Delta Controls acquired Mobrey….

Last April, Delta Controls were pleased to announce that they had signed an agreement with Emerson to purchase its Mobrey line of measurement products manufactured in Slough, UK – previously a part of the Measurement Instrumentation  business within Emerson Automation Solutions, and closely aligned with the Rosemount products. To ensure a smooth transfer of the Mobrey-branded products over to Delta, the transaction involved a two-step process.

• Emerson designated Delta as the exclusive global distributor for the Mobrey product lines, commencing on 1st April 2019.
• The official transfer of Mobrey (employees, inventory, intellectual property, product approvals, etc) was to take place no later than 30th September 2019.

For Delta Controls, their new enlarged business offers customers and distributors a wider range of leading instrumentation products from a single supplier and, importantly, a long-term commitment to support these brands and technologies.

The Mobrey portfolio of point level alarms and continuous level measurement products provides reliable measurement, monitoring and control of liquids and dry products. The manufacture of the Mobrey products will continue at the Slough premises ensuring continuity of supply and quality standards.

Chris Webborn, Director for Nuclear Applications at Delta Controls, said ‘We had been looking for some time for a partner for level products that would meet our high standards of reliability and value. In Mobrey we have this in a great complementary series of products backed by a superb name and reputation’.

The business is now renamed Delta Mobrey Ltd, and the new expanded Delta Mobrey Product Overview Catalogue is now available, including the Mobrey products now exclusively sold and distributed through Delta Mobrey Ltd.

Trusted globally for rugged reliability, Mobrey products have been providing industries with highly capable measurement products for over 100 years, with a proven range of Switches, Controllers, Transmitters and Steam and Water Level Boiler Control Systems, including the renowned Hydrastep 2468.

Westermo acquires Virtual Access Ltd

Westermo, a business entity of the Beijer Group, has acquired 100% of Virtual Access Limited, an Ireland-based technology company specialising in wireless industrial routers and gateways, plus managed connectivity services for customers in the utility, traffic management and telecommunications sectors.

Virtual Access has 40 employees and operations in Dublin, Ireland, with annual sales of approximately Euro12M (~130 MSEK). With the earlier acquisition of Neratec Solutions AG, a specialist in WLAN solutions used within the railway industry, this latest acquisition provides Westermo with an extensive industrial wireless portfolio to support remote data networking applications in a broad range of demanding applications.

“I am pleased that we today announce this second complementary acquisition to the business entity Westermo. We operate in markets where digitalisation is growing rapidly in an increasingly connected world and the acquisition of Virtual Access strengthens our position further”, said Per Samuelsson, President and CEO of Beijer Group.

Jenny Sjödahl, CEO of Westermo added: “The acquisition of Virtual Access will strengthen Westermo’s offering to the power distribution and utility markets, by providing an expanded remote access technology portfolio supported by our worldwide sales network. This acquisition supports our ‘WeGrow’ strategy in a superb way. Virtual Access in Ireland will become the technology centre for cellular remote access solutions within Westermo”.

Henry Brankin, Managing Director of Virtual Access Ltd, commented “We are very happy to join Westermo and the Beijer Group. Westermo’s worldwide sales organisation will ensure further global market reach and our complementary technologies will create a strong offering to a range of industries”.

The acquisition will have limited impact on Beijer Group’s earnings in 2019 and is expected to contribute in 2020 in line with the forecast Westermo profitability level.

Left to right: Tom Hughes (Former Chairman), Philip Duffy (CFO) & Henry Brankin (MD) from Virtual Access, accompanied by Jenny Sjödahl (CEO, Westermo), Per Samuelsson (CEO, Beijer Group) and Joakim Laurén (CFO, Beijer Group).

Yokogawa acquires RAP International

Yokogawa Electric Corporation has signed an agreement with UK-based RAP International (RAP) for Yokogawa to acquire the company and make RAP a wholly-owned subsidiary.

RAP specialises in providing digitised solutions that support risk assessment, management of the permit to work (PtW) process, and governance of control of work (CoW) for all plant maintenance activities.

Integrating RAP’s electronic risk assessment and PtW software solutions with Yokogawa’s real-time plant condition monitoring will improve safety assurance, reduce turnaround times, and support customers in providing enhanced protection for their people, assets, and the environment.

