The investment will increase annual production capacity for compressors and condensing units by 10 million units, including hydrocarbon models.
Valter Taranzano, Nidec Global Appliance
Nidec Global Appliance, a division of Japanese manufacturer Nidec, announced that it will invest US$70 million in new production lines for its Embraco brand compressors and condensing units, including propane (R290) and isobutane (R600a) models.
Currently, Embraco produces 45 million compressors and condensing units per year. The new production lines – at plants in Brazil, Mexico, China and Austria – will increase annual production capacity by more than 10 million units.
Nidec has three business units: one that provides solutions for commercial refrigeration equipment; another that makes compressors and motors for residential appliances; and a third that produces components for HVAC systems.
A number of factors, including effects of the COVID-19 pandemic, motivated the investment decision. “As people all around the world are spending more time at home, it has become increasingly important to re-evaluate the level of quality and energy efficiency of residential appliances,” explained Valter Taranzano, CEO of Nidec Global Appliance.
“In parallel, more people at home means more consumption of fresh food, increasing the demand for refrigeration in the food retail sector, such as supermarkets and convenience stores,” he said, adding that cooling is also a key factor in the health and scientific industries, two sectors that experienced an increase in demand for refrigeration due to COVID-19.
Taranzano noted that the investment package also puts Nidec “ahead of the game to support the transition to natural refrigerants and to variable speed (more energy efficient) compressors, which are two movements that are ongoing in different stages in many parts of the world.” Additional production capacity is also required “to support our future growth plans,” he said.
Investments in Brazil and Mexico
Out of the US$70 million, an investment of US$21 million in a plant in Joinville, Brazil, will add a third production line of EM compressors and deliver additional 2.5 million units per year in response to high demand in Brazil and Latin America. This is on top of a US$4 million investment already made to increase productivity, Nidec said.
The EM compressor – one of Embraco’s “best sellers, the company said – is a fixed-speed unit running on R600a and R290, and suited for a variety of applications, such as home refrigerators, supermarket’s refrigeration equipment, professional kitchens and merchandisers. The new production line will deliver the latest EM models, EM2 and EM3.
At a plant in Itaiópolis, Brazil, Nidec is investing around US$2 million to increase production capacity for condensing units by 25%.
In Apodaca, Mexico, the production facility is receiving US$35 million to build a new production line for ES compressors, increasing production capacity by 60%. The plant will supply North America, supporting the transition to hydrocarbon units with greater cooling capacity in the region.
Investments in Austria and China
In Austria and China, Nidec Global Appliance is investing in greater production of variable speed compressors, which “are a more environmentally responsible option that provides significant energy savings compared to traditional on-off compressors,” the company said, adding that the units have “the option of running on natural refrigerants.
In a plant in Fürstenfeld, Austria, Nidec is investing US$5 million to start production of two variable speed models, FMX and VES, for the European market.
“[The investment puts Nidec] ahead of the game to support the transition to natural refrigerants and to variable speed (more energy efficient) compressors.”– Valter Taranzano, Nidec Global Appliance
In Beijing China, US$3 million in funding will increase the annual production capacity of the VES, FMX and VEM variable speed compressors. The target markets for the products are China, Japan, Europe and the U.S., where they can be used in residential and some small light commercial applications, in segments such as merchandisers, food service and food retail.
These compressors are especially suited for countries that have stricter energy consumption regulations for appliances, and those “where technology is a key buying criteria,” Nidec said. The units can also adapt to different voltage levels.
The variable speed compressors “optimize energy consumption and give OEMs the flexibility to customize their product according to each market need,” said Guilherme Almeida, Strategic Planning Vice President at Nidec Global Appliance. “From the end users’ perspective, whether they are food retailers or homeowners, these compressors mean efficiency, reliability, sustainability and energy savings.”