LOPE's "Chinese Chip"

2024-06-03 17:33
Lope's "Chinese Chip"

In the wall mounted furnace industry, there is a very special enterprise, which is Lope Thermal Energy. It did not enjoy the market dividend of "coal to gas" conversion, and when the domestic market was booming, it chose to study and absorb oxygen overseas. In the era of "coal to gas conversion", we resolutely chose to return to China, attempting to rely on our own technological accumulation in fully premixed products to lead domestic enterprises towards the "fully premixed era" and expand new growth poles for industry development.

China has always had the saying of "taking advantage of the fire to rob" since ancient times, and there is rarely a case of giving charcoal in the snow. In the view of Qinggore Information, Lope's strategic transformation is actually like delivering charcoal in the snow for the current development of China's wall mounted furnace industry. Today, let's walk into Zhongshan Nuopu Thermal Energy Technology Co., Ltd. together and listen to the stories of the company's chairman Deng Chengjie and Nuopu, as well as the era of full premix.






First,from "cold" to "hot", a difficult decision

In the development history of wall mounted stoves in China, the emergence of Lope is not a significant milestone, but it is definitely a crucial one. This also starts with the entrepreneurial story of company chairman Deng Chengjie. In fact, Deng Chengjie is considered an elderly person in the HVAC industry, having been in the industry for over 30 years.

    Deng Chengjie has been engaged in the refrigeration industry for over 30 years, with nearly 20 years dedicated to expanding overseas markets and frequently dealing with foreign-funded enterprises. During his over 20 years of working overseas, Deng Chengjie has served many enterprises, including those that produce wall mounted boilers. Therefore, for him, although he has been focusing on the refrigeration industry for over 20 years, he is not unfamiliar with the heating industry. Some clients have suggested that he pay more attention to the heating industry and understand the growing demand for wall mounted boilers. In Deng Chengjie's view, both the refrigeration and heating industries belong to the HVAC industry, and it is not impossible for both parties to penetrate their business. So, at the suggestion of the client, Deng Chengjie began to frequently engage with the wall mounted furnace industry from 2015 to 2018, to learn and research. During this period of study, the strong promotion of the "coal to gas" policy in China has led to a rapid and promising development of the wall mounted boiler industry.

    During this period, there have been constant suggestions from domestic customers for me to plan and layout my products. Deng Chengjie, who was somewhat tempted, did not hesitate and plunged into the "heat" of coal to gas conversion. After several years of exploration and learning, he referred to the usage scenarios of wall mounted stoves abroad and gave himself a clear direction for investment and entrepreneurship - entrepreneurship must have a high starting point and choose a promising sunrise industry. Based on this, Deng Chengjie was the first to abandon the popular ordinary wall mounted boilers at that time. "Personally, I believe that when an industry is already booming, investment loses its meaning." Deng Chengjie's years of expansion experience abroad made him understand the application advantages of fully premixed condensing furnaces, and they were not widely used in the domestic market at that time. "This is a great cut to make a fully premixed heat exchanger and expand the new track of Northrop from a high starting point, doing things that everyone has not started yet. Of course, after clarifying the company's investment direction, Deng Chengjie did not flow into this pool of" mixed water "in China. In his view, domestic market peers who have been eagerly promoted by" coal to gas "no longer have the energy and ideas to make early layouts on fully premixed products, which is temporarily not within his consideration.".

In 2019, Zhongshan Nuopu Thermal Energy Technology Co., Ltd. was officially established. Deng Chengjie anchored the company's business direction in the overseas fully premixed condensing furnace market and introduced production equipment for fully premixed heat exchangers from Germany, beginning to compete with some foreign heat exchanger brands on the same platform. Based on the accumulation of resources in expanding overseas markets in recent years, Northrop has begun its search for the "national first brand of fully premixed heat exchangers". "In the first few years of our entry, we directly targeted the overseas market, strengthened and accumulated our technical reserves in fully premixed heat exchangers through cooperation with foreign enterprises. For the domestic market, my initial judgment was that the time was not yet right and we needed to wait for some time." Deng Chengjie said, "It has been 5-6 years.". During this period, the grand "coal to gas" campaign has basically come to an end in 2022, and the market policy has narrowed. After the dividend of coal to gas conversion ended, a large number of domestic wall mounted boiler enterprises began to seek strategic transformation, abandoning or reducing the production of ordinary wall mounted boilers, and began to target the gradually emerging fully premixed condensing furnaces.

