Heat Exchangers Market

Updated date - Oct 22, 2019

[137 Pages Report] Heat Exchangers Market is projected to reach USD 22.59 billion by 2023, from USD 13.5 billion in 2017 at a CAGR of 9.0% during the forecast period. The base year considered for the study on the heat exchangers market is 2017 and the forecast period considered is between 2018 and 2023.

Market Dynamics

Technological advancements in the heat exchangers market

In the recent years, the heat exchangers market has witnessed significant advancements in technology owing to increasing demand for recovering valuable energy, reducing costs, and limiting environmental emissions. These developments include deployment of new and efficient heat exchangers, innovative heat transfer equipment, as well as the introduction of systems of heat exchangers in various industrial processes. In 2017, a key market player Kelvion developed AirToAir heat exchangers for the heat recovery and efficient use of energy. Moreover, in 2015, GEA launched 2H Massdek structured packings for improving the cost-effectiveness and performance of heat exchangers. Heat exchange combined with heat storage is also a methodology for improving energy efficiency, while cooling in gas turbine and combustion engines are other areas where maximum developments are observed. Different types of tubes, such as twisted tubes and corrugated tubes, and arrangements and baffles, which include helix and rod, are introduced to improve performance and simultaneously reduce operating costs by reducing fouling losses. Shell & tube heat exchangers made with these modified tubes and baffles also help in lowering the shell side pressure drop and reducing the weight of heat exchangers, by maximizing overall heat transfer efficiencies. Rapid advancements in the manufacturing of plate type heat exchangers have made it possible to produce pressed plates that are cheaper than those used earlier. The fabrication cost of these plate exchangers is also low. These pressed plates are less corrosive and less reactive, which decreases the frequency of replacement.

Thus, the key to stronger growth in the mature and traditionally risk-averse heat exchangers market is innovation and advancement in technology. End users require energy efficiency, ease of maintenance, reduction of corrosion, and improved heat transference. With advancements in technology and design, new all-welded plate heat exchanger technology is gaining importance over conventional shell and tube products, especially in high-temperature and pressure applications. Moreover, compact heat exchangers, as well as a self-cleaning heat exchange technology to eradicate fouling, are also being developed. These technological advancements provide more corrosion resistance, thus increasing the life of the heat exchangers.

Lack of awareness about energy efficiency in buildings

Lack of awareness about enhancing energy efficiency in buildings restricts the demand for HVAC insulation in many developing and underdeveloped countries. Many architects and engineers overlook building energy efficiency while designing a private or public infrastructure. Many misconceptions prevail among the consumers as well as building professionals about the costs and associated problems of low energy and insulated houses. At the same time, many of the benefits of insulation are still not understood. In some cases, buildings are not even insulated according to the building codes of that particular location and weather conditions of that region. These concerns indirectly hinder the demand for heat exchangers.

Large aftermarket for heat exchangers

Heat exchanger is a critical component of any process industry, and its performance and longevity have a direct impact not only on the capital cost but also on operating costs. Breakdown maintenance and repair are always expensive. Thus, the regular maintenance of heat exchangers is crucial, the cost of which can be relatively lower in comparison to rotating equipment, such as pumps and compressors. The maintenance of heat exchangers is important to ensure continuous production and system uptime, and to avoid sudden failures.

The process fluids and utility fluids in heat exchangers generate materials that adhere to the heat transfer surface, thereby affecting the heat exchange rate that leads to different types of corrosion, erosion, scaling, or fouling in the heat exchanger. The maintenance of heat exchangers is inevitable, and if neglected for many years, gaskets become brittle that eventually affects their sealing performance, causing fluid to leak into the environment. A well-planned maintenance of heat exchangers helps companies in saving energy and reducing operational costs up to 30%. Maintenance helps produce less pressure drop on the system, requiring less effort on the pumps and other components. This helps in lowering energy consumption while increasing the heat transfer rate and operational efficiency. The regular maintenance of heat exchangers also offers several benefits, such as improved performance, energy conservation, environment protection, and cost reductions. The maintenance of the plate type heat exchangers is much easier than that of the shell & tube type. Thus, end users prefer using the former type for their processes. This creates a huge aftermarket for the manufacturers of heat exchangers, wherein they can sell spare parts, such as gaskets, seals, and other components and also take service contracts for cleaning and maintenance of heat exchangers.

