Nidec grows its Motor business

Nidec, based in Kyoto, Japan, has expanded rapidly by acquiring many of the world’s major manufacturers of motors, large and small. Established in 1973 by the current CEO and Chairman Shigenobu Nagamori, now a 71 year old billionaire, and three colleagues, they had the objective of “becoming the World’s No. 1”, and designed small precision motors (fractional HP motors for small fans). In 1979, Nidec became the first company in the world to successfully commercialize a direct drive spindle motor for HDDs that used a brushless DC motor. Nidec subsequently established a position as the world’s biggest maker of precision motors for hard-disk drives, acquiring part of the Seagate Corporation in Thailand, and achieving a claimed market share of around 80%. Based on this success, between 1989 and 2007 Nidec invested in the acquisition of 27 companies, mainly based in Japan. Some of these were on the edge of bankruptcy, including units cast-off by Toshiba and Hitachi. Then there was the financial crisis of 2008, and at the same time the personal computer growth shifted away from disc drives to solid-state storage modules for the new top-selling computer tablets and smartphones.

As a result, Nidec started a new international acquisition strategy in 2010, when their group sales were quoted at $8Bn. One of the largest deals was a major move into the North American market with the purchase of the Commercial and Industrial Motors and Appliance Controls businesses from Emerson Electric: combined these businesses accounted for more than $0.8Bn in sales. This was, in fact, the founding business of the Emerson Electric Manufacturing Company, started by John Wesley Emerson, a Civil War Union veteran, in St Louis in 1890.

Overall, Nidec spent $2.9Bn on acquisitions between 2010 and 2016. In their 2016 FY Nidec Group annual sales were quoted as $10.5Bn, which some analysts consider shows a lack of any organic growth over the six year period, the sales figures being enhanced by the acquisitions. Employees in 2016 were approximately 100,000, apparently 20% lower than two years earlier: this lower number still only results in sales of $105,000 per employee. More recently quoted figures have mentioned 140,000 employees.

Fractional Motors Market

A different, outside view (possibly a European biased view) was provided by IMS Research (now part of IHS) in 2012. In their view, driven by the multiple acquisitions made in the fractional HP motor market by major groups like ABB, Regal Benoit (of the US) and Nidec, Ametek of the USA spent $270m to acquire Dunkermotoren of Germany, a consolidation of two of the top ten manufacturers of such motors in the World, particularly concentrating on factory automation and medical markets: Dunkermotoren had sales of $170m. According to Bryan Turnbough, market research analyst with IMS: “Since the [2008] downturn, larger companies have been finding new areas of growth through acquisitions, while smaller companies are struggling to keep up. This is changing the competitive dynamics of the industrial fractional HP motors market, which has a low growth of between 3 and 4 percent annually”. Ametek and Dunkermotoren were considered amongst the market leaders in fractional HP DC motors, particularly aimed at rotary and linear motion applications, and the combination was seen as a threat to the dominance of the top two suppliers, Maxon and Faulhaber.

Nidec markets in 2016

The Nidec 2016 FY report shows small/fractional HP motors now represent only 38% of their total sales: the rest is automotive motors 23%, appliance and commercial motor markets 24%, plus 14% in instruments, factory automation, robots and switch components. Chairman Nagamori said that Nidec had “expanded our range from small precision to supersized motors of all kinds, and from motor peripherals to application products. These components are widely used not only in IT products but also in a wide range of fields including home appliances, automobiles, office equipment, industrial equipment, and environmental energy equipment. We strive to become the world’s No.1 comprehensive motor manufacturer, based on everything that spins and moves”.

Nagamori is known for his eccentric management style, and has been voted Japan’s best CEO. He is driven by ‘ambition and ego’: plus is always obsessed by cleanliness in the factories and of the workers. To him passion matters, and enthusiasm, and tenacity: “Motivated people can do anything if they work hard”. His style has enabled him to retain the backing of the Japanese banks and investors.

The Nidec $1.2Bn acquisition

So in 2016 Nagamori negotiated his largest ever acquisition, a $1.2Bn cash deal to buy two further Emerson businesses, Control Techniques of the UK and Leroy Somer of France. Emerson had been looking at the ‘strategic alternatives’ available to them for their motors and drives, and power generation and storage businesses for over a year, and there were several parties interested in the acquisition of the motors and drives companies – from Europe, Asia and elsewhere. Both had been acquired by Emerson in the 1990s, and employed 9500 people, producing combined sales of $1.7Bn in 2016.

