A boiler is essentially an energy conversion device, which is a device that uses thermal energy or other thermal energy released by fuel combustion to heat a working fluid, water, or other fluids to specific parameters. The boiler is composed of two parts: "pot" and "furnace", the water-holding part is the "pot", and the heating part is the "furnace", and the hot water or steam produced by it can directly provide the required heat energy for industrial production and people's lives, and can also be converted into mechanical energy through the steam power device, or converted into electrical energy through the generator.
According to different energy sources, boilers can be divided into several categories, such as gas boilers, biomass boilers and coal-fired boilers. Among them, gas boilers occupy the largest market, accounting for 35.16% of the entire Romanian and Polish boiler market in 2020, followed by biomass boilers with a market share of 24.82%, and coal-fired boilers accounting for 24.17% of the total market share with biomass boilers. From the perspective of application sites, boilers can be mainly divided into three categories: residential, commercial and industrial boilers, of which residential boilers occupy 56.53% of the market share, and commercial boilers and industrial boilers account for 14.19% and 10.68% respectively.
The total market value was $555 million in 2020 and is expected to increase to $1,086 million in 2027
Studies have shown that Poland has the majority share in the large boiler market of Romania & Poland. In 2020, the boiler market in Poland was worth $519 million, accounting for 74.71%, while the Romanian market was worth only $176 million, accounting for 25.29% of the market.
According to the data, in 2015, the total market value of the boiler industry in Romania and Poland was 555 million US dollars, and since then it has increased year by year, increasing to 700 million US dollars in 2019. However, in 2020, due to the impact of the pandemic, the market value decreased to USD 695 million, with a compound annual growth rate (CAGR) of 4.60% from 2015 to 2020. According to this data basis and development law, we have carried out a series of function operations, and used scientific models to deduce the data for the next 7 years, and finally it can be predicted that after the epidemic eases, the market size of the boiler industry in Romania and Poland will rebound rapidly, reaching 792 million US dollars by 2023, and is expected to exceed 1 billion US dollars by 2027, reaching 10.86 US dollars. Among them, the Romanian market is worth 273 million US dollars, accounting for 25.10%, and the Polish market is worth 813 million US dollars, accounting for 74.91%. It can be seen that Romania's market share will decline during the forecast period, while Poland's market share will increase to some extent during the forecast period.
In 2020, the CR5 will be less than 20%, the industry concentration is average, and the market competition is fierce
The top 3 companies in the industry are Defro, TERMET SA and Viessmann. In 2020, the market share of the three companies was 8.75%, 3.67% and 3.24%, respectively, for a total of 15.66%. In addition, the industry CR5 is less than 20%, only 19.38%, which shows that the concentration of the boiler industry in Romania and Poland is average, there are many small and medium-sized enterprises, and the market competition is fierce.
With the increasing urbanization rate, the boiler market in Romania and Poland will enter a new period of growth
After decades of development, the urbanization rate in Romania and Poland has reached more than 50% and is still increasing. Urbanization means an increase in the demand and requirements for infrastructure such as adequate electricity, heating, as well as large shopping malls and entertainment facilities, so the continuous increase in urbanization rate is one of the main drivers of the boiler industry in Romania and Poland. In addition, Poland has a rapid economic development, strong ability to attract investment, frequent commercial activities, and strong demand for electricity and heat. Over the past few years, the region has been a major market for the boiler industry and is showing a growing trend. In the future, with the development of the Polish economy, the growing population, and the increase in trade activities, the region is expected to become a major market to boost the development of the industry during the forecast period. On the other hand, Romania and Poland rely mainly on fossil fuels for electricity, and in order to reduce the environmental damage caused by fossil fuels, the two countries are moving towards clean energy, putting forward new requirements for boilers, which will be an important turnaround.
Coal used to be the main fuel in both regions, but in recent years, the government's efforts to promote a low-carbon economy and strict regulations have led to a declining share of coal in the overall fuel market, which in turn has led to a smaller and smaller share of coal-fired boilers. On the contrary, gas boilers and biomass boilers are expected to be the major growth drivers of the market during the forecast period, owing to their cleaner and in line with the prevailing trends.
However, the boiler industry in Romania and Poland is quite competitive, and the market is mostly small and medium-sized enterprises, and the market concentration is very low. As the market continues to evolve and products are updated, companies that already have stable customers, mature teams, and a comprehensive understanding of customer needs are likely to be less affected, while new entrants will struggle to gain a foothold in the market without a strong team, sufficient capital, and mature sales channels.
Poland and Romania, on the other hand, have some of the lowest labor costs in Europe, and the average hourly wage for employees remains below the European average. According to data released by Eurostat in 2019, labor costs in Poland are €10.1 per hour, compared to an average of €27.4 in the EU. But the data also shows that labor costs in Poland and Romania are rising steadily, and at a higher rate than most EU countries. Romania in particular, saw an 11% increase in hourly labor costs in the Romanian economy (excluding agriculture and public administration) in 2018 to €6.9 from €6.2 in 2017. Although the two countries still have one of the lowest labor costs, this increase in costs will still affect the profitability of enterprises, and will also affect production advantages, thus restricting the development of the industry.