NR2208

NEWS RELEASE                                                                                        MARCH 2016

Daikin Now has Over a Nine Percent Market Share in Air Filtration with the Purchase of Flanders

Daikin Industries Ltd., through its subsidiary American Air Filter Co. Inc., has acquired Flanders. The acquisition price was $430 million. As a result of the merger, the Daikin’s filter sales will exceed ¥100 billion ($890 million) annually.  Approximately 75 percent of that business is in the $7.3 billion air filtration segment. So Daikin will enjoy almost 10 percent of a world market. This is a market which is quite splintered and no competitors are dominating.

Flanders is a U.S. based corporation as is AAF. Both have long histories dating back to the post World War II period where the U.S. was the center of the semiconductor industry and warm air heating (steam radiators were used elsewhere). The U.S. filter market share was greater than 50 percent at that time.  Now the market share is falling toward 10 percent.  Semiconductor production is centered in East Asia.   Residential filter sales are soaring in countries such as China and India with highly polluted air.

Flanders has high value-added products such as those used in cleanrooms for semiconductors, pharmaceuticals and food processing. There is also a middle value added product range used in gas turbine intakes. There has been a movement to much higher efficiency to better protect the high performance turbines produced today.  So the high efficiency microfiber glass filters from Flanders will be more relevant.

Flanders also has the low end products - a broad product lineup ranging from commercial to residential and a nationwide sales network.  Flanders has manufacturing bases near most major U.S. cities, including Chicago and New York, and provides short lead times and low logistics costs to deliver products that are cost competitive in the low end market.

Having established manufacturing bases in the regions of Japan, North America, Europe, China and Southeast Asia, Daikin has expanded its filter business through its subsidiaries AAF and Nippon Muki Co. Ltd.  Products have focused on commercial-use air conditioning filters used in buildings and factories and the engineering fields, including dust collection systems for production facilities. AAF has established itself in each region of the world and performs development, production, sales and service for products satisfying the needs of an extensive market.

Daikin, through AAF, is also a participant in the equally large dust collector filter market. However, it has chosen to pursue the low end value filters in this market and, therefore, has a tiny market share.  Some of the same cartridges used in gas turbine intakes are also used in woodworking, welding and other low temperature dust collector exhaust applications. Some competitors such as Donaldson and Clarcor are in both markets.  Clarcor recently expanded into the high end dust collector market with the purchase of the BHA division of GE.  Both the dust collector and air filter markets will show high growth over the next decade.

For more information click on: N022 Air Filtration and Purification World Market  

For more information click on:  N021 World Fabric Filter and Element Market