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The Nordic DNA is Flourishing in the Chinese Market

Over the past three decades, the international company SWEP has built up the fundamentals needed to advance itself in the globalization process. With its roots in Northern Europe and boasting over 900 employees across the globe, the company has gained a foothold in the heat exchange industry in China, but its target has been set far beyond that.

Mr. Ong Chin Shuan, General Manager of SWEP APAC

With Beijing, Tianjin and Hebei having been ordered to reduce their dependence on coal, the Chinese air-source heat pump (ASHP) industry has witnessed a significant boom in 2016. Benefitting from the policy, the manufacturing of air-source heat pumps is on the increase, and the industry’s upstream supply chain is wasting no time or effort in mapping out its strategies and waiting for the most crucial moment.

SWEP, a leading global supplier of Brazed Plate Heat Exchangers (BPHEs), is among the upstream supply chain. Founded in Sweden in 1983, the company has been focusing on the development and manufacturing of BPHEs for more than 30 years. The company wants to offer products with superior performance at a price that brings substantial value to its customers. Thanks to close communication, shared expertise and cooperation in development, SWEP, with manufacturing facilities spread across six countries and regions, and sales representatives found in over fifty countries and regions, can now bring more efficient service to its customers, wherever they are around the world. The company is in a good position to provide each of its customers with accurate and optimal offers in the field of heat exchange. This has helped SWEP earn the trust from a number of leading heating and cooling equipment manufacturers around the globe.

With China as the core engine for growing the business in the APAC region, SWEP has opened a manufacturing facility and central warehouse in the Suzhou Industrial Park located in the Yangtze River Delta. Seizing the opportunity brought forth by the recent coal-to-electricity policy, which is intended to pull the nation away from its dependence on coal, the company is ready to launch its leading global solutions in the air-source heat pump industry and allow them to be adopted by its customers.

 CHALLENGE EFFICIENCY in Heat Exchange Solutions

Mr. Pär Björkman, Segment Manager at SWEP

With the adoption of products such as air conditioners and water heaters in the 21st century, plate heat exchangers have become increasingly popular. However, in the context of intense market competition alongside the homogeneity of the products, SWEP, as an industry leader, has not been trapped in the aggressive price competition. Rather, the company maintains its product quality through continuous investment in R&D and optimization of its products, and it leads the development of China’s heat exchanger market as an expert on heat exchanger solutions.

In Europe, SWEP’s largest market in terms of both sales volume and installed units, the company has been an undisputed market leader despite fierce competition. According to Frost & Sullivan’s authoritative report, the company secured a 40% share in the European BPHE market in 2010, and, in addition, SWEP’s wall-mounted boilers have seen a staggering 70% share in that market.

Heat exchange performance is the foremost core indicator of a heat exchanger, and immediately differentiates great technologies from bad ones. The overall design and the compatibility of materials used have a direct bearing on performance. It is in the internal design that the biggest difference between SWEP’s products and those of its competitors can be found. Externally, heat exchangers from different brands are similar, but internally, from the distribution of various refrigerants to plate pattern adaptation, SWEP demonstrates its proven expertise and commitment to quality that lead to outstanding heat exchange rates. According to Ms. Ellen Feng, SWEP’s Sales Team Leader (South & West of China), SWEP has invested heavily in the improvement of the annual heat exchange rate. The development process of a high quality heat exchanger starts with R&D and innovation activities at both SWEP’s head office and SWEP China, taking into account different applications and market demands. This is followed by computer simulations along with several repeated rounds of prototyping, testing and improvement, eventually leading to the creation of products that can be put on the market. Its persistence in technology and quality contrib-utes to the trust of the global market in SWEP’s products.

The sustained focus on a single field not only allows SWEP to hone up its expertise, but claims a strong identity within the industry. “In my view, SWEP is an expert in heat exchanger solutions,” said Mr. Pär Björkman, the Segment Manager at SWEP who repeatedly highlighted the company’s technical DNA and soft power during his interview with Heat Pump Industry News, “but this not only represents the product itself. To make it better and even the best, our supporting software and service offers are key to success. SWEP’s BPHEs are applied in many known segments, including heat pumps, wall-mounted boilers, air conditioners and coolers, but there still are numerous unknown fields that SWEP needs to explore. We will therefore continue our research at a technical level and accumulate further know-how of heat exchange technology. SWEP has been positioning itself as an expert in heat exchange solutions.”

Mr. Ong Chin Shuan (left), General Manager of SWEP APAC, and Mr. Pär Björkman (right), Segment Manager at SWEP

Opportunities in the “Coal-to-Electricity” Policy

When Beijing announced the results for its bidding of “coal-to-electricity” projects throughout its thirteen districts and counties, 72 companies from the air-source heat pump industry offered to assist local governments with installation projects benefiting some 150,000 households across 463 villages. The policy provided room for the entire heat pump industry chain, from upstream to downstream, to play an active role in the distribution, shipment and installation process, with the goal of achieving the highest market capacity.

