INDUSTRY MARKET RESEARCH FOR BUSINESS LEADERS, STRATEGISTS, DECISION MAKERS CLICK TO VIEW

Table of Contents 2

List of Tables & Charts 3

Study Overview 4

Sample Text, Table & Chart 5

Sample Profile, Table & Forecast 6

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World HVAC Equipment

Industry Study with Forecasts for 2016 & 2021

Study #2889 | June 2012 | $6100 | 444 pages

The Freedonia Group 767 Beta Drive www.freedoniagroup.com Cleveland, OH • 44143-2326 • USA Toll Free US Tel: 800.927.5900 or +1 440.684.9600 Fax: +1 440.646.0484 E-mail: [email protected] Study #2889 June 2012 World HVAC Equipment $6100 444 Pages Industry Study with Forecasts for 2016 & 2021

Table of Contents United Kingdom...... 129 Emerson Electric...... 347 Other Western Europe...... 134 GD Midea Holding...... 353 Goodman Global...... 356 Executive Summary Gree Electric Appliances...... 358 ASIA/PACIFIC Group...... 361 General ...... 142 Hitachi Limited...... 365 Market EnvironmenT HVAC Equipment Supply & Demand...... 143 Ingersoll-Rand plc...... 369 General ...... 4 Demand by Type & Market...... 147 Johnson Controls...... 376 World Economic Overview...... 5 Australia...... 149 Kermi GmbH...... 382 Recent Historical Trends...... 5 China...... 156 Lennox International...... 383 World Economic Outlook...... 7 India...... 165 LG Electronics...... 389 Fixed Investment Trends...... 11 Indonesia...... 173 ...... 392 Personal Income Trends...... 13 Japan...... 179 Nortek Incorporated...... 396 World Demographic Overview...... 15 South Korea...... 187 Paloma Company...... 402 Population...... 16 Other Asia/Pacific...... 194 Households...... 17 Corporation...... 405 World Urbanization Patterns...... 19 ...... 409 Building Construction Expenditures...... 20 OTHER REGIONS ...... 411 Residential Construction Expenditures...... 22 Central & South America...... 202 Smiths Group...... 413 Nonresidential Construction Expenditures.....24 HVAC Equipment Supply & Demand...... 203 Tecumseh Products...... 415 Climatic & Cultural Factors...... 26 Demand by Type & Market...... 206 United Technologies...... 418 Pricing Patterns...... 27 Brazil...... 208 Limited...... 428 Legal & Regulatory Issues...... 28 Other Central & South America...... 215 ...... 431 Montreal Protocol...... 29 Eastern Europe...... 222 Additional Companies in Kyoto Protocol...... 31 HVAC Equipment Supply & Demand...... 223 World HVAC Equipment...... 435 Energy Efficiency...... 33 Demand by Type & Market...... 226 Technology & Product Innovation...... 34 Poland...... 228 Russia...... 234 Other Eastern Europe...... 242 List of Tables/Charts OVERVIEW Africa/Mideast...... 248 General ...... 37 HVAC Equipment Supply & Demand...... 250 Regional Overview...... 38 Demand by Type & Market...... 253 Demand...... 38 Turkey...... 255 Executive Summary Production...... 43 Other Africa/Mideast...... 262 1 Summary Table...... 3 International Trade...... 45 Demand by Product...... 47 Room Air Conditioners...... 49 INDUSTRY STRUCTURE Market EnvironmenT Unitary Air Conditioners...... 53 General ...... 271 1 World Gross Domestic Product by Region...11 Heat Pumps...... 56 Industry Composition...... 272 2 World Fixed Investment by Region...... 13 Boilers...... 59 Market Share...... 275 3 World Per Capita GDP by Region...... 15 Warm Air Furnaces...... 62 Development & Manufacturing...... 279 4 World Population by Region...... 17 Other Heating & Cooling Equipment...... 65 Marketing...... 282 5 World Households by Region...... 18 Distribution...... 284 6 World Urban Population by Region...... 20 Merger & Acquisitions...... 285 7 World Building Construction NORTH AMERICA Cooperative Agreements...... 289 Expenditures by Region...... 22 General ...... 68 8 World Residential Building Construction HVAC Equipment Supply & Demand...... 69 Expenditures by Region...... 24 Demand by Type & Market...... 72 Company Profiles 9 World Nonresidential Building Construction United States...... 74 Ariston Thermo...... 301 Expenditures by Region...... 25 Canada...... 81 Blue Star Limited...... 305 Mexico...... 87 Bosch (Robert) GmbH...... 309 Chunlan Group...... 313 OVERVIEW Daikin Industries...... 315 1 World HVAC Equipment Demand by Region 41 WESTERN EUROPE Danfoss A/S...... 323 Cht World HVAC Equipment Demand General ...... 94 Dectron Internationale...... 330 by Region, 2011...... 42 HVAC Equipment Supply & Demand...... 95 De’Longhi SpA...... 333 Cht World HVAC Equipment Demand Demand by Type & Market...... 99 DeLclima SpA...... 335 by Region, 2001-2021...... 42 France...... 101 Dunham-Bush Holding Berhad...... 337 2 World HVAC Equipment Germany...... 107 Elco Holdings...... 340 Shipments by Region...... 44 Italy...... 115 AB...... 345 Spain...... 122 (continued on following page)

