Heat exchangers: Market hot spot

London — Heat exchanger manufacturers are currently enjoying buoyant global demand, but also face challenges concerning materials supply, flat domestic markets and customer maintenance issues, believes Alan Ashton, sales director process, contractor and UK sales department at Tranter PHE AB.

“The problem in the plate heat exchanger (PHE) industry is keeping up with demand. We all have full order books,” Ashton told PE. The Stockport-based executive went on to highlight sourcing of raw materials, particularly titanium, as a key challenge for Tranter and other manufacturers.

Titanium is widely used for its corrosion resistance in heat exchangers. According to Ashton, difficulty in getting hold of the metal means “anyone looking to buy large numbers of titanium heat exchangers should plan at least two years in advance.” He added that Tranter has “very limited capacity for significant projects in 2007.”

Among heat exchanger makers, the severity of this issue depends on the relationship with titanium suppliers, continued Ashton. Tranter, he said, is probably the second largest buyer of the metal mainly through its marine business, while Alfa Laval — which acquired Tranter earlier this year — has the biggest allocation.

Meanwhile, much of the growth in the heat exchanger market is being driven by major projects in Asia and the Middle East, said Ashton, who cited a recent $5.5-million contract for Tranter in the Far East, which is scheduled for delivery in June 2007.

“Europe is not a massive growth area in terms of new plant but people are still buying as well as carrying out renewal and upgrade work,” said the Tranter executive. However, he added, that the company is targeting the oil & gas and renewable fuels sectors as a big growth areas in Europe.

Tranter is among a small band of players with market shares around 10% in Europe. These companies, said Ashton, are jostling for position in a market, which is dominated by Alfa Laval with as much as 50% of sales in the region.

With regard to Tranter’s new ownership, Ashton said Tranter has retained its independence within Alfa Laval, in line with the Swedish group’s strategy of operating different brands under a single umbrella. “We can’t hide the fact that we have been taken over by Alfa Laval but we don’t emphasise it,” he commented.

According to the executive, “there is certainly no interference” by Alfa Laval in the running of Tranter. For example, he said, “the market might wrongly get the idea that we now get together to arrange prices. But there is no contact regarding sales.”

Ashton believes Alfa Laval has every incentive to stick with this strategy, not least because of Tranter’s “outstanding” results. For example, he said, turnover has jumped from $80 million a few years ago to $150 million projected for 2006 and “much nearer to $200 million” expected in 2007.

In terms of technology, Ashton says that all-welded plate heat exchangers represent the key growth area today. He said, Tranter expects its sales of welded systems to reach 20% of turnover in the next two to three years — up from around 10-15% at present. This expansion will happen alongside growth in PHE, Ashton emphasising “there is no plateau in the PHE market.”

The big selling point for all-welded PHE is their pressure and temperature application range —from 70-100 bar and 250-350°C, compared to 25 bar and 160°C for plate and gasket systems. Against this, welded units are intrinsically more difficult to clean than shell and plate designs and so require greater attention to maintenance.

“When you buy an all-welded unit you can’t open it up and have to consider which filtration unit and chemical cleaning system to use,” said Ashton. “You get much better results if you clean-in-place once a month, rather than allowing it to run until it fouls up once a year.”

Indeed, continued the Tranter director, “for the vast majority of heat exchangers the ability is there to clean them, but most people leave it for three years until they are fouled up. In general, PHEs are quite small, they get installed and people forget about them until they don’t work any more.”

According to Ashton, Tranter is continually encouraging customers to introduce planned maintenance regimes: “A few customers are very keen on it but we would like there to be much more. Planned maintenance is all-important and it helps us if everyone goes down that route.”