The value of the
market for commercial
and industrial refrigeration equipment
is around £460m
at manufacturers selling prices, with growth rates generally modestly
positive.
The UK’s
refrigeration industry faces
major challenges.
While ozone depletion is being addressed, the global warming battle is
only just beginning. As a big user of power, the cooling industry is
in the spotlight in the drive to reduce carbon emissions and tackle
climate change.
As well as the
need for improved energy performance, other environmental issues - such
as noise, refrigerants, containment recyclability and materials - are
driving change throughout the industry.
These
environmental pressures, particularly in the form of less damaging
refrigerants and energy conservation, have long been evident in the
sector, and manufacturers have strived to conserve energy and develop
new refrigerants to lessen its contribution to global warming, with some
notable success in major supermarket refrigeration applications,
particularly in Europe.
These pressures
are expected to continue to exert, a positive effect on the market since
the legal requirement to switch to ‘new’ refrigerants means that many
products must be replaced, as adaptation is generally not cost effective
and, in many cases, impossible.
There has been an increase in the number of products and
components sourced in low-cost producing countries, and this is
reflected in the trade data. This is primarily a result of the economic
cycle evident in those countries. However, the complexities of many of
the products and the crucial role they play in many processes have
ensured that leading technically innovative companies have retained
their market position. As low cost producers seek to gain a foothold
in established market and access to sophisticated technologies, an
increase in mergers and acquisitions is anticipated.
The key factors influencing the market have included:
-
Continued growth in the chilled food sector, which
has provided good stimulus for the refrigeration industry over the
last few years.
-
Greater levels of imports of cheaper components or
finished products from low wage cost countries. More recently the
accession of several additional countries into the EU will have
created more low cost manufacturing opportunities for suppliers of
refrigeration products.
-
Competition in the market from overseas suppliers.
-
The retail industry in the UK remains under pressure,
from an uncertain consumer market, but additionally from the
difficulties associated with getting planning permission and
therefore developing out of town superstores.
-
The growth of in town stores such as the Tesco Metro
stores is providing some opportunity in the market place.
-
The rises in raw material prices have impacted on the
manufacturing costs of refrigeration equipment, though manufacturers
have tried to constrain any price rises as far as possible.
-
There have been significant rises in the prices of
energy over the last year or so, driven by the rising price of oil,
and this is again impacting on the costs of operation of
refrigeration equipment and putting pressure on the manufacturers to
manufacture more efficient products.
-
There are ongoing pressures to reduce energy usage
and emissions as a result of environmental concerns.
-
There are continued positive trends in the
entertainment and foodservice sectors with greater numbers of people
eating out. This should provide opportunities in the medium term
for the refrigeration industry.
-
There has been continued erosion of the UK fish
industry.
-
Greater numbers of single person homes, leading to
greater requirements for fresh food storage.
-
Greater
levels of transport and storage required of food, beverages, etc,
leading to a greater number of temperature controlled environments.
-
Greater levels of pharmaceutical production, leading
to more refrigeration applications in transport and in storage.
Key product groups include
cold stores, compressors, heat exchangers, transport
refrigeration and evaporators, with cold stores accounting for a
substantial share of the market, compressors also significant followed
by heat exchangers.
Key suppliers into the market include Carrier and Linde,
Danfoss, Hussman, ICG, JE Hall, Copeland and Hubbard.
The major end use sectors are
commercial activities
including retail and food service applications;
industrial activities
including warehousing, industrial processing,
petrochemical, pharmaceutical and ice production; also
Transportation,
including refrigerated road transport, containers,
lorries and boats used to carry perishable produce.
