Editor’s Note: Every successful project starts with a framework. A vision statement. A blueprint.
The editors of Engineered Systems are proud to introduce The Blueprint — a Q&A interview with HVACR engineering’s leading voices. These one-on-one discussions will examine the trade’s history, current industry trends, and the factors shaping the sector’s future.
By all accounts, 2018 was a banner year for Modine Mfg. Co. The Racine, Wisconsin-based manufacturer introduced its PTC unit heater with BMS connection compatibility, DOAS units, and more last year. In fact, the last two years have been phenomenal for the company, which boasted a 50%-plus increase in revenues.
Editor-in-chief Herb Woerpel sat down with Scott Miller, Modine’s vice president for the Building HVAC group, to discuss what worked in 2018, what’s in store for 2019, the manufacturer’s budding role in the ever-changing technology landscape, and more.
Engineered Systems: How have 2018 and the first half of 2019 been for Modine?
Miller: Overall, 2018 was a solid year, and we’re off to a good start this year. We’ve seen great strength on both sides of the market in our distributed products and our engineered products line. We’re still optimistic about future commercial spending levels. There’s quite a bit of media attention being paid to concerns about the future health of the economy, but we’re still seeing good broad-based activity. We expect that to continue at least in the short term.
Engineered Systems: What were some of the highlights for Modine in 2018 and thus far in 2019?
Miller: In the Building HVAC Group, we extended our packaged ventilation systems product lineup last year, which now runs up through the 60-ton range. We’ve spent many years developing products in this area. We also recently launched a BMS-compatible unitary unit, which is just the beginning of future launches in that particular space. We’re really excited about that. For Modine, as a whole, we’ve also fully integrated the Luvata HTS acquisition that we made at the end of 2016. There was plenty to keep us busy last year.
Engineered Systems: Looking back over the past two years, Modine has increased revenues by more than 50% from $1.4 billion in fiscal 2016 to $2.1 billion in 2018. That’s a fairly significant increase. What’s the catalyst of this growth?
Miller: We can credit this growth to a combination of things. A good portion of that growth could be attributed to the addition of Luvata HTS, which we call our Commercial and Industrial Solutions group (CIS), to Modine, and we’ve also experienced a great deal of organic growth within our key product lines, specifically within our Building HVAC area. It’s been a combination of growth factors that’s gotten us to the level we’re at right now.
Engineered Systems: Our engineering audience was excited about the release of the Effinity™ commercial unit heater with BMS compatibility to most monitoring systems. Can you tell us a little more about this unit?
Miller: We’re really excited about this as well. It’s a big change for us in what I call our unitary space. It gets us moving down the path toward more digital, real-time communication opportunities with our products. As time moves on, intelligence and digital communication will be baseline features, ensuring customers get the most value from their purchases. In our space, in certain areas, advanced technology is something that is going to evolve at a much more accelerated rate as we move forward.
Engineered Systems: What distinct advantages does the Effinity commercial unit heater with BMS compatibility offer HVACR designers and engineers?
Miller: Different customers will have different needs, requirements, and desires. Our goal is to enhance our overall value package for our customers. This not only enhances that two-way communication between our equipment and our customers, but it also provides different levels of communication depending on our customer needs. Like all Modine control systems, this particular unit can adapt to an existing BMS, allowing customers to easily replace old units with a more efficient unit heater.
Engineered Systems: What applications does the unit work best in?
Miller: This works best when you have multiple unitary units; areas where, in a traditional sense, each unit would have been operated independently. A greenhouse is one classic example. Using our unit equipped with BMS compatibility, systems can operate in coordination with each other — with or without operator interaction.
Engineered Systems: Define the IoT’s growing role in HVAC and explain Modine’s role in this segment.
Miller: I would look at it from two different perspectives: from the equipment manufacturer’s view as well as the customer/owner’s point of view. We’re not solely an equipment manufacturer. Our goal is to not only help our customers control their environment but also to integrate with them. Whether you call it intelligent equipment or smart equipment, the brains of our equipment have to evolve to meet the requirements of the marketplace. Whether it’s efficiency of performance, the ability to communicate, or self-diagnosis, all of these types of things will now be required to be integrated into one system. In the old days, it was adequate to run everything through a thermostat. Today, we want our equipment to be able to interact with the needs of specific situations and be able to communicate and adjust itself automatically. The intelligence of our equipment is always on our mind.
Engineered Systems: What does the future hold for HVAC and the IoT?
Miller: The folks who will be successful in the future are those who are able to produce equipment that operates efficiently while ensuring customers are getting the best value for what they’ve purchased. How do you do that as seamlessly as possible? It’s going to require training across the board from installers to maintenance to contractors to equipment manufacturers. We’ve all got to work together. The future is very exciting.
Engineered Systems: Modine’s very active in the data center space as well with multiple units designed to serve this space. What’s the latest from Modine when it comes to data centers?
Miller: For us, data centers are an important vertical market in our building HVAC and CIS areas. We’re very optimistic about where data centers and this particular market will go in the future for a couple of reasons. The mega trends point to a large amount of computing or data center growth in the future. This fits really well into what we do best, which is thermal management. There are lots of different technologies you can use in data centers, creating endless opportunities. We’re also excited about the developing vertical market of edge computing. What will that entail as we go forward? We have a growing presence in the data center market, but as products and markets develop, there will be a need for additional thermal transfer, especially where localized interaction is necessary. We believe that will bring additional opportunities for our business. We have products right now that serve markets like telecommunication and things we see as potentially applicable for the future as this market starts to develop a little bit more.
Engineered Systems: What top-secret recipes are you guys currently cooking up in R&D?
Miller: If I told you everything, they wouldn’t be secrets anymore. We are always following legislation in terms of what requirements those laws will bring for our products going forward. We also keep a close eye on what our customers tell us they will need in the future. The other thing we continue to focus on is making sure we have environmentally friendly products. The changes that will ultimately be coming across the globe for refrigerants also excite us. Any changes in the refrigeration laws will have a significant impact on what we can do as a business.
Engineered Systems: What’s on the docket for the rest of 2019 — anything exciting on the way?
Miller: We’re using the theme “We Connect” in 2019. We want our products to connect with our customers however they need them. That’s our goal as we move forward. We’ll continue to roll out our products with BMS compatibilities and continue to expand our key product lines. We’re very optimistic about our packaged ventilation and DOAS offerings, and we’ll continue to study the market to determine which particular product lines need to be adjusted to better serve our customers.
Engineered Systems: If you could convey one piece of advice for HVACR designers/engineers, what would it be?
Miller: Consider Modine more than just your equipment supplier. We’re here to help engineers and designers build their reputations. We know how important that is in the marketplace. We can do that not only by backing up our promise of quality equipment but by enhancing their ability to design and specify products all the way down to installing products and ultimately fulfilling customers’ needs. A happy customer for one of our partners is a happy customer for all of us.