Control Techniques manufacture variable speed drives, servo drives and motion controllers, with AC and servo motors, targeted at industrial applications. Similarly Leroy Somer produce alternators for power generation, diesel generators (at the Kato factory in the USA), and higher power motors and drives for industrial markets. Nagamori has visited the two European HQs, to meet and greet the staff following the acquisition: his normal approach is to look for dirt and grime, walls to paint, anything that can be cleaned up – hopefully he did not find any walls to paint. Whether the staff were reassured by his exhortation to “Look at the expansion in the use of robots, electric vehicles and drones” [as new markets for their motors and drives] is not certain. Nagamori had a very successful acquisition of Sankyo Seiki, a robot company in Japan in 2003, turning in a profit of $180m inside 12 months: Nidec also sells drone motors for the Amazon fleet. They were maybe happier with his statement that Nidec “put great emphasis on research and development”.

Time will tell. His latest (scaled down) target is group sales of 2000 Billion Yen by 2020, which equates to $18Bn, or 70% up on the 2016 figures. Consolidating the Emerson acquisition he has already added 16 of the required seventy points. As the company logo says: “Nidec…. All for Dreams”.

This article was first published in my column in the ‘South African Journal of Instrumentation and Control’, June 2017 issue, published by Technews in South Africa.

UV keeps bottled water safe

Hanovia UV has supplied Cott Beverages UK, based in Derby, with a PureLine intelligent UV system to keep its production process water pure.

PureLine range

In an increasingly regulated and safety-conscious market, legislation such as the EU Directive for Bottled Water 98/88/EC (1998) drives the beverage industry to meet ever more stringent standards of quality. Microbial growth due to contaminated water or ingredients can cause discolouration, off flavours and shortened shelf-life. The threat of contamination is further increased as manufacturers respond to demands for less chemical additives and preservatives. Effective microbial disinfection of the whole process is therefore essential.

To meet this requirement, Cott Beverages has been using Hanovia UV disinfection technology to treat process water used in the production process. The company decided to use UV technology to ensure final product security prior to mixing and bottling and has been very satisfied with the performance of the UV systems.

“The Hanovia UV systems have been easy to integrate, maintain and operate,” said Chris Prentice, site service engineer at Cott Beverages. “They provide us with absolute insurance before bottling by making sure that we are producing and maintaining a high-quality product, which is essential for our brand.”

PureLine UV from Hanovia is an intelligent system that is optimised for the beverage industry to simplify the treatment of water, sugar syrup, brine and even reducing chlorine and ozone. Critically, there are no microorganisms known to be resistant to UV – this includes pathogenic bacteria such as listeria, legionella and cryptosporidium (and its spores, which are resistant to chlorination). Unlike chemical treatment, UV does not introduce toxins or residues into process water and does not alter the chemical composition, taste, odour or pH of the fluid being disinfected.

UV is used for both primary disinfection or as a back-up for other purification methods such as carbon filtration, reverse osmosis or pasteurisation. Because UV has no residual effect, the best position for a treatment system is immediately prior to the point of use. This ensures incoming microbiological contaminants are destroyed and there is a minimal chance of post-treatment contamination.

UV disinfection systems are easy to install, with minimum disruption to the plant. They need very little maintenance, the only requirement being the replacement of the UV lamps every 9-12 months, depending on use. This is a simple operation that takes only a few minutes and can be carried out by trained general maintenance staff. The Hanovia UVCare training programme supports businesses like Cott Beverages to make sure servicing is carried out by certified engineers at all UK production sites.

75 Gas Chromatographs for Oman

Yokogawa IA GC8000

Yokogawa GC8000

Yokogawa Electric has received an order to supply an analyser package solution for the Liwa Plastics Industries Complex, which is being built for Oman Oil Refineries and Petroleum Industries Company (Orpic), a company owned and operated by the Oman government.

