Southeast Asia's fire market is set for impressive growth, driven by various positive factors including the region's economic expansion and more stringent regulations, which have led to stronger demand. Meanwhile, end users are looking for better and more cutting-edge technology, which includes wireless and IP solutions.
The fire and safety market has never grown out of style as people attach significant importance to the protection of life and property. Recent estimates by Research and Markets estimate that the global fire safety market will grow at a compound annual growth rate (CAGR) of 13.9 percent from 2013 to 2018, when the market size is expected to reach US$66.6 billion.
Among the places where growth in fire equipment and products are especially noticeable are Southeast Asia countries, including Thailand, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. According to estimates by Frost & Sullivan, Southeast Asia's fire safety market will grow at a CAGR of 8.1 percent between now and 2017, reaching a size of $548.3 million by that year. “Yes, no doubt the Asian fire and safety market is set to grow successfully,” said Robin Chen, Marketing Manager of Lightak.
Economic Expansion
The upbeat sentiment certainly has to do with Southeast Asia's economy, which is on a roll. A recent survey from the Organization for Economic Cooperation and Development indicated that Southeast Asia economies will grow at a CAGR of 5.4 percent between now and 2018. Among them, Indonesia, the Philippines, and Vietnam will record high growth rates of 6 percent, 5.8 percent and 5.4 percent, respectively, over the next five years.
This expansion has led to a construction boom in the region and increased incomes for citizens, who now attach greater importance to fire safety. “There is definitely a stronger need for asset and life protection,” said Chen.
Regulations Trigger Demand
Tighter regulations on fire safety in Southeast Asia have also triggered demand for products. In Thailand, for example, fire alarm is law. Every building has to have fire alarm systems, according to Suwong Ratchawong, Fire Safety Technical Manager for Thailand at Siemens Ltd., Building Technologies Division.
Adds Warodom Sucharitakul, MD of Shinaracha Frotector, a Thailand-based fire protection consulting firm: “Fire safety systems are required in buildings higher than 23 meters or bigger than 10,000 square meters. There are also requirements that maintenance programs for fire safety systems be done in factories.”
Other Southeast Asian countries also have similar codes. In India, all buildings 15 meters in height or above must have a control room on the entrance floor of the building with communication systems to all floors. In Singapore, every floor of a building with height of 24 meters or above is required to have a water sprinkler system. These regulations create business opportunities for suppliers eyeing the Southeast Asia market.
Technological Trends
An increase in fire safety awareness in the region has led to growing interest in more sophisticated fire safety technology, for example addressable panels, wireless, and IP.
Addressable Panels
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Addressable fire control panels hold several key advantages over conventional ones. In a conventional panel, which remains popular due to its lower cost, up to 80 loops can be included, with each loop connecting 20 to 30 devices such as detectors and call points. The drawback is that it can only identify the zone where is a fire may be taking place. An addressable fire control panel, on the other hand, can have hundreds of devices connected to a loop, each with its own unique address that enables the panel to recognize the exact location of the fire.
“There are more applications of addressable fire alarm systems from residential complexes to commercial projects, indicating increased demand and need for more precise detection,” said Henry Shaw, Overseas Manager at Horing Lih Industrial. According to the company, its addressable control panel can have a maximum of 32 loops, each able to connect with 250 addressable devices. That's a total of 8,000 addressable points.
Wireless
Besides the more mature fire safety solutions, Southeast Asian users are also exploring new technologies, for example wireless and IP. In the words of Lightak's Chen, there is definitely strong interest in these technologies, especially among those who can afford them. “In India, for instance, you've got lots of noblemen. These are the people who need protection the most,” he said.
Wireless fire products are those that require no wiring between devices and the panel. Examples include wireless alarms and detectors, which are becoming more prevalent in the market. “Wi-Fi is suitable for particular projects. For example, you have two or three buildings, and the distance between building and building may be 800 meters, making it quite difficult to lay cable or fiber optic,” Ratchawong said. “Also, for antique buildings, they cannot dig roads and put in fiber optic. That's when they can use Wi-Fi.”
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IP
IP-based fire equipment is another phenomenon that has picked up steam in Southeast Asia. According to a recent report by IHS, a main reason for the technology's growing acceptance is its ability to connect with other devices in home automation systems. “Here, buildings are integrating fire equipment with building management, security, and lighting equipment to improve operational efficiencies and have fewer people reviewing and monitoring the information,” the report said.
Ratchawong corroborated IHS's observation. “Information technology like the Internet is already coming to Southeast Asia. Most of the owners and end users would like to incorporate fire alarm system into these technologies, like control panels communicating with each other through the Internet,” he said.
With new technologies emerging, it's important for suppliers to keep up with the changing market taste to ensure best business results. “Manufacturers always have to follow exactly what's needed by the customer,” said Lee Ran-huang, GM of Ching Gu Electronics. “You must also have a vision of what will be needed five to ten years later.”
Challenges
Price will continue to be a challenge for suppliers in the Southeast Asian market, where competition is fierce due mainly to cutthroat price war waged by Chinese manufacturers, who offer products at super low prices and in the process push out other players.
While smaller manufacturers find it hard to survive in this environment, larger companies respond by offering products with superior quality and functionality. Siemens, for example, has come up with products with intelligence in it. “Our detector has a microprocessor inside, with which it can make decisions on whether there is real fire, or it's just false alarm,” said Ratchawong.
Another challenge, in particular for smaller companies, is requirement that products be certified by international certification bodies like UL and FM. In large government or private projects, certified products must be used, and suppliers who can provide them have a better chance to win the contract. These suppliers tend to be larger companies who can afford the huge certification fees.
Rosy Prospects
Challenges aside, the Southeast Asia fire market is set for remarkable growth that can't be ignored. Regional economic expansion, the growing importance that people attach to safety, and the adoption of new fire technologies all contribute to rosy prospects for Southeast Asia's fire market down the road. The popular catchphrase “Burn, baby, burn” indeed encapsulates the sentiment that both manufacturers and users have for the market.