1. European heating has always been a mixed industry. Now, technological varieties are
compounding regional preferences to further diversify the markets.
It may be the biggest single
market for heating appliances,
but Europe’s heating market has
always been as diverse as its
Junkers, part of the Buderus
Thermotechnik (BBT) group, is
a leader in instantaneous water
heaters. The company’s
premium Celsius Plus model
allows users to change water
temperature while showering by
using a waterproof remote
control.
climates and cultures. Traditional
floor-standing boilers, which
heated many European
households for decades, are
being replaced by new-
generation products that are
increasingly energy efficient and
even stylish in design. Condenser
technology penetration is
growing, and more Europeans
are finding it economical to clear
up floor space by installing a
wall-hung boiler.
Heat pump use is growing. Solid
fuel users, paying half the fuel
costs of other users, are finding
themselves at a major advantage.
Even solar panels are moving
into
the realm of affordability and
practicality for European

2. consumers, in the temperate
Mediterranean and even chillier
Scandinavian markets
The Industry Grows
Mostra Convegno is the place to
go to evaluate the European
industry. Attendees at the Milan
show are clearly focused on
Italy, but the success of the
growing trade show mirrors the
growth of the European heating
industry. Italy is a strong market
for heating, as well as a
important heating appliance
manufacturing hub.
Figures from ANIMA
(Federation of Italian
Associations of Mechanical,
Engineering and Related
Industries) show total 2005
revenues of Italian production of
air-conditioners, heating
appliances, taps and fittings,
pumps and valves, and water
treatment will be about 8.6
billion euros (approx. U.S. $10.8
billion). That includes strong
exports of approximately 4.6
billion euros (approx. $5.7
billion). Included in this total,
heating appliances and system
components registered growth of
3.1 percent in 2005, with a 4.4-
percent increase in exports over
2004 and expected turnover of
around 2.5 billion euros (approx.
$3.2 billion). Increases are also
expected in 2006.
One question much on the mind
of Mostra attendees was how
manufacturers can conquer the
Italian market with a high-end
product portfolio. Claudio

3. Guerreschi, marketing
coordinator for Buderus Italy,
says his company does not sell to
wholesalers, but to installers.
“We do a lot of business with
planners for medium or large
projects. To provide this service,
we have five divisions all over
Italy,” he says. “We emphasize
the high technological level of
our products and the great
service we can deliver. Buderus
has a very wide product range,
and everything is integrated. Not
everything is produced by
Buderus itself because we put the
integration first. We are a
systems supplier, and that is the
difference with the Italian mass
producers, which do have a cost
advantage.”
MTS Group, formerly Merloni
Termo-Sanitari, had the largest
presence at Mostra. MTS has
been working on European
expansion in recent years, like
many competitors. In Italy, MTS
is a mass producer under the
Merloni brand. In the global
marketplace, the Thermowatt
subsidiary is a leading
manufacturer of electric and
electronic components for water
heaters, boilers and household
appliances. It is said to supply all
the world’s major producers,
with annual production
exceeding 30 million units.
The French operations of
Chaffoteaux & Maury have been
integrated in the Group, adding
substantially to the revenue.
Swiss subsidiary Elco, which
includes German burner maker
Elco Klöckner, has been

4. reorganized in recent years,
combining with other business
units to form Elco Heating
Solutions. Elco provides a
complete high-end product line,
including domestic boilers,
industrial solutions and solar
products. It has a full-service
strategy, much like that of
competitors Buderus and
Viesmann.
“We offer all capacities up to 50
kW and are oriented toward the
Germanic countries, with
premium products,” notes Bernd
Kempkes, product manager of
boilers for Elco. “We focus as
much on support for heating
planners and extensive after-
sales support, as well as selling
the hardware itself. Because we
have 800 service centers all over
Europe, we can offer a 2-hour
service. Even in Italy we are
developing this full-service
concept, independent from the
Merloni organization.”
Elco is also focusing on the
Russian market, and plans to
build brand recognition in China
through promotions during the
upcoming Olympics. “We are
convinced that we have the best
full-service concept in the
market, and that we can be
successful all over the world,”
Kempkes tells APPLIANCE.
“There are always customers
willing to pay for a complete and
energy-efficient solution.
The Market In Europe
Bosch-Buderus Thermotechnik
(BBT), which came into