Manufacturing plants rely on scheduled and unscheduled maintenance activities to keep operating, ranging from daily rounds by field service personnel to the replacement of major pieces of equipment that can require shutdown of the entire plant for days or more. Control of work is the setting in place of a predetermined system for maintenance so that all necessary steps are carried out to prevent accidents and injury to people, damage to equipment, and unwarranted release of materials into the environment. However, in many plants these CoW systems are still paper-based or semi-automated through a combination of bespoke spreadsheets and document management systems, which can contribute to human error during operations.

Since 1994, RAP has been developing and implementing software solutions with integrated best practices that let customers digitise their CoW processes to make their maintenance activities safer, more accurate, and more efficient. RAPnet, its flagship product, is a comprehensive and easy to use electronic CoW system for automating maintenance processes: it is built around a large knowledge base incorporating decades of accumulated first-hand knowledge and experience. The digitised off-the-shelf solution includes standard modules for safety risk assessments, PtW management, management of change, interlocks and overrides, and isolation management. The system is complemented by consulting services as well as mobile and cloud-based functionality to fully deliver on the digital ambitions of customers. With support for 25 languages, it has already been implemented at over 150 locations in 30 countries in the oil, gas, chemical, utilities, and steel sectors.

Yokogawa provides industrial automation solutions to optimise productivity and efficiency whilst at the same time assuring plant safety and asset integrity. The company offers solutions that can monitor the health of plant equipment, and a digital platforms to support field maintenance. RAP solutions will further enhance the Yokogawa asset and safety assurance value proposition. Yokogawa will expand the availability of RAP consultancy services and road-tested systems through its global sales network, starting in Europe. The company will also carry out development work to integrate these into its existing technology portfolio and create a digital transformation platform that enables real-time monitoring of both plant assets and maintenance procedures.

Simon Rogers, head of the Yokogawa Advanced Solutions Division, commented: “Yokogawa believes that to create unique value for our customers it is important to integrate domain knowledge into the technology solutions we deliver. RAP systems are built around manufacturing industry best practices developed over the past 25 years, enabling customers to digitise and transform their maintenance safety processes, better protect their workforce, and improve operational efficiency. One of the strategies laid out in our Transformation 2020 mid-term business plan is to expand our OPEX business, so in line with that we look forward to making this outstanding addition to Yokogawa’s safety assurance portfolio available to our customers around the world as soon as possible.”

Electrocomponents plc buys Monition, adds to RS

Electrocomponents plc has today completed the acquisition of Monition, the UK-based pioneer in the design, development and application of condition monitoring systems. Monition is based in Worksop, Nottinghamshire, and will become an operating brand within the RS Technical Services operation.

Monition provides managed services in areas such as condition monitoring, predictive maintenance and the Industrial Internet of Things (IIoT) to improve their customers’ reliability, operability and maintainability. Originally founded in 1988 by Ian Jennings, Monition has more than 30 years of operational knowledge and expertise in the reliability and condition-monitoring sector, developed in co-operation with European and UK governments, leading Universities and industry specialists. It has well-established relationships within the maintenance functions in a range of blue chip clients, particularly within the food and beverage sector.

“The acquisition of Monition supports our strategy of building a range of differentiated value-added solutions such as connected factory and IIoT solutions for our customers,” said Pete Malpas, Managing Director of RS Northern Europe. “Whilst we already have an extensive range of customer solutions including calibration, eProcurement and inventory management solutions, we believe that the Monition portfolio will enable us to provide our customer base with the intelligent solutions they need to maintain their operations more effectively and as such will bring us closer to becoming first choice for our customers. We are thrilled to welcome Monition to RS and the Electrocomponents Group.”

Mike Burrows, Managing Director of Monition, commented: “We are extremely excited to become part of RS and the broader Electrocomponents Group. We share a common vision to deliver high-quality, innovative maintenance solutions to our customers. Being part of a larger Group will bring Monition benefits of scale and additional resources, which will help us accelerate the design and development of cutting-edge maintenance engineering solutions to address Industry 4.0 and digital manufacturing needs.”

Monition will retain its trading name and, as part of RS, will benefit from the financial strength, scale and international spread of the broader Electrocomponents Group.

