Geographic exposure

Many of Gränges’ customers are global, which requires Gränges to have a corresponding presence and scope.

Gränges offers manufacturing, sales and technical support on three continents. Production plants in Finspång and Shanghai are, furthermore, important skill centres for research and product development in close co-operation with customers.

Asia

Since the establishment of the plant in Shanghai in 1996, the company has secured a leading position on the Asian market. In 2016, Asia accounted for 34 per cent (46) of group sales in terms of volume, with China as its main market. Other key markets include Thailand, South Korea and India. The automotive industry accounts for the bulk of Gränges’ sales in Asia, although sales in the stationary heat exchanger industry are increasingly important as the market matures. Most of the production volume at Gränges’ plant in Shanghai is sold in Asia, of which around half goes to China.

Long-term prospects are good, with an increased emphasis on comfort and improved energy efficiency driving growth in the automotive and stationary heat exchanger industries. A growing aftersales market is one of the contributors to increased demand for heat exchanger material. In terms of global light vehicle production, Asia as a whole accounts for 52 per cent (51) while China accounts for 29 per cent (27). In 2016 production increased by 6.6 per cent in Asia and by 12.8 per cent in China. From 2017 to 2020, production of light vehicles is expected to increase by an average of some 3 per cent a year in both China as well as in Asia as a whole, according to IHS.

Europe

Gränges has a strong position on the European market and through advanced technological content in its products consolidated its leading position. In total, the European market amounted to around 27 per cent (38) of group sold volumes in 2016, with the UK, Italy, the Czech Republic and Poland as the single largest markets.

Europe is a consolidated market with a high proportion global customers. The majority of all volume supplied to the European market is produced at the plant in Finspång.

Car manufacturers continue to discuss a faster transition to electric hybrid engines – engines that require a greater number of heat exchangers, which is positive for Gränges. In terms of global light vehicle production, Europe accounts for 23 per cent (24), and in 2016 production increased by 2.6 per cent. From 2017 to 2020, production of light vehicles in the region is expected to increase by an average of around 1 per cent per year, according to IHS.

Americas

Gränges has been present on the American market since 1994, and with the acquisition of Noranda downstream in 2016, has obtained a leading position also in this market, with exposure to a number of other market niches.

Americas accounted for around 39 per cent (16) of the Group’s sales volume in 2016, following the consolidation of Noranda into Gränges’ accounts from 22 August, 2016. Gränges’ main markets are the US and Mexico. In South America, Brazil is an important market.

Plants in the Southeastern United States supply the majority of customers in the region with products. Plants in Finspång and Shanghai provide automotive customers with material for brazed aluminium heat exchangers, which are currently not produced in the US.

The market for automotive heat exchangers is relatively concentrated with a small number of manufacturers, and the largest end-customers located primarily in the Southeastern US. As a share of global production of light vehicles, Americas account for 22 per cent (23), and in 2016 production increased 0.1 per cent. According to IHS, between 2017 and 2020, the manufacture of light vehicles in the region is expected to grow by an average of around 2 per cent per year.

The market for material for stationary heat exchangers, primarily air conditioning, is expected to grow in the coming years on the back of rising US household incomes and increased demand for indoor climate control. At the same time, product development is driven by the need for more energy efficient units and reduced use of coolants.

The market for transformer windings is strongly linked to the non-cyclical market for transformers, which is expected to show a growth to 2020. The market for food packaging is expected to show a stable annual growth rate between 2017 and 2020.