Annual Report 2006 - Munters

Dehumidification Division“Customers are increasingly adoptinga life cycle cost perspective wheninvesting in new systems, and thereforeappreciate the energy conservationbenefits of Munters products.”To date, the highest sales figures for these systems havebeen reported in the US, a country that has significant areaswith hot climates and high humidity, and where the highestlevels of awareness and financial conditions to address thesefundamental problems exist. Munters is focusing on expandingits sales into these markets. The largest competitors incommercial dehumidification are traditional air-conditioningcompanies such as Trane and Carrier.Zeol operates in a much smaller market than the othertwo business areas, but is highly profitable in its selectivepollution control niches. The Zeol systems are similar to thedehumidification systems. The main customer segment isthe semiconductor industry and automotive paint shops. Thesemiconductor business has cyclical characteristics, whichalso affects Zeol’s earnings pattern. Exhaust air regulatorychanges, as well as growing requirements for improved indoorair quality, is driving demand for Zeol’s products.Focus 2007Having achieved a global organization, with the entailingscale benefits to purchasing and production, the next longtermstrategic step is to concentrate the product offering toa lesser number of global modular-format product ranges.Product development is focused on energy-efficient solutions.The Division is also closely monitoring a select number ofcompanies, where acquisitions could broaden the existingproduct portfolio and fit in with the Division’s general strategy.Margin improvement work within the Munters EfficiencyProgram will continue, as will accelerated expansion in theAsian region. The new Chinese facility will have a broadproduct range, and act as the manufacturing base for Asia anda hub for low-cost global sourcing needs.Developments during 2006The Division reported favourable profitability development,particularly in prioritized market segments. All business areasachieved major improvements within the global purchasingarea. Successes within Commercial Dehumidification resultedin the need to double capacity at the San Antonio, Texasplant. The increased business focus on Asia led to the decisionto build a new factory adjacent to the present one in China,effectively doubling the production capabilities there.Strategy Increase energy efficiency of products.Stronger focus on Industrial AC with HCU and DesiCool.Expand Zeol operations into additional segments andgeographical areas.Expand in Asia.Margin improvements through global sourcing andrelocation of manufacturing, as well as globalization of theproduct range.Acquisitions that will benefit from Munters energy efficiencyknow-how and leadership in dehumidification.CUSTOMER CASEStudents living better with MuntersIn premises where many people live or work, fresh airneeds to be supplied from outside. In humid and warmclimates, this often results in excessive indoor airhumidity. Humidity leads to mold and bacteria growth,with allergies and bronchial problems as a result.At Fairfield University in Connecticut, in the US,some 2,600 students live in several large studentdormitories on the university campus. The dormitorieswere experiencing serious problems with high humidityand condensation. The existing ventilation system wasinsufficient, especially during the summer months, whenmany opened windows to allow fresh air in.Munters was commissioned to solve the problem,first by installing mobile equipment for temporarydehumidification. The dormitory was closed for twoweeks, during which time it was completely dehumidified.Thereafter a permanent HCU system was installedand integrated with the university’s own system forenergy-conservation, which means the dehumidificationsystem is only activated when outdoor temperaturesand humidity make it necessary. Today, the studentshave a much better living environment with lower overallenergy costs for the university.16 M U N T E R S A N N U A L R E P O R T 2 0 0 6