workers.
Return on Capital
Investing in the sector should not be expected to yield returns in the short run. About 20 percent average profit can be expected within one year of establishment, with maximum earnings in the first year going towards marketing and promotion. The average payback period is estimated at about five years.
Those active in the sector believe the surge in energy costs and increased concerns among consumers about energy efficiency has led to higher demand for ventilating and air-conditioning products.
However, they note that unavailability of standard ventilation sizes leads to higher production costs since the vents are produced based on the specific sizes ordered by the customers.
In addition, unregulated imports, lack of attention to quality and improper timing in the process of production and delivery can pose risks to business-owners.
Experts say proper marketing and remaining up-to-date with the latest air-conditioning and ventilation systems would most probably guarantee the success of manufacturers.