Electrocomponents is listed on the London Stock Exchange and in the last financial year ended 31 March 2018 had revenues of £1.71Bn.

Hitachi buys ABB Power Grids

ABB has announced that Hitachi will acquire its Power Grids business as part of an expansion to the existing partnership between the two companies.

Hitachi plans to initially acquire an 80.1% stake in the Power Grids business and expects to close the acquisition in the first half of 2020. Hitachi has also entered into a purchase option to acquire the remaining 19.9% stake in Power Grids, making it a wholly-owned subsidiary.

In the fast-changing world of energy infrastructure, with a shifting customer landscape and the need for financing and increased government influence, ABB believes Hitachi is the best owner for Power Grids. As a stable and long-term committed owner, with whom ABB has developed a strong business partnership since 2014, Hitachi will further strengthen the business, providing it with access to new and growing markets as well as financing. Hitachi will accelerate Power Grids to the next stage of its development, building on the solid foundation achieved under ABB’s previous ownership.

Since 2014, Power Grids has been significantly improved under the ownership of ABB. The latest results are at the target margin corridor, having more than doubled margins, with positive third party base order development recorded for the last six consecutive quarters.

ABB will initially retain a 19.9 percent equity stake in the joint venture, allowing a seamless transition. The transaction agreement includes a pre-defined option for ABB to exit the retained 19.9 percent share, exercisable three years after closing, at fair market value with floor price at 90 percent of agreed Enterprise Value. Hitachi holds a call option over the remaining 19.9 percent share at fair market value with floor price at 100 percent of agreed Enterprise Value.

The joint venture will be headquartered in Switzerland, with Hitachi retaining the management team to ensure business continuity.

Starting in Q4 2018 until closing, ABB will report Power Grids in discontinued operations. As a consequence, ABB will record $350-400 million of stranded and other carve-out related costs, which are currently predominately recorded as part of the Power Grids cost base. These will now be recognised in ABB’s corporate & other operational EBITA. ABB expects to eliminate the vast majority of these costs by deal closing by transferring them back to Power Grids. ABB expects approximately $200 million of charges in Q4 2018 related predominantly to the legacy EPC substation business reported in non-core corporate & other operational EBITA.

ABB expects to incur one-time non-operational transaction and separation related costs of $500-600 million. ABB anticipates $800-900 million related cash tax impact. The completion of the transaction is expected by first half of 2020, subject to regulatory approvals and fulfilment of closing conditions. ABB intends to return 100 percent of the estimated net cash proceeds of $7.6-7.8 billion from the 80.1 percent sale to shareholders in an expeditious and efficient manner through share buyback or similar mechanism.

Sales and marketing people to admire

With the Farnborough Air Show coming over the horizon, in 2018, I thought it might be relevant to look again at the story first told in the SA Instrumentation and Control journal in 2016, just after the last Farnborough event.

First, the retail example

There is a family-run DIY shop in Winchester: it does not have the attractive displays of the DIY Supercentres, it is crammed with stuff in crowded aisles, and you have to ask where to look for anything. But then the staff know exactly where it is, are knowledgeable about how to use it, and make a good guess as to why you want it, and suggest two other things that might also be useful. So you come out with more than you wanted, but with reassurance. More important, they made the sale, helped the customer, and sold a few more bits. You have to admire their sales expertise, and their business just keeps on growing. Back in 2016, they proudly boasted that it was Rick Stein’s favourite D-I-Y shop!

A different approach, in industrial calibration

The Trescal postcard give-away

Occasionally you recognize similar marketing initiative in industry. In the public display days at the Farnborough Air Show 2016 there were aircraft enthusiasts (like me) lined up along the barriers, all probably with jobs that impinge on aviation, or engineering, or similar. So while waiting all day for his 10 minute display slot, Jean-Marc d’Hulst, the pilot of a French Starduster SA300 aerobatic biplane, walked along the crowd line handing out postcards showing his aircraft, chatting to anyone interested, and listened to by everyone around.

Turning the postcard over you realize that it is advertising the Trescal Group – which explains the name painted on the side of the aeroplane. This group is a world-wide network of companies that provide calibration, repair and verification services, specialising in the requirements of the avionics industry. These days, with traceability and accountability paramount, such services are in high demand, not just from the aerospace industry, and are usually bought in from a third party, so the records can be seen as from independent inspectors, and the third party supplier takes on all the hassle of maintaining the traceability for their test equipment.