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List of Tables/Charts 2 Western Europe: HVAC Equipment 14 South Korea: HVAC Equipment Demand by Type & Market...... 100 Demand by Type & Market...... 194 (continued from previous page) Cht Western Europe: HVAC Equipment 15 Other Asia/Pacific: HVAC Equipment Demand by Country, 2011...... 101 Supply & Demand...... 199 Cht World HVAC Equipment Shipments 3 France: HVAC Equipment 16 Other Asia/Pacific: HVAC Equipment by Region, 2011...... 45 Supply & Demand...... 105 Demand by Type & Market...... 201 3 World HVAC Equipment 4 France: HVAC Equipment Demand Net Exports by Region...... 47 by Type & Market...... 107 5 Germany: HVAC Equipment OTHER REGIONS 4 World HVAC Equipment 1 Central & South America: HVAC Supply & Demand...... 112 Demand by Product...... 48 205 6 Germany: HVAC Equipment Demand Equipment Supply & Demand...... Cht World HVAC Equipment Demand 2 Central & South America: HVAC Equipment by Type & Market...... 115 by Type, 2011...... 49 Demand by Type & Market...... 207 5 World Room Air Conditioner 7 Italy: HVAC Equipment Supply & Demand 120 8 Italy: HVAC Equipment Demand 3 Brazil: HVAC Equipment Demand by Region...... 52 Supply & Demand...... 212 Cht World Room Air Conditioner by Type & Market...... 122 9 Spain: HVAC Equipment 4 Brazil: HVAC Equipment Demand Demand by Region, 2011...... 53 by Type & Market...... 215 6 World Unitary Air Conditioner Supply & Demand...... 126 10 Spain: HVAC Equipment Demand 5 Other Central & South America: HVAC Demand by Region...... 55 Equipment Supply & Demand...... 219 Cht World Unitary Air Conditioner by Type & Market...... 128 11 United Kingdom: HVAC Equipment 6 Other Central & South America: HVAC Demand by Region, 2011...... 56 Equipment Demand by Type & Market.. 221 7 World Heat Pump Demand by Region...... 58 Supply & Demand...... 132 12 United Kingdom: HVAC Equipment 7 Eastern Europe: HVAC Equipment Cht World Heat Pump Demand Supply & Demand...... 225 by Region, 2011...... 59 Demand by Type & Market...... 134 13 Other Western Europe: HVAC 8 Eastern Europe: HVAC Equipment 8 World Boiler Demand by Region...... 61 Demand by Type & Market...... 227 Cht World Boiler Demand by Region, 2011...... 62 Equipment Supply & Demand...... 138 14 Other Western Europe: HVAC Equipment 9 Poland: HVAC Equipment 9 World Warm Air Furnace 231 Demand by Type & Market...... 141 Supply & Demand...... Demand by Region...... 64 10 Poland: HVAC Equipment Demand Cht World Warm Air Furnace Demand by Type & Market...... 