ABB to acquire Baldor Electric Company

ABB and Baldor announce a recommended offer for ABB to acquire Baldor for $63.50 per share, an overall transaction value of $4.2 billion, including net debt of $1.1 billion.

In line with ABB’s strategy: establishes ABB as a leader in the multibillion dollar North American industrial motors business and a global leader for movement and control in industrial applications (industrial motion).

Highly complementary portfolios: combination of Baldor’s leading position in North American motors and ABB’s global leading position in drives and motors.

Creates growth: this acquisition will enable ABB to penetrate the North American industrial market by using Baldor’s strong North American market access; will allow Baldor to expand globally by using ABB’s distribution network abroad.

Right time: additional growth for energy efficient motors and drives through the upcoming implementation of new energy efficiency regulations in the US and other markets.

Continuity: ABB retains Baldor management and brand. Fort Smith remains the headquarters for Baldor, and becomes the headquarters for the combined motor and generator business for North America.

Significant synergies: more than $100 million annual cost synergies and significant global revenue synergies of at least the same amount expected.

Value creating: transaction expected to be earnings accretive in year one.

ABB, the leading power and automation technology group, and Baldor Electric Company, a North American leader in industrial motors, have agreed that ABB will acquire Baldor in an all-cash transaction valued at approximately $4.2 billion, including $1.1 billion of net debt.

Under the terms of the definitive agreement, which has been unanimously approved by both companies’ Boards of Directors, ABB will commence a tender offer to purchase all of Baldor’s outstanding shares for $63.50 per share in cash. The transaction represents a 41 percent premium to Baldor’s closing stock price on Nov. 29, 2010. The Board of Directors of Baldor will recommend that Baldor shareholders tender their shares in the tender offer. The deal is expected to close in the first quarter of 2011.

The transaction closes a gap in ABB’s automation portfolio in North America by adding Baldor’s strong NEMA motors product line and positions the company as a market leader for industrial motors, including high-efficiency motors. Baldor also adds a growing and profitable mechanical power transmission business to ABB’s portfolio.

The transaction will substantially improve ABB’s access to the industrial customer base in North America, opening opportunities for ABB’s wider portfolio including energy efficient drives and complementary motors. This move comes at a time when regulatory changes in the US and other parts of the world will accelerate demand for energy efficient industrial motion products. The acquisition will strengthen ABB’s position as a leading supplier of industrial motion solutions, and will also enable ABB to tap the huge potential in North America for rail and wind investments, both of which are expected to grow rapidly in coming years.

“Baldor is a great company with an extremely strong brand in the world’s largest industrial market,” said Joe Hogan, ABB’s CEO. “Baldor’s product range and regional scope are highly complementary to ours and give both companies significant opportunities to deliver greater value to our customers.”

John McFarland, Chairman of the Board and CEO of Baldor, commented: “Our Board of Directors believes this transaction is in the best interest of our shareholders, our employees and our customers. It demonstrates the value our employees have created and the strength of our brand and products in the global motors industry. We are excited about the opportunity to join ABB’s worldwide family as we have always respected ABB. We are very pleased that ABB will locate its motor and generator business headquarters for North America in Fort Smith and we are confident that the combined global platform will be well positioned to capitalize on meaningful growth opportunities in the future.” John McFarland will stay with the combined business to support a successful integration.

“ABB is well known in the marketplace for premium, innovative and advanced products. We have respected them as both a market participant and a value-added supplier for many years,” said Ron Tucker, Baldor’s current President and COO, and CEO designate. Ron Tucker will run Baldor including the mechanical power transmission products business and ABB’s motor and generator business in North America after the transaction is completed.

Baldor is based in Fort Smith, Arkansas, and is a leading supplier in the large North American industrial motors industry. In addition, Baldor offers a broad range of mechanical power transmission products such as mounted bearings, enclosed gearing and couplings – used primarily in process industries – as well as drives and generators. The Baldor drives business will be combined with the larger ABB drives business to achieve even further penetration of this important product line.

Baldor employs approximately 7,000 people and reported an operating profit of $184 million on revenue of $1.29 billion in first nine months of 2010. This represents an increase of 30% in operating profit and 11% in revenue over the comparable period in 2009.

The US market for high-efficiency motors is expected to grow 10 to15 percent in 2011on the back of new regulations, effective in December this year. Similar regulations in Canada, Mexico and in the European Union are expected in 2011.

“ABB and Baldor will be able to offer our North American and global customers an unparalleled range of high-efficiency industrial products and services to help them meet their new demands,” said Ulrich Spiesshofer, Executive Committee member responsible for ABB’s Discrete Automation and Motion division, into which Baldor’s business will be integrated alongside the existing Motors and Generators business. “We expect to achieve over $200 million in annual synergies by 2015, consisting of more than $100 million annual cost synergies and at least the same global revenue synergies. We estimate two-thirds of these synergies will be realized by 2013. We intend to build on Baldor’s excellent North American position to sell energy efficient drives, larger motors and generators. Together, we will accelerate the expansion of Baldor’s mechanical power transmission product portfolio into the global process automation market using ABB’s strong channels in this sector.”

