Danfoss to acquire Vacon

Denmark’s Danfoss A/S has bid $1.34Bn for the acquisition of Finland’s Facon Oyj, which would result in the union of two of the ten largest variable frequency drive suppliers globally. According to Kevin Schiller of IHS, the combined low voltage drive revenue from the two companies represent over 10% of the global market value; this is slightly less than the estimated market shares for ABB and Siemens, the two largest suppliers of low voltage drives globally.

Image_VDF Market Share (2)

As the figure above indicates, both companies have strong market share in EMEA and Asia Pacific regions. The combination of the Vacon and Danfoss VFD businesses will compete heavily in these regions, where traditionally only ABB and Siemens have competed for top market share. Further, the Danfoss announcement lauds Vacon’s strengths in China, Finland, India, Italy, and the United States.

According to the Danfoss press release, the combination of the Vacon and Danfoss drive businesses is expected to create ‘a new AC drives business with the clear ambition to build a leading position in the AC drives market’. While VFD market analyst Kevin Schiller from IHS agrees that the acquisition will secure a stronger foothold for the Danfoss and Vacon drive products, the newly formed drives business resulting from the acquisition of Vacon by Danfoss will not resemble its competitors. “ABB and Siemens cultivate much of their drives business alongside their sizeable share of the integral AC motor market, and are able to offer complete system solutions across all power ranges. Conversely, Danfoss has a comparatively undersized standalone motor market share. However, with significant market share in drives integrated with motors and end equipment, the new Danfoss and Vacon integration will most likely affect the competitive landscape in lower power ranges – below 50 kW.”

Through the acquisition of Vacon, Danfoss hopes to become the leading supplier of drives within the Nordic region, which has an estimated market size of over $500m. This region is expected to grow slightly slower than the market average, at just over 7% CAGR, from 2013 to 2018. While Danfoss has traditionally concentrated on the HVAC industry, the addition of Vacon’s business will diversify sales channels and strengthen product portfolios in the power generation and building automation sectors.

The Danfoss release published on 12 September was as follows:

Danfoss announces a public tender offer for all shares of the Finnish AC drives company Vacon. Vacon shareholders are being offered a cash consideration of EUR 34 for each share in Vacon representing an aggregate equity purchase price of approximately EUR 1,038 million.

“After a careful examination of Danfoss’ offer, the Board of Directors of Vacon has unanimously decided to recommend that the shareholders accept it. Vacon is truly one of the great industrial success stories, even globally speaking. By joining forces, the two companies will create a Nordic-based global player – a new AC drives business with the clear ambition to build a leading position in the AC drives market,” says Panu Routila, Chairman of the Board at Vacon.

The background for Danfoss’ offer is the company’s strategic focus on creating profitable growth. Vacon is a good match to achieve this ambition. Today, both Danfoss Power Electronics and Vacon are significant players in the AC drives business, and together they will gain an even stronger market position.

“We have a clear strategic ambition to be one of the absolute top players in the businesses where we operate. Vacon is a very strong and innovative player and by creating this new drives business we can ensure a strong long-term growth trajectory,” says Niels B. Christiansen, CEO at Danfoss.

Vacon is a global company with exceptional R&D, production, and supply chain competences in China, Finland, India, Italy, and the United States, and a highly skilled sales and service organization in 31 countries. The company plays a crucial role in building a new AC drives business to challenge the top players in the world. Finland, as a hotspot in the global AC drives business, plays an especially crucial role and Danfoss will be positioning Finland as one of its future centers of excellence along with the other power electronics centers worldwide.

“I believe that customers will benefit significantly from the two companies joining forces as they will bring even more competitive, innovative, and attractive AC drives to the market. Today, Vacon is stronger than ever, and it has a great future ahead together with Danfoss,” says Vacon’s President and CEO, Vesa Laisi.
The offer is subject to e.g. approval by relevant authorities, such as competition authorities, and Danfoss gaining control of more than 90 percent of the Vacon shares.

A separate stock exchange release on Danfoss’ tender offer was published earlier today and can be found at http://www.vacon.com.

Yokogawa Dell PCs

Yokogawa Electric Corporation has signed a contract with Dell Inc for the global provision of PC models that are selected and customized for Yokogawa use. Under this contract, which was signed on August 20, Yokogawa will offer high-quality system solutions that utilize Dell PCs and Yokogawa industrial automation (IA) system-related products.

High performance PCs that incorporate the latest technologies are being used more and more in the control systems field, for example, by replacing the dedicated terminals used as human machine interfaces and to connect with host systems. However, while a production control system usually remains in use for a period of one to two decades or even longer, new PC hardware, operating systems, and application software incorporating the latest technologies and offering ever higher levels of performance are continually being released. While incorporating this new PC hardware and software in a control system, the control system supplier must take care to ensure that the overall system continues to meet the highest quality standards. To satisfy this need and offer quality system solutions, Yokogawa has concluded this contract with Dell for the supply of dedicated Yokogawa PC models.

