NEWS RELEASE                                                                                                                JULY 2014

Commercial Air Filter Sales to Approach $2 Billion in 2015

Sales of air filters for commercial and institutional buildings will reach just under $2 billion in 2015. This is the conclusion of the McIlvaine Company in Air Filtration and Purification World Market.

Commercial Air Filter Revenues ($ Millions)

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China is the world’s leading purchaser of commercial filters. This is due to several factors. One is the high rate of growth of the commercial building industry. Another is the high particulate levels in ambient air. This results in more rapid filter replacement than in countries with relatively clean air.

The Chinese construction industry recorded a nominal CAGR of 19.99 percent in 2009–2013. The infrastructure and residential markets collectively accounted for 72.3 percent of the total construction industry in 2013 and are expected to grow at 9 percent CAGR due to increased public investment, urbanization and the strong demand for housing.

Twenty years ago the U.S. was the center for HVAC, but now China holds the number one position.

In terms of air conditioning unit sales in China, Japanese manufacturers Daikin, Hitachi, Toshiba and Samsung command more than 30 percent of the market. Daikin also owns AAF and is one of the largest air filter manufacturing companies in the world. Western companies York, Carrier, Trane and Dunham-Bush have more than 25 percent market share for air conditioners in China. Haier, Gree and Midea account for more than 20 percent of the market.Other suppliers are Hisense, Panasonic, Kelong, Glaze, Aux, Chigao, Mitsubushi, Samsung, Changhong, Chunlan, TCL, Hitachi, Sharp, Fujitsu General, Sanyoo and LG.

China can be divided into five climatic zones, each of which has different filtration needs:

• Severely cold, e.g. Heilongjiang province, where heating is very important for most of the year,
• Cold, e.g. Beijing, where heating is necessary from October to March, while cooling in summer is not a big problem,
• Hot in summer and cold in winter, e.g. Shanghai and nearby provinces, where cooling in summer and heating in winter are necessary,
• Warm, e.g. Guangdong and Fujian provinces, where heating is not necessary and cooling is needed in summer,
• Hot, e.g. Hainan province, where cooling is needed all the year.

Buildings contribute up to 25 percent total energy consumption in China. (Sixty percent is for heating and cooling.)

The fast economic development and the increasing living standards of people in China have prompted a new wave of building construction. Since the year 2000, 1.5 billion m² area of buildings have been built every year, and this is projected to continue until the year 2020. International companies are now conducting research in China. In Feb. 2004, Trane founded its R&D center in Shanghai. York founded its Asia Pacific R&D center in Nov. 2004 in Wuxi. The Carrier R&D center started to function in 2006.

Air filters are used in both the central HVAC systems and for room air conditioners. One of the trends boosting revenues is the trend to select the more efficient and expensive F5-9 filters as opposed to the less expensive and efficient H1-4 design. Concerns about air pollution and health have influenced Chinese building owners to upgrade to more efficient filters. Another driver is energy consumption. Dirt on air conditioner coils increases energy consumption.

For more information on Air Filtration and Purification World Market, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/108-n022