“We are deeply impressed by the skill and passion of the Baldor team and their excellent customer relationships,” Spiesshofer said. “The strength of Baldor’s people and executive team, which will continue under the new ownership, will play a key role in our mutual success.”

Under the terms of the merger agreement, the transaction is structured as a cash tender offer to be followed as soon as possible by a merger. The tender offer is expected to commence in December and is subject to customary terms and conditions, including the tender of at least two-thirds (2/3) of Baldor’s shares on a fully diluted basis, and regulatory clearance.

Citi served as financial advisor to ABB and UBS Investment Bank served as financial advisor to Baldor.

ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 117,000 people.

Baldor Electric Company (NYSE: BEZ) markets, designs and manufactures industrial electric motors, mechanical power transmission products, drives and generators. Baldor employs approximately 7,000 people and is headquartered in Fort Smith, Arkansas, USA.

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Tank overfill protection, a part of an Emergency Shutdown system

Tank overfill protection has been around for more than a decade, but it’s only post-Buncefield that its importance has been fully appreciated. After Buncefield, “No more excuses”, says Ian Parry, Functional Safety Specialist at HIMA-Sella, and he discusses the development of a stand-alone, high-availability safety system.

Whilst it is about five years since the explosion at Buncefield fuel storage depot physically shook Hemel Hempstead, and metaphorically shook the petrochemical industry, the incident was back in the media in the summer following the fining of those companies considered responsible.

The penalties imposed against some are considered to be amongst the highest to date in relation to safety offences in the UK. Even so, there was considerable public outcry that the fines were too lenient, which created a second wave of ‘bad PR’ against the companies (and individuals) that were named and shamed.

The explosion, which is regarded as one of the largest in peacetime Europe, occurred in the early hours of Sunday 11 December 2005, when a storage tank overflowed. Fuel cascading down from vents at the top of the tank mixed with air to form a petroleum-vapour cloud which subsequently ignited.

As for how the overflow occurred, two significant factors are believed to be that: (a) a servo-level gauge had stuck, indicating that the tank was only at 85% capacity and therefore allowed for the addition of further fuel, and (b) an independent high-level alarm failed to operate and shut down the feed to the tank.

The reasons for the failure of the gauge (which had apparently failed before) and the high-level alarm (which it is reported can be placed into an inoperable position after testing, and on which a safety alert had been issued by the HSE) are still unclear. Suffice it to say that the explosion led to an investigation, conducted by the Buncefield Major Incident Investigation Board (MIIB).

As a direct result of the incident, and subsequent investigation, the UK Petroleum Industry Association (UKPIA) and Tank Storage Association (TSA) announced, in September 2008, that their members had committed to the standards of BS EN 61508 Safety Integrity Levels (SILs) and the installation of automatic shutdown systems to prevent the overfilling of storage tanks (that receive fuels via pipeline transfer).

In response to the above initiative many companies began developing, from scratch, ways of affording greater levels of safety for fuel storage tanks. Others though had been implementing overfill protection, as part of broader Emergency Shutdown (ESD) systems, long before the Buncefield incident. Hima-Sella, for example, first provided overfill protection as part of a safety upgrade at a tank farm in Grangemouth in the 1990s.

Hima-Sella has been actively involved in the design, supply and installation of a variety of control and safety systems to the oil and gas industry for more than 35 years. Its ESDs that have included overfill protection have been traditionally implemented using the company’s HIQuad or Planar F platforms (programmable electronic systems and solid state logic solvers respectively).

However, in the wake of the Buncefield incident – and with many petrochemical facilities wishing to add or enhance tank overfill protection without embarking on a site-wide upgrade – there was perceived within Hima-Sella the need for an easy means of ‘layering on’ tank overfill protection. Accordingly, and channelling almost two decades’ worth of relevant experience into the task, the company developed a tank overfill protection solution (TOPS) around its HIMatrix family of programmable logic controllers (PLCs).

Many oil and gas industry safety-related functions had already been, and continue to be, successfully implemented using HIMatrix; and these functions include Fire & Gas (F&G) Detection, Burner Management Systems (BMS), High Integrity Pressure Protection Systems (HIPPS) and ESD.

When used with suitable valves and transmitters, HIMatrix can be included in BS EN 61508 safety loops up to and including SIL 3. In addition, the platform is suitable for use in Zone 2 ATEX areas so, for TOPS, it can be sited close to the tanks it protects; thus simplifying cabling and reducing associated costs.

Also of great appeal to facilities seeking tank overfill protection was the fact that the HIMatrix hardware building blocks (the PLCs and I/O modules) plus suitable sensors can be configured to serve a range of safety requirements – from protecting a single tank through to a depot-wide network (using safe-Ethernet) if need be. But hardware is only part of the story. System behaviour is set in software – with the programs compiled using ‘certified functional blocks’.

