Elevator Modernization Market in the Philippines reached $1.2 billion in 2018, growing at a CAGR of 3.4% during 2019-2025. The rising building renovation activities in the Philippines is boosting the demand for elevator modernization market. Since 2015, the total number of renovation projects for residential and non-residential buildings in the Philippines are witnessing a Y-o-Y growth of more than 12%. Similarly, the strict enforcement of elevator compliance by the Philippines government is fueling the need for elevator modernization in the country. In 2019, an elevator at the Philippine Bank of Communications (PBCom) Tower malfunctioned and fell from the 10th floor to the ground floor at an abnormal speed. As a consequence, the government ordered the regulatory body to inspect all the elevators installed in the city. Thus, many buildings in the Philippines are likely to modernize their elevators to adhere to building regulation and ensure enhanced safety.
The report: “Elevator Modernization Market in the Philippines – Forecast (2019-2025)”, by IndustryARC covers an in-depth analysis of the following segments of the Elevator Modernization Market in the Philippines.
· The strict enforcement of building safety regulation coupled with rising demand for energy-efficient elevator components are likely to increase the market growth during the forecast period 2019-2025.
· In the wake of growing renovation projects in residential buildings, the residential segment will continue to create new opportunities for elevator modernization solutions.
· The full system modernization solution will be the fastest-growing segment owing to the large demand from the commercial segment.
· Top players offer customized solutions to their customer to differentiate create competitive advantage in the market.
End-User - Segment Analysis
Residential buildings dominate the elevator modernization market with 55.84% of market share in the Philippines. In 2018, approximately 15,577 buildings were renovated in the Philippines, out of which 83% renovation work was carried out on residential buildings. Similarly, between 2017-18, the number of building renovation work increased by approximately 11% in the Philippines. Most of these renovation work includes the improvement of interior design, elevator modernization, and enhancement of building safety. Central Luzon, Davao, and Ilocos are the top 3 regions in the Philippines accounted for approximately 25% of the total residential renovation projects in the Philippines. The growth of the renovation projects in the residential segment will continue to increase the demand for elevator modernization in the Philippines.
Product - Segment Analysis
Individual component upgardation solution is widely adopted during elevator modernization in the Philippines and holds approximately 40% of the market share. Component upgrades are a quick and cost-effective way to make smaller improvements in elevator performance, safety, and eco-efficiency. Most of the old residential buildings in the Philippines are upgrading their elevators through individual component replacement due to cost-effectiveness. However, full modernization solutions are presently witnessing significant demand from commercial buildings due to low downtime. The replacement of individual components at different time interval may need to interrupt the operation several times, and the downtime may likely to increase by 20%-25% as compared to entire system modernization. As the renovation activities in commercial building are experiencing a Y-o-Y growth of 15%, full system elevator modernization is likely to grow at a faster pace during the forecast period.
Drivers – Philippines Elevator Modernization Market Market
Strict enforcement of Elevator Compliance:
Elevator compliance is constantly evolving in the Philippines. The Office of Buildings (OBO) and other governing bodies have been constantly boosting regulatory efforts to keep elevators code compliant and millions of passengers safe. In 2019, the Mayor of Makati, a city in Philippine issued an order to OBO for carrying out a rigorous inspection in all buildings based in Makati to ensure the elevator compliance as per National Building Code of the Philippines. Similarly, in 2017, Office of the Building Official (OBO) in the Philippines issued a notice to one of the malls situated in CEBU City, Philippines, for failing to renew their elevator fitness certificate.
Thus, most of the older buildings in the Philippines have started initiating their elevator modernization work to adhere to the regulatory compliance and to avoid a huge fine. This factor is accelerating the market growth for elevator modernization.
The emergence of energy-efficient elevator technology:
The conventional/old elevator in the Philippines consumes 30% more energy as compared to modern elevators. Thus, many building owners in the Philippines having older elevators experience high operating cost. In recent time, most of the building owners are adopting some modernization technique to improve energy efficiency during elevator operation. Most of the developments of elevator modernization towards achieving energy efficiency are seen in replacing older hoist system with gearless hoist system and control panels.
Similarly, the deployment of regenerative drives in modern elevator system are increasingly deployed in elevators, as it increases the efficiency of the elevator system by 15%-20%. In addition to this, the introduction of new suspension traction media in elevator design reduces the overall installation space and energy consumption. Most of the end-users are showing their concern towards deploying these energy-efficient components in existing elevators, thereby creating the need for elevator modernization.
Challenges – Philippines Elevator Modernization Market Market
The threat of high downtime:
Elevator modernization in the Philippines requires a minimum downtime of 3-7 days. Thus, the buildings having a single elevator find it difficult to accommodate such a long downtime. As per major elevator modernization solution providers, there are 40% of buildings in the Philippines, where there is an opportunity for elevator modernization. However, the penetration of the elevator modernization solution in these buildings is just 20%-22%. Most of these buildings have a single elevator system and thus, are unwilling to accommodate downtime. Therefore, many building owners prefer to modernize a few components in elevators that can be performed with minimum interruption.
Elevator Modernization Market in Philippine is moderately concentrated with the top 5 players holding approximately 55% market share. The key players included in this market are United Technologies Corporation, KONE Corporation, Schindler Holding Ltd., ThyssenKrupp AG, Fujitec Co Ltd., Hitachi Ltd., Electra Elevators, Hyundai Elevator Co., Ltd, Mitsubishi Electric Corporation, and Toshiba International Corporation. The major players such as KONE, Schindler, and Hyundai Elevators are focusing on introducing energy-efficient solutions into their existing product portfolio. Also, these players create various customized solutions for their customer to meet the client’s requirement and budget.
In 2019, KONE, a leading solution provider of elevator and escalator, acquired the service and repair business of Eltec Elevator Ltd. in Vancouver, British Columbia.
In 2018, Kone invested approximately 180 million on R&D for the development of elevator and escalator technology.
Philippines Elevator Modernization Market Research Scope:
The base year of the study is 2018, with forecast done up to 2025. The study presents a thorough analysis of the competitive landscape, taking into account the market shares of the leading companies. It also provides information on unit shipments. These provide the key market participants with the necessary business intelligence and help them understand the future of the Philippines Elevator Modernization Market. The assessment includes the forecast, an overview of the competitive structure, the market shares of the competitors, as well as the market trends, market demands, market drivers, market challenges, and product analysis. The market drivers and restraints have been assessed to fathom their impact over the forecast period. This report further identifies the key opportunities for growth while also detailing the key challenges and possible threats. The key areas of focus include the types of Philippines Elevator Modernization Market, and their specific applications in the residential, commercial, and industrial sector.