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Danfoss Greens America

May 18, 2006
Danish manufacturer helps U.S. OEMs be more competitive and environmentally friendly.

As regulations mandate greater energy efficiency for such products as home appliances and commercial air conditioners and environmental-protection standards become stricter, more U.S. OEMs could be turning to a Denmark-based component and controls supplier for valves, thermostats, switches, meters, frequency converters, flow controllers, sensors and compressors. At least that's what Danfoss A/S hopes.

Danfoss, unlike Muppets character Kermit the Frog, finds an advantage in being green. The $2.7 billion global company, headquartered on the remote Danish island of Als, derives more than 50% of its revenues working on products affected by regulations or voluntary standards.

"Fighting pollution and global warming and such things is really a grass-roots movement in Europe, much more than in the United States, and we have tried to turn it into a business," says Jorgen Clausen, president and CEO of Danfoss. The company's operating strategy is to help customers in North America, Europe and China become more competitive with more efficient products while also respecting and protecting the environment. Its business in North America, primarily U.S. based, is growing 40% a year. Its business in China is growing 35% a year.

Danfoss CEO Jorgen ClausenMuch of Danfoss' success appears to come from collaborative partnerships with customers. "If they are developing a new model of whatever they do, we will work very closely with their engineering department, and sometimes we change also our own products so they exactly match their requirements," Clausen says.

Danfoss, for example, is working with Manitowoc Ice, a subsidiary of Wisconsin-based Manitowoc Co. Inc., to bring its ice machines into compliance with efficiency standards mandated by 2005 federal energy legislation. " We went out and found suppliers that were willing to work with us on driving efficiency in our machines, and Danfoss is one of the companies that very much stepped up to the plate," says Mike Rimrodt, product line director at Manitowoc Ice.

Since 2003, Trane, a part of Piscataway, N.J.-based American Standard Companies Inc., has had a global agreement with Danfoss to provide variable frequency drives for the HVAC (heating, ventilation and air conditioning) equipment it sells to building owners. "The variable frequency drives Danfoss manufactures for Trane help maximize the energy efficiency and savings in HVAC fan and pumping systems," relates John Conover , president of Trane Americas.

Providing technical solutions to help customers meet energy-efficiency standards is a defining way Danfoss does business, indicates John Galyen, president of Danfoss' North American refrigeration and air conditioning division. Noting that a compressor is the largest current-drawing component of a refrigeration or air conditioning system, he states: "We can make an impact by making that component more efficient. We also leverage our controls background and knowledge to make the system more efficient." In concert with Clausen, he emphasizes that Danfoss also differentiates itself from other suppliers is by being green. "When we're coming up with ideas for sure there is a commercial aspect; it has to be viable commercially," he states. "But . . .it also has to be good for the environment. It can't detract," he stresses. "We don't look at the non-green way out."

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