Interview with Hannu Wahlroos, Head of Luvata’s ECO Heatcraft Division

Hannu Wahlroos has an MSc in Metallurgy from the Tampere University of Technology (Finland) and has spent his entire career working for Luvata and Outokumpu. He therefore has a unique insight into Luvata culture across many different divisions and different regions. He has worked in research, quality, production, engineering, product management, and sales and as a general manager of Outokumpu Pori tube mill. He moved to China to manage a newly established tube mill in Zhongshan in October 1997. After ramping up the tube mill in China he has been leading the whole of the Heat Transfer Division since the year 2000. 

1- What’s the importance of the HVACR market for Luvata (sales, product innovations, market share,…)?

Luvata is a world-leader in metal fabrication, component manufacturing and related engineering and design services. Luvata is serving several important industries like energy, telecommunication, data center, medical and heating, ventilation, air conditioning and refrigeration industries (HVACR). About 50% of Luvata business is related to HVACR. Luvata is the global leader in coils and coolers as well as copper heat transfer tubes (ACR tubes) for this industry and as such represent a core business of Luvata group. Luvata’s strategy is to partner with its customers to help them improve their products, their efficiency and have impact on capital tied in to the business.  In short, HVACR market holds a primary position, as per strategic importance and business size to Luvata group.

Strategically, HVACR is a market in which – given the always increasing challenges in terms of performances, energy saving demands and restrictive regulations aimed at the safeguard of environment – Luvata has the opportunity to further grow and improve its position, thanks to its customer focused and solution driven approach and policies, that have always been oriented to the optimisation of  technologies, processes and product design, to meet the highest market expectations and customers demand.

From the size point of view, it easy to say: the new born Luvata’s ECO Heatcraft division is the biggest inside the Luvata Group, with further plans of expansion in the emerging countries.  And do not forget that in addition to this, HVACR in Luvata means also copper tubes, a sector in which the company can boast a high reputation and a long and successful history. This also means that our skills, know how and expertise cover the whole business, from the raw material to the finished product, from the supply of optimised components to the most advanced product design solutions.

Innovation is a key factor of success: with regards to HVACR coils and coolers, we concentrate on developing new generation products, which offer the highest efficiency with environmentally friendly solutions (i.e. research on new refrigerants including CO2, tube and fins turbulence effect optimisation etc).

2- How has the company’s heat transfer division evolved?

Luvata group (former Outokumpu Copper Group) has been a leader and the innovator in the global copper heat transfer tubes for HVACR industry since many years and in the year 2002 Luvata acquired Heatcraft coil business from Lennox, one of the leaders in HVACR OEM products in the USA.  Heatcraft business consisted of coil operations in the USA, Mexico and Europe. The main market for Luvata coil business was USA where Luvata is the market leader.  Luvata developed this business and expanded the operation in China in 2004. (Luvata has been manufacturing copper HVACR tubes in China since 1995). By entering to acquire ECO, Luvata strengthened its global leadership in this business and will handle also the coolers in order to meet the requirements of the refrigeration, high tech, conditioning and industrial sectors.

As already mentioned, the main fact in the heat transfer division is the recent acquisition of the ECO Group; the integration process is still ongoing, but the positive effects of this fundamental step are already clear and visible. It consents to create strong synergies inside the division and within the whole group; in addition to that, it stimulates our competitiveness, thanks to the sharing of best practices and the mutual exchange of know how.

3- Why did Luvata decide to acquire the Eco Group?

The reasons are many, as actions of this size have strong impacts on organisation, financials and strategy. First consideration, is that the acquisition of ECO makes a lot of sense in Luvata’s heat transfer business both financially and industrially: ECO is fully complementary to Heatcraft in terms of geographic presence (Europe vs NA), but absolutely compatible in terms of products, production and growth strategies. From the sales perspective, it moreover completes our global market coverage. Also the 2 business visions – despite possible misalignments due to different company cultures and background – are highly compatible and complementary. Furthermore, the acquisition allows Luvata to enter the coolers market and to expand it worldwide. ECO is a successful group that can and will strongly contribute to Luvata's strategy and mission - partnership beyond metals.

4- What is expected of ECO Heatcraft division? What are its main goals?

As said above, the merger of ECO to Luvata’s coil operations carry high degree of industrial sense and aims to create a global heat transfer company that can serve its global customer base locally wherever they may move.  We can better anticipate technology changes and drive new solutions to the industry and contribute to the development of this important industry.

Our target? Ambitious, of course: we aim at becoming the leaders in the heat exchangers market in terms of market shares and technology and at being rewarded as the most important and reliable partner in the sector worldwide. Not a simple supplier: a solutions provider who can be challenged with most complicated heat transfer problems, able to realize products to be fitted directly in their machines.

5- Who are the division’s main clients and competitors?

The company is active in a variety of markets (geographically and in terms of market segments) and operates consistently with them, whether they are global, regional or local. Despite of this, some of the clients’ names are recurrent and quite renown in the sector, as they belong to some of the major players worldwide. Just to mention a few (but surely not all) Carrier, Ingersoll Rand, Bergstrom, Johnson Control, Caterpillar, LG, Emerson, Lennox, Danfoss, Copeland, Delphi, De'Longhi, Frigoglass, Tecumseh, Maersk, Wartsila, FWG, and many, many others.

With regards to competitors, there are plenty of them, for instance Super Radiator USA, Luve-Contardo Italy, Sierra Italy, Modine USA, Guentner Germany, Alfa Laval Sweden, CI group Thailand, Lloyds India to mention some.

6- Which new products can the HVACR market expect from ECO Heatcraft and how soon?

Our continuous improvement activity and product R&D is always focused on the design of new generation products, so that we can assure customers the most advanced products in terms of technical solutions, efficiency and energy saving. With regards to our products, particular emphasis can be given to our CO2 applications, on which our product designers concentrates their effort in order to provide environmentally friendly products, that can assure high performances in the safeguard of atmosphere.

Futhermore, on the coolers side, our range optimisation aimed at matching the most up to date market requirements in terms of application and performances will lead us to launch in 2008 some new models, range extensions of series already appreciated and successful in the market, dedicated to big commercial and industrial applications.

7- In your opinion, how will the global HVACR market evolve? What will be the trends of the future?

Signs of the evolution trends are already visible on the market and reconfirm the central importance of some matters that are major issues, not only for the HVAC&R sector: reference must be made to environment issues. This is not anymore a mere promotional slogan: given the current situation worldwide, it is more and more a parameter we have to consider as a key factor of development for us and future generations. This is why our processes and production are more and more focused on this side, in terms of energy saving, savings in raw materials and refrigerants used in our products. International and local regulations worldwide establish limits and rules; our target is to supply the market with the most advanced solutions to overcome the strictest regulations in terms of environment protection.

Environment related issues are even more stressed by the strong economic boost that the emerging countries are undergoing and that will lead them to develop – in a timeframe of few years – new infrastructures, industries and facilities.

Global economy is and will further be effected and involved by this: ECO Heatcraft is perfectly aware of the challenges and opportunities that such changes offer and is already active in order to support them proactively in all the HVAC&R application fields involved (industrial cooling, commercial refrigeration, AHU, etc.).

8- What can you tell us of Luvata’s plans and priorities for the future in what concerns the HVACR industry?

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