Objectives of the Study:

• To define, describe, and forecast the heat exchangers market based on type, application, and region
• To provide detailed information regarding key factors such as drivers, restraints, opportunities, and challenges influencing the growth of the heat exchangers market
• To strategically analyze micromarkets with respect to individual growth trends, growth prospects, and contribution to the heat exchangers market
• To analyze opportunities in the heat exchangers market for stakeholders and provide detailed information on the competitive landscape of the market
• To strategically profile key players operating in the heat exchangers market and comprehensively analyze their market shares and core competencies2

Note1: Micromarkets are the subsegments of the heat exchangers market included in the report
Note2: Core competencies of companies are determined in terms of their key developments, SWOT analysis, and key strategies adopted by them to sustain in the market

Both, top-down and bottom-up approaches were used to estimate and validate the size of the heat exchangers market and estimate the sizes of various other dependent submarkets. The research study involves the extensive use of secondary sources, directories, and databases such as D&B Hoovers, Bloomberg, Factiva, the Securities and Exchange Commission, American Society of Mechanical Engineers (ASME), Securities and Exchange Commission (SEC), and American National Standards Institute (ANSI), to identify and collect information useful for this technical, market-oriented, and commercial study of the heat exchangers market.

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Players operating in the heat exchangers market include Alfa Laval (Sweden), Kelvion Holdings (Germany), Danfoss (Denmark), Xylem (US), API Heat Transfer (US), Gunter (Germany), and Hindustan Dorr-Oliver (India)

Key Target Audience:

• Manufacturers of Heat Exchangers
• Traders, Distributors, and Suppliers of Heat Exchangers
• Regional Manufacturer Associations and General Heat Exchanger Associations Government & Regional Agencies and Research Organizations
• Investment Research Firms

“This study answers several questions for various leading players across the value chain of heat exchangers, primarily which market segments to focus on, in the next two to five years for prioritizing their efforts and investments.”

Scope of the Report:

This research report categorizes the heat exchangers market based on type, application, and region.

Heat Exchangers Market, by Type:

• Shell & Tube
• Plate & frame
• Air Cooled
• Others

Heat Exchangers Market, by Application:

• Chemical
• Petrochemical and Oil & Gas
• HVACR
• Food & Beverage
• Power Generation
• Paper & Pulp
• Others

Heat exchangers Market, by Region:

• North America
• APAC
• Europe
• Middle East & Africa
• South America

The heat exchangers market has been further analyzed based on key countries in each of these regions.

Available Customizations:

Along with the market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:

Regional Analysis:

• A country-level analysis of the heat exchangers market

Company Information:

• Detailed analysis and profiling of additional market players

Drivers

Surging energy prices

The surging prices of energy have resulted in increased demand for heat exchangers. The global demand for heat exchangers is expected to increase in the near future considering the vital role they play in the major industries, such as petrochemical, petroleum refining, and power. Heat exchangers are one of the most efficient options for saving energy. They help in reducing power costs by 20–40%, as they do not require electricity. Thus, the increasing focus on saving energy costs plays an important role in driving the demand for heat exchangers. The demand for energy-efficient equipment by energy-intensive consumers, such as chemical and pharmaceutical manufacturers, food & beverage processing plants, and the oil & gas and marine industries is also driving the heat exchangers market, globally.

Rapid industrial expansions in the developing markets of APAC

A major shift from the developed regions, such as Europe and North America, to developing economies of APAC, such as China and India, is witnessed in the heat exchangers market. The rapid industrialization in these developing countries and increasing investments in manufacturing, commercial, and industrial projects have contributed to the overall expansion of the heat exchangers market.

According to BP statistical review, in 2017, China’s nuclear power generation increased by 17%, while natural gas production increased by 8.5% to reach 149 bcm. Thus, the country plays an important role in driving the heat exchangers market in APAC. Rapid industrial expansions in India, Japan, and other countries are also increasing the demand for heat exchangers in the region, thereby driving the market.