234 by Region, 2011...... 65 ASIA/PACIFIC 11 Russia: HVAC Equipment 10 World Other Heating & Cooling 1 Asia/Pacific: HVAC Equipment Supply & Demand...... 239 Equipment Demand by Region...... 66 Supply & Demand...... 146 12 Russia: HVAC Equipment Demand Cht World Other Heating & Cooling Equipment 2 Asia/Pacific: HVAC Equipment by Type & Market...... 242 Demand by Region, 2011...... 67 Demand by Type & Market...... 148 13 Other Eastern Europe: HVAC Equipment Cht Asia/Pacific: HVAC Equipment Supply & Demand...... 246 NORTH AMERICA Demand by Country, 2011...... 149 14 Other Eastern Europe: HVAC Equipment 1 North America: HVAC Equipment 3 Australia: HVAC Equipment Demand by Type & Market...... 248 Supply & Demand...... 71 Supply & Demand...... 153 15 Africa/Mideast: HVAC Equipment 2 North America: HVAC Equipment 4 Australia: HVAC Equipment Demand Supply & Demand...... 252 Demand by Type & Market...... 73 by Type & Market...... 156 16 Africa/Mideast: HVAC Equipment Cht North America: HVAC Equipment 5 China: HVAC Equipment Demand by Type & Market...... 254 Demand by Country, 2011...... 74 Supply & Demand...... 162 17 Turkey: HVAC Equipment Demand 3 United States: HVAC Equipment 6 China: HVAC Equipment Demand Supply & Demand...... 259 Supply & Demand...... 78 by Type & Market...... 165 18 Turkey: HVAC Equipment Demand 4 United States: HVAC Equipment 7 India: HVAC Equipment by Type & Market...... 261 Demand by Type & Market...... 81 Supply & Demand...... 169 19 Other Africa/Mideast: HVAC Equipment 5 Canada: HVAC Equipment 8 India: HVAC Equipment Demand Supply & Demand...... 267 Supply & Demand...... 85 by Type & Market...... 172 20 Other Africa/Mideast: HVAC Equipment 6 Canada: HVAC Equipment Demand 9 Indonesia: HVAC Equipment Demand by Type & Market...... 270 by Type & Market...... 87 Supply & Demand...... 177 7 Mexico: HVAC Equipment 10 Indonesia: HVAC Equipment Demand by Type & Market...... 179 INDUSTRY STRUCTURE Supply & Demand...... 91 1 World HVAC Equipment Sales 11 Japan: HVAC Equipment 8 Mexico: HVAC Equipment Demand by Company, 2011...... 274 by Type & Market...... 93 Supply & Demand...... 184 12 Japan: HVAC Equipment Demand Cht World HVAC Equipment 276 by Type & Market...... 187 Market Share, 2011...... 287 WESTERN EUROPE 13 South Korea: HVAC Equipment 2 Selected Acquisitions & Divestitures...... 3 Selected Cooperative Agreements...... 292 1 Western Europe: HVAC Equipment Supply & Demand...... 191 Supply & Demand...... 98