Scope of the contract and the Yokogawa solution
Under the terms of the contract, Dell will supply PCs that have been tested to verify their compatibility with Yokogawa products. Yokogawa will globally distribute these PCs as Yokogawa certified models for use with its industrial automation system-related products, including the Centum VP integrated production control system, ProSafe-RS safety instrumented system, Plant Resource Manager (PRM), and Exa series solution-based software. These PCs are ‘long-life’ products that will remain available for twice as long as equivalent commercial off-the-shelf products. To meet a variety of operating conditions and installation requirements, they will be available in a rack-mount or desktop configuration with either a server or client operating system.

The provision of Dell PCs under the terms of this contract will enable Yokogawa to offer high quality system solutions. In addition, this will enable a reduction of maintenance costs. Key benefits are as follows:
1. Stable operation: As the PC hardware and OS to be used with the Yokogawa system-related products is set for a specified period of time, stable operation is ensured.
2. Fewer model changes: Because individual models are available for longer periods of time, model changes will be less of a concern when purchasing a new PC, either as an add-on or replacement.
3. One-stop maintenance service: Yokogawa‘s maintenance service will cover both its system-related products and the PCs.

Regarding this contract, Chiaki Itoh, vice president and head of the IA Marketing Headquarters, comments, “How to combine IT and IA is an important management issue for manufacturers because they urgently need to strengthen their competitiveness in the global market and ensure that they are managed in a sustainable fashion. By making the best use of Yokogawa IA technologies and know-how accumulated over the years and the latest Dell technologies and extensive supply chain, Yokogawa will continue to be able to offer its customers solutions that achieve the goals of our VigilantPlant initiative.”

“We are proud to partner with Yokogawa to help deliver next-generation industrial automation systems”, said Joyce Mullen, vice president and general manager OEM Solutions, Dell. “Yokogawa and Dell engineers are collaborating to deliver stable PC models tailored to the needs of control systems.”

Sasol CEO to join ABB Board

ABB’s Board of Directors has unanimously proposed David Constable, ceo of Sasol, as a new member. The shareholders will vote on his nomination at the company’s next annual general meeting on April 30, 2015.

Constable is the President and CEO of Sasol Limited, a leading international integrated energy and chemicals company based in South Africa, and the former Group President of Operations of Fluor Corporation, where he served for more than 29 years in leadership positions. He is also a member of the WEF International Business Council and The Business Council in the United States. He is 52 and a Canadian national.

Since Constable’s appointment as President and CEO of Sasol, he has driven a comprehensive, group-wide change program, which has reset the organization’s strategies, priorities, culture, operating model, structures, systems and processes. Importantly, he has also shaped the group’s growth initiatives in southern Africa and North America, driving well-defined contracting strategies and world-class project execution.

“David Constable’s nomination to the board reflects ABB’s commitment to strengthen our expertise for EPC solutions and the process industries sector,” said Hubertus von Grünberg, Chairman of the Board. “His strong background and experience in a field where ABB recently faced challenges in the Power Systems division will further enrich our board. His strong link with Africa as an attractive region for ABB makes him a welcome new member of our board.”

Constable has extensive international experience. He has lived and worked in the United States, the Netherlands, Canada, Chile, Argentina and South Africa. He is married with two children.

ABB HVDC link to export renewable energy from N.Scotland

One of the latest ABB orders, worth over $800m, is from Scottish Hydro Electric (SHE) Transmission plc, to provide the Caithness-Moray high-voltage direct current (HVDC) power transmission link, which will connect the electricity grid on either side of the Moray Firth in northern Scotland. This follows a favorable decision by Ofgem (Office of Gas and Electricity Markets), an independent National Regulatory Authority, on the need for the link, which will bring green, renewable energy from wind, wave and tidal sources in the North to supply the larger populations residing further South.

ABB will design, engineer, supply and commission two 320 kilovolt land-based HVDC Light converter stations, one rated at 1,200 megawatts (MW) at Blackhillock in Moray and another rated at 800 MW situated at Spittal in Caithness.

ABB’s scope of supply also includes submarine and underground cables covering a total transmission length of nearly 160km. The link is scheduled to become operational in 2018.

“We are pleased to support this major transmission project that will enable integration of a significant amount of renewable energy into the grid and supply clean, emission-free electricity to millions of people,” said Claudio Facchin, head of the ABB Power Systems division. “ABB pioneered HVDC technology and continues to lead the way through innovation, as seen from several recent breakthroughs.”

