Danfoss completed the acquisition of German compressor manufacturer BOCK in 2023, reinforcing Danfoss’s position as a full-service provider of greener cooling and heating solutions. What was the impact of this move and how does this align with global industry trends?
In an exclusive interview, Refrigeration Industry speaks to Danfoss’s Kristian Strand (President Commercial Compressors), about the acquisition of the BOCK brand and the company’s global expansion plans.
Refrigeration Industry (RI): What are Danfoss’ primary strategic goals following the acquisition of BOCK and how do you envision the company evolving in the next decade?
Kristian Strand (KS): Over the last few years, we have been investing heavily to grow Danfoss and to be the best partner for our customers, as well as an industry contributor, to drive decarbonization.
Danfoss Climate Solutions is a leading player in compressor technology and, with the BOCK acquisition last year, our portfolio is now one of the broadest in the world, highly efficient, and catering to all types of refrigerants and HVAC&R (Heating, Ventilation, Air Conditioning, and Commercial Refrigeration) applications.
Our expertise spans every stage of the entire heating and cooling process from production to installation. With this portfolio and expertise, we are a strong decarbonization partner for our customers, helping them to develop and offer the most efficient and resilient energy-efficient systems.
RI: Following the acquisition, are there any specific products and services Danfoss will prioritize for development and expansion?
KS: With BOCK we see great growth potential, and we will make significant investments in all parts of the business – development, sales, and service network as well as test- and production facilities.
We are building a new factory in Mexico for scroll and semi-hermetic compressors and sensors to meet the expected increase in demand in North America. The new factory is expected to be ready by the beginning of 2025, starting with a capacity of 150,000 compressor units, 1.6 million pressure sensors, and 1 million mildly flammable (A2L) refrigerant leak detection sensors.
To produce Turbocor oil-free centrifugal compressors, we started the construction of a new factory in Florida (US), in 2021. The new Florida factory should start production of Turbocor compressors at the beginning of this year, with an annual production capacity of about 20,000 units.
We have also set up a new Configuration and Service Center for Turbocor compressors at our headquarters in Nordborg, Denmark. The new center will handle repair and final-stage assembly, configuring Turbocor compressors based on customer requirements. We will begin to build the foundation for full production in Denmark for European customers by 2026.
We are also continuing to strengthen our portfolio through digitalization. The food retail industry is an example of a business that is transforming through digitalization – and sustainability is a key phase of this journey.
To foster the green transition, we recently announced a new partnership with the US company Enersponse to collaborate on ensuring food retailers achieve grid stability while reaping financial rewards via automated demand response. Enersponse’s software is now seamlessly integrated into our Danfoss Alsense software, allowing retail managers to easily respond to alarms, and ensure 24/7 monitoring of food conditions to ensure that the food stays fresh, all while reducing energy use during peak periods.
RI: How is the integration of BOCK impacting Danfoss’ operations, product portfolio, and market strategy?
KS: BOCK’s renowned CO2
and low-GWP semi-hermetic reciprocating compressors and condensing units expand Danfoss’ position as a full-service provider for greener cooling and heating solutions from products and solutions to components and support – all backed by a global presence. The brand’s shared commitment to innovation, expertise, and support will help fast-track decarbonized cold chain and heating systems worldwide.
With one of the world’s largest portfolios of compressors for natural refrigerants such as CO2 (R744), hydrocarbons, and other low-GWP refrigerants, BOCK has an impressive global reputation for quality, innovation and climate-friendly technology within the refrigeration and air conditioning sectors. BOCK’s portfolio and commitment to energy efficiency strongly supplement Danfoss’ existing product ranges, providing customers with unique access to one trusted supplier, who can help them chart their own journey towards decarbonization through expert consultation, support, and training.
RI: How will Danfoss’s transformation after the acquisition affect its relationships with customers and the broader industry, especially in terms of support and collaboration?
KS: Offering a more complete portfolio of solutions to the market, we are proud to enter the air-conditioning bus market for the first time with BOCK’s solutions.
RI: With a growing emphasis on sustainability, what are Danfoss’s initiatives and plans regarding the development and adoption of natural refrigerant products and services?
KS: With the trend towards low-global warming potential (GWP) refrigerants, we have a leading position in the refrigeration, air conditioning, and heat pump markets with a broad range of solutions: our semi-hermetic reciprocating compressors are suitable for natural refrigerants such as propane (R290) and CO2, while we recently also launched a new line of R290 scroll compressors.
Additionally, we are also focused on making our own operational use of refrigerants more climate friendly. For example, we have launched a new commissioning method to catch and prevent leaks in our compressor laboratories.
RI: What are the main challenges and opportunities Danfoss faces in the current market, especially with the shift towards eco-friendly solutions?
