Over the last ten years considerable development on the heating equipment market was shown by the sector of steel panel radiators. Over this period the volume of the Russian market of steel panel heating radiators consumption in kind increased by 1.5.
Meanwhile, the share of steel panel radiators on the common market of heating radiators and convectors also increased both in kind and in financial terms: from 18% to 23.6% and from 20.4% to 25.4% respectively.
Thus, manufacture of steel panel heating radiators is presently one of the most topical and promising branches in the heating equipment industry.
Besides, steel panel radiators are a category of devices with inherently high characteristics of safety (impermeability and static strength), energy efficiency (heat transfer), and durability (lifetime).
In this connection, we would like to take a closer look at the major development trends in the steel panel heating radiators segment of the Russian market.
According to the statistical data provided by the largest Russian manufacturer of steel panel heating radiators OAO Research Technological Institute Progress (an APHR member), the total volume of steel panel heating radiators consumption market in the Russia Federation in 2015 amounted to approximately 3 500 000 pcs.
The share of goods from member-states of the Eurasian Economic Union (with production sites in the Russian Federation, the Republic of Belarus, and the Republic of Kazakhstan) accounted for 33,77% (1 182 000 pcs). Whereas the share of the four leading manufacturers of steel panel heating radiators from the European Union (Purmo, Poland; Kermi, Germany; Vogel, Poland; Korado, the Czech Republic) on the home Russian market in 2015 amounted to 32,85%.
The remaining part of the home Russian market is occupied by other foreign manufacturers of steel panel radiators.
In particular, worth mentioning are Turkish steel panel heating radiators occupying a considerable part of the Russian market (600 000 pcs) – 17%.
At that, last year the Russian consumption market contained steel panel heating radiators from a wide range of European Union countries, such as Poland, Germany, Finland, Hungary, Italy, Slovakia, the Czech Republic, the Netherlands, Belgium, Bulgaria, and Great Britain.
In its turn, the Russian Federation presently has two large enterprises manufacturing steel panel heating radiators:
– OAO Research Technological Institute Progress (Izhevsk, the Udmurt Republic, Prado trademark);
– ООО Euroradiators (Engels, the Saratov region, a joint venture with the German enterprise Bosch, Buderus trademark).
Two enterprises manufacturing steel panel heating radiators are also to be found in other member-states of the Eurasian Economic Union: in the Republic of Belarus (OAO Lidselmash plant in the city Lida, Grodno region, Lidea trademark) and in the Republic of Kazakhstan (ТОО Santekhprom plant, the city Karaganda, Sole trademark).
It is essential to point out a number of positive aspects among the main observed and expected trends in the development of this segment of the market.
Firstly, the existing Russian manufacturers are planning to considerably increase their current volume of production in the coming years.
The Udmurt Progress plant is planning to double their production volume within two years: while in 2015 their production volume amounted to 432 000 pcs, in 2016 it is planned to manufacture as much as 600 000 steel panel heating radiators, and in 2017 – 900 000.
Besides, the recently launched Bosh Thermotekhnika plant in Engels, the Saratov region, is planned to reach its design capacity of 400 000 steel panel heating radiators per year in 2016.
It is to be counted on that the increase in the steel panel heating radiators production volume will make the price offers of Russian manufacturers more competitive as compared to those of foreign enterprises due to the economy of scale.
Moreover, the current devaluation of the Russian ruble is adding to the competitive advantages of domestic production on the Russian internal market as compared to steel panel heating radiators of foreign manufacture.
Secondly, Russian businessmen and investors are considering establishing new enterprises manufacturing steel panel radiators on the territory of the Russian Federation
Thus, it is a short-term plan to launch an enterprise manufacturing steel panel heating radiators of various connection types and of a wide size range within an investment project on the territory of the Kaliningrad region (Svetliy city). In case the project is carried out successfully, by 2019 the production capacity of the plant will amount to 300 000 steel panel radiators.
So, as soon as in the medium-term perspective (two or three years) Russian manufacturers of steel panel heating radiators will be able to increase their share in this segment of the Russian market more than twice– up to 70%.
Yet, this segment of the Russian radiators market has new challenges and dangers.
In the first place, due to the complicated situation in the construction sector the two coming years are expected to bring a general decrease in heating radiators consumption, including steel panel radiators. In addition, the considered segment can show as much as a 15% decrease in the current year, and in 2017 –20% as compared to the base level of 2015.
This situation, given the increase in domestic production, will lead to a considerably harsher competition on the Russian market of steel panel heating radiators both in prices and quality features.
Secondly, Russian manufacturers can contend with a tough challenge of the increased import of Turkish steel panel heating radiators, including the so-called “contract manufacture” under contracts, concluded between Russian importers and Turkish enterprises.
At present, the Russian market has over 55 trademarks of heating radiators imported from the Republic of Turkey.
Such prerequisites are indeed to be observed now, and it is not to be excluded that they can drive the steel panel radiators segment to the same “diseases” that the Russian market of aluminum and bimetal heating radiators has suffered: radiator mass reduction, customs value understatement, import at dumping prices, invalid characteristics of weight and heat transfer on the package and in the supporting documents, poorer quality of the goods.