Refrigeration: It's all about efficiency and insulation

The global refrigeration and insulation panel markets are driven by two main factors production economics and insulation values.

Simon Robinson spoke to a number of machinery suppliers to assess their views on these markets.

Energy efficiency and production efficiency have been two of the big drivers in the domestic refrigeration market according to machinery suppliers surveyed by Urethanes Technology International over the summer.

In geographical terms, the markets for refrigeration appliances -- such as domestic or commercial refrigerators -- and the market for insulating board machinery are quite different. By looking at the machinery trends in these areas it is possible to get a good idea of what the manufacturers are doing.

Rolf Trippler, Hennecke managing director said “it is hard to detect a market for domestic refrigeration that is growing really strongly.” “Looking at projects, NAFTA is the strongest market this year,” Trippler said. However he said for Hennecke this was because of “a few high volume projects."

Hennecke is finding that the market for refrigeration “in Asia in general and China in particular are very quiet at the moment,” Trippler added.

He continued: “Our information from the Chinese market [is that], all appliance companies are suffering.”

“Latin America is very difficult for international companies supplying machinery to the domestic refrigeration makers,” Trippler said.

In terms of insulated panels Trippler said: “Europe is the driver for technical developments and quality. The big market leaders want to invest in different locations.”

Trippler added “ The Asian market is growing, but handicapped a little by local regulations of fire protection.”

Nicolas Beyl, president of the reaction process machinery segment at KraussMaffei, reflects Trippler’s view of the appliance market.

It is “a little bit soft at the moment if you look at it from a global perspective,” he said. “But,” Beyl added, “There are some areas of good growth and good development.”

Perhaps surprisingly, as we will see, later Beyl sees Latin America as a strong market.

Ranking the markets

Ranking the different markets for appliances Beyl said: “First of all South America, the largest market in South America is Brazil. Second the NAFTA region is doing well, and Mexico of course. And then third is China.”

His views are echoed by Steven Hoong, deputy general manager at Singapore-based RIM Polymers. ”Appliances and Insulation sectors are growing in North America and Asian countries,” Hoong said.

Eraldo Greco, commercial director OMS Impianti said: “UK market is working very well and our distributor Shane Wootton of CTM UK is doing a good job”

Greco , said: “We have a couple of interesting orders in the commercial refrigerator sector, with companies such as Williams Refrigeration in Kings Lynn, both projects will be delivered by the end of the year.”

Francesco Abba, sales and marketing manager at Cannon Afros, agreed with OMS’Greco. He said: ”We see a general growth of the business, but the most promising area is North America; Europe is following –– that’s being led by Germany and the UK. We also see a recovery in the Italian market.”

Abba continued “We received orders in Italy In the first half of 2015 which were about five times the level of 2014. It’s a sign that people are starting to invest again, and at least they have some optimism for the future.”

However, Abba and Greco  have different views on the Russian market for insulation

Abba said: “Russia is completely shut down. We were used to selling some machinery worth several million Euros in Russia in the past and this year it is almost down to zero.”

He continued: “The European Union sanctions are making Russia more self-reliant. They are trying to use their own sources.”

A Russian conundrum

But Russia does offer some sales to other machinery players in the insulated panel market. Greco of OMS Impianti said his firm has won two turnkey projects in high speed lamination of insulated rigid boards sector inRussia.”

Greco, said that the first one, for Pirro Group located in “Saratov on the Volga river in south of Moscow, was officially opened ceremony in December 2014, with the presence of important local authorities and TV local channel”.

Speaking in late July, Greco, said: “Right now, we are assembling the second big plant in Ryazan Russia, for Tekhnoizolyatsiya, part of Technonicol Group, and we plan to be ready to start up the line by the end of the year.”

“Technonicol is a broad-based insulation company,” Greco added with a strong presence also in bitumen membrane, EPS & XPS and in mineral wool as well. This investment moved the company into polyurethane insulation products too.”

Russia is one of the key areas for OMS in the future, Greco said: “We have an aggressive business plan to expand more in Russia and the CIS,” he said.

North America

Across the Atlantic, OMS is currently starting up a high speed lamination line for the Soprema Group in Quebec Canada;

This is a “turnkey project for OMS together with OMS Automation our division in charge of design and manufacture of the cutting-profiling-stacking and packing lines for the PIR boards,” said Greco .

Greco, continued: “There are still decisions to buy foaming lines Europe, but they are slower to reach.”

“Companies are looking to see where they will happen,” Greco said. “National markets are behaving differently.  The UK seems to be recovering from the slowdown,” he added.

The importance of China 

Cannon’s Abba said: “China is still growing, but not as quickly as in the past. “It was double digits but in the past year it was 7.5%.”

He continued: “I guess that this year, with the recent problems of the Chinese stock market -- which was down considerably over the summer -- this may have an effect on the business. I believe there may be stop on some of the investments,” said Abba.

Abba added “For us China is very important, it has been the most important export market in the past few years.

