Rockwell Automation expects to see more growth in its business outside the US

Rockwell seeking Mideast prospects [Gulf Industry]

Al Bawaba Ltd.

Rockwell Automation expects to see more growth in its business outside the US in the next five years and is pursuing opportunities in emerging markets including the Middle East, its vice president for global business development says. Joe Kann said currently half of Rockwell's business is outside the US but the company's goal was to drive that to about 60 per cent in five years. "We will see a lot of that coming from the big drivers – China, India, Brazil and Mexico. But markets like the Middle East are new opportunities for us. We're not well established in these markets so we anticipate some very high growth rates there and are trying to shift more resources from our focus in Western Europe to Turkey and the Middle East and also Africa. As Western Europe continues to be flat we will be redeploying resources to other parts." Kann said the Middle East was primarily driven by the oil and gas industry so "we're following our large customers there."  Rockwell was a late entrant in the region but its business was good and it would like to do more, he said. "Customers there are sophisticated and they want leading-edge technologies. We'll be investing more in terms of distribution, service and sales capabilities." While much of the business in places like Saudi Arabia was project-oriented, business in Africa was mainly centred on mining operations in the south and oil applications in the north. He said Turkey stood out differently because of its very healthy machine building business and Rockwell would continue to be engaged in that field.

Joe Kann Rockwell Automation reported sales of $6.25 billion in fiscal 2012, up 4 per cent compared to around $6 billion in fiscal 2011. As much as 50 per cent of its revenue comes from heavy industries, while consumer packaging accounts for 30 per cent with the remainder made up primarily by automotive and tyres. "For 2013 and 2014 our focus won't change from what we've been doing but we're trying to negotiate through the new challenges of the economy. Globally we see good opportunities in what we broadly consider the emerging markets such as China, and India. They have slowed down in 2012 but we think they will be recovering," said Kann. "As energy and gas prices go, so does the Middle East and we anticipate there will be continued strong capital investment there. The same is the case with Latin America. Metal prices are relatively stable, so mining has slowed down somewhat, but in a majority of markets, particularly in oil and gas, there's a lot of expansion and prices are high. They are going into deep water applications and in more remote locations. In the US you have the unconventional oil and gas applications such as in shale gas. That is driving capital investment. We will pursue these higher growth markets." Kann said the US market had proved solid for Rockwell and there were signs that manufacturing would return to its shores. In Northern and Western Europe, the machine building industry was strong and even in the depressed regions of the continent that industry continued to do much better while other sectors suffered.

Rockwell Automation is interested in the Middle East urban transportation business

SHIFT IN PATTERN The company is making available products more suitable to emerging markets, particularly items from its mid-range product portfolio, which targets smaller and simpler applications. "But we're also continuing for example to expand our capabilities to some of our heavy industries which are so important in the those markets," he said, adding the company had acquired a systems integrator in South Africa and had closed a deal in China with a company that makes motor controls – medium voltage drives. It would serve as an extension to Rockwell's medium voltage drives business. "At the same time we will move more and more of our business centres to the emerging markets. For example, our engineering design centre in Singapore is focused heavily on serving the machine builders markets. While Rockwell serves a vast majority of industrial segments, it expects to play a bigger role in some of the infrastructure around urban settings such as subway systems like rail and transportation. The company has substantial business in Asia but is now pursuing similar opportunities in the Middle East. The company will also expand into the process side of the business. New-generation technology that Rockwell is involved with will go forward. "Cloud and big data and how that relates to our service organisation and our service offerings will be something you are going to hear more and more," Kann said. Rockwell is introducing a series of process optimisation solutions that will target applications for the shale gas business. Kann said the company's Pavilion product offering helped ensure process control and was ideal for controlling waste by-products to make the operation as energy efficient as possible. Shale gas operations would benefit from monitoring and tracking.

ADVANTAGES "Our integrated architecture is unique in industry for being a single platform that can perform many different kinds of controls. The value to the customer is that he can work in a single control system and do all the different types of applications," said Chand. "Part of that portfolio would be our intelligent motor offering. Motors are still a huge portion of the electrical load in industries… our goal is to control motors and keep the assets running. "Another differentiator is that we don't try to do everything ourselves. We have formed a partner network ranging from big companies such as Cisco and Microsoft to small firms that have specialised products or specialised applications knowledge." Kann said Rockwell would develop smaller and simpler devices for communications, enabling greater flexibility and intelligence leading to machines acting smarter and self-diagnosing. "Convergence of communications is the biggest driver we're looking at. We continue to have ongoing research around our motor control offerings. Our core control platform Logix is going through a major upgrade right now that will improve its performance and scalability and flexibility."