Indeed, it is through a combined hardware and software architecture, plus ‘how’ functions like TOPS can be implemented, that made HIMatrix – which is IEC 61508 certified by the TÜV – such a suitable platform.

For example, consider what TOPS sets out to do. A basic control loop for filling a tank might use a level gauge as a trigger to shut off a pump; and to a large degree this is just “hard-wired logic”. The tank is either full or it isn’t. Clearly though, such black-or-white logic fails if the gauge sticks below its trigger level; as the tank will continue to fill. Such a system could not be built using BS EN 61508 certified equipment and engineering methodologies; in that – within the system development tools – the architecture would not compile (without errors anyway).

The safest approach is to be aware of changing levels; to go analogue if you wish. And an intelligent safety system would question why, when telling the pump to work, the level in the tank is not changing. Whether it is the pump or the level sensor at fault is almost irrelevant. Something is amiss, so stop.

Also of great appeal to those seeking to layer-on tank overfill protection is of course the speed with which it can be introduced to a site. In the latter case, it is worthy of note that one of the first sites in the UK to adopt Hima-Sella’s TOPS was (in the summer of 2008) the Mayflower fuel storage depot at Plymouth.

There, the initial requirement was to protect a single tank. This was achieved using a HIMatrix F20 PLC mounted in an enclosure on the side of the tank. It monitors a fuel level gauge and can trip an inlet valve if necessary; whilst transmitting data back to a DCS on the site. In addition, there is an ESD pushbutton. This is line-monitored to provide extra safety should a failure of the pushbutton or its associated wiring occur.

In 2009, additional tanks on the Mayflower and Cattedown sites were fitted with TOPS, bringing the total (between the sites) to around 20.

Most recently, in the summer of 2010 (and on the heels of the ‘Buncefield fines’), Hima-Sella has seen a dramatic rise in interest for its TOPS. Most enquiries were, understandably, from site operators/owners. Interestingly though some insurance companies have been enquiring too; as they are becoming increasingly interested in the feasibility of enforcing level-monitoring at smaller storage depots (particularly those which are unmanned when deliveries are made).

In addition, Hima-Sella has recently started working with a number of sensor manufacturers – including Vega, Krohne and Endress & Hauser – and has begun evaluating a variety of sensing technologies including radar and differential pressure and ultrasonic level measurement.

In conclusion, and repeating our opening gambit, ‘Buncefield’ is back in our minds following the fining of the companies held responsible. Also, the Health & Safety Executive and Environment Agency [together, responsible for regulating non-nuclear hazardous industrial sites in the UK under the Control of Major Accident Hazard Regulations (COMAH) 1999] are responsible for ensuring that lessons are learned. As a competent authority, and in the wake of the Buncefield fuel depot explosion, it will come down hard on companies that put workers and members of the public at risk, and which cause environmental damage.

In the event of another explosion as a result of a tank overfill, companies will have no excuses for not doing their utmost in terms of implementing reliable and fail-safe preventative measures and procedures.

Ian Parry, Hima-Sella, www.hima-sella.co.uk

 

Curvaceous control system alarm management

Alarm management is a both a worldwide hot topic and a widespread problem. With the advent of digital control rooms, where alarms are available and selectable for every input, there can be up to 2,000 – 4,000 alarms per console, potentially providing thousands of alarm events in an incident, which simply cannot be evaluated by the operator. How can the over-whelmed operator decide which alarms are safe to be ignored?

Investigations into alarm management systems began in the mid-1990s, due largely to legislation, fear of litigation, and initiatives by OSHA and HSE.  However despite these drivers, quantifying the economic value of an alarm system, or even the value of rationalising it, has rarely been attempted. Few, if any, plants actually know the value, as opposed to the cost, of their alarm systems so they cannot begin to justify initiating additional expenditure on alarm rationalisation or on-going continuous improvement. Sadly focus falls on alarm system performance only when companies are compelled by legislation or coerced by the need to be seen to have adhered to Best Practice.

Following his career at ICI, and then as Programme Director of the Abnormal Situations Management Consortium in the USA, Ian Nimmo formed UCDS Inc, a consultancy to help provide ‘Best Practice’ solutions for reducing the frequency and severity of abnormal situations in process plant control. After presenting a paper at the London Control Room Conference last December, Ian said: “At this conference I saw some outstanding alarm work by Dr Robin Brooks at Curvaceous Software. This was the first alarm management paper in the last ten years that got me excited as he explained how alarms can achieve management objectives, how to understand alarm settings in a new light, and how to change them correctly.”

Following up on this introduction, Ian Nimmo attended the conference for users of Curvaceous Software held in March 2010, to hear more about the latest version of the CVE 2.5 software for Alarm Rationalisation and management. Robin Brooks, Managing Director of PPCL, the new name for Curvaceous Software, explained that the plant operational performance data available from historians provides the profile of previous plant operations.

Maintaining quality and saving £000s in Plastics Production

In the Curvaceous Conference user group discussions, George Forrest, Managing Director of Altremis Limited, the only Multi-Variable Analysis consultancy in the UK, outlined the use of CVE in solving process performance and quality problems in a UK plastics company, which helped to realise around £180k of savings per year.