My photo of his display, in a grey Farnboro sky

Jean-Marc d’Hulst is a VP of Trescal: the company news on their website shows they seem to acquire another laboratory in another country every few months. They now have 180 laboratories in 21 countries: these labs cover Europe, Asia, USA, South America and North Africa at the moment. Trescal also provide engineering training and consultancy on measurement problems to improve process performance for all types of industry. Jean-Marc has displayed this year at the Paris, Farnborough, Berlin and Marrakech air shows, and indeed his company expertise was also broadcast during the public commentary at each display. With these marketing skills also applied to the group acquisition and expansion strategy, maybe Jean-Marc will take his Starduster display to South Africa very soon!

2017 Update

While the comment about South African expansion was aimed at the readers of SAIC, the news this November is that Trescal has made another acquisition in South America, Trescal has acquired Teclabor, a calibration services provider based in Recife (Brazil). This is the third acquisition in Brazil, expanding their local geographical coverage into Pernambuco state.

Founded in 1985, Teclabor is an accredited one-stop-shop calibration laboratory, with strong capabilities in liquid flow, volume, mass (scales), temperature and humidity. Teclabor employ 30 people, generating a turnover of 3,3 million Brazilian Reais (approx 1,0 million Euro), and is mainly active in the Food & Beverage sector.

During 2017 Trescal has also acquired several other companies: Gebhardt Instruments in Germany, Acucal Inc in the USA, and Pyrometro Services in Malaysia.

 

E+H acquires Blue Ocean Nova

A new Endress+Hauser press release says the company is further expanding its portfolio of products, solutions and services in the field of process analytical measurement, by  acquiring Blue Ocean Nova AG, a manufacturer of innovative inline spectrometers for monitoring quality-relevant process parameters. 

Blue Ocean Nova will operate under the umbrella of the Endress+Hauser centre of competence for liquid analysis headquartered in Gerlingen, Germany: the 15 employees currently located in Aalen, Germany will be retained. “The intelligent process sensors developed by Blue Ocean Nova will enhance our offering in the field of process analytical measurement, adding a strategic building block,” said Dr Manfred Jagiella, Managing Director of Endress+Hauser Conducta GmbH+Co. KG. As a member of the Group’s Executive Board he is also responsible for the analytics business. 

Innovative concept

The process sensors developed by Blue Ocean Nova cover the relevant optical spectroscopy regions of UV-VIS, NIR and MIR to analyze liquids, gases and solids inline. The innovative technology allows the spectrometer to be directly integrated into the measurement probe, even in explosion-hazardous areas. The sensors can furthermore be automatically cleaned and easily integrated into process control systems.

The systems from Blue Ocean Nova are utilized in the food & beverage, oil & gas, chemicals and life sciences industries for applications such as concentration and moisture measurements and for measuring relevant quality parameters. The technology enhances the Group’s portfolio, which already encompasses Raman spectroscopy, tunable diode laser absorption spectroscopy (TDLAS) and process photometers.

Extensive experience

Blue Ocean Nova was founded by Joachim Mannhardt and Stefan Beck in 2015, bringing extensive product development experience in the field of industrial spectroscopy and process analytical measurements to the company. “Endress+Hauser opens the door to international markets and customers for us,” explains Stefan Beck. Joachim Mannhardt adds: “We’re convinced that our technology will be an ideal enhancement to Endress+Hauser’s optical portfolio.”

Endress+Hauser acquired Blue Ocean Nova effective 31 October 2017. Both parties agreed not to disclose the details of the transaction. Joachim Mannhardt and Stefan Beck will remain on the management team of the innovative company. “With this acquisition, we are continuing to pursue our strategy of strengthening the process analytical measurement portfolio and in the future supporting our customers from the lab to process,” says Manfred Jagiella.

