BY BESTENIGAR KARA
Operating in the heating, cooling, and air conditioning industries for a century, the Japan-based Daikin’s Turkish subsidiary Daikin Turkiye aims to achieve double digits in the fiscal year 2024 in line with its sustainable growth targets, according to Hasan Onder, President of Daikin Turkiye, Middle East, and Africa. “We ended the fiscal year 2023, starting on April 1, 2023, and ending on March 31, 2024, with a turnover of TRY 18.4bn,” Onder said in an exclusive interview with TR MONITOR.
Daikin, which has been operating in Turkiye through its distributors since 1978, physically penetrated the Turkish air conditioning sector by acquiring the air conditioning systems manufacturer Airfel in July 2011. Today, Daikin Turkiye manufactures a wide range of products, such as combi boilers, air conditioners (AC), multi-split AC, light commercial air AC, heating pumps and air purifiers under the personal systems category and central air conditioning units, industrial cooling systems and variable refrigerant flow (VRV) solutions, fancoil units (FCU) under the industrial systems category with its Daikin and Airfel brands, at its production plant on an area of 163,000 square meters in Sakarya. The company has four regional offices, nearly 2,000 employees, 500 dealers, 500 sales points, and over 500 authorized services in Turkiye. “The number of our service technicians has exceeded 1,500 as of 2024,” said Onder. Daikin has grown 35-fold on a lira basis since its expansion into Turkiye.
Daikin Turkiye is not only responsible for Turkiye but also positioned as the R&D, production, and logistics base for Eastern Europe, the Middle East, and North Africa. The firm is responsible for Azerbaijan, Uzbekistan, Turkmenistan, Kazakhstan, Kyrgyzstan, Armenia, Tajikistan, and Georgia, among the CIS countries, and Northern Iraq, Mongolia, and the Turkish Republic of Northern Cyprus, where it also exports a wide range of products in addition to Europe. Daikin Turkiye has 95 sales points and nearly 50 authorized services in the CIS countries. Its exports hit EUR 350m in the fiscal year 2023. With this performance, Daikin Turkiye became the ‘Top Split Air Conditioner Exporting Company’ for the ninth consecutive year and the ‘Top Exporting Company ’ for the sixth consecutive year at the ‘2023 Top Exporters Awards’ by the Turkish HVAC&R Exporters Association (ISIB). “We are a reference region with our know-how, qualified human resources (HR), management skills, and success in production,” Onder noted.
According to Onder, Daikin Turkiye addresses each level of the consumer pyramid thanks to its multi-branding strategy. It also supports the enhancement of efficiency and sustainability of air conditioning systems with its energy efficiency advisory services while contributing to the energy transformation in the industry. Moreover, it has started hiking the localization rate in its output for the national benefit and improving cost, quality, and supply processes. In the fiscal year 2022, it localized 80 parts with 13 suppliers and gained a 30% cost advantage. In the next fiscal year, the company localized 83 parts with five suppliers and gained a 25% cost advantage.
R&D BUDGET QUINTUPLED
Daikin Turkiye launched its R&D center in 2011. The facility has hiked its employment 3.5-fold, quintupled its budget, and become the fastest-growing R&D center affiliated with Daikin Europe. It has highly concentrated on the green hydrogen usage in combi boilers, parallel to the Daikin Europe R&D center. “NDJ, CSU, NDJ Smart combi boilers, which comply with green hydrogen, are among our leading innovative products and are exported to Europe,” said Onder. Moreover, the firm’s ongoing ‘100% Hydrogen-fueled Combi Boiler Design and Prototype Production’ in collaboration with Sakarya University has been found eligible to be supported by TUBITAK.
FCU is another product group with R&D by Daikin Turkiye. Daikin’s low static pressure ducted FWE-F FCU, manufactured in Turkiye, has taken place in Europe, Turkiye, and CIS countries as the improved model of the FWA-A FCU. “Daikin Turkiye’s R&D engineers played a critical role in developing this product,” Onder noted.