Stringent environmental regulations

The Kyoto Protocol that came into effect in 2005 has increased the pressure on various industries to reduce energy usage and the associated carbon dioxide (CO2) emissions. Heat exchangers offer an environment-friendly cooling solution to these energy-intensive industries in comparison to other heating or cooling equipment. These exchangers do not use non-renewable fossil fuels, such as coal or natural gas, for heat transfer. They not only allow the heat to transfer safely and efficiently from engines and other mechanical items, but also conserve energy in some specific mechanical items.

Increase in HVACR deployments and growth in industrial activities

Moderate growth in the global commercial construction industry along with increasing modernization and urbanization in developing countries has fueled the demand for heat exchangers. The increase in HVACR deployments backed by the favorable government investments in the commercial construction industry has also propelled the demand for heat exchangers, which is expected to continue during the forecast period. Apart from this, the heat exchangers market is driven by rapid growth in power consumption from the industrial sector in developing countries, resulting in the growing adoption of energy saving equipment.

Technological advancements in the heat exchangers market

In the recent years, the heat exchangers market has witnessed significant advancements in technology owing to increasing demand for recovering valuable energy, reducing costs, and limiting environmental emissions. These developments include deployment of new and efficient heat exchangers, innovative heat transfer equipment, as well as the introduction of systems of heat exchangers in various industrial processes. In 2017, a key market player Kelvion developed AirToAir heat exchangers for the heat recovery and efficient use of energy. Moreover, in 2015, GEA launched 2H Massdek structured packings for improving the cost-effectiveness and performance of heat exchangers.

Restraint

Slow growth of the market in Europe and North America

The heat exchangers market in Europe and North America is mature and is witnessing a slow growth rate. Although these regions have a huge market size, the growth is expected to be slow, during the forecast period, in comparison to other regions. The slow growth rate in these regions is mainly attributed to the slow economic activity in these regions. The slow growth also results from higher energy costs and stringent environmental regulations.

Lack of awareness about energy efficiency in buildings

Lack of awareness about enhancing energy efficiency in buildings restricts the demand for HVAC insulation in many developing and underdeveloped countries. Many architects and engineers overlook building energy efficiency while designing a private or public infrastructure. Many misconceptions prevail among the consumers as well as building professionals about the costs and associated problems of low energy and insulated houses.

The heat exchangers market is projected to reach USD 22.59 billion by 2023 from USD 14.68 billion in 2018, at a CAGR of 9.0% from 2018 to 2023. The growth of manufacturing, chemical, and construction industries is driving the market for heat exchangers.

Shell & tube is the most widely used types of heat exchangers that accounted for the major share of the heat exchangers market in 2017. Shell & tube heat exchangers can manage fluids at high temperatures and pressures due to which they are preferred in a variety of applications such as chemical, petrochemical and oil & gas, food & beverage, and power generation.

Based on region, the heat exchangers market is segmented into Asia Pacific, North America, Europe, South America, and the Middle East & Africa. Currently, Europe is the largest market for heat exchangers. The region has huge installed plant capacities of heat exchangers. The heat exchangers market is also emerging in various countries such as China, India, Saudi Arabia, and Brazil due to increasing industrialization.

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The heat exchangers market is segmented on the basis of application into chemical, petrochemical and oil & gas, HVACR, food & beverage, power generation, pulp & paper, and others. Chemical was the largest application segment of the heat exchangers market in 2017, due to the increasing demand for heat exchangers from the chemical industries in China and the US. The HVACR segment is projected to be the fastest-growing application segment of the market between 2018 and 2023, in terms of value. This growth of this segment can be attributed to the rapidly growing construction industry and increased government investments in infrastructural projects.

Some of the key players operating in the heat exchangers market include Alfa Laval (Sweden), Kelvion Holdings (Germany), Danfoss (Denmark), Xylem (US), API Heat Transfer (US), Gunter (Germany), and Hindustan Dorr-Oliver (India).

Alfa Laval (Sweden) has extensive experience in the field of heat exchangers. The company focuses on taking investment risks to expand its production capacity and increase its market share. It is focusing immensely on research & development to launch new products & services. The company maintains a strong brand image in the heat exchangers market, as it provides high-quality products. In 2017, the company signed 7 contracts to supply heat exchangers for various applications, in chemical and petrochemical and oil & gas across different regions.

