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issue: August 2004 APPLIANCE Magazine

European Report
European Heating Trends

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by Paul Roggema, European correspondent, APPLIANCE magazine.

While most Europeans are flocking to the warm French countryside and Spanish beaches, the region’s heating industry is looking forward to the next winter season, which promises to offer new developments.

The large takeover of Buderus by Bosch is showing effect, and Vaillant is working on some interesting innovations through fuel cell field tests. Further, manufacturers continue to evaluate the emerging Eastern European markets.

Last year, Robert Bosch GmbH took over one of the leading German boiler makers, Buderus AG, leaving the industry to wonder how Bosch would integrate the company with its own Bosch Thermotechnik heating division. Just recently it was announced that both companies are to be merged as BBT Thermotechnik GmbH and that the new head office will be located in Wetzlar, where Buderus is located. The rationale for the merger is clear: Bosch wanted to grow, Buderus was for sale, and both companies fit relatively well together, as Bosch is strong in gas-fired wall-hung boilers and Buderus in floor-standing oil models. Buderus has a strong service organization in Germany, and Bosch is present throughout Europe. Together, revenues for 2003 total 2.1 billion euros (approx. U.S. $2.6 billion) and a staff of 11,000, placing BTT in the industry’s top spot and replacing former industry leader, Vaillant Hepworth Group.

Responding to the new competition, Stafan Jakubik, press representative for Vaillant, tells APPLIANCE: “We are not suddenly changing all our plans because of a new market leader. We believe in our company, and we are still leading in wall-hung boilers. We have a lot of new products, for conventional and renewable sources. For instance, per Jan. 1, 2004, we finalized the takeover of small co-generation manufacturer Ecopower.”

Vaillant is currently field testing fuel cell co-generation units they call Euro 2. Designed together with U.S. fuel cell manufacturer Plug Power, there are now 40 systems undergoing testing across Europe, and 20 more are expected to be tested later this year. The main goals of the testing phase are to reduce complexity (and costs) and improve reliability. Units are connected to a central control center to form a Virtual Power Station. In hardware, there is a new inverter, which is now integrated and air-cooled. Protection against overheating is improved, and output now varies between 1.5 kWh and 4.6 kWh, whereas the previous minimum was 2.5 kWh. The new, fifth-generation reformer is said to be more efficient, smaller, and lighter.

While the industry is seeing growth, price pressures continue to be an industry challenge. According to UK research firm Consult GB, the volume of the European heating industry in 2003 was 8 million units, or 5.8 billion euros or approx. $7.1 million (values measured as factory sales price). “Growth in units was 8 percent, but in value only 3.5 percent, which shows the price squeeze,” says Dominic Denison-Pender, managing director at Consult GB. “Most of this growth comes from the UK, Europe’s largest market with 1.4 million units. The phenomenal growth there is due to new regulations for 2005, [which says that] all boilers sold must be condensing.”

Mr. Denison-Pender believes that the move to condenser boilers is the most important technical issue facing the industry. “Germanic countries already made the change; France and the UK are following,” he says. “In France, there is government support for condenser boilers. Now, even the Italian brands have competitive condenser offerings.”

In other markets, Mr. Denison-Pender said the Turkish market went up almost 50 percent after inflation stabilized. “Turkey is a difficult and very dynamic market, also the only one where an American company (Carrier) is active,” notes Mr. Denison-Pender. “Russia has a booming construction sector around Moscow, and market was up by 20 percent in 2003. In Romania, sales went under (by 20 percent) after the government stopped a subsidy for replacing collective heating by individual boilers.”


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