KraussMaffei’s Beyl sums up the change in the Chinese market for white goods such as fridges and freezers: “Three years ago there was a real boom in white appliances. You really saw the output numbers going up very steeply every year; over the last three years, the market has consolidated. But given the sheer size of the market, it is still very good”

“The plants built to handle complexity are not necessarily bigger than before but they are structured to cope with variations in demand more efficiently,”

Nicolas Beyl,  KraussMaffei.

Beyl said he feels the consolidation of the Chinese market has two causes: “People saw that the market was growing and there was heavy investment, maybe there was some over-investment.”

Beyl reinforced Abba’s message: “The other dimension is that the 10% annual GDP growth has slowed. Now, we are only seeing 7% or 8% growth in China.”

“Despite the economy contracting to 7% growth, it still takes the lead compared to European countries,” said RIM Polymer’s Hoong.

He added that in the face of challenging market conditions in China ”many appliance and insulation companies are restructuring internally to reduce their expenses and improve their operation cost efficiency,” Hoong said.

While there are structural changes in China, there are also product shifts to contend with in the domestic appliance sector, Beyl of KraussMaffei added.

“The Chinese market is looking towards more upmarket products. There is still a huge volume of basic refrigerators being produced and there’s already capacity installed. But now households in China are becoming wealthier and having a big refrigerator can be a status symbol in some areas of China. This is reflected in our sales,” Beyl added.

Product changes

Gabriele Amodeo, head of the center of excellence for reaction process machinery at KraussMaffei Italiana, explained in greater detail that while the size of plants being installed in China was stable, ”there are two completely different tendencies.”

“One is to have a mass production plants with very short cycle times of around 12 to 15 seconds where the cure time is the same for all models in production,” Amodeo said.

“The other,” he said “is to produce different types of refrigerator in terms of cure times and sizes. This can mean a cure time from 2 minutes to 12 minutes with a flexible plant.”

Amodeo continued: “The demand for flexibility is greater in the commercial refrigerator market. There is a similar but lower level of demand in the domestic refrigerator market,” he added.

KraussMaffei’s Beyl added: “If you go to a white appliance shop today to look for a domestic refrigerator, you will see a wide array of products. The producers are confronted with this wide range of demand and they need to be able to cope with that complexity of products. So they need highly flexible production equipment.”

A key selling point for machinery makers in this market is change over time, said KraussMaffei’s Amodeo: “With flexible plants, to minimise the amount of time for model change you need automation in mould change. You can also take one fixture out of production, exchange the mould and put it into production without any interruption of the production process. (See box below)

“The plants built to handle complexity are not necessarily bigger than before but they are structured to cope with variations in demand more efficiently,” KraussMaffei’s Beyl added.

Hennecke’s Trippler is slightly sceptical about whether increased automation is here to stay: “One demand which came from the market was the necessity of automatic mould change systems. At the moment it is too early to judge if it is a long-term trend or short-term fashion,” he said.

Beyl said: “There is a tendency to produce bigger refrigerators in China and also South America

Slower growth regions

Amodeo of KraussMaffei said: “The situation in Latin America is mixed, there is a market for small refrigerators and side-by-side refrigerators.”

But,” he added, “small fridges are not particularly small in comparison to other countries.”

Amodeo added: “There are almost no table-top models produced in Latin America, nevertheless all other small size refrigerators are present. The working range of the plants requested in Latin America reflects this kind of market; they can cover small to the largest size for domestic refrigerators.”

“National markets are behaving differently, he said, the UK seems to be recovering from the slowdown,”

Eraldo Greco, commercial director OMS Impianti.

Cannon’s Abba agreed that the Latin American markets are harder and mixed in their demands. Taking Brazil as an example he said, speaking in the summer, doing business there is difficult for international machinery players.

“Brazil has a recession. They have also devalued the currency and have import taxes which can be almost 40%. Therefore,” he concluded, ”the import capability of the country has been reduced.”

“Internal competition comes from some small producers… Their prices are so low compared to international machinery makers, due to the import duties,” Abba said.

Growth Drivers

While fashion in refrigerators helps to drive innovation and sales in that sector of the rigid foam market, the other driver in both refrigeration and rigid boards is improved environmental performance.

Improved environmental performance covers less resource-intensive production; more efficient operation of refrigeration and greater insulation performance in the rigid board sector.

Hennecke’s Trippler said: “The only reason for investments over the last few months is the change of refrigerator models.”

Trippler said that this means fridge makers are including more “French door and multi-door models. This drives of new investment.

Hoong of RIM Machinery said that in Asia, market change is being driven by environmental demands of by the Montreal Protocol.

These requirements are seeing international aid helping panel and refrigeration makers in some Asian countries replace 141-b blowing agent with pentane systems.

In Asian countries, Hoong adds, while they are doing that “some companies take the opportunity to bring in new production lines in order to expand their markets.”

Abba at Cannon sees the position simply. He said: “Growth is being driven by energy-saving, which is closely linked the installation aspect on one side and the CO2 equivalent emission reduction.

“The less we spend to heat or cool down buildings, the less CO2 we will emit. This is very important not only economically, but also environmentally,” Abba said.

According to Abba Cannon approaches energy saving in a number of ways such as improving isolation processes and customer efficiencies as well as production efficiency.