    "During the expansion of overseas markets, we have good cooperation with Copa, Hana and Lendi. As far as the Türkiye market is concerned, Knoop has successfully entered the local mainstream brands and accumulated good reputation. Customers like Copa have maintained good business dealings since the launch and entrepreneurship of Northrop Deng Chengjie stated in an interview with Qinggore Information that in the past few years of expanding overseas, Lope's product performance and quality have never disappointed customers, and the quality has been continuously improved and optimized in service. In Deng Chengjie's view, it is precisely because of the accumulation of 5-6 years of learning and practical experience in overseas markets that we have solidified the foundation for Northrop to build the "national first brand of fully premixed heat exchangers".

    Of course, choosing the high starting point product of fully premixed heat exchangers and promoting it to overseas markets has also taken significant risks. "At the beginning, there were many difficulties. In China, from material selection to process and assembly, you could not find a reference, and even plagiarism had no goal. So we had to go overseas to seek technology, and set up a technology research and development team in Türkiye." Deng Chengjie said that as a new brand of full premixed heat exchanger, Knoop spent a lot of energy to search and study these existing patents, and circumvented the "pit" of these patents through its own independent innovation. There are too many bitter stories here. In Deng Chengjie's view, the overseas R&D team of the company has made an indelible contribution to the establishment of Lope in the field of fully premixed heat exchangers. Today, Knoop's overseas R&D team has expanded to 6 people, 2 from Italy and 4 from Türkiye, including cutting-edge talents in R&D, quality control and other fields. "At present, this team has become a fulcrum of Lope's overseas market, not only responsible for industrial technology development, but also providing professional after-sales service and technical support." Deng Chengjie revealed in an interview that Lope's overseas technology team is collaborating with some well-known local enterprises to develop high-power products, covering multiple models such as 99KW, 100KW, 125KW, 150KW, etc. It is expected to be officially launched in the third quarter of 2024.

    Heroes have been tempered since ancient times. For Northrop, seeking development amidst relatively mature foreign brands, coupled with the lack of support from domestic market applications as a domestic brand, is like "grabbing food from a tiger's mouth" in overseas markets, which is not an easy task. "Fortunately, after years of technological accumulation, we have also seen the demand for fully premixed products in the domestic market, which is an opportunity for Lope to shift from overseas to the domestic market." Deng Chengjie believes that with the policy of coal to gas narrowing and the implementation of the country's "dual carbon" goal, fully premixed condensing furnaces with high thermal efficiency and energy-saving and environmental protection performance are currently one of the best energy heating solutions. Especially in March 2024, the government encourages the exchange of old for new products to achieve high-quality development, encourages product energy efficiency transformation, and achieves product upgrading and replacement. This is a rare opportunity. I am personally optimistic about the future development of fully premixed wall mounted boilers and hope to help domestic enterprises smoothly achieve product strategic transformation and seek new development paths through Lope's technological exploration. It is precisely because of the market development trend of future wall mounted boilers that Deng Chengjie hopes that domestic peers will take this matter seriously with a positive attitude, do a good job in strategic transformation as soon as possible, upgrade products and services, and welcome the arrival of new markets and opportunities.

Second,from "outside" to "inside", a "Chinese chip" of Lope

In 2022, after experiencing the development pains of the post "coal to gas" era, domestic wall mounted boiler brands became the main force of transformation and began to focus on fully premixed condensing wall mounted boilers. Some companies even directly cut off the business of ordinary wall mounted boilers. For a while, the industry has shown a development trend of fully entering the era of pre mixing. However, due to the incomplete industrial chain support at that time and the relatively rough technology of domestic fully premixed products, these enterprises represented by domestic brands also encountered certain difficulties in transformation and upgrading. At that time, the industry also raised doubts about fully premixed products. Deng Chengjie believes that as soon as the "coal to gas" competition ended, he immediately hoped to enter the "fully premixed era". The timing was not yet fully ripe, and at that time, Lope was still continuing to accumulate and actively preparing to expand the domestic market. For domestic enterprises, having a domestic brand as a technical support will result in twice the result with half the effort in product development and expansion. And with the dream of being the national number one brand of fully premixed heat exchangers, Northrop has become one of the best choices.

    In the past two years, the popularity of fully premixed products in China has not decreased. With the joint development of host enterprises and accessory enterprises, in terms of supporting equipment, it is now fully possible to achieve 100% localization. That is to say, the technical barriers of fully premixed products have been basically broken through, and the "fully premixed dream" of domestic wall mounted furnace brands is no longer a castle in the air. It is also possible to seek new development opportunities through the upgrading and replacement of fully premixed products. "As of now, what I personally understand is that many large domestic brands, such as Little Squirrel, and other manufacturers can achieve 100% localization, and there is no problem with technology and quality." Deng Chengjie said that in recent years, Northrop has made great efforts in developing domestic fully premixed heat exchanger products, and has also done a lot of technical docking work with some foreign and domestic parts suppliers, which can provide overall product technology development solutions for whole machine manufacturers.