KS: It is always about combining energy efficiency, low GWP, safety, and affordability. At Danfoss, we are committed to solving this equation in the best viable way. One challenge is for example that most of the low-GWP refrigerants are flammable. Here, safety is a key parameter to be respected.
As part of our Environmental, Social, and Governance (ESG) strategy, we are also working towards increasing the circularity of our products by reducing their carbon footprint through the full product life cycle. For example, we have joined the First Movers Coalition on aluminum where we commit that at least 10% of all our primary aluminum procured annually is low carbon. We believe that circular design and low-carbon raw materials come at a cost, and we need a shift in mindset to accelerate the market uptake.
RI: Any technologies of interest to watch in the next five years or so? How is Danfoss investing in research and development (R&D) to stay at the forefront of technology in the HVAC&R industry?
KS: There is a quite strong move towards electrification across the globe. With this megatrend, our offerings match global needs very well. Our product portfolio has seen strong growth in the last few years as we have many different technologies to drive energy efficiency. We have also made long-term investments in innovation, and R&D for the future so that we can develop innovative technologies to meet our customers’ needs. For example, we have been investing in growing market segments such as heat pumps, data centers, electrification, software, and digitalization.
At Danfoss, we like to co-develop innovation together with our customers. We do this around the world in our Application Development Centers (ADCs) and with our innovative simulation tools. Last year, we opened a new flagship energy-efficient “Smart Store” supermarket near our headquarters in Denmark. The supermarket is part of a full Decarbonization Park, including several innovation centers for applications such as heat pumps, heat recovery, next-generation district heating networks, and data centers. The smart store also works as an ADC – a collaborative test environment where we offer the cooling and heating industry the opportunity to access state-of-the-art test facilities and expert support, for field testing new components and cloud technologies for both small and large applications to enhance energy and operational efficiency for food retail.
Innovation is part of our DNA and we continuously win innovation awards. A recent example is the AHR Expo 2024 in Chicago where we showcased several innovations, including the Innovation Award-winning DSG scroll compressor and the PSH scroll perfected for low ambient temperature heat pumps.
RI: Can you discuss Danfoss’s environmental commitments, particularly concerning reducing carbon emissions and enhancing energy efficiency?
KS: Our philosophy is to pioneer solutions for our customers to enable decarbonization in an intelligent, cost-efficient manner, but we also ensure carbon neutrality in our own operations through energy-efficient solutions and by applying ambitious standards and setting stretch targets across our business.
We have committed to reaching CO2
neutrality in our global operations by 2030 at the latest and have confirmed science-based targets to reduce emissions to stay within a trajectory to keep global warming below 1.5°C.
How are we doing this? As an engineering company, we naturally believe in science to solve our biggest challenges. We decarbonize our campuses and productions using the philosophy of reduce, reuse, and resource. As an example, we reduce energy consumption through heat pumps and chillers and resource excess heat recovered from our data center to heat our offices, feeding the rest into the district energy network to heat the surrounding homes.
At our 250,000 m2 headquarter-campus in Nordborg, we have reduced heat consumption by 78%, and electricity consumption by 50% by using our own technologies with payback times of less than three years. After reducing energy consumption and using excess heat, we ensure that we use renewable energies for the remainder of the demand. Our current heating demand is supplied by 40% heat recovery from manufacturing processes and our Danfoss data center, 40% from green district heating, and 20% locally produced biogas.
Apart from using our own energy-efficient solutions to reduce our energy consumption across the company and production sites globally, regionalization of production is also a key focus for us. If we have local production, we can avoid logistical challenges such as container shortages, soaring costs, etc., and also reduce our CO2 footprint related to transport.
RI: How does Danfoss get involved in the global advancement of natural refrigerants beyond product development?
KS: Danfoss is involved in a number of industry committees, associations, and alliances. For example, we are a member of the Cool Coalition, a broad stakeholder alliance bringing together industry, policymakers, academia, and NGOs to drive climate-friendly and energy-efficient cooling. A concrete outcome is the global cooling pledge, announced at last year’s COP28, where over 60 governments committed to sustainable cooling, including for example the ratification of the Kigali Amendment or the introduction of minimum energy performance standards (MEPS).
Another example is our engagement in Rwanda (ACES) and Kenya (Loss 2 Value), via concrete projects together with partners to accelerate the expansion of the cold chain and support with dedicated training activities.
We are also active members of numerous industry associations and help shape their work towards the adoption of sustainable cooling technologies. And in North America, together with the NASRC (North American Sustainable Refrigeration Council), we strongly support training for CO2 as a refrigerant, with our mobile training unit. These are just a few examples.
Thanks a lot for the interview!
