IHS Research Note: ‘Middle East and Africa set for strong growth opportunities in access control’

In the company’s latest Research Note, Blake Kozak (senior analyst for security and building technologies at IHS) highlights the potential growth opportunity for electronic physical access control equipment in the Middle East and African regions.

The EMEA region continued to make strides toward recovery in 2013 and is expected to see moderate growth from 2014 through 2015 for traditional electronic access control.

For traditional access control, IHS has estimated growth of about 3.1% in 2014. When including electronic locks (mechatronic, digital cylinder and electromechanical), IHS estimates a growth of about 7.4% in 2014.

According to IHS’ 2014 report on access control, the Middle East and African regions are forecast to be worth about $180 million in 2014, which combine to have a CAGR of about 15% from 2013 through 2018.

Cutting-edge technology is sought after

IHS found that many countries across the Middle East are searching for and installing the most cutting-edge technology available.

To encourage Best of Breed adoption, many countries in the Middle East have programmes in place to reduce the amount of counterfeit product entering the country (for example Saudi Arabia with the Intertek program). IHS expects this program is helping to keep margins higher than in other parts of the region.

Detail of a typical mechanical combination lock

Detail of a typical mechanical combination lock

For Africa, many international banks and regional banks have been investing in expansion across the African continent. When banks expand and/or new banks are created, this presents a growth opportunity for electronic access control.

In the past, South Africa represented the most opportunity for access control adoption but this may be changing soon. In April 2014, Nigeria’s official statistics agency released rebased GDP data – the first such revision since 1990 – providing a more accurate assessment of the economy. The broad revision puts Nigeria ahead of South Africa with a GDP measure for 2013 of US$509 billion (89% higher than the corresponding figure from the now outdated series).

Additionally, infrastructure such as airports, seaports, education and critical sites (including oil and gas and energy) are all experiencing very strong growth. IHS expects a significant impact on the access control industry in the short to medium term.

Rate of movement towards IP

Lastly, IHS has assumed the consumption of IT equipment suggests the rate of movement towards IP and other more advanced security technologies.

According to IHS’ Global Insight, the Middle East and Eastern Europe/CIS countries were expected to both have a CAGR of about 6.5% from 2013 through 2018.

Overall, the Middle East and African regions are expected to be great markets for growth over the next 2-3 years. Wireless locks, IP-enabled devices and iris recognition readers will be at the forefront of product requests.

Training and educating not only integrators, installers and distributors but also end users is going to be critical for success.

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