The Liwa Plastics Industries Complex is being built in Sohar, on Oman’s northern coast. This package order is for 15 analyser houses and associated analysis systems consisting of process analysers and sampling instruments. The client is a joint venture between Chicago Bridge & Iron Company (CB&I, a major US construction company) and CTCI Corporation (a major Taiwanese engineering company) that is responsible for the engineering, procurement, and construction (EPC) of an approximately 800,000 ton per annum naphtha cracker and related utility facilities at this complex. The analysis systems for this steam cracker and its off-site utility facilities will rely on Yokogawa GC8000 process gas chromatographs to separate mixed gases and volatile liquids into their respective components and measure their concentrations. A total of 75 of the GC8000 units have been ordered, and this is Yokogawa’s largest single project order to date for this product. Yokogawa Electric Korea will have overall responsibility for analyser house fabrication, system integration and site commissioning services. As both Yokogawa Electric International and Yokogawa Europe Solutions have extensive experience in constructing analyser houses, Yokogawa Electric International will manage the engineering, delivery, and commissioning of this Yokogawa equipment, and Yokogawa Europe Solutions will provide project execution support. The analyser houses will be delivered by the third quarter of 2018: the Liwa Plastics Industries Complex is scheduled to start operation in the first quarter of 2020.

It is believed that Yokogawa won this large order because the customer evaluation rated highly the company’s advanced knowledge of gas analysers and liquid analysers, expertise in the construction of analyser houses, and track record in supplying gas chromatographs to oil refineries and chemical plants all around the world. In recent years, the increasing need to improve product quality in the oil, natural gas, petrochemical, and chemical industries has been met by using gas chromatographs for accurately analysing the different gas components.

Backed by this order, Yokogawa will further expand sales of the GC8000 and other process analyser solutions, growing the process analyser system integration business, and helping their valued customers to improve the quality of their products.

E+H reports on 2016 sales

The report that follows was first published on Eoin O’Riain’s Read-Out.net website in Ireland last week. It gives the first report on Nick Denbow’s visit to the E+H European presentation in Basel, which included a tour of the Maulberg manufacturing operation for level measurement products, like the NMR81 radar based systems. Financial results for the 2016 year were discussed with the 70+ journalists and media analysts attending.

This year, Endress+Hauser expanded the presentation of their annual financial results, inviting journalists from not only Germany and Switzerland, but including others from Belgium, the Netherlands and Great Britain. In all 70+ attendees heard Klaus Endress and Matthias Altendorf say that the consolidated Group sales fell slightly between 2015 and 2016, by 0.2%, achieving Euro2.1Bn. This fall was actually only because of currency fluctuations. “Currencies created a headwind for us last year,” said Altendorf. Working from the value of sales in local currencies, sales in total actually increased by 2.1%. Whilst the Group is family owned, their annual report is published and audited to the standards expected of any other international business.

CEO Matthias Altendorf emphasised that “When compared to overall industry growth, we held our own”. E+H performed well in Europe, but sales in America declined. Africa and the Middle East experienced solid growth, but in the Asia-Pacific region business stagnated.

Within Europe, the best performances for E+H came from Ireland, Italy and Finland. The best performing sectors in all countries were food & beverage, life sciences, and water & waste water. Overall business declined in oil & gas, chemicals and primary industries like metals. The power and energy industry sectors showed good performance outside Germany, where E+H also felt the effect of weak German exports and some internal restructuring. The oil & gas decline badly affected sales in USA, UK and Norway, although the UK sales centre gave a good performance by aligning efforts with other active market sectors.

Investment continues.

E+H plans for investment and growth continue for the current year. Earlier in the week a new factory extension was opened in Reinach, where flow products are manufactured. (see Read-out Signpost – “Flowmeter output growth requires new facilities” – 5 May 2017).  The journalists were given a tour of the manufacturing facility in Maulberg (D), where a new extension to the production area is in operation, and a new NMi level measurement system calibration facility for radar based systems has just been completed. This is certified suitable for calibration of the Micropilot NMR81 radar system, working at 80GHz, which achieves a +/-0.5mm accuracy over a 30m range, for use in oil storage tanks and oil terminals. There are plans now to extend this calibration facility to allow such calibration out to 40metres, as well as to extend the factory yet further: 1912 people work at E+H Maulburg, and 5200 people in the Basel region, out of the total E+H staff of 13,000.

