Impact Analysis of Covid-19
The complete version of the Report will include the impact of the COVID-19, and anticipated change on the future outlook of the industry, by taking into the account the political, economic, social, and technological parameters.
A cooling tower is a heat rejection device that rejects waste heat to the atmosphere through the cooling of a water stream to lower temperature. Cooling tower is used to cool the water circulating in the cooling system. It is a heat rejection device that removes unwanted heat from the cooling system in the atmosphere. The circulating water is cooled either by evaporation or by blowing air to the warm water. There are two types of cooling towers namely open cooling towers and closed-circuit cooling towers. Cooling towers are widely used in different industries such as chemical, oil and gas, food processing, power generation plants, and other air-conditioning applications.
The global Cooling Towers Market was accounted for US$ 3,015.8 Mn in terms of value in 2019 and is expected to grow at CAGR of 4.7% for the period 2020-2027.
Market Dynamics- Drivers
- Rising use of energy-efficient systems is expected to drive growth of the global cooling towers market during the forecast period
Cooling towers optimize the use of energy in cooling systems. However, this energy efficiency is achieved at the expense of excess water usage over conventional cooling systems. Furthermore, cooling towers are widely deployed in power generation utilities, manufacturing industries, and HVAC units, which offers a wide scope of conserving water through its maintenance and monitoring. Technological advancements in such integrated axial fan and advanced heat transfer are boosting adoption of cooling towers. For instance, Novo Nordisk, a multinational pharmaceutical company achieved an annual saving of almost 5 million kWh through installing four new cooling towers to its existing cooling tower system and optimizing operations of its insulin production in Kalundborg, Denmark. Therefore, these factors are expected to drive growth of the global cooling market during the forecast period.
- Average GDP growth rate is expected to propel the global cooling towers market growth over the forecast period
Increase in GDP growth rate has led to increase in infrastructural development and subsequently enhanced HVAC deployments. The global market has witnessed increasing output at the end of 2013 with developed countries such as Germany, Japan, and the U.S. being the major contributors. Instead of fears of fiscal budget cuts and government shutdown in 2013, the purchasing managers index (PMI) in the U.S. has observed steady uptake to post gross domestic product (GDP) growth of over 3 % in the second, third and fourth quarter of 2013. Furthermore, emerging economies such as India, China, and Taiwan, Singapore, and South Korea have witnessed constant increase in production, which in turn, is expected to propel the global cooling towers market growth over the forecast period.
Asia Pacific held dominant position in the global Cooling Towers market in 2019, accounting for 25.5% share in terms of value, followed by Europe and Asia Pacific respectively
Figure 1: Global Cooling Towers Market Share (%) in terms of Value, By Region, 2019
Cooling Towers Market - Impact of Coronavirus (Covid-19) Pandemic
The COVID-19 pandemic have majorly affected the manufacturing industries around the globe. Owing to the COVID-19, many countries such as India and Spain have imposed nationwide lockdown. Due to the Lockdown, there is a shortage of the workers at the manufacturing facilities. Due to the less manpower, the manufacturing facilities are struggling to move the products. The Cooling towers are used in the manufacturing facilities to remove the unwanted heat from the system. Owing to the above mentioned reasons, the COVID-19 pandemic is expected to restrain the Cooling tower market growth during the year 2020-2021.
Market Dynamics- Restraints
- Fragmented market worldwide is expected to hinder the global cooling towers market growth over the forecast period
The global cooling towers market is highly fragmented due to the presence of both regional and international market players. Regional manufacturers offer cooling towers at low cost and hence are affordable for SMEs. On the contrary, major cooling tower manufacturers cater to various industries such as large or mid-sized manufacturing industries and power plants. Regions such as Europe and the U.S. are promoting the use of closed-circuit cooling towers, and dry and hybrid cooling towers as compared to open circuit evaporative cooling towers. The U.S. Environmental Protection Agency (EPA) is also promoting the use of closed-circuit towers due to their enhanced performance, and water savings as compared to open circuit cooling towers. Therefore, these factors are expected to hinder the market growth in the near future.
- The requirement of a large quantity of water is expected to restrain growth of the global cooling towers market during the forecast period
Cooling tower requires a large quantity of water, which challenging to manage for small and medium-sized companies. The large quantity of water also results in excessive cost thereby compromising with the budget of a business. Therefore, these factors are expected to restrain growth of the global cooling towers market during the forecast period.
