RIYADH: Saudi developer ROSHN has entered into a partnership with Johnson Controls Arabia to implement advanced cooling technology, reinforcing the Kingdom’s commitment to improving energy efficiency.

This agreement was announced by Johnson Controls Arabia CEO Mohanad Al-Shaikh during the Public Investment Fund Private Sector Forum held in Riyadh on February 12-13.

The collaboration focuses on the provision of engineered variable refrigerant flow (VRF) technology, which is novel to the region and is intended to stimulate local manufacturing.

This initiative aligns with Saudi Arabia’s broader objectives of technology localization and enhancing national capabilities in the energy sector, as delineated in Vision 2030.

Saudi Arabia has set a target to derive 50 percent of its electricity capacity from renewable sources by 2030, a commitment mirrored in this partnership.

Al-Shaikh highlighted the advantages of VRF technology, noting its superior energy efficiency compared to conventional cooling systems.

"The energy efficiency ratio of the VRF technology is much better than the traditional on-off technologies that we’ve always used in our houses," he stated.

The introduction of this advanced technology not only promises improved energy performance but also enables building owners to utilize fewer machines, enhancing the aesthetic appeal of buildings.

Al-Shaikh emphasized the goal of fostering local manufacturing, which he believes will contribute to the growth of the private sector's share of the gross domestic product.

In terms of market size, the global heating, ventilation, and air conditioning (HVAC) industry is estimated at $120 billion, while Saudi Arabia’s annual HVAC sales are projected to reach SR18 billion ($4.79 billion).

Al-Shaikh indicated a potential 8 percent growth by 2025 compared to the previous year.

He also mentioned ROSHN's expanding operations across the Kingdom and suggested that this partnership may be the first of many with other Public Investment Fund (PIF) companies involved in large-scale projects.

Johnson Controls Arabia, which traces its history back 75 years to its initial project in Jeddah, operates under several brands, including its flagship York brand for HVAC systems.

The company’s manufacturing facility in Jeddah stands as the largest of its kind in the Middle East and Africa, equipped with 11 production lines and comprehensive research and development capabilities.

Al-Shaikh noted that products manufactured in Saudi Arabia meet the same certification standards as those sold in North America and Europe.

As of late 2024, Johnson Controls Arabia increased its local production capacity significantly, now manufacturing 90 percent of the products sold in Saudi Arabia, up from 30 percent two years prior.

Plans are in place to increase exports to North America by approximately 25 to 30 percent by 2025.

Al-Shaikh explained the challenges associated with localizing the supply chain, citing a reliance on nearly 400 suppliers and the use of 40,000 parts for manufacturing.

To enhance supply chain resilience, he emphasized the necessity of attracting parts manufacturers to establish operations within Saudi Arabia.

Looking ahead, Al-Shaikh discussed the evolving landscape of building technologies, particularly the integration of artificial intelligence and operational technologies.

He highlighted the importance of bridging the gap between these technologies to achieve sustainability goals, stating, "working on the hardware by itself will not allow you to achieve that net zero."

The collaboration between ROSHN and Johnson Controls Arabia represents a significant step towards enhancing energy efficiency in Saudi Arabia and forward progress towards achieving the Kingdom's ambitious Vision 2030 objectives.