Environmental concerns have been a universal focus of attention for some time. People have hopes of improving their living environment through initiatives such as the transformation from coal-based to clean energy, and SWEP clearly endorses the new “coal-to-electricity” project. “Coal-fired heating is one of the major sources accountable for the smoggy weather in Northern China, so heating with clean energy has obvious advantages. Initially deployed in Beijing, it is possible that the ‘coal-to-electricity’ project will eventually cover the whole of Northern China in the future. Meanwhile, people in Southern China have also been paying great attention to heating in recent years, as their demands for indoor heating have been on the increase. Heat pump products will therefore be found in various applications in the field of heating throughout a wide range of regions in the future.”

With such a prosperous market situation for the heat pump industry, SWEP, a professional brand with vast experience of heat exchanger technology, will surely not miss this precious opportunity for development. In 2016, the supply demand of the “coal-to-electricity” project reached a significantly high level. Such time-pressing and task-heavy projects pose a great test to governments, companies and the market alike. Projects are to be finished by the end of October, and all installation work needs to be completed by the middle of November at the very latest. This includes such tasks as personnel deployment, product supply and installation according to the “one household/one design” policy. To meet this major challenge, SWEP has offered a simple answer: increased investment in hardware, reasonable transfer of global capacities and warehouse facilities, timely commu-nication with customers and a maintained buffer inventory.

According to Mr. Ong Chin Shuan, General Manager of SWEP APAC, the Chinese market has been one of SWEP’s strategic priorities, helping the company with its growth in the APAC region in combination with the current “coal-to-electricity” project. Such a large project sets great challenges for a company’s overall operation capacity with regards to how it can better serve existing projects and customers, identify and develop other customers and provide customers with timely and effective support. With the Suzhou plant as an example, SWEP has adopted the advanced production process of automatic punching, together with a comprehensive production management system, material tracking and product quality control. For finished products, SWEP conducts a 100% helium check and can provide dedicated stocking or urgent transportation from other manufacturing facili-ties around the world to respond flexibly to customers’ delivery requirements. The company also offers a wide range of solutions to its customers, including anti-freezing measures for plate heat exchangers, with the inten-tion of optimizing product applications and helping them solve problems during supply and in-stallation.

“The difference between us and domestic heat exchanger manufacturers is that what they focus on may be low prices and availability, while SWEP wants not only to deliver the products our customers need, but also to provide professional technical support and globalized services, which is more important. What we do today concerns ‘coal-to-electricity’ or heat pump heating, but in the future, there will definitely be many new and unexplored fields that we will need to engage in,” said Ms. Ellen Feng, sharing her insights from a market perspective.

Ms. Ellen Feng, SWEP’s Sales Team Leader (South & West of China), in an inter-view with Heat Pump Industry News

Quality to Win the Market

It is common knowledge that the East and West differ geographically. In China, the greatest challenge plate heat exchangers have to face is water quality, above all in Northern China, where heating is an absolute necessity. Fully aware of this, SWEP ensures that timely communication minimizes the influence of water quality on heat exchanger equipment. When discussing with customers, the company recommends that they install a filter in the system to avoid blocking of the passage as a result of scaling and fouling. SWEP also recommends a certain amount of water treatment, such as cleaning pipelines prior to installation. Scaling is related to temperature, with calcium and magnesium ions being more prone to scaling above 60°C. The water temperature of SWEP’s products, however, is 40-45°C during standard consumption, markedly lower than the scaling temperature and thereby reducing the negative impact on water quality.

As far as China is concerned, not only does it have a different climate, but the country is also materially different when it comes to supply, demand and competition. Since SWEP is a foreign-funded company with a larger production scale, its products are priced slightly on the higher end of the spectrum.

“SWEP chooses to partner up with customers with a focus on product quality and technological development, and the same goes for its customers,” said Mr. Ong Chin Shuan. “Despite SWEP not being the less expensive option, there are companies that maintain a keen interest in SWEP. With all the leading heat pump busi-nesses that have chosen SWEP, it is clear that the reason we are selected and recognized is not due to our product prices.”

This is an era in which quality is highly valued. It has been proven over time that the brands that survive in the market are those that offer the highest quality products and professional service. In the past few years since SWEP entered the Chinese market, the company’s products have proven to be qualified to serve the domestic market, and in 2008, their listing as Copeland product samples was yet another statement of the superiority of the SWEP heat exchange equipment. In the meantime, the company has been active in the establishment of a large customer base, and it has certainly gained good standing with them. With the knowledge that successful communication is required between the company and the customer, and that a good reputation needs to pass by word of mouth, SWEP has been striving to transfer the technical advantage of its products and equipment to its customers by working openly and directly with them through its sales channels in China. The company also assists customers in addressing what they need through its product advantages, building a good customer rela-tionship chain step by step. SWEP’s achievements have demonstrated its clear success in earning the trust of the Chinese market.

Today, SWEP’s BPHEs can be found in a variety of applications in numerous fields within China, meaning that the company has found firm footing in the nation’s heat exchange market. Still, SWEP aims to do more than what is has accomplished in the Chinese market so far. “What an outstanding brand should do is lead the whole industry instead of care about its market share in the industry,” Ms. Feng said. “If the market were to dwindle, each player’s share would be reduced. If everyone is directed to develop the industry, then we will all see considerable improvements in our sales performance.” That is why SWEP will deliver products to its customers and better optimize product design in the future, aiming to expand its products to cover more applications. SWEP will also continue to keep the idea of forward-looking and sustainable corporate development and move ahead together with its partners as an efficiency expert in the heating industry.