Food & Water 2022
The Food & Water Division works with products and systems for food and water applications, for example in industries such as food, pharmaceuticals, biotech, brewing, dairy and water treatment.
Share of Group order intake
Aftermarket’s share of the division
16.1%
Operating margin
21,909
Order intake, SEK million
20,691
Sales, SEK million
3,339
Operating profit, SEK million
Strong growth in most major markets and industries
Growth continued in 2022, reflected in all end markets and most geographic markets. Demand was driven by an increased structural demand for more efficient equipment, a growing addressable market and a continued recovery in capacity investments in areas where demand weakened during the pandemic. Several years of high focus on innovation, market presence and building an even stronger channel partner network is coming even more into fruition, allowing the division to increase its market position in several technologies and end markets during the year.
Nish Patel
President, Food & Water Division
Orders increased by 36 percent in 2022, to a new record level of SEK 22 billion. Demand remained strong across most end markets. The changing consumer behaviour in the food market drove demand for new plant-based proteins, an area expected to play an increasingly important role as we strive to find more sustainable methods of food production to serve a growing population. Investments also continued in technical infrastructure within water treatment in many geographical markets. The increased need for more efficient water and wastewater treatment is driven both by new regulations and lower operational costs. Growth remained strong in Biotech & Pharma and Brewery driven by investments in new processing equipment.
The acquisition of Desmet, a world leader in engineering and supplying processing plants and technologies for the edible oils and biofuel sectors, was finalized in August. Global investments in biofuels and HVO (hydrogenated vegetable oil) have accelerated in recent years. The need for alternative fuels is expected to continue to grow in the years to come, and the acquisition was a strategically important step to significantly strengthen Alfa Laval’s position in this growing market and support the transformation towards renewable fuels. Besides strengthening our offering, Desmet also added highly regarded development competences and facilities for the biofuel industry, and a strong global presence in sales and engineering.
The service business developed well during the year with 12.5 percent growth and today represents 25 percent of the division. The positive development for value-added services and field services continues as a result of increased presence and new ways of working.
Phasing fossil
Around 45 million tonnes of vegetable oils and animal fats are used in the production of biodiesel and HVO every year, driven by legislation and increased consumer demand for transportation fuel, including jet fuel. Global demand for biofuels is expected to grow by 41 billion litres, or 28 percent, between 2021-2026 according to IEA.
With more than a 100 years of experience of refining fats and oils from plants and animals, Alfa Laval offers the market’s broadest portfolio of technologies for boosting the technical capabilities and commercial viability of biofuel processing operations. Our process lines are always optimized according to the demands of our customer’s market and local conditions. This is how we ensure customers get the perfect solution for the most reliable – and profitable – performance in their processing.
Sustainable growth
The division continued to work on all aspects of sustainability, both in terms of offering and in terms of applications and industries served. The acquisition of Desmet broadens Alfa Laval’s offering not least as a very strong player in the biofuel market and increases the sustainable offering of the division. The dedication and focus on investments in technological innovation and development of a sustainable and competitive product range continued beyond the Desmet acquisition. New technology is becoming even more energy efficient, in most cases also combined with enhanced performance. Significant reductions in energy consumption have been achieved for separation technology as a whole, both for high-speed separators and decanters, where newly launched products can typically reduce energy consumption by as much as 50 percent. Another priority area is water and waste treatment, where improved products are helping to reduce customers’ water consumption or making water treatment processes more efficient. Zero liquid discharge is one such example, where water is recovered from wastewater for reuse in our customer’s processes and residual waste streams are significantly reduced.
Driving the digital agenda
It is becoming evident that sales are increasingly subject to a significant digital transition. This includes customers and channel partners asking for more information to be available online for direct customer interaction with the possibility to configure and select products and features on their own, to obtain a rapid response. Supporting this trend involves a continued expansion of our e-commerce platform, enabling more business to be fully conducted in a digital, secure and efficient way. Digitalization is also having an impact on service and maintenance work. More and more products are connected and monitored via sensors and camera technology. This kind of remote support saves time, facilitates problem solving, simplifies preventive service and ultimately gives the customer more reliable uptime.
Give the cow a break!
According to Markets and Markets, the plant-based drink, yoghurt, ice cream, cheese and creamer market was estimated to be valued at USD 22.6 billion in 2020 and is projected to reach USD 40.6 billion by 2026, recording a CAGR of 10.3 percent in terms of value. Consumers continue to show an increasing preference for plant-based and vegan food options over animal-based food. Other factors driving demand for plant-based options are the growing attention to the nutritional benefits offered by plant-based foods, in combination with a rise in lactose intolerance and other kinds of dairy allergies, which are also fuelling demand.
