Stability despite uncertain macro-­economic conditions

After two years of somewhat subdued demand, the transactional part of the portfolio recovered throughout the year and demand on the important Chinese market returned to growth. However, a somewhat subdued investment climate prevailed as a result of high interest rates and uncertain macro-economic conditions, which not least caused customers to postpone decisions for larger, capacity-related projects. Strong execution of the order book, in combination with positive effects from footprint optimization and portfolio management, contributed to a stable profitability.

Increased focus on sustainability remains a key driver for demand during the year, be it in plant-based foods where several large projects were won, biofuels or energy and water saving equipment in general. The division also benefitted from a continued focus on innovation and enhancement of an already strong market presence through direct sales channels as well as a broader partner network, further strengthening the market position in several technologies and end markets during the year.

Demand in the biofuel sector, both in bioethanol and biodiesel including HVO (Hydro Treated Vegetable Oil) was overall down compared to a record year in 2023. However, underlying demand remained positive and regulations stipulating a higher blending in petrol and diesel in regions such as North America, South America and India continued to drive investments. Alfa Laval’s historical presence and offering in this growing market was strongly enhanced with the acquisition of Desmet in 2022, both in terms of offering and also presence and competence.

The service business developed well during the year, with 4 percent growth and today represents 27 percent of the division. A positive effect was seen from a stronger market presence, a structured approach of addressing the installed base of Alfa Laval equipment and the wider development of value-added and field services.

The transformation agenda

Transformation in the Food & Water Division is about more sustainable ways of producing, transporting and consuming goods, affecting offering, way of conducting business and requirements for the applications and industries served. Sustainability is, from many perspectives, the driver. For us, it means developing equipment that have sustainability features such as lower energy and water consumption, equipment and solutions that help our customers improve yield in their processes, and getting usable biproducts from raw material and feed used and by that also adding the circularity aspect. The division accelerated its focus on the transformation aspects taking place in the society, although already an important corner stone of the strategy. Products and solutions are developed and offered with this in mind, thereby also supporting our customers’ transformation agendas.

With Water being an increasingly scarce resource, water and waste treatment remains a key focus: Improved products help reduce customers’ water consumption or make water treatment processes more efficient. Global investments in technical infrastructure for water treatment applications were unchanged compared to 2023. Despite being a prioritized area in most countries, investments are not on necessary levels to truly meet the challenges ahead. The division aims to be at the forefront with efficient and innovative solutions for the water industry. Zero liquid discharge is one example where water is recovered from wastewater for reuse in customers’ processes, with residual waste streams significantly reduced.

Next Generation Food drives new requirements in technologies and processes, as well as application development, enabling the division to be a supplier of choice for alternative protein and plant-based food and drink equipment. With new products and solutions adapted to the industry and with offerings that themselves are more sustainable in terms of energy and water consumption, we aim to lead the way. The large order in Sweden for plant-based proteins from peas to strengthen the sustainable food supply was just one of several orders during the year, confirming Alfa Laval’s strong position in this new area.

New fuels, such as biofuel, are after the acquisition of Desmet a meaningful part of the offering. In addition to a growing demand, more sustainable offerings to the industry continue to be developed through focused R&D. Biofuels constitute an important part of the division and is an area of focus with its positive contribution to the global sustainability agenda.

Innovation is key for a more sustainable usage of resources. Significant reductions in energy consumption have been achieved across the product range, with the new separation technology portfolio, high-speed separators as well as decanters being a prime example where new products typically reduce energy consumption by up to 50 percent.

An important enabler across products and industries, is the digital transition of sales, including the configuration of products, ordering and support. Efforts were further increased in 2024, with a continued expansion of the e-commerce platform which enables a bigger part of the business to be fully conducted in a digital, secure and efficient way.

Digitalization also continues to play a more extensive role in service and maintenance work. During the year, more connected products were added and monitored via sensors and cameras to facilitate remote support, saving time, enabling problem solving and simplifying preventive service that ultimately secure more reliable uptime for our customers.