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A growing market

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In general, the refrigeration market is relatively insensitive to economic cycles, because we need chilled foods in both booms and recessions. But the market for refrigeration technology is still driven by a number of factors and megatrends.

Urbanisation and better living standards

Change in food behaviour is an example of a trend that affects the market for refrigeration. The urbanisation and higher disposable incomes of recent years have led to an increase in demand for chilled and frozen ready meals. The need for investment is growing and leading to increased demand in both traditional food retailing and in totally new retail categories. When the shopping is bought online, refrigeration in transport is also increasingly important.

Transition to environmentally friendly refrigerants

The European F-gas Regulation is another factor driving demand for refrigeration. Historically, many refrigerants have been based on hydrofluorocarbons, known as F-gases. When these F-gases are released, or leak out, into the atmosphere they contribute to the greenhouse effect in a similar way to carbon dioxide emissions. One difference, however, is that some of the F-gases are significantly stronger greenhouse gases than carbon dioxide. This was why the EU introduced an F-gas regulation on 1 January 2015. It successively prohibits refrigerants with a high greenhouse effect. The new rules aim to reduce emissions of F-gases by almost 80% by 2030 in relation to 2015 levels. Today, researchers and companies are developing alternative and synthetic refrigerants that do not damage the ozone layer and contribute less to the greenhouse effect. The EU resolution means that there will be a wide-ranging restructuring of the refrigeration industry over the next few decades, with a major need to invest in eco-friendly refrigeration technology. At the same time, most markets are lagging far behind in the implementation of the technology shift. The transition can also become intense when access to F-gases is reduced by import restrictions. Beijer Ref is one of the players that is actively providing the market with high-tech solutions for refrigeration and HVAC based on environmentally friendly refrigerants.
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Growing middle class

There are several factors in the comfort cooling (HVAC) segment that are driving an increase in demand. The installation of heat pumps and air conditioning in the home is becoming more common, even in northern parts of Europe. The trend in the heating segment is moving towards replacing traditional oil and gas boilers with far more energy-efficient air/water heat pumps. The growing middle class in Asia is also contributing to increased demand for comfort cooling. The same holds true for Africa, where the middle class is expected to grow strongly over the next few years, which means that many more will have the opportunity to buy air conditioning.

Digitalisation produces effects

E-commerce is growing in line with increased digitalisation, including in Beijer Ref’s industry. Artificial intelligence and new types of sales channels and operators will become increasingly common.