SHE Transmission is undertaking a major strengthening of its power network serving the north of Scotland to accommodate the rapid growth in generation of electricity from renewable sources, with around 1,200 MW of wind, wave and tidal energy planned to be connected. With associated reinforcement of the existing onshore network, this project represents the largest investment in northern Scotland’s electricity network since the hydro development era of the 1950s.

A key enabler for this is the installation of a subsea HVDC cable, capable of carrying up to 1,200 MW of electricity between Caithness and Moray, equivalent to the electricity needs of about 2m Scottish residents.

ABB’s HVDC Light solution leads the way in VSC (Voltage Source Converter) technology. The company has delivered 13 of the 14 commissioned VSC links in the world. HVDC Light continues to be a preferred solution for long-distance underground and underwater power transmission links.

HVDC Light technology is increasingly being deployed across a range of applications such as the connection of remote renewables, cross-border interconnections, power-from-shore feeding offshore oil and gas platforms, and city center in-feeds where space is a constraint.

Sensors guide tractors accurately

Peterborough based Garford Farm Machinery designs and manufactures advanced environmentally sustainable agricultural equipment to help large scale weed control and crop cultivation farming problems worldwide. Its ‘Robocrop’ range, covering weeding, hoeing or spraying, employs a specially developed precision guided vision system that uses real-time digital image analysis in conjunction with a hydraulic servo ‘sideshift’ assembly that laterally positions various multiple tools  exactly on or within the crop rows as the tractor mounted equipment is driven forwards.

The precision guided tools are used for mechanical weed control; to remove individual unwanted plants, hoe between rows of plants, or spray rows of plants – with impressive lateral positional accuracies of better than 10 mm at average tractor speeds of 12 km/hr.

Variohm EuroSensor provides the durable precision linear and rotary sensors for use in these extreme environmental and physical conditions, for tractor steering angle and lateral position feedback for the plant rows. To complete the package of sensors on the Robocrop, Variohm also supplies combined pressure and temperature sensors for hydraulic system monitoring.

The In-Row Weeder

Robocrop_Inrow WeederThe Robocrop InRow Weeder is the latest in the Garford range and utilises the tried and tested video image analysis technique to locate crop plants through pixel and colour recognition and then use this information to control individual rotating weeding discs which actually hoe the area between the plants (inter-row) or in line with the plants (inter-plant), eradicating competing weeds but leaving crops intact. The InRow Weeder features multiple individual discs which operate across several crop rows with a maximum width of six metres. The rotation of each disc is synchronised with the forward speed of the tractor and the plant positional information from an imaging camera which can cover a two metre width. Each weeding disc is coupled to a hydraulic motor, driven via a proportional valve controlled by the cab mounted Robocrop computer, which includes an HMI display to select modes and display operational information.

The sensors supplied to Garford are part of a comprehensive range of sensor technologies that Variohm EuroSensor designs, manufactures or sources for linear and rotary position, load, force and vibration measurement in demanding applications throughout industry, agriculture, construction, autosports and research.

 

Yokogawa recovery is now completed

The recent Yokogawa User Conference in Berlin was reported in the INSIDER Newsletter July 2014 issue, showing a major emphasis on wireless systems, and the addition of new wireless sensors, for example for flammable gas alarm applications. The Berlin conference was the first significant Yokogawa European event since the Nice User Group meeting in November 2012, and so gave a good opportunity to talk to the management and assess how the business has reorganized and progressed over the few years. The overall impression is that Yokogawa is back to full health, so the major players need to move over.

The problems of the last five years.

The group has had a hard time over the last five years, following the world-wide recession and then their poor financial results in 2009. Then Japanese factors affected the Group badly, with the rise of the Japanese Yen reducing the competitive position – because of local production and group HQ costs – and the country then faced the impact and aftermath of the Fukushima disaster. Some of the Test and Measurement Division businesses were sold off, realizing some capital, and the company structure has been rearranged: jobs and resources were re-allocated. Wound around this, the wireless standards ‘war’ between ISA100 and WirelessHART, where Yokogawa for a long time took the brunt of the problems, and presumably had to help in the process of finalizing the ISA100 standard into a workable form: at least this is now completed, and consequently Yokogawa is the leader in the ISA100 field.

Recovery factors

Perhaps the major market factor that aided the Yokogawa recovery was the growth of the LNG liquefaction and shipping activity around the world, since is this an area where they have significant expertise and have a large market share compared to the other majors. Currently there are continuing LNG projects, the Japanese Yen has returned to the historic level of ¥100=$1, and over some years the production facilities have been diversified, reducing the concentration in Japan.

