VZCZCXRO8724
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN
RUEHLZ RUEHNEH RUEHPW RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHAH #1008/01 2221318
ZNR UUUUU ZZH
P 101318Z AUG 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 3270
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 5522
RUEHBJ/AMEMBASSY BEIJING 3242
RUEHKO/AMEMBASSY TOKYO 3107
RUEHIT/AMCONSUL ISTANBUL 3765
RUCNDT/USMISSION USUN NEW YORK 1079
RHMCSUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 3784
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 001008 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN; EB 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PGOV EINV TX
SUBJECT: TURKMENISTAN: U.S. FIRMS DOMINATE COMMERCIAL AIR 
CONDITIONING MARKET 
 
¶1.  (U) Sensitive but unclassified.  Not for public 
Internet. 
 
¶2.  (SBU) SUMMARY:  U.S. companies have supplied almost 
all the commercial air conditioning systems (central air 
conditioning systems, not single-household units) for 
new, foreign-built government, commercial, and 
residential buildings in Turkmenistan during the past 
eight years.  The products of two U.S. companies -- 
Johnson Controls and Carrier -- dominate the local market 
for these systems.  In the case of Johnson Controls, it 
used its strong market position in Turkey to become the 
nearly exclusive provider of commercial air conditioning 
units ("chillers") to Turkish-built projects in 
Turkmenistan.  As the years pass, the need for parts and 
service of its systems led Johnson Controls to open a 
local office.  END SUMMARY. 
 
¶3.  (SBU) Central air-conditioning systems appeared in 
Turkmenistan in the mid-1990s, when the first Western- 
style hotels were built in Ashgabat.  By the end of the 
decade, these systems spread to newly-built or renovated 
government buildings.  The market for central air 
conditioning systems started booming in 2000-2001, when 
the Turkmen government launched mass construction of 
government and residential high-rises equipped with 
central air conditioning. 
 
¶4.  (SBU) Johnson Controls entered the market through 
Turkish construction companies who managed to win the 
lion's share of construction contracts thanks to late 
President Niyazov's preference for Turkish construction 
companies.  Johnson Controls' Istanbul branch became the 
major supplier of York-branded central air conditioning 
systems to Turkish construction companies doing business 
in Turkmenistan.  The air conditioning equipment was 
procured and delivered in Turkey and then shipped by the 
Turkish companies to their projects in Turkmenistan. 
According to a Johnson Controls representative, the 
company currently enjoys the advantage of being the 
almost exclusive supplier of central air conditioning 
systems to Turkish construction companies operating in 
the country, controlling about 90% of the market.  Since 
parts and service are becoming an important factor given 
the age of the earliest installed systems, Johnson 
Controls recently completed registration of its branch in 
Turkmenistan and is in the process of opening an office. 
The Ashgabat branch will provide spare parts and 
technical maintenance service to users and owners of the 
company's products. 
 
¶5.  (SBU) Carrier controls the remaining ten percent of 
the Turkmen market for central air conditioning systems, 
supplying the French Bouygues construction company. 
Bouygues typically wins contracts for the highest 
prestige government buildings and is the only non-Turkish 
foreign construction company operating in Turkmenistan. 
 
¶6.  (SBU) COMMENT:  The U.S. companies supplying central 
air conditioning systems to construction projects in 
Turkmenistan are unlikely to face any serious competition 
in the near future, as their main customers (Turkish 
companies and Bouygues) still have very strong positions 
in the country.  By establishing a permanent presence in 
Turkmenistan, Johnson Controls, besides providing spare 
parts and services, might start supplying equipment not 
only to Turkish companies' projects, but also to Turkmen 
customers directly.  Local governmental organizations and 
state-owned and private sector enterprises could become 
customers.  Moreover, the Turkmen Government has declared 
 
ASHGABAT 00001008  002 OF 002 
 
 
that it will facilitate and encourage the development of 
local construction companies and has already awarded a 
few contracts to them.  If the government continues this 
policy and gradually increases the share of local 
companies in the construction market, Johnson Controls 
will be in a strong position to become a major supplier 
of central air conditioning systems for their projects as 
well.  END COMMENT. 
 
MILES