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