Analytical measurements

The biggest growth area in E+H is actually in the analytical instruments that use Raman spectroscopy to analyse liquid and gas streams on-line. The major industries now applying this technique are within the life sciences sector, where immediate analysis of input and both gaseous and liquid effluent streams enables much closer control of biochemical and fermentation processes. Indeed the 2017 issue of the E+H corporate magazine “Changes” features a major focus on new applications in the Life Sciences industries.

Other new analytical techniques are developed for monitoring water treatment processing, for example in the new Swiss plants which by law have to have a fourth stage of purification, to remove hormones, phosphorus and other drug residues. The strength of E+H here derives from their strategic decision a few years ago to invest in the process analytical area, particularly in the field of spectroscopy, acquiring Kaiser Optical, Analytik Jena and SpectraSensors. “Our analytics strategy has been validated by the market,” said Matthias Altendorf.

Bundling IIoT activities

The acquisition of German SensAction AG in early 2017 also ties in with Strategy 2020+ which was rolled out last year. The company, headquartered in Coburg (D), manufactures innovative systems for measuring concentrations in liquids. Endress+Hauser is tackling the challenges of digitalization by bundling a number of activities. A new subsidiary in Freiburg in Breisgau,(D), is working exclusively on products, solutions and services related to the Industrial Internet of Things (IIoT).

The significance of digitalization can also be seen in the growing number of patent registrations. There were 273 first filings in 2016. The intellectual property rights portfolio thus boasts more than 7,000 active patents. R&D spending rose to 7.8 percent of sales. Endress+Hauser introduced 64 new products to the market. “We are investing in innovation for our customers,” underlined the CEO.

Trends in automation.

The focus for E+H sales and their customer base is broadly on automation engineers, so it was interesting to hear Matthias Altendorf comment that the statistics for industrial output show that the Britain has now dropped out of the top 10 countries in terms of automation business activity, whereas they had held a prominent position there some years ago.

The other aspect of interest was that there are distinct differences between countries, in terms of the sex of the engineers involved in the major projects served by E+H. In Germany they are mostly male, whereas the majority of engineers in Turkey are female. In South Korea and India there are high percentages of female engineers (and engineering journalists). Also, by industry, it is noticeable that in the biochemical and life science sectors the engineers are predominantly female.

Time-Sensitive Networking in Profinet

Bob Squirrell of PI and the UK Profibus Group advises that Time-sensitive Networking is planned for integration into Profinet. The release is as follows: 

“A promising new IEEE technology for Ethernet that combines the bandwidth of IT (information technology) networks with the latency of OT (operational technology) networks is in the offing in the form of TSN (Time-sensitive Networking). TSN consists of a tool kit of standardized mechanisms that can be used in Ethernet-based networks. In the PI (Profibus & Profinet International) “Industry 4.0” working group, the requirements and goals for the future use of TSN in Profinet have now been worked out.

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The focus of the work is first and foremost on easy handling for Profinet users. They should be able to use the new technology easily in their devices or systems while still taking advantage of the existing knowledge. Furthermore, services such as diagnosis, parameterization, etc. should be identical as in the current landscape. The engineering, i.e. the configuration of the network, should also be performed in the familiar way. In this way PI permits an easy transition to the new Ethernet landscape and ensures broad acceptance among users.

In addition, PI relies on standard Ethernet technology so it can both draw on a broad selection of Ethernet chips for the implementation of the Profinet interface on devices and also benefit from the further developments of IEEE technology such as gigabit bandwidths. Furthermore, synchronous networks can be implemented for isochronous applications with TSN. Previously, networks had to be set up separately and integrated in dedicated chips in the devices. This is the only way to ensure not only that Profinet remains future-proof for users, but also that simpler setups will be possible.

Besides a stack architecture that is easy to integrate and scale, a further crucial goal for the use of the technology is a high degree of determinism and robustness to IP-based traffic that is not real-time capable. The reliability increases, since TSN allows bandwidth to be reserved on the network for individual tasks so they are not disrupted by other traffic. This is especially important, since a variety of protocols will be used side by side in future in Industry 4.0 networks. In this way PI incorporates parallel communication via OPC UA between stations on the system level or from devices on the field level to the cloud right from the start.

However, with the introduction of TSN, it is also necessary to simplify the engineering of the network for more complex systems, until they become plug-and-work-capable networks that permit reconfiguration during ongoing operation. In addition, the TSN mechanisms that arise alongside the real-time protocol procedure offer the options that PI is consistently pursuing.