 

Yokogawa acquires FluidCom chemical injection valve technology

Yokogawa has announced the acquisition of TechInvent2 AS, a Norwegian enterprise
that holds the rights to FluidCom, a chemical injection metering valve (CIMV). The FluidCom CIMV prevents blockages and corrosion in oil wells, pipelines, and other facilities and employs a patented technology for thermal control. It incorporates the functions of a mass flowmeter, control valve, and valve controller and has very few moving parts. FluidCom systems have already been delivered to several international oil and gas majors. With TechInvent2 joining the Yokogawa Group, Yokogawa will now target delivery of this solution to the oil and gas upstream and midstream sectors, thereby helping to improve operational efficiency, reduce operational costs, and enhance health, safety and the environment (HSE).

Background Information

Based on its Transformation 2017 mid-term business plan, Yokogawa will continue to focus on the oil and gas industries, and will strive to strengthen its solutions targeting the upstream and midstream sectors, in addition to its forte downstream sector businesses.

Following its April 2016 acquisition of KBC Advanced Technologies, a provider of consulting services that are based on its own advanced oil and gas simulation technologies, the company has been striving to work with its customers to create
value through the provision of solutions that address every aspect of their business activities. At oil wells and pipelines, efforts to ensure a secure oil flow path (flow assurance) play an important role in maintaining production efficiency. The adherence of various chemical substances to the inside walls of a pipe can reduces its internal diameter and causes corrosion. To prevent the accumulation of substances and corrosion, certain chemicals must be injected in the pipes. Improving the efficiency of this process is a major challenge in the upstream and midstream sectors.

The FluidCom CIMV

Chemical injection valves have traditionally been manually operated in the upstream sector, although there are cases where chemical injection has been automated using an actuated solution. In the former case, the valves must be frequently opened, closed, and adjusted by plant personnel. This is costly as it necessitates the hiring of additional staff, and it is work that must be done under very harsh environmental conditions in the field.

It is also a well-known problem that inaccurate and unstable dosing of chemicals leads to additional operational costs and challenges with specific processes. To address and resolve such problems, there is an increasing demand for integrated automatic injection solutions that perform stably and offer a high level of precision in the dosing. The FluidCom CIMV has a unique design which is based on a patented technology, providing integrated flow control and metering using a unique combination of material and thermal effects.

FluidCom is a fully automated and reliable device with a simple design that performs autonomous valve control and continuous flow metering. The device is able to stably inject chemicals in the required small amounts. It has few moving parts and has proven to be an accurate, reliable solution for the control of chemical injection applications. No regular maintenance is required and remote control features are provided.

The device features a self-cleaning mechanism that reduces maintenance workload, and the automatic injection of chemicals in the correct amounts eliminates the need for manual interventions by plant operators and maintenance workers, thereby enabling personnel to lessen their exposure to harsh environmental conditions in the field.

Chemical injection valves have traditionally been operated as manual systems in the upstream sector under harsh conditions. The FluidCom can automate chemical injection operation and reduce times that plant operators and maintenance workers go to field and operate in harsh environments. So using FuidCom improves healthy and safety.

FluidCom is also a valuable solution for downstream operations, where corrosion prevention is always a pressing concern. An ISA100 Wireless version is planned. The ISA100 Wireless technology is based on the ISA100.11a standard. It includes ISA100.11a-2011 communications, an application layer with process control industry standard objects, device descriptions and capabilities, a gateway interface, infrared provisioning, and a backbone router.

Commenting on the acquisition of this company, Shigeyoshi Uehara, head of the Yokogawa IA Products and Service Business Headquarters, said: “FluidCom will improve flow assurance, which is a key concern of our customers in the oil and gas industry, and it will make a major contribution to their operations by helping them not only improve production efficiency and reduce operational costs, but also enhance HSE. The combination of FluidCom, KBC simulation technology, and Yokogawa field devices will allow us to expand the range of our upstream and midstream solutions and enable the delivery of value in new ways to our customers.”

About TechInvent2

TechInvent2 is a fully owned subsidiary of TechInvent AS, a Stavanger, Norway-based company founded in 2008. TechInvent is owned by the founder and CEO Alf Egil Stensen, the venture capital firm Statoil Technology Invest AS, Aarbakke Innovation AS, and Ipark AS. The company has been supplying its FluidCom chemical injection technology to major oil companies since 2016. Alf Egil Stensen will continue as CEO of the company now that it is part of Yokogawa.

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.

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.

It 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.