‘Condensing Hydro Furnace’
Heating Air with Warm Water Supply
Market Size Nine Times Larger Than Boilers
Kyungdong Navien has thrown down the gauntlet in the North American main heating market this year based on eco-friendly technology. Kyungdong Navien sells more than 400,000 condensing water heaters annually in the North American market, with this market already accounting for nearly 60% of its total sales. This year, the company plans to enter the 'Furnace' market, the most widely used heating method in North America, aiming to leap forward as a global HVAC company.
On the 31st, Kyungdong Navien announced that North American sales, which accounted for 42.9% of total sales five years ago in 2019, increased to 57.7% last year. This ratio is based on cumulative sales up to the third quarter of last year. According to the provisional full-year results disclosed recently, consolidated sales reached KRW 1,204.372 billion, a 3.7% increase compared to the same period last year. Fourth-quarter sales rose 11.3% to KRW 375.391 billion. Considering that growth was driven by the North American market’s performance, the proportion of North American sales in the total full-year sales including the fourth quarter is expected to have increased further.
Kyungdong Navien has steadily expanded its stage overseas beyond the mature domestic boiler market. In particular, in North America, condensing water heaters and boilers hold the number one market position. Condensing technology, which collects heat escaping outside and reuses it for reheating, is a competitive technology of Kyungdong Navien. Based on this, the company’s strategy this year is to expand into the furnace market, the main heating method in North America.
Unlike Korea, where boilers are used, North America mainly uses 'gas furnaces' that heat air with combustion exhaust heat and supply it indoors. This market exceeds 4.7 million units annually, which is nine times the size of the U.S. boiler market and more than five times larger than the condensing water heater market. Targeting this market, Kyungdong Navien recently shipped the 'Condensing Hydro Furnace' locally, which heats air with warm water and supplies it indoors. This method compensates for the drawbacks of the existing method, which directly heats indoor air at high temperatures, making it very dry and posing risks of harmful gases entering indoors due to incomplete combustion. Kyungdong Navien’s method does not dry the air and precisely controls indoor temperature by adjusting the water temperature, providing stable heating. Additionally, by linking with the 'heat pump,' a heating and cooling product that utilizes external thermal energy such as geothermal and air heat, it can provide heating in winter and cooling in summer.
The growth outlook is positive. Among gas furnaces, the ratio of conventional furnaces to condensing furnaces is currently about 6 to 4. However, with increasing environmental awareness, the share of condensing furnaces is expected to grow further. Lee Sang-kyu, head of Kyungdong Navien’s U.S. branch, said, "Just as we wrote a success story with condensing water heaters, we will target the North American main heating market and expand into the global market through new businesses such as condensing hydro furnaces and heat pumps."
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