HEATING HEATING
SWITCHING ON TO
T
here are some contradictions in the figures for boilers sales coming through that don’t fully reflect the reality of what is happening in the UK
heating sector.
So believes Carl Arntzen, CEO of heating and hot water specialist Worcester Bosch.
“The official figures tell us the volume of gas boilers sold to end of August is up 4% but I think that that is masking some contradictions in the underlying trend, as it doesn’t feel to us like a UK economy that is growing at that sort of rate,” he says.
Some of that can be put down to the market disruption at the beginning of the year caused by the sudden surprise closure by Wolseley of its distribution arm bcg, he adds.
“As a business Worcester had been very loyal to bcg and to fellow distributor F&P in terms of supplying boilers to the smaller independent merchant sector. We had to change at very short notice and so we had to start opening direct accounts with smaller independent merchants; since then we have been very busy doing that and fulfilling their supply chain requirements. As a result, as the statistics ae based in our deliveries into the supply chain, we believe that for the first three or four months of the year, that has probably over inflated the figures for the first few months.“ By the end of 2018, Arntzen says Worcester expects the market to be pretty flat, with some hope coming from tentative weather forecasts predicting a second “Beast from the East”
28
FUTURE HEATING TRENDS
BMJ talked to Worcester Bosch CEO Carl Arntzen about the UK heating sector today, tomorrow and in the future.
cold snap, which could give things bit of push towards the end of the year
Moving on, 2019 and beyond remain very difficult to call, he says.
“The Brexit issue is causing us a lot of uncertainty in terms of what the market will do. Our base assumption is that the market will remain pretty flat, assuming that the economy struggles a little bit and with currency deflation, it’s going to be a challenging year next year.
“So we see something that’s pretty flat and we have run about five different scenarios in regards to Brexit from hard to soft and everything in between. As a German owned business - and one that is fully integrated with our German supply chain – we are moving lots of components and materials and finished goods and people back and forth all the time, so Brexit is a challenging thing for us to get our heads round. In reality no-one knows anything.”
What is easier to predict is that there will continue to be supply chain disruption from digitisation. Arntzen reports that there have been a number of what he calls “interesting developments” in the retail sector, and that he believes digitisation will come increasingly to the heating and hot water industry.
“We have seen the emergence of some online platforms in the last 12 to 18 months - but several others have merged since then. We have also seen a lot of movement from retailers like John Lewis who are getting
interested in the heating industry.”
Another certainty is that online behemoth Amazon is increasingly interested in the UK heating and plumbing market, as it is in the United States, although Arntzen points out that the market over there is largely electrical rather than gas-fired. “Even so, we know that they have been in the heating sector for a while now and that they are talking to all of the industry and it’s purely a matter of time before they attempt to enter the heating sector here. There is lots of stuff happening around energy and heating and in the next five to 10yrs we definitely see more disruption coming to the sector.”
Other interesting developments are likely to arise from increasing connectivity of devices, Arntzen continues. “The whole Internet of Things hasn’t really got going yet. In 10 to 15 years’ time, virtually everything will have sensors fitted and we will be tracking everything in real time whether it’s cars or energy assets or our appliances in the home. At Worcester Bosch, we see the emergence of that technology proliferating over the next decade or so. What that means is that you will have millions of connected assets and devices. Boilers will be no exception. We will have the ability to connect to a boiler remotely, to extract data from that boiler and to push information to that boiler remotely. In fact, we are already testing it and trialling some of that. It won’t be long before we will be able to send an engineer out to an appliance knowing
www.buildersmerchantsjournal.net November 2018
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