Opportunities

Growing demand for nuclear power generation

A heat exchanger is an essential component of a nuclear reactor. The performance of a heat exchanger has a significant impact on the overall efficiency and power output of a nuclear power plant.

About 11% of the world’s electricity is derived from nuclear power, and its capacity is increasing gradually. A significant capacity is being further created by the upgrading of plants. There were about 450 nuclear power reactors in operation and over 60 reactors under construction equivalent to 16% of existing capacity, globally, in 2017. The increasing use of heat exchangers in nuclear reactors, upgrading of existing nuclear plants, and proposed nuclear power plant projects are expected to create new growth opportunities for the heat exchangers market during the forecast period.

Large aftermarket for heat exchangers

Heat exchanger is a critical component of any process industry, and its performance and longevity have a direct impact not only on the capital cost but also on operating costs. Breakdown maintenance and repair are always expensive. Thus, the regular maintenance of heat exchangers is crucial, the cost of which can be relatively lower in comparison to rotating equipment, such as pumps and compressors. The maintenance of heat exchangers is important to ensure continuous production and system uptime, and to avoid sudden failures.

This creates a huge aftermarket for the manufacturers of heat exchangers, wherein they can sell spare parts, such as gaskets, seals, and other components and also take service contracts for cleaning and maintenance of heat exchangers.

Challenges

Fluorinated greenhouse gas regulations

The regulations set on the use of fluorinated gases (F-gases) act as a challenge to the growth of the heat exchangers market. These regulations restrict the use of heat exchangers as evaporators and condensers in chillers. In 2015, the European Union (EU) suggested important changes in the regulations to control emissions from F-gases, including hydrofluorocarbons (HFCs). According to these changes, the EU has adopted two legislative acts, namely, the MAC Directive on air conditioning systems used in small motor vehicles and the F-gas Regulation that cover all other key applications in which F-gases are used.

According to EU regulations, while HFCs are banned in some applications, HFC refrigerants will be allowed only if the system concerned satisfy the Eco-Design criteria. Similar changes are being debated in the US (SNAP - Significant New Alternative Policy) and China.

Competitive Landscape

Expansions, 2015–2018

Date	Approach	Company Name	Description
January 2015	Expansion		Alfa Laval (US) and Tranter, a group of companies within the Alfa Laval Group, consolidated its European manufacturing plant of welded heat exchangers to the existing manufacturing site in Schopfheim, Germany. This initiative was taken to remain competitive in the heat exchangers market.
May 2015	Expansion		Kelvion opened a new R&D laboratory in the UK, to help the company develop innovative solutions for the heat exchangers market.

Source: Company Website

Acquisitions, 2015-2018

Date	Approach	Company Name	Description
July 2018	Acquisition	Godrej & Boyce and SPX Corporation	Godrej & Boyce acquired two brands of heat exchangers, namely Yuba and Ecolaire, from SPX Corporation to become the leader in the heat exchangers business.
August 2016	Acquisition	Danfoss	Danfoss acquired Sondex Holding A/S, a global company headquartered in Denmark. This strategy helped the company improve its product offering in heat transfer.

Source: Company Website

New Product Launches, 2015–2018

Date	Product Name	Company Name	Description
November 2017	NF 100M	Kelvion	Kelvion developed new heat exchanger plates “NF100M” for viscous and particles containing mediums for various industries such as food & beverage, petrochemical, and pulp & paper.
August 2017	NF 150L	Kelvion	Kelvion developed new heat exchanger plates “NF150L” for viscous and particles containing mediums. This NW model has a wider plate gap, which allows efficient heat transfer.

Source: Company Website

Contract and Agreements

Date	Approach	Company Name	Description
June 2018	Contract	Alfa Laval	Alfa Laval (US) signed a contract worth USD 6.2 million (SEK 55.0 million) to supply Alfa Laval welded and gasketed heat exchangers to an ethylene glycol plant in the Middle East.
June 2018	Contract	Alfa Laval	Alfa Laval (US) signed a contract worth USD 13.7 million (SEK 120.0 million) to supply Alfa Laval OLMI heat exchangers to a petrochemical plant in China.

Source: Company Website

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