    "Some of the products of some enterprises have also passed the tests of the Lope Laboratory, and after one or two heating seasons of verification, they have successfully passed the first wave of market tests." Deng Chengjie believes that the path for domestic brands' fully premixed products to advance has been paved and can be widely promoted. As for Lope, we are fully capable of achieving localization and being able to resell for export, which also proves that our fully premixed technology has reached international level. At the same time, I understand that some of our fan and valve body enterprises have also achieved international level product performance. From this, we can judge that the fully premixed condensing furnace can already achieve 100% localization. In fact, Deng Chengjie has also seen that in the fully premixed market, China is constantly moving forward. This also further strengthens the determination and confidence of Lope to actively expand the domestic market and serve national enterprises.

In April 2024, Sifang Optoelectronics Co., Ltd. signed a strategic investment agreement with Lope Thermal Energy to support Lope's deep development of the domestic fully premixed market. For Northrop, with the strategic investment of listed company Sifang Optoelectronics, it will usher in a new development in product research and capacity expansion. "We will have more confidence in promoting the industry to fully enter the era of pre mixing and win the second spring of development." Deng Chengjie revealed in an interview that the company is preparing to expand production.

    At this time, boosting confidence is crucial for various industries. In Deng Chengjie's view, whether it is the replacement market brought about by the "post coal to gas" era or the recently launched policy of encouraging the exchange of old for new by the country, this is actually a new opportunity for the development of the wall mounted furnace industry. "At present, many wall hanging furnace enterprises are waiting for good news. I want to say that, on the one hand, we can expect the state to increase subsidies for all premixed products, and regardless of the predictable market opportunities brought by trade in and natural replacement, even in Europe, Iran, Russia, Türkiye and other countries and regions, there is still a large export gap." In Deng Chengjie's view, as long as domestic enterprises improve the quality of all premixed products and firmly adhere to the development path of this technology, they will certainly win a good future. "At this moment, changing the track is as early as possible, and investing in fully premixed vehicles is as fast as possible." Deng Chengjie believes that the development of domestic enterprises on the fully premixed track is actually urgent.

   Of course, everyone has a royal heart. In Deng Chengjie's view, from the beginning of its establishment, Knoop has aimed at fully premixed heat exchangers and established the brand positioning of "the first national brand of fully premixed heat exchangers", and has been committed to consolidating its foundation and continuously moving towards its dream. Today, Knoop has fully entered the forefront of the industry in terms of sales and influence on fully premixed heat exchangers. According to Deng Chengjie, currently, over 80% of domestic whole machine manufacturers have chosen to cooperate with Lope to develop fully premixed products.

Third,the era of full premix has arrived, what is Lope doing

Although fully premixed condensing heat exchangers are not an emerging industry, their application in the domestic market is on the rise and is currently in a strong trend of domestic production. For Northrop, the accumulation in overseas markets in earlier years will undoubtedly open up a green channel for its expansion into the domestic market. In fact, Lope has taken on the responsibility of expanding the domestic fully premixed market.

    Deng Chengjie confidently believes that the heat exchanger developed by Northrop will have more advantages in adaptability. He said, "Faced with different components, structural designs, and solutions from different manufacturers, the Northrop heat exchanger can basically meet the matching requirements, which is our technical feature and advantage." In addition, Deng Chengjie also introduced that with the continuous development of the product, the power range of Northrop products is becoming wider and wider, ranging from 20KW to 65KW. In the future, products as low as 12-16KW and as high as 100KW and above will be launched. We have established a relatively complete supply chain in the field of fully premixed condensation products, which can better match various demands of the domestic market.

    Of course, we believe that with the advancement of the "fully premixed era" in the domestic wall mounted furnace market, Lope's "Chinese chip" will definitely shine and continue to approach the "national first brand of fully premixed heat exchangers".

    At the end of the interview, Deng Chengjie revealed to Qinggore Information that based on the expansion of future fully premixed product applications and the development path of technology, Lope Thermal Energy has prepared two technical reserves: firstly, the company is developing an engine assembly for a gas heat exchanger, integrating heat exchangers, fans, gas valves, and other related components. Through blending and synthesis, the product achieves perfect balance and high performance, and is more convenient to match with wall mounted boilers. Secondly, research on hydrogen fuel burners and improve heat exchangers to produce hydrogen fuel mixed products.

    For the market, it's better to arrive early than to arrive coincidentally. Lope's strategic decision from "outside" to "inside" was indeed coinciding with the situation and emerged