"Despite Construction Crisis, VRF Market Sees Increase in Value Across Europe in 2023"

The market for Ventilated Rainscreen Facades (VRF) and their substructures (VRF Profiles) in the Top 8 European countries demonstrates remarkable stability in 2023, with only a slight 2.0% decline in quantity. In absolute terms, the market decreased from 46.8 million square meters to 45.8 million square meters. Higher average prices contribute to a significant revenue growth of 4.8% in 2023 for both sectors, as indicated by two recent studies (VRF and VRF Profiles) conducted by Interconnection Consulting.

In 2023, the VRF market records a 4.8% increase in value, reaching 2.4 billion euros in the examined countries. VRF Profiles achieve a revenue growth of 3.6%, resulting in a market volume of 2.0 billion euros. Notably, the crucial new construction sector, particularly in non-residential buildings, experienced significant declines in some European markets, such as Germany. This decline can be attributed to substantially higher construction and financing costs, along with the current economic recession. A stagnation is expected for the VRF market in 2024. Significant growth is anticipated only from 2025 onwards.

United Kingdom Takes the Lead

A closer look reveals diverse market dynamics in the surveyed countries. While Germany and Austria report significant market declines of -19.3% and -16.0%, respectively, the United Kingdom and Spain exhibit noteworthy quantity growth, with increases of +14.5% and +9.0%. “One reason for the growing demand in the United Kingdom, especially in new construction, is that the facades from manufacturers now better meet fire protection requirements,” explains Julia Hrebenkova, the study’s author. The quality of facades has improved, and consumer preferences for VRF have risen. Spain experienced growth in all segments except commercial buildings and single-family houses. Significant investments were made, especially in Madrid and Valencia. Among the Top 8 European countries, the United Kingdom assumed the lead as the largest market in 2023, with a share of 23.1% (Top 8 countries), surpassing Germany. Comparing Switzerland and Austria, it is evident that, with a similar population size, the Swiss VRF market is 50% larger. This is due to significantly higher construction volumes in Switzerland in core segments like office buildings, commercial buildings, and industry.

Aluminum Dominates the Market

In the VRF market, aluminum is the most favored material, with a market share of 25%, owing to its low maintenance and fire-resistant properties. In Germany, the aluminum share is highest at 36.5%, while in France, it is the lowest at 10.5%. The second-largest group is fiber cement cladding, with a share of 17.2%. Particularly in Switzerland and Poland, the shares in this product group are very high at 30.2% and 22.5%, respectively, posing significant competition to aluminum. Aluminum dominates the market for VRF Profiles with a share of 69%. This preference is due to cost efficiency, flexibility, and malleability. However, the material has limitations, such as limited load-bearing capacity and high thermal conductivity, posing a risk in case of a fire, explained Julia Hrebenkova, the study’s author. Stainless steel profiles provide an alternative; although heavier, they offer exceptional strength and a long lifespan. The share of steel profiles is 27.7%.

Market of Global Players

The top 10 manufacturers in the VRF market in the surveyed countries have a market share of 38.4% in quantity. The low share of top players is attributed to the local structure of the market. Proximity to architects and planners contributes to the success and dominance of local players. The key players in alphabetical order are Alucobond, Cembrit, Eternit, FunderMax, Hardie Cladding, Kronospan, Rheinzink. In the VRF Profiles segment, the share of the top 10 manufacturers is slightly higher at 59% in quantity, with the presence of local manufacturers. The key players in alphabetical order are EJOT, ETANCO, Fischer Group, HILTI, SFS, Slavonia.

The two studies for VRF and VRF Profiles examined the markets in the United Kingdom, France, Spain, Italy, Germany, Austria, Switzerland, and Poland.