Danfoss makes millions on new agreement in China

Danfoss will supply components for Chinese heat pumps and will thus receive a share of the 20 billion DKK ¨that Beijing has devoted this year to improve the energy efficiency.

Coal-fired plants out, heat pumps and natural gas in. This is just one of the ways in which Beijing’s local government will cut back on the air pollution that has plagued the metropolitan area for years.

Therefore, three million have been appointed that will coal-fired plants replaced with one of the more environmentally friendly sources of energy. And this is where Danfoss has got a foot inside by concluding a specific agreement with the China Heat Pump Industry Alliance. “It has really become a big and important business for us. We started with a pilot project in a Beijing apartment block last year and are now rolling it out on a large scale. It has so far secured us a turnover of over 100 million DKK, And there is much more to be expected when including to all of North China”, says Managing Director of Danfoss China, Kjeld Stærk.

It is not actually Danfoss, which supplies the heat pump itself to replace the coal-fired plants. What they do is to supply components such as compressor, heat exchanger and automation, after which it is all collected and distributed by a Chinese company. “For the state-owned China Heat Pump Association, there is a lot of prestige at stake here, as they compete with suppliers of natural gas. So, instead of joining a local company, they have exceptionally chosen a Western supplier like Danfoss”, explains Kjeld Stærk.

The first agreements for delivery to these heat pumps were concluded last year, while the formal contract was signed in June. It took place in Beijing under the auspices of Minister of Energy, Utilities and Climate Lars Chr. Lilleholt and his Chinese ministerial colleague, Nur Bekri.

“As a minister, I’m actively working to open doors for Danish business through export promotions to, for example, China. Here we have made several cooperation agreements that give Danish companies a foothold in the Chinese market. I am very pleased and proud that the joint effort with companies like Danfoss carries fruit and results in concrete orders. We need much more of this”, says Lars Chr. Lilleholt, who recently launched Denmark’s first export strategy for energy technology, with the goal of at least doubling exports of Danish energy technology to 140 billion DKK by 2030.

Source: Børsen