Big changes are happening at global fan and motor manufacturer ebm-Papst as it battles a downturn in the heating market in its home country where German energy policy now mandates that new heating systems be powered by renewable energy. Corporate repositioning efforts are focusing on its core strengths in air and heating technology to serve international markets. Recent developments include:
- Plans to expand its manufacturing and engineering facility in Connecticut
- Plans to sell its Industrial Drive Technology business to Siemens
- Completion of a new manufacturing plant in Tennessee
- Growth expansions at numerous other sites globally
Set to kick off this summer, a $3 million project at its manufacturing and engineering facility in Farmington, Connecticut entails a substantial 14,500-square-foot extension to the existing facility. Central to this expansion is the revitalization of the Tooling Center, the division responsible for crafting equipment used in manufacturing at both its USA locations.
“The expanded Tooling Center underscores our commitment to optimizing production processes and enhancing support for our North American operations,” explained Mark Shiring, CEO Air Technology Americas. “By localizing our tooling capabilities, we aim to boost efficiency and responsiveness while reducing reliance on external resources.”
The upcoming expansion follows closely on the heels of a significant growth investment made by the company less than two years ago. After only 12 months of construction, ebmpapst Inc. opened its second location in the USA in November 2022—a new production plant for highly energy-efficient, electronically commutated fans and motors in Telford, Tennessee.
“The sale of IDT is part of the consistent implementation of the corporate strategy of ‘Making the Future Together’, which has been in place since 2022. With this strategy, ebmpapst intends to focus on its core business of air and heating technology and accelerate the transformation of the company in terms of sustainability and digitization as well as international expansion,” says Dr. Klaus Geissdoerfer, CEO of ebmpapst Group.
“We will use the proceeds from the sale of the IDT business to further expand the Air Technology and Heating Technology divisions, to further strengthen our three regions of Europe, APAC/MEA, and the Americas and to invest in future areas such as digitization and the sustainability of our product portfolio.
At present, the company is suffering in Germany from the aftermath of the controversial Buildings Energy Act which mandates that new heating systems be powered by renewable energy and the resulting uncertainty in the markets. The heating technology segment lost 18% of its sales compared to the previous year. “We continue to hope for a clear and practical roadmap for the heating transition in Germany and Europe,” says Geissdoerfer.
Growth markets in Asia are also seeing fresh investment by the company. Around 25 million euros is going into the site expansion in Xi’an, China, where 27,000 square meters of production space will be created. The company had already opened its new China headquarters ONE Shanghai in the spring, and a further location in southern China is already being planned. A state-of-the-art IT hub has been established in India. The company also plans to expand local production capacities to supply the Asia region outside China from India in the future. Singapore was recently expanded as the new Asia-Pacific headquarters.
In eastern Europe, a new air technology site is being organized in Oradea, Romania. The 56,000 square meters of land for this project has already been acquired and construction is expected to begin at the end of the year.