The company made hundreds of products across three manufacturing lines, which used extruders to push hot molten plastic through a heated pelleter plate to create long strands of plastic. The pelleter plate is heated by hot oil, and the process is similar to forming spaghetti strands. On the first line, as these strands exit the pelleter plate they are cut into pellets by high speed rotating knives.

The facility was experiencing occasional excessive knife wear on a specific family of products resulting in poor pellet quality. This led to excessive operational down-time, operator intervention, off-quality material and customer complaints. By using CVE software, data from the last ten product specific runs over a 12 – 18 month period was collated. This included measured weighing and process variables, set points and quality data. Knife wear was measured and indicated by the current amperage of the motor turning the knives. Within a very short time it was discovered that the excessive knife wear was related to the temperature of the pelleter plate. When the plate temperature was low, knife wear increased.

The CVE analysis recommended increasing the temperature set point conditions for the pelleter plate along with loop turning work to reduce the temperature variation. The facility then went from an average of seven to eight knife changes per product to just one knife change at the start of each run. In terms of reduced downtime, knife wear and off-quality generation the facility estimated a saving of around £80,000 per year and a reduction in customer complaints to zero.

In a related study, the same facility saved a further £100k by using CVE to solve a ‘plant mystery’ – why a high quality product would suddenly go off-quality for no apparent reason. Data was collated from three specific product runs: one excellent, the second average and the third poor. Additionally all the data from the other two manufacturing lines, from the period when the product runs had occurred was assessed. CVE analysis quickly discovered the root cause of the problem to be a drop in pelleter plate temperature: eventually this was traced to subtle disturbances in the hot oil boiler system on start-up of the second manufacturing line, because two of the three line pelleter plates were heated using a common hot oil system.

From this work, it became clear how important the pelleter plate temperature was in relation to the product quality and how sensitive it was to temperature variation. Pelleter plate temperature is now recognised as a key process variable within all the company’s other facilities worldwide.

Refinery applications

Much of the current interest in the use of the PPCL approach, using Visual Explorer (CVE) software for improved alarm management, arises from petrochemical processing and oil refining operations. An example quoted by Robin Brooks used data from a refinery hydro-desulphurisation (HDS) unit.

 

 

 

Figure 1: CVE plot of plant data over 3 months for 26 variables (vertical pink lines). Alarm set points are triangles, production of in spec kerosene plots are in blue, with out of spec operation in pink.

By using a CVE display graph showing 178 process variables as recorded at 5 minute intervals over three months of operation, it was possible to identify the patterns for the three different modes of operation: Standby, Kerosene desulphurisation and Light Gas Oil (LGO) desulphurisation. Like most plants, they had one set of alarm limits to cover all three modes – not necessarily optimal for any mode. Necessarily this leads to a lot of standing alarms, and a high alarm annunciation rate. For example there were 41 standing alarms in the standby mode, and a minimum of 3 at all times in other modes of operation. Alarm annunciations peak at 22/hour but are typically 8 per hour.

In order for the operator to use the process monitoring alarms to enable him to tune the plant for best operation, for example in Kerosene desulphurisation, then the plant alarms must be defined for this operational mode only.  Taking the plant CVE plot for the Kerosene desulphurisation mode only, it was seen that the starting positions for the alarms included almost all of the previous plant operational states, which produced both in-spec and out-of-spec kerosene.

By moving the alarm limits to the edge of the in-spec product profile only, the operators will be triggered with an alarm whenever the process strays into an area where previous data shows a history of out-of-spec performance. Previously the operators did not have this view of the operating envelope of plant performance available, and so had not realised the incorrect settings of the alarms that could have advised them of the poor performance.

Bringing the alarm limits in to the boundaries of this good operational zone without improving and tuning the model based controls does lead to unacceptably high standing alarm counts and annunciation rates – which can be seen in CVE – so improvement of the plant operating controls in parallel with the tightening of alarm limits typically sets a medium-term plant process improvement programme in place for the operation.  This is made possible and practical by the new-found ability with CVE to literally ‘see’ operating envelopes

The same challenge had previously been faced by operators at Mallinckrodt Chemicals, where some CVE alarm limits that triggered a pump shut-down were adjusted to be tighter, and significantly within the normal operational limits, to see whether the operators would be able to learn how to control the plant to a different style. In their para-aminophenol (PAP) process, these operators soon learned how to operate within these new tighter limits, encouraged, it was reported, by their desire to avoid going out into the cold and rain to the field-mounted pump starters!

“Alerts” provide operator guidance

A major refinery in North America has successfully used the PPCL alarm rationalisation processes within the Visual Explorer (CVE) and Process Modeller (CPM) software to reset their alarm limits.

A new class of alarms, known as “Alerts”, implemented by the real-time CPM product, were considered to fulfil the role of lower priority alarms and effectively give early warning of impending problems, but without themselves having a high annunciation rate. Alerts are similar to alarms except that they are not subject to the same rigorous Management of Change procedures, and they do not have fixed values – these depend on the current stage of the process.