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Worldwide sales of heat pumps and unitary air conditioners, along with a US recovery and rapid growth in China, will spur gains in overall HVAC equipment demand through 2016.

Global HVAC demand to reach $107 billion in 2016 Asia/Pacific HVAC Equipment Regional Demand 53% ($107 billion, 2016) Global demand for HVAC equipment is projected to increase 6.1 percent per year through 2016 to $107 billion. This growth rate is an acceleration from the gains of the 2006-2011 period, reflecting in part the reduced 2011 bases of the developed countries as the global re- cession of 2009 restrained construction North America spending and reduced access to 19% financing. Economic recovery and the corresponding improvement in construc- tion activity in several key markets, Western Europe 14% particularly the large US market, will aid gains through 2016. Other Regions 14% North America will pace de- veloped region gains; China to be fastest growing nation HVAC demand growth in the Asia/Pacific ment programs that boosted market North America is anticipated to achieve region will outpace the global average, penetration in rural areas. the fastest average annual advances increasing 6.4 percent per year through through 2016, boosted primarily by the 2016. Four of the world’s fastest growing Heat pumps, unitary air national markets reside in this region. US recovery. Gains in Canada will be conditioners to lead gains slower, reflecting already high penetra- Rapid growth in building construction tion rates and construction markets that spending, along with rising industrializa- Sales of all types of HVAC equipment were less affected by the global reces- tion and per capita incomes, the ongoing are expected to improve through 2016 sion. Low air conditioning system modernization of the housing stock, and from low 2011 bases. Heat pumps will ownership rates in Western Europe (rela- opportunities arising from the relatively continue to post the fastest growth, re- tive to other industrialized nations) will low penetration rates, will aid advances. flecting the lower penetration rate in present opportunities, although gains will China will exhibit the largest growth, many markets, plus the ability of these be limited by the slowest regional growth comprising one-third of global demand systems to provide both heating and in building construction through 2016. gains from 2011 to 2016. Market gains cooling capabilities, and to offer greater However, regulations regarding energy have predominantly been spurred by the energy efficiency than most other cooling efficiency and the use of more environ- nation’s rapid industrialization, resulting systems. Demand for unitary air condi- mentally friendly refrigerants will boost in large increases in building construc- tioners will also register above average sales of HVAC equipment in Western tion expenditures, as well as by rising gains, particularly in markets with strong Europe and other developed markets. personal incomes and favorable govern- nonresidential construction activity.

Copyright 2012 The Freedonia Group, Inc.

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Sample Text, TABLE VI-9

Table & Chart INDONESIA: HVAC EQUIPMENT SUPPLY & DEMAND (million dollars)

Item 2001 2006 2011 2016 2021

Gross Domestic Product (bil 2010$) 644 825 1100 1485 1955 per capita GDP 3010 3620 4530 5800 7270

adia/pacific Population (million persons) 213.7 228.2 243.0 256.1 268.8 Households (million) 55.1 62.3 70.0 77.8 85.2 Indonesia: HVAC Equipment Supply & Demand Gross Fixed Investment (bil 2010$) 176.2 242.2 358.5 475.0 618.0 In 2011, HVAC equipment demand in Indonesia totaled $725Building Construction Expend (bil 2010$)49.1 68.8 102.2 130.6 170.1 million. After being adversely impacted by the Asian financial crisis of 1997-1998, demand for HVAC equipment rose an average of 9.0 percent $ HVAC equipment/000$ GDP 0.47 0.65 0.66 0.79 0.82 annually from 2001 to 2011. Strength in the country’s manufacturing $ HVAC equipment/capita 1.4 s2.3a m3.0ple 4.6 5.9 and mining industries has served as the catalyst for the construction $ HVAC equipment/household 5.5 8.6 10.4 15.0 18.7 of new industrial and commercial facilities, including high-rise office $ HVAC equipment/000$ GFI 1.7 2.2ta b2.0le 2.5 2.6 buildings which require HVAC equipment. Construction of residential $ HVAC equip/000$ construction 6.2 7.8 7.1 9.0 9.4 buildings has also boosted HVAC equipment demand, particularly since newer buildings are more likely to be equipped with air conditioningHVAC or Equipment Demand 305 535 725 1170 1595 at least be designed with later installation in mind. In general, intensity of use (in per household terms and in relationship to building construc net- exports -100 -200 -350 -490 -700 tion spending) is low by both regional and global standards. This is due to widespread poverty in the country, still incomplete electrification,HVAC Equipment Shipments 205 335 375 680 895 and the substandard quality of much of its housing stock. Additionally, Indonesia’s climate is tropical, with average winter temperatures staying % Indonesia 1.0 1.0 0.8 1.1 1.1 above 20 degrees Celsius, resulting in little need for heating equipment.Asia/Pacific HVAC Equipment Shpts 19830 33705 46640 63800 81500 However, because market penetration is low, there remain opportunities for additional sales in the forecast period.