5. existence as a result of the 2003
merger of Robert Bosch GmbH
and Buderus, attracted much
attention during the Milan trade
show with its recent “Market
Report Energy Use” report.
The report says there are more
than 350 heating brands in the
European market, 250 of which
operate only regionally. BBT
claims it is the largest European
company, with 2.6 billion euros
(approx. $3.2 billion) in revenue.
Second in line is Vaillant, at
approximately 1.5 billion euros
(approx. $1.9 billion). BBT
estimates Viessmann (Germany),
MTS (Italy) and Baxi (United
Kingdom) come in third, with
revenues around 1 billion euros
(approx. $1.2 billion) each. A
group of five companies all have
around 500 million euros
(approx. $622 million) in
revenues: Riello and Ferroli
(Italy), Atlantic (France),
Remeha/De Dietrich (Holland),
and Weishaupt (Germany).
BBT estimates the world heating
market at 24 billion euros
(approx. $30 billion) in 2005.
Europe is the largest market for
the industry, representing 42
percent or 10.1 billion euros
(approx. $12.6 billion), followed
by Asia at 29 percent and the
U.S. at 26 percent.
Heating systems (including
combi boilers) account for 65
percent of European revenues.
Domestic hot water (DHW)
heaters represent 24 percent of
the sector, and alternative energy
products like solar equipment
and heat pumps account for 11

6. percent.
One recent industry trend is the
growth of condenser technology.
According to BBT, open-flue
products were down from 28
percent to 23 percent, and
condenser products were up from
12 percent to 17 percent. Some
believe this is because of new
United Kingdom regulations that
seem to favor condenser systems.
In 2005, condenser products
totaled 7.5 million units, of
which 5.6 million were wall-
hung. By country, the United
Kingdom sold 1.65 million, Italy
sold 1.3 million, France sold 0.8
million, Germany sold 0.7
million, and Russia sold 0.8
million. In terms of wall-hung
boilers, condenser units dominate
the markets in Switzerland and
Holland, with the technology
representing 100 percent and 89
percent of sales, respectively.
Spain leads in DHW heaters with
0.7 million units, followed by
Russia, Portugal and Italy. The
trend for this sector is the
replacement of separate DHW
boilers with combi boilers.
The Swedish market continues to
lead in heat pumps. The country
has a 38-percent share (63,000
units) of the total European unit
sales (160,000). Other big
markets include France with
24,000 units and Germany with
20,000.
Solid-fuel burners are popular in
Middle and Eastern Europe,
where gas prices have soared,
and solid fuel costs are about half
of gas and oil. Total industry
sales are 345,000 units, with

7. Poland leading at 21 percent of
sales and the Czech Republic
following at 12 percent.
Central Heating Boiler
Contrasts
An industry report from Dutch
research firm VHK uses 2002
data to compare unit production
and monetary value of central
heating boilers in different
countries of Europe, revealing
interesting national contrasts.
• Italy: 2,322,000 units produced
at an average value of about 505
euros (approx. U.S. $628) per
unit
• France: 942,000 units at an
average of 755 euros
(approx$939) per unit
• Germany: 641,000 units at an
average of 1,260 euros (approx.
$1,568) per unit
• Finland: 13,00 units at an
average value of 1,460 euros
(approx. $1,817) per unit
• Denmark, Sweden and Austria:
average value of more than 1,000
euros (approx. U.S. $1,244) per
unit
Green Building In Europe
Energy efficiency efforts extend
into the European construction
industry. Several Mostra
Convegno conferences were
dedicated to energy-efficient
building techniques. With an
initial cost increase of just 2
percent to 4 percent and using
existing technology, buildings
can be constructed to achieve
energy savings up to 60 percent.

8. The same philosophy can be
applied to heating appliances, but
some European markets make
energy efficiency more difficult
than it should be. Claudio
Bianchini, president of
Assotermica, the Italian
association of heating equipment
manufacturers, points out that
Italy is the largest manufacturer
and exporter of heating
equipment in the world, but
domestically it still uses basic
technologies.
“In Italy we use the same
technology that we export to
Romania because there are no
controls and the regulations are
complicated,” Bianchini
explains. Even so, he says that
energy savings of up to 30
percent can be achieved by the
more intelligent use of existing
and known technologies.
One initiative aimed at saving
energy is the European
Commission’s (EC) Eco-Design
Project. The EC states that eco-
design, the integration of
environmental considerations at
the design phase, is the best way
to improve the environmental
performance of products.
However, a coherent framework
is needed to prevent
uncoordinated measures. More
importantly, national or regional
measures that limit
competitiveness should be
avoided. The EC project focuses
on uniform rules for eco-design,
resulting in an eco-label, which
allows for a fair comparison of
products with uniform criteria.