The growing equipment market gives Alfa Laval an opportunity to expand its presence and business in the field, while also developing its offering with respect to how customers can better upcycle leftovers and capitalize on waste streams.
Significant end markets
20%
Proportion of the division’s order intake
Dairy
Hygienic products for dairy processes – from whey, milk and cream processing to the production of ice cream, cheese, soured cream or yoghurt. Products include separators, heat exchangers, tank cleaning equipment, membranes, pumps and valves.
8%
Proportion of the division’s order intake
Water and waste treatment
Products and solutions for municipal wastewater treatment and for industrial water and waste treatment. The range includes everything from decanter centrifuges and belt presses, to spiral and tubular heat exchangers and membrane bioreactors.
5%
Proportion of the division’s order intake
Protein
Products for the recovery of protein, fats and oils from vegetable and animal residues for the production of everything from gelatine, fish oil and fishmeal to bone meal, surimi and animal feed. The product portfolio includes separators, decanter centrifuges, evaporation systems, membranes, heat exchangers and steam boilers.
9%
Proportion of the division’s order intake
Ethanol, starch and sugar
Separators, decanter centrifuges, heat exchangers and evaporation systems are used in the production of starch and sugar, which in turn are raw materials in the production of ethanol.
9%
Proportion of the division’s order intake
Brewery
Products for all aspects of the brewing process, from mash and wort production and fermentation, to filtration and pasteurization. The range includes, for example, separators, membranes, decanter centrifuges, mixing equipment, plate heat exchangers, pumps, valves, run-off water systems and pasteurization modules.
10%
Proportion of the division’s order intake
Pharma & Biotech
Pumps, valves, separators, membranes, decanter centrifuges, tank cleaning equipment and heat exchangers for processes with stringent cleanliness requirements, such as the production of liquid or solid pharmaceuticals, vaccines, creams and ointments.
17%
Proportion of the division’s order intake
Edible oil
Products such as separators, decanter centrifuges, heat exchangers and pumps are used to produce oils from rapeseed, olives, soybeans or fish, for example. These oils are processed to meet customers requirements in terms of colour, taste and nutritional value.
19%
Proportion of the division’s order intake
Prepared food & beverage
Changing lifestyles also brings new ways of how consumers are preparing and consuming food. Alfa Laval’s technologies allow the hygienic and efficient preparation and manufacturing of prepared food.
Producing more with less
By 2050, the world’s population is expected to reach 9.7 billion people. This will put a heavy strain on food supply and critical infrastructure, including water and sanitation. It will be more important than ever to use natural resources efficiently and improve the environmental impact of our industrial processes.
According to the United Nations, currently 2 billion people lack access to clean drinking water and 3.6 billion are still living with poor quality toilets ruining their health and pollute their environment. In addition, one in nine people do not get enough food to lead active, healthy lives. By 2050, the need for high-quality protein will increase by 50 percent.
For the food industry, this will mean having to get more from natural resources through more efficient and sustainable processes. Alfa Laval is already a leading supplier of innovative products and solutions that can help food and beverage producers maximize yields from their ingredients while saving water and energy. For example, in its largest ever order, the company will work with one of the world’s biggest brewing companies, Golden Brewery in the US, to install new state-of-the-art equipment that will reduce water and energy usage while maximizing the yield and meeting the highest standards of productivity and sustainability.
Another sustainable solution is the Alfa Laval Revos™ concentration system. It can remove water from beer, wine and cider, in order to greatly decrease its volume for transportation. Water is then added close to where the beverage will be consumed, without affecting its quality or taste. This can reduce shipping costs by up to 80 percent as well as reducing emissions from transportation.
Food scarcity, along with lifestyle changes such as increased vegetarianism and veganism, are leading to new plant-based protein sources being developed. In 2022, Alfa Laval signed an agreement to deliver a customised process system, consisting of separators, decanters and evaporators, that will extract protein from mung beans for a leading plant-based food producer. The solution, which will be installed in a new plant in Singapore, will also recover more than 90 percent of the water used in its process.
The recent acquisition of Desmet, meanwhile, will strengthen Alfa Laval’s position in the renewable energy arena and complement its offering within edible oils and plant- and animal-based proteins for food and feed.
These steps position Alfa Laval to be a pioneer in finding new ways to meet the food and water needs of future generations.