The Manager leading the project said: “Alerts require Alert limits. They are related to the current process operating point so don’t have fixed values, unlike HiLo alarm limits, and there has previously been no way to establish Alert limit values, that would be usable for more than a few days at best. In this project, we have introduced the new PPCL GPC technology, based on an operating envelope of the process that re-calculates the Alert limits in real-time as an inter-related set of limits. The way we find the operating envelope guarantees that the process is always inside the HiLo alarm limits.”

The use of CVE delivered a significant increase in the ‘No Alarms Present’ time for each segment of the process. Using CPM to find Alert limits also generated corrective advice to assist the operator, enabling him to avoid approaching the HiLo Limits, and thus reducing their Probability of Failure On Demand. The existing HiLo Limits were rationalised one-by-one using the experience and deep process understanding of Operators and Support Engineers, with the objective of minimising the number of visible alarms and the annunciation rate at any time. This maximises the significance of those alarms that do remain visible.

Time variation of Alerts

The alarm management software in CVE2.5 can take the data plot and use an algorithm to set the operator “Alerts” at the edge of the area defining previously known good performance. So new operating Alert levels can be set when the process moves into the next phase, which might be triggered by elapsed time, or by the initiation of a valve sequence when the process moves on a step. This can be configured within the CVE software, where the Alert levels themselves move up and down in time, in step with the process.

Current pressure on oil refineries operating within the USA, after the Texas City explosion and investigation, numerous incidents since then investigated by the Chemical Safety Board, and calls for tighter OSHA regulation under the new administration, has meant that all process control alarm system procedures are under scrutiny: this style of intelligent Alert system, based on previous operational data, combined with separate ESD systems, shows potential for providing effective control: this is why there is so much interest in PPCL systems from the petrochemical and oil refining industries.

Curvaceous Software is now known as PPCL, and can be found at http://www.ppcl.com

Ian Nimmo at UCDS can be found at http://www.mycontrolroom.com

Oil and gas reservoir simulation and VR training

At the Invensys OpsManage’10 customer conference in Disney World, Paris, this week, Invensys Operations Management (IOM) gathered 825 representatives of existing and potential customers, integrators and partner companies from across Europe, Africa and the Russian areas.  A new partnership alliance was signed during the conference, between the National Center for Development of Innovative Technologies (NC DIT), based in Moscow, and IOM, which will mean that the TimeZYX Group, a leading private sector company operating within the NC DIT, will combine its reservoir simulation package, MKT, with the SimSci-Esscor simulation software. The TimeZYX MKT package, will help  SimSci-Esscor to deliver a more integrated reservoir and surface facilities simulation system for oil and gas wells world-wide. TimeZYX will therefore benefit from the global reach of IOM into the oil and gas production market, and SimSci-Esscor will benefit from TimeZYX contacts, particularly throughout Russia, where their simulation packages will benefit the productivity of existing wells.

“This partnership will reinforce our presence in the Russian oil and gas industry” said Stuart Batchelor, vice president for emerging markets within IOM. “Combining our industry-leading PIPEPHASE surface facilities simulator with the TimeZYX reservoir simulation module will provide customers with the technology they need to make better, more-accurate reserve estimations as they pursue productivity excellence.”

The new solution will provide operators with a better understanding of the oil and gas reservoir behavior with regard to the interaction between gathering stations and the surface network. By simulating “what if” scenarios, oil and gas companies will be able to increase the recovery factor and reservoir predictability.

Kazakhstan president sees virtual reality training in action.

Earlier, Invensys Operations Management demonstrated the EYESim virtual reality (VR) system to President Nursultan Abishevich Nazarbayev of Kazakhstan and Jose Manuel Barosso, President of the European Commission, as a part of the Kazakhstan-European Partnership Summit held in Brussels on October 27.

EYESim is the first industrial virtual reality training solution for process plant engineers and operators, that enables them to see and safely interact with the VR model of the plant and processes they control. To do this they use a stereoscopic headset, and can enter a completely immersive virtual environment in which they can apparently move throughout the plant. EYESim technology is geared towards the energy, chemical, oil and gas, and other vital process industries: those that face knowledge management and training challenges, particularly in a rapidly expanding economy like that in Kazakhstan.

Invensys has demonstrated its commitment to the education and development of Kazakhstani engineers through its sponsorship of the Kazakh-British Technical University. President Nazarbayev expressed his appreciation of these efforts and the IOM commitment to his country, applying advanced technologies and contributing to the education and development of Kazakhstani citizens.

Commercial Launch in collaboration with ENI.

At OpsManage’10, IOM and SimSci-Esscor announced the commercial launch of the EYESim 3D simulation training solution in collaboration with Eni Refining and Marketing, Italy’s  largest international refiner. Building on Eni’s refining expertise, the new EYESIM training kiosks take a unique approach to training field operators on generic and specific process tasks, helping the operator improve the safety and productivity of the refinery. The first kiosks will be piloted in Eni’s Gela refinery on the Southern coast of Sicily before being deployed in other Eni facilities around the globe.