9. Solar Heat in Cold Climates
Buderus offers a range of oil-
fired heating solutions, like this
Logano G115 floor-standing oil-
fired combi boiler with a
Logalux LT direct water heater
tank. The company makes boiler
sections from special, low-
temperature-adapted, flexible
and corrosion-resistant
GL-180M cast iron sections.
Profiled and beveled steel push
nipples are designed to ensure
long leak-free life. The G115 is a
modified three-pass boiler
engineered to achieve a high
level of efficiency without
leaving residue. Combustion is
optimized through the use of
positive pressure-fired boilers
and optimum chamber
geometry without a heat-
consuming refractory or target
wall. Stack losses are minimized
with the modified three-pass
flue, designed with large heat
transfer areas. Low standby
losses are achieved with the
help of a 7.5-cm (2.95-inch) layer
of thermal insulation
constructed around the unit’s
entire block, including
underneath.
Solar panels are clearly in

10. demand,” says Guerreschi of
Buderus Italy. “For markets such
as Italy and Spain, we offer
special medium-priced solar
panels.”
Other companies catering to the
trend include Elco, which
supplies high-efficiency solar
panels using vacuum tubes,
designed specifically for the
Northern European climate. MTS
offers a new solar collector with
integrated storage tank. The
design is less complex compared
to the Elco panels, and a warmer
climate in the Mediterranean
means high efficiency levels
aren’t needed. The product can
therefore be made more
affordable.
Another industry trend is
underfloor heating, according to
Roberto Rossi, field marketing
manager, Southern Europe at
heating components supplier
Honeywell. “In France,
electricity provider EDF is
promoting heat pumps heavily,
so sales have almost doubled,”
he says. “The Spanish market is
moving faster toward innovation.
There are less condensing boilers
there.”
The European heating appliances
industry has consolidated
steadily in recent decades, even
as Europe has merged its
currency and lifted trade barriers
between its member countries.
Still, regional preferences
continue to be strong market
forces. As fuel prices continue to
drain the pockets of consumers,
the variety of heating
technologies in Europe will keep

11. growing, and the drive to
innovate will continue to run hot.
AHBL & PSO Strengthening Relationships
Arif Habib Bank (AHB) and Pakistan State Oil (PSO) signed an agreement to place AHB's ATMs at selected PSO petrol pumps located
throughout Pakistan.
The document was signed at a ceremony at PSO House. The Managing Director, Pakistan State Oil, Mr. Kalim Ahmed Siddiqi and
Executive Director, Arif Habib Bank, Mr. Saleem Chamdia represented their respective organizations.
Also present at the occasion were Mr. Yacoob Suttar, Executive Director Finance & IT, PSO, Mr. Kalim ur Rahman, Chief Operating
Officer, AHBL, Mr. Rustom H. Mavalvala, Deputy General Manager Non Fuel Retail, PSO, Mr Haider Rizvi, Consumer Asset Head,
AHB, and several other members of both the organizations.
Speaking on the occasion, Mr. Kalim Ahmed Siddiqui highlighted PSO’s initiatives aimed at continuously delivering enhanced service
to its customers and described the joint venture as futuristic and highly customer oriented. PSO’s corporate vision extends to well
beyond the realm of fuel. Company’s ‘Non Fuel Retail’ (NFR) initiatives like ‘auto car wash’ project namely ‘Wash Express’, ATMs and
‘Self-service Banking Centers’ as well as the ‘Quick Service Restaurants’ in addition to its convenience stores called the ‘Shop Stop’, offer
state-of-the-art facilities in terms of flexibility and convenience to the customers when they visit PSO’s forecourt.
Mr. Saleem Chamdia stated that Arif Habib Bank was looking forward to diversifying operations across Pakistan and saw PSO’s retail
outlets as a convenient platform to proliferate its business. He further added that this agreement is part of the Bank's strategy to
continuously provide its customers with the best services.
PSO and AHB value their relationship with the customers and are striving hard to offer a variety of innovative Banking products and
services to suit the needs of their customers through AHB's ATMs and Branchless Banking Centers at selected PSO Retail Outlets.