Danish heating and cooling system manufacturer Advansor’s decision to limit its portfolio to CO2 applications allowed the company to simplify its product range and focus on becoming a leading player in the food retail market, outgoing commercial product director and co-founder Torben Hansen told Accelerate Europe in an exclusive interview.
After nearly a decade of development and the acquisition by Hillphoenix in 2011, changes are afoot for Advansor as Hansen departs for new challenges. Before leaving the company at the end of 2015, Accelerate Europe talked with Hansen about initial challenges and breakthrough moments for Advansor, as well as just why radical ideas are needed for natural refrigerants to prevail.
Hansen describes how the company went full circle after its first foray into CO2 water chillers and heat pumps, having initially been warned away from the commercial refrigeration sector.
"Water chillers were too niche for CO2. We probably sold five units in one or two years, when we should have been selling 20 just to [cover our costs]," Hansen said. "Heat pumps then looked quite promising, until the government changed the rules overnight."
Hansen says the company was left “scratching its head” and even considered folding. Ironically, it was a call from a Danish contractor that may well have kept the company afloat.
"He asked us for a [retail food] solution with CO2 but we said: 'no, we make heat pumps'. He asked again, and this time we started doing some designs, as we didn't actually have a choice. It was our last chance to turn the company around."
Simplifying Advansor’s offering
Asked whether restricting their portfolio to only CO2 was a risk – Advansor remains one of the only companies to have committed to this strategy – Hansen admitted: "That was a great risk but it was the only window open for us. We saw that cascade solutions were already covered, and in our opinion secondary refrigerants were not going to be the future. There are numerous applications suitable for CO2, like the industrial systems entering the market now, so we didn't feel limited in any way just working with this refrigerant. We were 10 years ahead at that time in our minds."
It also allowed Advansor to simplify in that it could focus on rolling out a single technology platform, rather than working with six or seven technology platforms "That allowed us to standardise our systems [and] to be flexible with the use of CO2," he explained.
Initially, Advansor benefitted from customers’ feedback. "For the first 2-3 years we had very good partners evolving with us. We listened to what they were saying, since we knew that our product was not perfect," Hansen said.
Breakthrough moment
The breakthrough came in 2009, when UK supermarket giant Sainsbury’s announced its decision to roll out CO2 systems. "They trialled our technology and that of two other companies. They ended up choosing us, and as a result our production grew fivefold. We needed to convert their stores to CO2 systems and we gave them our word that we wouldn’t miss one single delivery."
Advansor’s next big moment was an agreement with Carrefour to produce their systems in Europe. "They took a great risk to go for CO2 in regions where people said that it wasn’t going to happen. People were waiting to see what kind of problems they would experience. Again, failure was not an option. That was around 2013, and at that time we had done more than 1,000 systems. From a technology perspective we felt safe about it, but it was exciting to roll it out in many countries."
The acquisition in 2011 of Advansor by Hillphoenix was "a perfect acquisition" for both parties, Hansen argues. "Hillphoenix wanted to be the number one technology leader in the USA and we had the industry-leading technology that they didn’t. It also gave us the chance to enter the U.S., where we had no presence, no intention, and no way to get in."
"Furthermore, in our home market Europe we also saw several acquisitions in the industry taking place. We were looking to be a part of a strong organisation and also feeling the pressure from end-users. The success that we had during the last four years wouldn't be possible without the bigger reputation Hillphoenix brought."
Steering market away from HFCs
For Hansen, now that Advansor is established as a leading CO2 transcritical system supplier, the next challenge will be to continue growing and to continue steering the market away from HFCs.
"We are still a niche player if you look at the total market impact we had in terms of the share from the total systems being produced. We achieved 1000% growth, but I strongly believe we are just about to take off now. For Advansor, the next challenge will be to maintain leadership and keep its market share percentage even in the event of an explosion of growth in Europe."
His parting advice for others? Do not be afraid to challenge the status quo. "If people have a good idea and its radical, I would always say it’s worth it because at some point you will be rewarded. If we all sit back, we would still have R22 systems."