Karsten Schneider, Chairman of PI, summarizes the benefits of this approach thus: “PI will expand Profinet with the mechanisms of TSN in layer 2, retaining the application layer on the higher levels. This makes it possible to migrate the applications to the new technology simply and incrementally and to take advantage of the advantages of an open, globally standardized IT technology.”

 

ABB’s acquisition of B&R examined

Alex West, principal analyst at IHS Markit in Wellingborough, UK, discusses whether the B&R acquisition will give ABB a boost in industrial automation.

The recent acquisition of B&R Automation is ABB’s latest acquisition and it brings an established range of PLCs, industrial PCs, HMIs, I/O modules, servo drives, and servo motors to the ABB portfolio. This is a move which gives ABB, one of the leading vendors in process automation, a step-up in terms of a discrete automation portfolio, which was an obvious gap in its offering.

IHS Markit ABB and BR Global Market SharesIt also brings access to discrete automation sectors and an established business with over 4,000 machine builders. By acquiring B&R Automation, ABB has expanded its ‘knowledge’ pool. It now has more expertise in discrete automation, which has strengthened its capability of providing products, and IoT solutions to OEMs in sectors like packaging machinery. There is certainly opportunity to expand its IoT solution business as the uptake of IoT technology has so far been faster in discrete sectors, particularly those that are consumer related.

ABB Chief Executive Officer, Ulrich Speisshofer, states that the combined global customer base will create huge opportunities for the Fourth Industrial Revolution, with an “installed base of more than 70 million connected devices, 70,000 control systems and now more than 3 million automated machines and 27,000 factory installations around the world”. It does sound impressive. Does this make the combined company a concern for other leading suppliers of industrial automation components?

Globally there is little change to the competitive environment in terms of supplier rankings. According to IHS Markit’s Industrial Automation Equipment Tracker, at a global level ABB shows little advancement in the market share ranking.  It will gain share for products such as industrial PCs, PLCs, servo drives and servo motors. The latter two product rankings show the greatest changes for the combined company. ABB was estimated to be ranked number 32 of servo drive suppliers and now moves to a top 15 position. For servo motors, ABB was ranked number 35 globally in 2015; the combined business is now estimated to put them at number 14. A significant change, but not enough to pose a threat to the leading suppliers to these markets.

This acquisition brings the combined company into more direct competition with Schneider Electric as it now has comparable global market shares for I/O modules, industrial PCs, position control hardware, servo drives, and servo motors. The greatest market share increase is estimated for the industrial PC market, with a market share increase of 3% to place the combined company as the seventh largest supplier in revenue terms. The market share increase is estimated at around 3% for the operator terminal and PLC markets. This puts ABB as the tenth largest supplier of operator terminals and sixth largest for PLCs at a global level.

EMEA market impact

ABB will also gain the ability to scale the machine automation business in Europe, where B&R Automation generates around 65% of global sales. In the EMEA region, ABB’s market share is estimated to increase by around 3% for I/O modules when using 2015 base figures. This moves ABB to second place of the leading suppliers to the EMEA market, above Schneider Electric. In EMEA the combined company is estimated to have gained market share of over 4% for operator terminals and PLCs, making it one of the top five leading suppliers for these products.

Industrial communications

Another area of likely change is that of industrial communication protocols. B&R Automation’s POWERLINK and openSAFETY protocols could now become the standard for ABB’s automation products. According to IHS Markit’s Industrial Communications Intelligence Service, POWERLINK is estimated to be the seventh largest industrial protocol at a global level in terms of 2015 new node connections; sixth in the EMEA region. For openSAFETY, it is estimated to be the eighth largest safety protocol at a global level by new node connections. ABB’s acquisition of B&R Automation may see these protocols’ being more widely supported with a larger product portfolio, which could impact share of other leading industrial communication protocols.

Smart manufacturing

An area that may be worth watching is the ABB Ability Platform and how it will develop over the next few years. With trends to IIoT and smart manufacturing it is becoming increasingly important for industrial automation companies to develop and support software portfolios. This may be a driver of further ABB acquisitions as Spiesshofer explained to reporters “There will be more acquisitions…as one of the drivers of growth going forward, but there is no ‘must haves’ we are desperate about.”