Cooling Towers Market Report Coverage
||Market Size in 2019:
||USD 3,015.8 Mn
|Historical Data for:
||2016 to 2019
||2020 to 2027
|Forecast Period 2020 to 2027 CAGR:
||2027 Value Projection:
||USD 4,354.9 Mn
- North America: U.S., Canada
- Eastern and Western Europe: Germany, U.K., Spain, France, Italy, Russia, Rest of Europe
- Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, Rest of Asia Pacific
- Rest of the World: South Africa, North Africa, Central Africa, Brazil, Argentina, Mexico, Rest of World
- Southern Arica
- By Type -(Open Cooling Tower and Closed Circuit Cooling Tower)
- By Heat Transfer Method -(Evaporative Cooling, Dry Cooling and Plume Abatement (Hybrid))
- By Application -(Air-Conditioning, Power Generation Utilities and Manufacturing Industry)
SPIG S.p.A, Absolute Cooling Tower Services Ltd., ESINDUS S.A (Hamon Group), Paharpur Cooling Towers Limited, FANS a.s., LIANG CHI INDUSTRY (THAILAND) CO., LTD., Delta Cooling Towers, Inc., SPX Corporation, Cooling Tower Depot, Inc., and Superchill Australia Pty Ltd.
- Rising use of energy-efficient systems
- Average GDP growth rate
|Restraints & Challenges:
- Fragmented market worldwide
- Plume abatement cooling towers can present lucrative growth opportunities
Open circuit cooling towers produce high amount of plume. Visible plume in most cases does not cause any noteworthy environmental impact on the surrounding. However, concern arises when the plume builds, causing a safety hazard. An inversion in weather conditions may result in thick, persistent fog that decreases visibility in the surroundings. For instance, when cooling towers are located near airport plume may cause interference in airport operations, leading to serious problems for the air traffic controller.
- Contracts and agreements can present lucrative growth opportunities
Major companies in the market are focused on contracts and agreements, in order to enhance the market presence and gain a competitive edge in the market. For instance, in September 2014, FANS A.S. entered into a contract with Sokolovska uhelna, A.S. for the supply of air-cooled condensers.
Figure 2: Global Cooling Towers Market Value (US$ Mn), 2017 - 2027
The global Cooling Towers market was valued at US$ 3,015.8 Mn in 2019 and is forecast to reach a value of US$ 4,354.9 Mn by 2027 at a CAGR of 4.7% between 2020 and 2027.
- North America Trend
Among regions, North America is expected to witness significant growth in the global cooling towers market during the forecast period. This is owing to rising growth of petroleum and oil & gas sectors across the region. Furthermore, high growth of power generation industry is expected to boost the regional market growth over the forecast period.
- Asia Pacific Trends
Asia Pacific is expected to register a lucrative growth in the global cooling towers market over the forecast period. This is owing to the rapid growth of food and beverage sector in the region.
Value Chain Analysis
Raw Material Suppliers
The value chain of the cooling towers market is centered on original equipment manufacturers (OEMs), that is, cooling tower vendors. This market’s value chain is initiated by raw material and component suppliers. Different components integrated in cooling towers for functional operation include condenser pump & distribution system, cooling loop system, heat transfer media, cooling tower fan system, cooling tower basin, cooling tower pumps, drift eliminators, and cooling tower fills. Raw material suppliers provide reinforced cement concrete (RCC), timber, wood, stainless steel, galvanized steel and fiber-reinforced plastic, among other materials required for the building of cooling towers
Key players operating in the global cooling towers market are SPIG S.p.A, Absolute Cooling Tower Services Ltd., ESINDUS S.A (Hamon Group), Paharpur Cooling Towers Limited, FANS a.s., LIANG CHI INDUSTRY (THAILAND) CO., LTD., Delta Cooling Towers, Inc., SPX Corporation, Cooling Tower Depot, Inc., and Superchill Australia Pty Ltd.
Major companies in the market are focused on contracts and agreements, in order to enhance the market presence. For instance, in September 2019, SPIG S.p.A, a subsidiary of Babcock & Wilcox Enterprises, Inc., entered into a contract with Kingdom of Bahrain to supply a sea water cooling tower to SEPCOIII for the Al Dur Phase II Independent Water and Power Project.