Smart Buildings

Daikin Strengthens HVAC Controls Business in North America

In this Research Note, we examine Daikin, the Japanese headquartered air conditioning manufacturer, based on their Integrated Report, year ending 31 March 2023 and the group’s recent strategy in North America to strengthen its HVAC controls support and service business. Daikin Industries Ltd, is the global No. 1 air conditioning manufacturer, with over 96,000 employees, 100 production sites, and more than $24.9 billion in air conditioning revenues across the 170 countries in which it operates. We wrote previously about Daikin's collaborations with Smart Building Startups. Currently, North America is Daikin’s largest regional market. In fiscal 2022, Daikin was the second-highest-selling air-conditioning manufacturer in North America, with sales of approximately ¥1,210.0 billion (around $8.1 billion). In local currency terms, Daikin North America's sales were 124% of the previous year's level, with an operating margin of 9%. In the FUSION 25 strategic management plan targeting fiscal 2025, Daikin has set its sights on becoming the No. 1 […]

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In this Research Note, we examine Daikin, the Japanese headquartered air conditioning manufacturer, based on their Integrated Report, year ending 31 March 2023 and the group’s recent strategy in North America to strengthen its HVAC controls support and service business.

Daikin Industries Ltd, is the global No. 1 air conditioning manufacturer, with over 96,000 employees, 100 production sites, and more than $24.9 billion in air conditioning revenues across the 170 countries in which it operates. We wrote previously about Daikin's collaborations with Smart Building Startups.

Currently, North America is Daikin’s largest regional market. In fiscal 2022, Daikin was the second-highest-selling air-conditioning manufacturer in North America, with sales of approximately ¥1,210.0 billion (around $8.1 billion). In local currency terms, Daikin North America's sales were 124% of the previous year's level, with an operating margin of 9%.

In the FUSION 25 strategic management plan targeting fiscal 2025, Daikin has set its sights on becoming the No. 1 air-conditioning business in North America, with a target of ¥1,500.0 billion by the end of fiscal 2025.

Daikin Integrated Report, FY ending 31 March 2023
Daikin Integrated Report, FY ending 31 March 2023

Initiatives to achieve this include enhancing the scale of their residential-use air-conditioning business and developing the industrial-use Air Conditioning and Applied Solutions Businesses. The company aims to strengthen the cooperation between Daikin Comfort Technologies North America (DNA), formerly the Goodman Global Group, Inc., which is responsible for residential-use Air Conditioning Business, and Daikin Applied Americas Inc. (DAA), which oversees their applied Air Conditioning Business.

They intend to propose systems that combine the VRVs, applied systems, control devices, and other products of these two companies to further enhance the scale of their commercial-use Air Conditioning Business.

Acquisitions Support Daikin Commercial AC Strategy

In July 2022, Daikin Applied Americas acquired a majority interest in CM3 Building Solutions, a U.S. building automation, HVAC support, energy services, security and fire protection company.

CM3, based in Fort Washington, Pa., was an early innovator in building automation and systems integration and has a team of 150 building solutions experts to deploy technology and solutions that improve comfort, safety and efficiency. CM3 is a certified Schneider Electric Master EcoXpert.

In December 2022, Daikin Comfort Technologies North America Inc. acquired Venstar. Founded in 1992 and based in Southern California, Venstar designs and builds a broad variety of thermostats and energy management systems. The company’s Surveyor Energy Management System allows retailers, restaurant chains and other multi-location businesses to remotely monitor, manage and control energy consumption while reducing maintenance expenses.

Currently, Surveyor is used to control more than 100,000 HVAC systems and building lighting in more than 30,000 retail locations throughout North America. Venstar’s Skyport Cloud service provides businesses a secure and private cloud service for command and control of HVAC systems.

“Venstar’s energy management expertise and smart, communicating controllers will help contractors, homeowners and businesses optimize the energy-saving and performance benefits of inverter-driven HVAC systems,” explained Dennis Thoren, Vice President of Controls and Solutions at Daikin.

In March 2023, Daikin Applied Americas acquired Alliance Air Products, the San Diego-based custom air-handling equipment manufacturer. Alliance Air's engineering and technology expertise adds to the Daikin portfolio of high-efficiency equipment and services for data center cooling, and other mission-critical and custom applications.

Established in 2004 as a custom retrofit air handler manufacturer, Alliance Air has since grown into all areas of custom HVACR manufacturing with over 700 employees and 230,000 ft. of manufacturing space.

Daikin’s commercial air conditioning business has been enhanced by these recent acquisitions - extending their product portfolio, strengthening their services business and augmenting their data center solutions offering and other high-growth, mission-critical applications.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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