Abba  said his firm’s vacuum-assisted mould filling concept can help with both sides of the equation. “This is used to produce top-class refrigerators, A 4+ class with vacuum technology. This gives better cavity filling; low materials consumption; better insulation; and far higher efficiency in terms of production, he said.

“Today we are not only working on refrigerators but also on panel side of the business,” he concluded.

Blowing in the wind

Another variable which can alter the efficiency of polyurethane insulation is the blowing agents chosen by appliance and insulated board makers.

Piero Corradi of Cannon explains: “We have two pictures and they are both quite different, one for panels and one for refrigerators.”

Taking panels first, Corradi said all the blowing agents like methyl formate, formic acid, n-pentane and water blown formulations can be used.

“In this case, at the end, after the regulations, the price is the driver,” Corradi said. “So,” he continued, “fluorinated blowing agents or the fourth-generation HFOs are not used because of their price. The situation is still open on panels.”

Corradi added: “The situation with domestic refrigerators is very much more defined. “More or less, everybody will use a blend of pentane or cyclopentane and HFO’s,” he explains.

There are good technical and cost reasons for using a blend, Corradi explains: “A 50-50 blend of pentane and HFO gives a lambda close to 100% HFO but with a cost reduction. The price of Cyclopentane is approximately 10% of that of HFO.”

 “Many refrigerator makers have pentane in the factory already, so they only need to make a small investment for the HFO pre-blending phase,"

Piero Corradi, Cannon

Corradi said: “Many refrigerator makers have pentane in the factory already, so they only need to make a small investment for the HFO pre-blending phase and they can be state-of-the-art on PU foam insulation technology.

Using a pentane-HFO blend has performance advantages over the lifetime of finished refrigerators, Corradi said. “The difference between the lambda of fresh and aged foam can be marked. With Pentane alone we have some diffusion of the Pentane gas through the cells to be replaced by air. So insulation class drops with time. After one month we see a 10% difference at least.

“This can almost be stopped with HFO’s. These are bigger molecules: the diffusion effect is very, very small,” Corradi added.

According to Corradi, this leads to an improvement in the insulation values of older rigid foams blown with HFO/pentane mixtures, he said.

A blending approach looks sensible on other grounds, the respondents seem to be saying.

Trippler at Hennecke puts the generally slow penetration of HFOs in to the rigid foam market down to several reasons. “HFO is significantly higher in price than pentane and on top of that the content of HFO in polyol must be higher compared to pentane,” he said.

He continued: “One more reason, beside the price, is that foams blown with HFO must normally be poured into closed moulds. For cabinet foaming that’s not a problem, but it is for door foaming.”

He added that if 100% HFO formulations were to be used for door foaming “all companies that use pentane for door foaming today would need to change their equipment.

Board now

In the insulated board sector, building regulations, with stricter requirements on the flammability of insulation materials, have seen an increase in interest in polyisocyanurate panels.

RIM Machinery’s Hoong explains: “Some countries have strict regulations when comes to building panels. Isocyanurate is the way to meet the safety class requirements.

Cannon’s Abba said: “the only advantage of isocyanurate formulations is fire resistance so the driver for this growth is the fire resistance of the foams.

However, PIR foams process differently to rigid polyurethane materials, interviewees said.

Amodeo at KraussMaffei said: “There is increasing demand for isocyanurate foams in panel production. Customers are asking for production systems which started off with closed pour and moved to an open pour with isocyanurates.

He explained that “An open pour system allows for better distribution of the isocyanurate foam in the mould. The flowability of isocyanurate foams is not as good as in isocyanate foams, therefore you need open pour."

Cannon’s Corradi suggests his firm’s vacuum technology could be helpful to counteract the greater viscosity of PIR formulations. It could “reduce pressure on the cavity we have to fill, helping to open the process window.

Corradi continued: “This gives is more freedom on chemical formulations.”

KraussMaffei’s Amodeo adds that: “In the past, 5% to 10% of the market for discontinuous panels was interested in isocyanurate foams because of their flame retarding feature. Now this foam is becoming more important because it has better insulation properties. As a matter of fact, current demand for isocyanurate foams in the sector peak to about 40% to 50% of new requests.”

The increasing penetration of PIR into the rigid board market will mean that rigid board machinery will have to become more sophisticated said Trippler: All new equipment must handle both.

The changing face of refrigerator manufacture

The world of fridge manufacturing is increasingly complex and driven by the need for increased production efficiency.

Maurizio Corti of Cannon said that for insulation foam flow laminarity is very important. For fridges, demoulding time is increasingly important. Turning to refrigerators first, he said “Typically five years ago the de-moulding time was four minutes or more. Now the target is 100 seconds.”

Corti continued: “In production terms that means we’ve gone from a typical five minute cycle time down, to about 180 seconds today in updated production plants.

Cycles are likely to get shorter in the future Corti said: “We are testing de-moulding times of 100 seconds” for fridges. In discontinuous panels, Corti said “We see the same trend, we are going to half the demoulding time.”

He explained that not all of this time saving flows through to the bottom line, because the other steps of the process stay the same in practice “efficiency has is be increased by 30 to 35%.”