“Using proven SimSci-Esscor simulation software integrated with a games console controller and experiencing 3D navigation, trainees and plant personnel can learn process operations and procedures from an interactive tutorial. They can also score their performance with unrestricted access to training kiosks that offer a fully lifelike virtual plant,” said Maurizio Rovaglio, head of innovation and emerging technologies, Invensys Operations Management. “This project continues the close, long-term relationship we have had with Eni Refining and Marketing, with a focus on reducing risks, improving safety and securing productivity excellence at Eni facilities’ worldwide using new 3D training tools and advanced applications from Invensys Operations Management.”

Using and applying gaming and other skill sets most familiar to younger employees, the EYESim solution also appeals to employees new to the engineering and plant workplace, as well as experienced engineers. It combines virtual reality technologies with high-fidelity process and control simulation, computer-based maintenance and documentation management and other applications to provide a highly realistic and safe training environment for improving operating efficiency and skills. Simulations are driven by the IOM SimSci-Esscor DYNSIM high-fidelity process simulator and SimSci-Esscor FSIM Plus software, providing Foxboro I/A Series control system emulation, and other compatible programmes.

The INSIDER news items for November

PlantPAx v2.0 claimed to be ahead of competition, for process availability, asset management, scalability and batch control.

The Rockwell Automation Fair in Orlando early this month highlighted the process automation and control capabilities within Rockwell, now developed and enhanced significantly by the incorporation of the ICS Triplex and Pavilion Technologies acquisitions made some four years ago, and by continuing close joint and collaborative development work with Cisco and Endress + Hauser. PlantPAx System Release 2.0, due early in 2011, uses ICS Triplex technology for high availability, with a broad portfiolio of connectivity options, like HART, Profibus-PA, and Foundation Fieldbus, and provides asset management even for intelligent motor control centres and power control components. Comprehensive batch and sequencing control is available from an S-88 compliant engine, which can integrate into a higher-level batch strategy, also ensuring that OEM solutions, such as clean-in-place skids, easily plug in to plantwide production operations.  The Automation Fair itself illustrated the reach of the Rockwell Automation PartnerNetwork, where most of the 101 members of this network take stands in this major exhibition, and then over 11,000 visitors throng the hall for two days.

HUG discusses wireless plant of the future
Press at the Honeywell User Group European meeting in Barcelona last month were invited to attend a round-table discussion on “The wireless plant of the future” chaired and moderated by Michael Babb, in his role as Editor of Control Engineering Europe. In a radical departure for a HUG meeting, Yokogawa were invited to attend, in the person of Toshi Hasegawa, a Project Leader in the Yokogawa Technology Marketing Department in Tokyo: plus Khalid Hussein, of QAFCO, the Qatar Fertilizer Company, gave his view, from a user’s perspective. From Honeywell, Mols repeated the suggestion that WirelessHART users are finding the battery life of the mesh network sensors near the gateway is much reduced, because of frequent messaging, at a not insignificant replacement cost (for their proprietary battery packs). Battery life was claimed to be not as significant a problem for ISA100 networks. Possibly this will be a topic for users to make further comment on, from both sides.


CHARMs results analysed at Emerson Exchange

The Emerson User Group meeting in the USA, called Emerson Exchange, took place in September, and as INSIDER reported last month saw the retirement of John Berra. Many reviews of different aspects of this meeting have been presented in the media over the last month: one from the ARC Advisory Group caught my attention, with some different views relating to the Emerson DeltaV S-Series hardware, with its use of Characterization Modules (CHARMs) used to establish electronic marshalling connections, and thereby simplifying the tasks of on-site wiring. An apparent barrier to the adoption of fieldbus technologies by EPCs was the additional training needed for staff, and a fear factor over new technology, when established systems were satisfactory, and understood. So it was a real breakthrough for ARC to see Vincent Grindlay, supply chain director at Fluor UK, excited about the advantages apparent with DeltaV Version 11 and its electronic marshalling technology, in the build phase of a project.
Dresser gives GE a process control valve  capability

GE has emerged from three years of relative inactivity in the take-over market with around $25-30Bn to spend on share buy-backs and acquisitions, and has immediately spent $3Bn on Dresser Masoneilan. The declared objective is now to concentrate on existing business areas, and “infrastructure” is the stated broad theme, presumably meaning expansion of their $40Bn Energy technology Portfolio. Dresser also will further the development of GE Energy’s monitoring, diagnostics and performance optimization offerings. Dresser’s pressure relief and control valve technologies will be complemented by GE’s domain expertise, which will create opportunities to bring additional technology and applications to Dresser’s offerings. You have to wonder whether GE appreciate the real value of this capability in their overall process offering?

