Market
Industry consumes almost 50 percent of all globally produced electricity.1) Compressed air is a key part of industrial manufacturing processes and is widely used, for example, to power up machines, equipment and automation, as well as for moving materials related to production processes in different ways. 10 percent of industrial electricity is used to produce compressed air.2) Therefore almost 5 percent3) of all electricity produced globally each year, about 1400 TWh, is used to produce industrial compressed air.
The growth of industry and the strong increase in automation increase the use of compressed air by approximately 5.8 percent annually, which also increases the consumption of electricity.4)
The increase in environmental awareness increases the use of energy-efficient and less environmentally burdening devices and clean technologies. On the other hand, the continuous increase in the price of energy increases the need for industry to look for more energy-efficient solutions than the current one. The challenges of “oil-free”5) screw technology, which is currently the predominant technology in compressed air compressors, are the impurities contained in the compressed air produced by it, the energy inefficiency of the technology, and the high need for maintenance and upkeep due to the rapid wear of complex devices and parts. Clean and oil-free compressed air is also essential in many industries. Industry therefore needs a more energy efficient and environmentally friendly solution for producing compressed air.
Tamturbo offers its customers a new generation compressor solution to achieve cleaner, in the Company’s opinion, more energy-efficient and almost maintenance-free compressed air production. Tamturbo’s Touch-Free™ technology is 100 percent oil-free. It offers a truly ecological and sustainable solution for the production of compressed air. In addition, according to the Company’s understanding, it is a clearly more affordable option than traditional technology in terms of life cycle costs. The solution can also be implemented as an Air-as-a-Service service, in which case customers only pay for the compressed air they use.
Tamturbo’s current and potential new customers are the world’s leading industrial companies that want to use oil-free compressed air in their production processes without the high costs of filtration and air purification. Such industries include, for example, the food and beverage industry, the paper and pulp industry, the electronics industry, the automotive industry, the textile and glass industry, the chemical industry, the pharmaceutical and cosmetics industry, and the manufacturing industry, all of which use significant amounts of compressed air in their processes, and for all of which the purity of the compressed air is the quality of their own production of paramount importance.
Market size
Tamturbo operates in large, global and growing markets. The global air compressor market size was estimated to be valued at USD 16.51 billion in 2022 and is projected to grow at a CAGR of 5.8% from USD 17.22 billion in 2023 to reach USD 25.60 billion by 2030.6)
The market is divided into oil-free and oil-lubricated compressors. Based on the company’s own estimate and the source material it uses, the share of industrial oil-free compressed air in the market value in 2021 was about 3.0 billion dollars. According to the company’s own estimate, the share of oil-free compressed air is about 20–25 percent measured by air volume, and it will increase to 50 percent in 5-10 years.
Competitive environment
Industrial oil-free compressed air can be produced by a number of different technologies. The technology that competes with Tamturbo’s air compressors in the same power range is the “oil-free”7) screw compressor technology manufactured by only a few large companies. In addition, numerous medium-sized manufacturers purchase essential oil-free compressor components or compressor cores from these large manufacturers and build their own oil-free compressor packages.
From the perspective of customer needs, Tamturbo’s products compete mainly with oil-free dry screw compressors. Indirectly, Tamturbo also competes with traditional geared turbo compressors and oil-lubricated screw compressors.
The purity of compressed air is absolutely critical in many industries, including those processes where compressed air comes into contact with end products. The oil contained in the compressed air produced by traditional technology damages air compressor actuators, degrades the quality of the products manufactured and exposes workers to poor air quality and mineral oil in the form of vapor and aerosol.
Based on the company’s own estimate, the rapid and strong growth of the market relevant to Tamturbo is due to the growing demand for oil-free compressed air within the growing compressed air market, and the technological breakthrough in the oil-free compressed air market. The key driver here is the increase in environmental awareness, which increases the use of energy-efficient and less environmentally burdening devices and clean technologies. The rise in the price of energy also creates cost pressures for the industry. The main goal of Tamturbo’s growth strategy is to take advantage of this ongoing technological breakthrough by enabling cleaner and more energy-efficient processes with its completely oil-free compressed air solutions, according to the Company’s understanding, with clearly lower life cycle costs, thus displacing traditional technology.
Sources
1) https://www.iea.org/data-and-statistics/charts/electricity-total-final-consumption-by-sector-1971-2019
2) www.energy.gov/eere/amo/articles/determine-cost-compressed-air-your-plant
3) Total global production of electricity app. 29 000 TWh (https://emberclimate. org/data/data-tools/data-explorer), of which 5% is 1400 TWh (2022) (compressors total/year)
4) https://www.fortunebusinessinsights.com/industry-reports/air-compressor-market-101672
5) Although the name oil-free screw compressor refers to complete oil-freeness, the unit still uses oil. The gearbox and bearings of the compressors are lubricated with oil, but the compression spaces of the elements themselves are completely oil-free.
6) https://www.fortunebusinessinsights.com/industry-reports/air-compressor-market-101672
7) Although the name oil-free screw compressor refers to complete oil-freeness, the unit still uses oil. The gearbox and bearings of the compressors are lubricated with oil, but the compression spaces of the elements themselves are completely oil-free.