Baxi and the Band A boilers

Baxi, founded in 1866, is best known for its heating systems. It started out selling solid-fuel fires, then launched gas boilers in the early 1960s. Today it has 1400 staff in the UK and the group’s turnover is more than *1.25 bn (£8.4bn). Its headquarters are in Preston, but it has manufacturing sites in Germany, Italy, France, Denmark, Spain and Turkey to cover the commercial, industrial and residential markets. Alex Scott, product manager for the residential sector, talks about the boom in the condensing boiler market since Part L of the Building Regulations was implemented in April 2005.

Q: What impact has Part L had on business?

A: There has been a pretty dramatic swing. The volume across the marketplace is the same but proportions have changed. In 2005, high-efficiency condensing boilers made up 60% of sales. That’s risen to 87% this year.

Q: How did you get ready for the new Regs?

A: In 1998 we started working on what would become band A condensing boilers, but we found out that a lot of our clients were reluctant to specify them because they were new technology and came with a premium price tag. So we decided to supply band B boilers as a stepping stone.

Both bands perform better than the standard efficiency qualifying level for the Building Regulations. They’re both in equal demand because band B boilers perform 15% better than the boilers they are likely to replace. When Part L came into force and condensing boilers were increasingly specified, 95% of our customers were familiar with the new system. The transition has been easier.

Q: Does Part L spell the end of band D boilers?

A: Traditional systems for band D boilers have become less worthwhile but they are still allowed in some markets in England and Wales. In Ireland there is no energy efficiency standard yet and they’re still allowed in Scotland. But to specify band D boilers in England and Wales, you have to prove that other options are too expensive. It’s a lot of trouble. The market for band D boilers is definitely on the decline.

Q: What’s the most popular product?

A: Combination boilers dominate the market with 70% of total sales. They have displaced the traditional floor-standing and back boilers. Wall-hung boilers are still popular. Combis are not appropriate to every insulation application, however. The National House Building Council says combis are best suited for small properties because of the limited amount of water available. The problem is, people use them in applications where separate boilers are more suitable.

Q: How do you provide guidance to specifiers?

A: We have a sales team that works with the new-build market. We also have a team specifically dedicated to liaising with social housing market providers.

Q: What’s the largest job you’re working on?

A: We’ve recently secured a contract with all local authorities in Greater Manchester. They are going to specify 70,000 of our boilers over the next five years.

Q: How would you describe the market?

A: The market is healthy. There are about 26 million households in the UK and it is estimated that 1.5 million have to replace their heating system every year.

Q: How do you respond to the government’s emphasis on alternative sources of energy?

A: This year we launched a solar package. We provide the cylinder, solar panels and control system, which means installers don’t have to get each part from different manufacturers and make sure they match. We have also launched systems that use biomass and heat pumps and we are developing microgeneration products in collaboration with Microgen Energy. The only products we don’t offer yet are photovoltaic panels and wind turbines.

Q: Are there any factors that could lead to higher prices or shortages?

A: The price hikes in raw materials have affected us as much as anyone else. China is sucking in copper and steel, which has had an impact. We absorb as much of the extra cost as we can by working with alternative suppliers, but the increase for, say, copper pipes is passed on. But customers see it whichever firm they use.