Article appeared in HVR magazine, November 2007
The warm air market has been hit hard in the past few years with change being forced on all players, across the whole value and supply chain.
Increasingly sophisticated customer requirements on their own mean that the pace of change, just to keep up, is a major challenge on its own. Couple this with Parts L and F of the building regulations, rising energy costs and policies now in place to address climate change and you have an industry facing interesting times.
However, with a focus on reducing our carbon footprint taking almost centre stage over the last twelve months, there has been much change in the industry and all players, however large or small, have certainly felt it.
In spite of this, our customers still have to heat their premises. A building is just a shell, effectively. It is lighting, heating and ventilation, that make an effective and productive working environment.
Temperature has a bearing on health and safety, a direct impact on productivity and the bottom line. Some premises have to be kept at a controlled temperature in order to preserve stock. Residential care homes need continual heating. Providing a comfortable environment to the retail encourages customers to stay for longer, which has an impact on how much they spend and all of these factors mean one thing - increased costs across the board.
There are incentives to businesses to encourage them to invest in low carbon technologies. The Enhanced Capital Allowances (ECA) scheme enables a business to claim 100% first-year capital allowances against spending on qualifying plant and machinery featuring low carbon technologies.
Businesses can write off the whole of the capital cost of their investment in these technologies against taxable profits for the period during which they make the investment. This can deliver a helpful cash flow boost and a shortened payback period against the installation cost.
Businesses can claim 100% capital allowance in the first year after installation of products included on the Energy Technology List. This can mean that, on a £50,000 capital investment, £15,000 can be written off against Corporation Tax (assuming tax at 30%). Claiming your ECA is normally done as part of your normal income and Corporation Tax return calculations.
Warm air and radiant heaters qualify for the ECA scheme, with the qualifying criteria for radiant heating being 86% combustion efficiency, 60% radiant efficiency and 91% combustion efficiency for warm air heating.
Over the last eighteen months Powrmatic have undergone a dramatic change programme in order to keep at the front of the warm air market. We've restructured our heating range around two product groups, suspended and cabinet heaters, launched a new corporate brand identity and rationalized our 3 factories into one, reducing part numbers from 40,000 to just 5,000.
Much of this has also involved reducing our own carbon footprint. Gone are the large lorry loads of part assembled heaters being moved between sites to be painted or wired. In comes modern, high efficiency, quick turn around plant.
In the early days, Powrmatic had a variety of different skilled workers working at various sites as the heater moved along a very long production line. Now, from raw material to finished product, the product moves no more than 100 metres from start to finish. All operatives have gone through extensive retraining to enable us to do this, whilst remaining competitive in an industry being attacked by cheaper foreign imports.
Our NV range of suspended gas unit heaters has been designed in conjunction with specifiers, installers and users to provide efficient and cost effective heating and ventilation for industrial and commercial properties.
The resulting combustion efficiency of 92% easily meets the requirements of the Government's ECA initiative and has qualified for the Energy Technology List. Having ECA approval, the NV unit heater assists Powrmatic's customers in gaining 100% capital allowance in the first year to offset installation costs.
The NV's ease and flexibility of installation offers major advantages for customers and contractors. Being wall or ceiling mounted, they free up valuable floor space and provide a space-saving, quiet and energy-efficient solution for industrial space heating. 100% manufactured in the UK, distribution of the units involves fewer fuel miles than those imported from overseas.
Installers have the option of a conventional fan flue or room sealed flue plus a range of single flue or twin (concentric) flue terminals. The exhaust fan can also be easily rotated to allow top or rear flue discharge. This allows the contractor to offer an instant solution without having to order special components with long lead times.
Although the nature of today's demanding applications means that you still have to deliver great products, the climate change agenda has become part of our every day life.
This has meant many of Powrmatic's customers have changed the way they do business, in order to remain competitive. This, in turn, has caused Powrmatic, like many others, to look at new strategies to help it best serve the new demands its industry faces. The hard work is starting to pay off, but there are some interesting times ahead!