The HVAC equipment market in Indonesia is forecast to grow at a 10 percent annual pace through 2016 to $1.2 billion. This rate is an improvement over the gains of the 2006-2011 period and is the second fastest growth rate worldwide, only slightly behind India. Advances will be aided bys ongoingample industrialization text activity and gains in building con- struction expenditures. Growth will also be boosted by improving per capita incomes, making supplemental heating and cooling equipment a possibility for a rising share of the population. HVAC equipment growth in the near term will tend to be limited by some concern over economic CHART VIII-1 instability in Indonesia, which could make it more difficult to obtain financing for large construction projects. WORLD HVAC EQUIPMENT MARKET SHARE ($79.6 billion, 2011) 174 Copyright 2012 The Freedonia Group, Inc.

10.0% D aikin In d s

9.7% G ree Elec M a rkse tample O th e rs L e a d e rs 5 0 .1 % 4 9 .9 %chart 5.7% UT C

6.4% In g erso ll-R an d

6.3% GD M id ea

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Sample Profile, TABLE VI-10 Table & Forecast INDONESIA: HVAC EQUIPMENT DEMAND BY TYPE & MARKET (million dollars)

Item 2001 2006 2011 2016 2021

Building Construction Expend (bil 2010$)49.1 68.8 102.2 130.6 170.1 $ HVAC equip/000$ construction 6.2 7.8 7.1 9.0 9.4

HVAC Equipment Demand 305 535 725 1170 1595 By Type: Room Air Conditioners 100 200 185 430 580 Unitary Air Conditioners 65 100 170 245 340 Heat Pumps 70 130sa m210ple 285 400 Boilers 5 5 5 5 5 Warm Air Furnaces 5 10ta b15le 20 20 COMPANY PROFILES Other Heating/Cooling Equipment 60 90 140 185 250 By Market: Residential 125 220 270 430 560 Kermi GmbH Nonresidential 180 315 455 740 1035 Pankofen-Bahnhof 1 94447 Plattling Selected HVAC Equip Demand (000 units) Germany Unitary Air Conditioners 80 130 160 210 280 49-9931-501-0 Room Air Conditioners 285 530 925 1360 1890 http://www.kermi.de Warm Air Furnaces 10 20 25 35 30 sample Heat Pumps 80 130 180 240 320 Annual Sales: $200 million (estimated) Employment: 2,000 (estimated)profile Key Products: radiators

Kermi is a leading European manufacturer of heating technologies and shower enclosures. The Company is owned by AFG Arbonia-For- ster-Holding AG (Switzerland), a holding company for a group of firms “Shipments of HVAC equipment by involved in the global construction materials and machinery industries. plants in Indonesia totaled $375 The Company participates in the world HVAC equipment industry million in 2011. Domestic produc- through the manufacture, sale, and distribution of residential radia- tion growth from 2006 to 2011 ben- tors under the KERMI brand name. For example, Kermi produces efited from generally healthy local the THERM X2 line of steel panel radiators featuring the Company’s proprietary X2 technology engineered to save energy efficiently even and export market conditions. How- during the transfer of heat. These radiators are designed to be compat- ever, the nation remains a signifi- ible for installation with all modern heating systems, including heat cant net importer of HVAC products, pumps, high-caloric value systems, and solar thermal systems. Kermi with China, Japan, South Korea, and makes THERM X2 radiators in valve, compact, compact hygienic, replacement, and VERTEO vertical profile configurations sold through the US among the major suppliers. the Plan and Profile product lines. For example, Plan types feature a In 2011, net imports were equiva- smooth, coated front section. The Company additionally manufactures lent to 48 percent of demand.” design radiators to meet customer specifications for bathing and living --Section VI, pg. 175 room applications. These radiators widely vary in shape, color, heating efficiency levels, ease of use, and other functions, and are available