"Your idea has to be strong enough to be placed in public eye and challenged. It is the test that you will have to go through anyway. You will also have to accept that people may go and copy it."
This article was prepared by Andrew Williams and is based on a longer interview conducted by Nina Masson and Suzanne Lindquist for the inaugural edition of Accelerate Europe.
Hansen describes how the company went full circle after its first foray into CO2 water chillers and heat pumps, having initially been warned away from the commercial refrigeration sector.
"Water chillers were too niche for CO2. We probably sold five units in one or two years, when we should have been selling 20 just to [cover our costs]," Hansen said. "Heat pumps then looked quite promising, until the government changed the rules overnight."
Hansen says the company was left “scratching its head” and even considered folding. Ironically, it was a call from a Danish contractor that may well have kept the company afloat.
"He asked us for a [retail food] solution with CO2 but we said: 'no, we make heat pumps'. He asked again, and this time we started doing some designs, as we didn't actually have a choice. It was our last chance to turn the company around."
Simplifying Advansor’s offering
Asked whether restricting their portfolio to only CO2 was a risk – Advansor remains one of the only companies to have committed to this strategy – Hansen admitted: "That was a great risk but it was the only window open for us. We saw that cascade solutions were already covered, and in our opinion secondary refrigerants were not going to be the future. There are numerous applications suitable for CO2, like the industrial systems entering the market now, so we didn't feel limited in any way just working with this refrigerant. We were 10 years ahead at that time in our minds."
It also allowed Advansor to simplify in that it could focus on rolling out a single technology platform, rather than working with six or seven technology platforms "That allowed us to standardise our systems [and] to be flexible with the use of CO2," he explained.
Initially, Advansor benefitted from customers’ feedback. "For the first 2-3 years we had very good partners evolving with us. We listened to what they were saying, since we knew that our product was not perfect," Hansen said.
Breakthrough moment
The breakthrough came in 2009, when UK supermarket giant Sainsbury’s announced its decision to roll out CO2 systems. "They trialled our technology and that of two other companies. They ended up choosing us, and as a result our production grew fivefold. We needed to convert their stores to CO2 systems and we gave them our word that we wouldn’t miss one single delivery."
Advansor’s next big moment was an agreement with Carrefour to produce their systems in Europe. "They took a great risk to go for CO2 in regions where people said that it wasn’t going to happen. People were waiting to see what kind of problems they would experience. Again, failure was not an option. That was around 2013, and at that time we had done more than 1,000 systems. From a technology perspective we felt safe about it, but it was exciting to roll it out in many countries."
The acquisition in 2011 of Advansor by Hillphoenix was "a perfect acquisition" for both parties, Hansen argues. "Hillphoenix wanted to be the number one technology leader in the USA and we had the industry-leading technology that they didn’t. It also gave us the chance to enter the U.S., where we had no presence, no intention, and no way to get in."
"Furthermore, in our home market Europe we also saw several acquisitions in the industry taking place. We were looking to be a part of a strong organisation and also feeling the pressure from end-users. The success that we had during the last four years wouldn't be possible without the bigger reputation Hillphoenix brought."
Steering market away from HFCs
For Hansen, now that Advansor is established as a leading CO2 transcritical system supplier, the next challenge will be to continue growing and to continue steering the market away from HFCs.
"We are still a niche player if you look at the total market impact we had in terms of the share from the total systems being produced. We achieved 1000% growth, but I strongly believe we are just about to take off now. For Advansor, the next challenge will be to maintain leadership and keep its market share percentage even in the event of an explosion of growth in Europe."
His parting advice for others? Do not be afraid to challenge the status quo. "If people have a good idea and its radical, I would always say it’s worth it because at some point you will be rewarded. If we all sit back, we would still have R22 systems."
"Your idea has to be strong enough to be placed in public eye and challenged. It is the test that you will have to go through anyway. You will also have to accept that people may go and copy it."
This article was prepared by Andrew Williams and is based on a longer interview conducted by Nina Masson and Suzanne Lindquist for the inaugural edition of Accelerate Europe.
By hydrocarbons21.com team (@hydrocarbons21)
Jan 18, 2016, 11:51
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