Daikin Turkiye launched the VRV production plant with a EUR 13m investment in May 2022 when it started manufacturing wall-hung Sensei condensing boilers at its new production line. Its R&D team, meanwhile, worked in accordance with the Communiqué, which entered into force in 2021 in Turkiye and obliged improvements in AC fans and fan motors’ energy efficiency. The team studied a VRV indoor unit with 100% fresh air within this frame. Daikin Turkiye currently produces six different models of it.
On the other hand, thanks to Daikin’s R&D, using R-32 refrigerant with low global warming potential has been possible in air conditioning systems worldwide. “We launched the first split AC with R-32 refrigerant in 2015 in Turkiye and Europe simultaneously and broke fresh ground in the Turkish air conditioning sector,” Onder added. The company shares 93 patents related to using R-32 refrigerant with the sector free of charge. While the firm will continue to invest in producing high-technology products and product development, it will strengthen its R&D further globally as part of Daikin’s strategic management plan named ‘Fusion 25’.
Daikin manufactures a wide range of air conditioning products under the Daikin and Airfel brands at its production plant on an area of 163,000 square meters in Sakarya. The plant includes an R&D center, which has increased its employment 3.5-fold, quintupled its budget, and become the fastestgrowing R&D center affiliated with Daikin Europe.
EUROPE’S FIRST IN ISTANBUL
Daikin Turkiye structures its e-commerce operations and processes as part of its ‘Customer-driven Daikin’ targets. The firm’s e-commerce strategy is to reduce distance with customers, understand customers’ expectations on time, increase customer satisfaction and loyalty, forecast sales, after-sales services, and production better, and offer campaigns with high efficiency.
On the other hand, Daikin incorporates four experience centers, where it exhibits its products and technologies, in Tokyo, Osaka, Shanghai, and İstanbul. Meanwhile, Daikin Turkiye Air Conditioning Technologies Experience Center is Daikin’s first experience center in Europe. It has welcomed over 21,000 visitors since 2015. Moreover, Daikin Turkiye continues to provide training to add value to its employees and stakeholders at the Daikin Turkiye Academy, established in 2013. It has trained 68,901 people for 546,364 hours since its establishment.
SAVED 176,069 KWH ENERGY WITH KAIZEN APPROACH
Daikin Turkiye continues its sustainability work under the guidance of ‘Daikin Environment Vision 2050’. As part of this vision, Daikin aims to achieve carbon neutrality by 2050 by reducing greenhouse gas emissions throughout the product lifecycle. It plans to reduce its net CO2 emissions by 30% or more in 2025 and 50% or more by 2030, compared with emissions without measures with the base year set at 2019.
Daikin Turkiye released the Second Sustainability Report in the fiscal year 2023. The firm’s Kaizen approach reduced 73 tons of equivalent CO2 emissions with 176,069 kWh/year energy savings in electricity consumption and prevented 15 tons of waste generation with reusable packaging instead of cardboard packaging. It has met 69% of the energy needs of its production plant since 2020, when it kicked off the solar power plant project. As part of its ‘Zero Waste’ project, the firm sorted its waste at the office and social spaces and recycled 14.6 tons of waste. Regarding the production processes at the factory, 2,240 tons of metal and 2,535 tons of packaging waste were used for recycling, and 61 tons of paper and 55 tons of hazardous waste were used for energy recovery. “We’ll meet 100% of our electricity need in our offices and sales points from solar energy with the solar farm we will set up this year,” Onder highlighted.
“RISK TO LOSE COST ADVANTAGE INCREASES”
According to Hasan Onder, Turkiye is in a period when those who quickly adapt to the green transformation and attach importance to sustainability and energy efficiency can survive. “We must rapidly adapt to green transformation in all areas such as design, production, and process management in order not to lose our competitive advantage as a sector, especially in Europe,” said Onder. Turkiye maintains its advantage with its strategic location, logistics capabilities, innovation-enabling infrastructure, and technological opportunities. However, the risk of losing cost advantage and investment attraction increases. “The sector faces sharp cost hikes caused by the inflationary environment while ongoing raw material price surges affect the price of the finished product,” Onder noted. To him, increasing qualified HR isn’t an issue only the private sector can contribute to. “There is a substantial need for a source. The public and private sectors should act together more for this.”