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Other Studies About The Freedonia Group World Commercial Refrigeration Equipment The Freedonia Group, Inc., is a leading international industry market research com- Global demand for commercial refrigeration equip- pany that provides its clients with information and analysis needed to make informed ment is forecast to rise at an accelerated pace of 4.6 strategic decisions for their businesses. Studies help clients identify business oppor- percent per year through 2016 to $32.5 billion. China will remain the fastest growing market, but gains will tunities, develop strategies, make investment decisions and evaluate opportunities slow from their previous pace. Reach-ins and walk- and threats. Freedonia research is designed to deliver unbiased views and reliable ins will provide the best global growth opportunities. outlooks to assist clients in making the right decisions. Freedonia capitalizes on This study analyzes the $26 billion world commercial refrigeration equipment industry, with forecasts for the resources of its proprietary in-house research team of experienced economists, 2016 and 2021 by product, world region and for 21 professional analysts, industry researchers and editorial groups. Freedonia covers a major countries. The study also evaluates company market share and profiles industry players. diverse group of industries throughout the United States, the emerging China mar- #2953...... December 2012...... $6200 ket, and other world markets. Industries analyzed by Freedonia include:

Commercial Refrigeration • Chemicals • Plastics • Life Sciences • Packaging • Building Materials • Security Equipment & Electronics • Industrial Components & Equipment • Automotive & Transportation US demand for commercial refrigeration equipment will rise 4.6 percent per year to $9.4 billion in 2016. Equipment • Household Goods • Energy/Power Equipment Transportation systems will remain the largest seg- ment and grow the fastest, followed in pace by ice Click here to learn more about Freedonia machines. Food and beverage distribution will be the fastest growing market, while foodservice will remain the largest. This study analyzes the $7.5 billion US commercial refrigeration equipment industry, with forecasts for 2016 and 2021 by food and beverage Freedonia Custom Research market and equipment type. The study also evaluates company market share and profiles industry players. Freedonia Custom Research delivers the same high quality, thorough and unbiased #2914...... June 2012...... $4900 assessment of an industry or market as an industry study. Since the research initia- tive is based upon a company’s specific needs, companies harness Freedonia’s Gaskets & Seals research capabilities and resources to answer unique questions. When you leverage US demand for gaskets and seals is forecast to in- crease 4.6 percent per annum to $9.6 billion in 2016. the results of a Freedonia Custom Research engagement, you are able to obtain Compression packings, body seals and expanded important answers to specific questions and issues associated with: mergers and graphite gaskets will register the strongest growth. acquisitions, new product launches/development, geographic expansion, entry into The growing use of better-performing, higher-priced gaskets and seals will help drive value gains. The new markets, strategic business planning, and investment and funding decisions. marine and rail segment will post the fastest market advances. This study analyzes the $7.6 billion US gasket and seal industry, with forecasts for 2016 and Freedonia Custom Research is ideal for companies seeking to make a strategic dif- 2021 by type and market. The study also evaluates ference in the status quo and focus on future business growth. Working side by side company market share and profiles industry players. #2884...... May 2012...... $4900 with clients, Freedonia’s team is able to define a research project that is custom- tailored to answer specific questions and provide the basis from which a company HVAC Equipment can make informed business decisions. Demand in the US for heating, ventilation and air con- ditioning (HVAC) equipment is projected to increase 5.1 percent annually through 2015. Unitary air condi- Click here to learn more about Custom Research tioners will offer the best opportunities in the cooling system market. Heat pumps will remain the largest type of heating equipment, and grow the fastest within that segment. This study analyzes the $13.1 billion US HVAC equipment industry, with forecasts for 2015 and 2020 by fuel type, equipment type and market. The study also evaluates company market share and profiles industry players. #2813...... November 2011...... $5100 Welding Equipment & Consumables US demand for welding equipment and consumables will rise 6.4 percent annually through 2015. Arc and resistance welding systems will remain the domi- nant welding techniques. Welding electrodes and filler metal will remain the dominant consumables, while emergent products like flux-and metal-cored electrodes grow the fastest. This study analyzes the $5.2 billion US welding equipment and consumables industry, with forecasts for 2015 and 2020 by technol- ogy, product and market. The study also evaluates company market share and profiles industry players. #2785...... October 2011...... $4900 Click here for complete title list Click here to visit freedoniagroup.com

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