Masoneilan valves to integrate with ABB 800xA

Possibly feeling a little left out in the cold will be ABB, who made an announcement on September 22, maybe two weeks before the GE acquisition, that ABB and Dresser Masoneilan had agreed to collaborate on emergency shutdown valve (ESDV) integration with the ABB System 800xA. An integrated process will monitor, test and manage these ESDV during all operational conditions, from normal plant operations to abnormal situations, providing crucial process elements for the oil, gas and petrochemical industries, as well as many other industrial processes.

IOM rebuild Northern Europe sales operations

Mike Teller, appointed IOM general manager for Northern Europe some 18 months ago, nas his plans in place for the various IOM businesses in this market, particularly as to how they should address the opportunity presented by the $53Bn of ageing assets currently approaching the end of life stage  – many of these assets, together with an ageing workforce, are in the North Sea. For Teller, Northern Europe is defined as Eire, UK and Norway, to strongly focus on the offshore oil industries, and it also includes most of the IOM oil projects in “export” territories like Kazakhstan and Saudi Arabia.

Coriolis meters perform on two phase flows

A news release from ABB this month suggested that their internal R+D testing of the ABB CoriolisMaster flowmeter has shown that it can accurately measure the mass flowrate and density of liquids that contain up to 45% distributed gas inclusion, compared to the industry standard maximum gas volume fraction (GVF), which they suggest is around 10%. Joel Weinstein, a research and applications engineer from Micro Motion, presented a paper to last month’s North Sea Flow Measurement Workshop, describing the recent Micro Motion work establishing the limitations of Coriolis technology in oil and gas multi-phase conditions. Weinstein concludes that following these recommendations with the best Micro Motion Elite sensor would lead to a better than 1% accuracy in mass flow rate measurement up to 5% GVF for high flow rates.

Who owns the ubiquitous Rotameter name?

The word rotameter is assumed to be a generic name for a variable area flowmeter, describing a freely rotating float visible in a glass tube. However Rotameter is a fairly carefully trade-marked word, for gas or liquid flowmeters, and Rota in Germany, the flow centre of excellence within the Yokogawa group, owns the rights to the trademark in Germany and various European countries. In the UK the rights have devolved through GEC Rotameters and KDG Instruments to Emerson, who have passed the product range to Flotech Solutions. In the USA, the rights were registered by Brooks Instruments way back in 1955, and they are newly independent from the Emerson family. So who should claim what?

Significant changes for the UK automation press

It seems that 2010 is the year for editorial changes in the UK based automation press, not least of which was of course the retirement of Andrew Bond from the full time editor on the INSIDER. The most significant news this month is that Michael Babb, Editor of Control Engineering Europe (CEE), intends to retire after the November 2010 issue. Twenty five years ago, Michael started as the original Control Engineering USA “Man on the spot”, reporting from Europe for the US journal, and also providing a European edition of the journal. The new approach for CE Europe at IML has been to recruit Suzanne Gill as editor, who is the ex-editor of Automation, a rival title from the Datateam publisher (in the UK context). Datateam, having lost Suzanne Gill after maternity leave, also faced the hopefully temporary loss of Michelle Lea in August, on maternity leave – she has now had twins: Lea is another experienced editor, having been in charge of the UK journal Process & Control. Last month IML also decided that they no longer needed an editor for the HazardEx journal, a slot filled for the past seven years by long experienced control and automation editor, Paul Gay.

Emerson achieves $76m in 2010 wireless bookings

Figures for the full year show Process Management sales falling back slightly, to $6022m from $6135m in 2009, but earnings moving up to $1093m from $1060m. Within this Emerson wireless solutions achieved bookings of $76m in the year.

Emerson joins the FDT Group!

John Berra has been retired for only a month, and there appear to be some policy changes. Emerson Process Management has joined the FDT Group as a sponsoring member. “We are delighted to have Emerson join our leadership team” said Glenn Schulz, Managing Director of the FDT Group, as Steve Armstrong of Emerson was appointed to the Board of Directors and Martin Zielinski joined the Executive Committee, as Vice President. Hopefully Zielinski has also modified his views a little, compared to October 2004 when he told INSIDER that “FDT/DTM is being used as a barrier to trade”!

Rockwell Automation Reports 2010 Results

Rockwell Automation has reported fiscal 2010 fourth quarter revenue of $1,356.9 million, up 26 percent compared to $1,074.4 million in the fourth quarter of fiscal 2009. Fiscal 2010 fourth quarter net income was $131.3 million or $0.91 per share, compared to $28.9 million or $0.20 per share in the fourth quarter of fiscal 2009.
Total segment operating earnings were $205.1 million in the fourth quarter of fiscal 2010, up from $79.6 million in the same period of 2009. Total segment operating margin in the fourth quarter of fiscal 2010 increased to 15.1 percent from 7.4 percent a year ago, primarily due to higher segment operating margin in the Architecture & Software segment.