The ABB acquisition of B&R Automation will fill a gap in the existing portfolio and will give them access to an established and loyal machine builder customer base. This will certainly be a concern for other leading suppliers to these product markets and sectors. The combined company will likely represent more of a challenge to some of the leading suppliers of I/O modules, industrial PCs, servo drives, and servo motors. At a global level, the acquisition is estimated to have made marginal improvements to the supplier rankings for machinery automation.

Fashions in sensor technology

I confess it was 50 years ago when I started looking at new technology for sensors. Back then, colleagues and I updated the old WW2 mine detector, using really low frequency (i.e. 1 kHz) magnetic waves to discriminate between ferrous and non-ferrous items, and assess the size and range of the target by the signal phase measurement. Here the electronics used ‘modern’ operational amplifiers, on a ‘chip’.

The 1980s

Ten years on, in the ’80s, the technology coming into vogue was ultrasonics, replacing float systems to make liquid level switches, and then, still using analog electronics, the first Doppler ultrasonic flowmeter appeared. With the availability of digital microprocessor circuitry, timed pulses transmitted through the air down to the surface of a liquid led to non-contact liquid level measurement, and major success in the automation of sewage sump pumping systems. (The success lasted maybe 30 years, as when the mobile phone business created low cost microwave components, similar systems based on radar began to take over in this market.)

The next leap forwards in the mid-’80s was the time-of-flight ultrasonic flowmeter – actually achieved with discrete digital circuitry, which was faster than the available microprocessors. The technology was originally developed at Harwell, for measuring liquid sodium flows in nuclear reactors, but these flowmeters found major application in monitoring clean water flows, primarily in water distribution mains. Over the next 25 years the technique was picked up by commercial interests, and continually refined, introducing clamp-on sensor systems, and adapting the technique for gas flows as well. Even domestic gas meters were introduced using the same principle. Eventually the microprocessor speed became fast enough to achieve the flow measurement accuracy needed – using multiple sound paths – for the fiscal measurement of oil flows, which is now one of the major applications, along with similar gas flow measurement tasks.

Other sensors where I was not initially involved were in the fields of gas detection – where for flammable gases, Pellistors created a major business area – and fire detectors. It seems that UV and IR fire detection systems are still seeking the best approach. Possibly because of the awareness brought about by the Internet, the pace of change and the commercial opportunities, the large corporations are quick to acquire small spin-off companies from university or other research after any small success, because of what technology they may have discovered: they do this ‘just in case’, to protect their market position.

Current developments

The area I see as most important currently, and a fruitful area to flag up for research projects, is in any style of optical analytical measurement sensor. Specifically, the component that brought this into industrial instrumentation was the tuneable diode laser (TDL), developed prior to 2005 for the telecommunications industry, to transmit telephone conversations and data down fibre-optic cables. Around 2007 Yokogawa acquired a business from Dow Chemicals, which used TDL sensors for near-infrared absorption (NIR) measurements of a gas mixture, which gave the proportions of oxygen, carbon dioxide and monoxide, and water vapour. This allowed the unit to be used as a combustion analyser for industrial furnaces, boilers etc.

Over the last 10 years this area of technology has grown in importance, and in its capabilities. Spin-off companies have emerged from various universities, like Manchester and Glasgow. A significant task in these developments is the application of the solution to an industrial problem: it needs the two factors of solving both the technical design and the industrial application. Cascade Technologies was established in Glasgow in 2003, and their analysers were initially targeted at marine flue gas emissions monitoring. From 2013 they added a focus on pharmaceutical gaseous leak detection, and also the process industry, on ethylene plants. Their technology allows multiple gases to be measured simultaneously. The Cascade business has now been acquired by Emerson.

Another closely market-focused supplier of NIR analytical systems is TopNIR Systems of Aix en Provence, in France, actually a spin-off business from within BP. TopNIR use their systems to analyse hydrocarbons – both crude oil and processed products – to allow a refinery operator to know how to most profitably blend the available components into a final product, as well as to minimise any quality give-away in blending the different grades of gasoline and diesel. TopNIR quote the annual benefit to a typical refinery at $2 to $6 million, with an implied investment spend of up to $2 million!

This article was first published in the May 2017 issue of “South African Instrumentation and Control” published by Technews.co.za

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