The flow company, Rota, has always been headquartered in Europe: now the special custom assemblies of complete analyzer houses are also built in Europe and the USA, plus the latest LNG project on the Yamal peninsula in Russia will be engineered from Europe. In a discussion at their Berlin conference, Yokogawa president and COO Nishijima san reminded me that they already had two established manufacturing joint venture companies in China, manufacturing transmitters and flowmeters, and the DCS systems plus other measuring instruments are built in Indonesia, with general pcboard manufacturing in Singapore. Nishijima san also commented on the need for local manufacture in the USA to provide the fast lead times required in that market, so we might see investment in a new production assembly venture there.

The next steps – with wireless

The Berlin conference showed that Yokogawa is building on their ISA100 position, and is seeking other add-on wireless sensor technologies to increase their ‘in-house’ capability. This might be by using their add-on wireless adaptor/interface, to existing mains powered sensors. It looks like a good relationship has developed with GE Bently Nevada, and corrosion and intrusion detection sensors might be next, with maybe fire detection sensors to go alongside the GasSecure flammable gas detectors on offshore platforms. Dräger, the specialists in oil and gas safety technology, were one of the major sponsoring partners of the Berlin conference, and also presented a talk discussing fire detection, using visual flame detection systems.

Nishijima was appointed President in February 2013: in April 2013 Herman van den Berg was appointed European President, and in December 2013 Simon Rogers was recruited as the head of the UK operation. Van den Berg, probably in common with Chet Mroz and others in the USA, has been burning up the air miles to Japan over the past 18 months, as a part of planning the recovery of the business. In fact there was an acquisition in March 2013 of Soteica Visual Mesa, marking an entry for Yokogawa into energy management IT services. Nishijima san sees further alliances and even acquisitions as an important route for Yokogawa to consider, to achieve the future growth his shareholders expect to see, and the current improvement in debt/equity ratio and normalization of the company share status makes this much more possible.

DCS and software developments

The major existing DCS developments have involved cyber-security improvements, probably in conjunction with McAfee after the February 2013 announcement, and ISAsecure certification for ProSafe RS. Additions to expect in this area are augmented reality added onto the displays, and compatibility with virtual servers. Yokogawa sees major business expansion potential in providing IT techniques and services for their IA customers, as a continuing service activity.

Examples quoted were CMMS in the cloud, which is already being offered as a service in Japan, and a software service called iMaintain, jointly developed and installed with Akzo Nobel in Germany: plus there is also their RigRider drilling procedure software, as reported from the Offshore Europe Expo in the newsletter last September. iMaintain enables client engineers to access device live data and history via a tablet on site, after reading the device ID locally using OCR. The iMaintain server accesses the DCS via an OPC link, to get current data, but can also call up device notes previously recorded, and also the instruction manual. A similar service offering is the Sotieca VisualMesa energy management system, which can suggest fuel and operational changes that will run plants such as refineries at minimal cost. One example of this is a recent project for the BP Lingen refinery in Germany: the system is in use in around 70 sites in refineries and petrochemical plants in the EU and North America.

The R+D activity on instrumentation also continues….

In the area of field instrumentation, continuing development will be seen following their strategy of having a two tier offering, featuring a top of the range unit backed up with a lower cost unit aimed at lower specification requirements. This has been seen with the EJX and EJA-E pressure transmitter, and the Admag AXF flowmeter, with the RXF unit typically for water industry applications. A new version of the TDLS combustion gas analyzer will also be launched soon. The activity level in this area of R+D is significant, with typically 400 to 500 new patents generated in a year.

Nick Denbow

The INSIDER Newsletter covering industrial automation and control is a Spitzer and Boyes publication, see http://www.iainsider.co.uk

Rockwell $5.3m order for LSB nitric acid and ammonia plants

LSB Industries Inc, a diversified industrial manufacturer of chemical and HVAC products, has awarded a $5.3 million contract to Rockwell Automation. Rockwell will serve as the main automation contractor for two new plants, providing a $3.5 million PlantPAx process automation system with electrical, controls and instrumentation services, and a $1.8 million Ethernet motor control system. The systems will be installed at both of LSB’s new plants (nitric acid and ammonia) currently being constructed at its El Dorado, Arkansas facility.

“Rockwell Automation won the order based on its strong installed base, plant preference at our El Dorado ammonia plant, and its strategic partnership with the Casale Group,” said Dallas Robinson, vice president of operations at LSB.

Working with the Casale Group, a Swiss systems integrator specializing in ammonia and methanol, and Rexel, a global electrical distributor, Rockwell Automation won a major order for this ammonia plant, strengthening its position in the chemical sector.

“We’re pleased to deliver this important project for LSB Industries,” said Terry Gebert, vice president and general manager, Rockwell Automation global solutions. “Our domain expertise, process knowledge and project management will help LSB Industries implement and operate profitable, sustainable facilities.”

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