Free cash flow was $19.2 million in the fourth quarter of fiscal 2010 after a discretionary pre-tax contribution of $150 million to the company’s U.S. pension trust.
Sales for the full fiscal year were $4,857.0 million, up 12 percent compared to $4,332.5 million in fiscal 2009. Foreign currency translation contributed 2 percentage points to the increase. Income from continuing operations was $440.4 million or $3.05 per share, compared to $217.9 million or $1.53 per share in fiscal 2009. Segment operating earnings were $717.2 million, up 67 percent compared to $429.7 million in fiscal 2009.
Full fiscal year 2010 free cash flow from continuing operations was $410.7 million, after the pension contribution in the fourth quarter. Return on invested capital was 22.8 percent.

Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, “We capped the year with another quarter of strong revenue growth in all regions. I was particularly pleased to see very strong year-over-year growth again this quarter in China and India and strong sequential growth in Latin America and Europe. Logix grew 36 percent in the quarter.
“Our results confirm that our growth and performance strategy is working. For the full year, we grew revenue 12 percent and doubled earnings per share compared to fiscal 2009. Operating margin improved by 5 points, a great result in light of the compensation cost headwinds and growth investments we made in the second half of the year. Strong cash flow during the year enabled us to resume share repurchases, increase the dividend by 21 percent and make a $150 million discretionary U.S. pension contribution. We ended the year with a very strong balance sheet.
“Our performance this year is evidence that we are executing well as the recovery progresses and I want to thank our employees, customers and partners for their support throughout the year.”

Commenting on the outlook, Nosbusch added, “We believe that the global economic recovery will continue in fiscal 2011. We are starting to see signs that large capital project spending will improve, but timing remains somewhat uncertain. The growth investments we made in 2010 improve our ability to outperform the market in 2011 and beyond. For fiscal 2011 we are projecting revenue growth of 8 to12 percent excluding currency, plus 1 percent growth from currency translation. Based on this revenue outlook, we are providing fiscal 2011 earnings per share guidance of $3.80 to $4.20.”
Nosbusch continued, “Increased exposure to mid- and late-cycle markets should help as the recovery continues. Our strong balance sheet positions us to fund organic growth, make catalytic acquisitions and return capital to shareowners. Our strategy is to capitalize on expanded growth opportunities and technology differentiation. We remain committed to innovation, deepening our domain expertise and thought leadership – all key ingredients for helping our customers achieve their productivity and sustainability goals.”

Architecture & Software Segment
Architecture & Software fiscal 2010 fourth quarter sales were $575.9 million, an increase of 36 percent from $424.1 million in the fourth quarter of fiscal 2009. Currency translation negatively impacted revenue growth by 2 percentage points. Fiscal 2010 fourth quarter sales were up 4 percent sequentially compared to $553.9 million in the third quarter of fiscal 2010. Segment operating earnings were $128.4 million in the fourth quarter of fiscal 2010 compared to $36.9 million in the fourth quarter of fiscal 2009. Architecture & Software segment operating margin was 22.3 percent in the fourth quarter of fiscal 2010 compared to 8.7 percent a year ago. Segment operating margin increased primarily due to volume leverage.
Control Products & Solutions Segment
Control Products & Solutions fiscal 2010 fourth quarter sales were $781.0 million, an increase of 20 percent from $650.3 million in the fourth quarter of fiscal 2009. Currency translation negatively impacted revenue growth by 1 percentage point. Fiscal 2010 fourth quarter sales were up 9 percent sequentially compared to $714.2 million in the third quarter of this fiscal year. Segment operating earnings were $76.7 million in the fourth quarter of fiscal 2010, up from $42.7 million in the fourth quarter of fiscal 2009. Control Products & Solutions segment operating margin was 9.8 percent in the fourth quarter of fiscal 2010 compared to 6.6 percent a year ago. Segment operating margin increased primarily due to volume leverage.

New PTA Technology from Dow and Davy

The Dow Chemical Company and Davy Process Technology have announced the launch of COMPRESS PTA, a streamlined technology for the production of Purified Terephthalic Acid based on the breakthrough combination of demonstrated pressure filtration; solvent recovery and integrated water recycle processes. PTA production is integral to the manufacture of PET (polyethylene terephthalate); a performance polymer used in fiber, film, packaging containers, engineering resins and binder resins.

This new technology process offers PTA producers an investment cost reduction of 15%, higher reliability leading to higher capacity utilization, and conversion cost improvement of 20% compared to competing technologies. It is also easier to operate due to its simplicity, and offers lower environmental impact with lower emissions and less liquid waste.

In 2008, Dow and DPT broadened their 35-year collaboration on LPOxo Process Technology, the world’s leading process technology for producing Oxo alcohols, to include the further development of the Dow’s PTA technology. The work of DPT’s engineering group with proven experience in licensing and process optimization, supported by DPT staff, resulted in the introduction of the new COMPRESS PTA technology. The technology is jointly licensed, with basic engineering being provided by DPT, which has built a reputation for developing and designing processes with high efficiency and reliability, based upon a strong combination of chemistry, chemical and mechanical engineering skills.

Longer term improvements are being developed at DPT’s Technology Centre in the United Kingdom, with the establishment of pilot facilities to enable the work on further cost-reductions. An experienced team of professionals from both companies is assigned to each project on all phases and for the continued operation of the plant.