ABB: Current Growth Looking Up

Wednesday, April 25, 2012 @ 09:04 AM gHale

By Gregory Hale
While extolling the virtues of the potential when the merger with Thomas & Betts closes, ABB’s Joe Hogan was still talking about the potential for growth in North America and in security.

“We will see a resurgence in the industrialization of the United States,” said Hogan, ABB’s chief executive during his Tuesday keynote address at ABB Automation & Power World in Houston. He added over the past three years, the automation giant invested over $11 billion through acquisitions, the smart grid and with building a new cable plant.

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ABB paid $3.9 billion for low voltage products producer, Thomas & Betts, in January and Hogan did discuss the potential the company will provide once the deal closes.

In addition, Hogan added, ABB has made $100 million in technology investments with eight different companies outside of ABB and one of them was with security provider, Industrial Defender. At last year’s user’s group meeting, Hogan talked about the importance of a strong security posture and this year he went on to point out the potential.

“Industrial Defender has done well and has plenty of room to grow,” Hogan said.

There are five legs to ABB’s strategic direction, Hogan said.
• Drive competitiveness, which he said was the most important step.
• Capitalize on megatrends.
• Aggressively expand core business; services will play a big role in that regard, he said.
• Practice disciplined M&A.
• Disruptive opportunities, which he said is the most fun where you go out and try to create a new market.

As a part of the disruptive market area, Hogan talked about making a stronger push toward DC current versus AC. He gave the example of a ships using DC current were able to save about 20% in fuel costs. Another area for potential DC current use was with data centers, which are becoming vital cogs in this digital age.

When you really look at it, data centers use 100 times more energy than a normal office would. “They are digital factories,” Hogan said. These factories have a tremendous power requirement for the equipment and the constantly keep the data safe. “We will be a big part of that.”

It all comes down to energy efficiency and that is what all companies, not just manufacturers strive toward, said Enrique Santacana, ABB’s North America chief executive during his presentation Tuesday.

He said they were looking at robust business climate for this year and beyond. Part of that growth all falls within the realm of industrial automation with industrial productivity; grid reliability, aging infrastructure, exponential growth in data driven processes, and increased availability of natural gas.

The potential growth in the future also comes after a year of unprecedented global events like the tsunami and earthquake hitting Japan, all the Arab Spring uprisings, and the continued financial crisis in Europe, Santacana said.

He also added everyone should remember is issues behind the European financial crises. “That was a powerful warning about what happens when an area or country spends beyond its means.”