During the recent Endress+Hauser South Africa Interkama tour SA Instrumentation and Control caught up to E+H COO, Michael Ziesemer, for some Q&A on the stand at Hannover. His answers to our questions are full of interesting insight and delivered with the style of someone who knows what it is all about and looks forward to the future with enthusiasm. This is what he had to say:
Q: Economically, 2009 is regarded by many as being the toughest year since the Great Depression. How was it for E+H and in which segments did you see the biggest declines?
A: You are absolutely right. 2009 was one of the toughest years in history, manifesting as a broad-based decline across most, if not all, of the manufacturing sectors. Particularly hard hit of course was the automotive industry, and it was also very hard for the machine builders. I think the market shrank by about 16% overall, while at E+H we experienced a decline of around 10%.
In the context we take this as a positive, since it indicates that we were able to grow our share under the most adverse market conditions. Another plus for us is the company’s financial stability, particularly the positive cash flow. This allowed us to implement all the projects we had planned for last year, some of which are already becoming profitable. Business growth has resumed and we are currently enjoying a strong 2-digit increase in our order book. This must of course be evaluated in the light of last year’s declines.
Q: What are the challenges that face E+H in 2010 and how is the company planning to address these?
A: In short we see the key success factors for 2010 as productivity and profitability. These are not new of course, so one needs to examine them in a 2010 E+H context. One of our company values is loyalty; we take it very seriously. You only need to look at the number of long service awards in our organisation to recognise this. From a management perspective the social welfare of our people is paramount; there were no layoffs at E+H during 2009. So, due to the market contraction, we are in a position where productivity per person in the organisation is lower than usual by our standards. Couple this with a climate of rising material and energy prices, particularly electronic components, and a new playing field emerges. We think our decision to retain our skills base was absolutely the right one, now it is up to us to optimise our base production even further to take advantage of the newly emerging opportunities.
Q: An interesting observation for me on this tour is the attention to detail that E+H is putting in to substantiate its position as a primary supplier of sensor technology. Others say the future lies in converting data to information and ultimately to knowledge. Is there an E+H view on this approach and any future plans afoot?
A: Yes, you must remember that although we pride ourselves on the accuracy of our sensor technology, our transmitters are capable of supplying far more than just process data. An example is our range of Coriolis mass flowmeters which are capable of supplying a wealth of additional diagnostic information. We support the ideas of FDT and DTM and ultimately plan to integrate all fieldbus types to provide web-enabled asset management solutions. There is a working example of this being shown on the stand; we are using sensory information to pinpoint the source of abnormalities in energy consumption in a plant. For instance, a blocked filter could cause a change in the current drawn by the motor of a pump and could be identified through correlation with a pressure change in a pipe. This is just one of the ways that sensor ‘data’ can provide maintenance personnel with the ‘information’ they need to locate the source of a problem quickly. Taking these ideas further we have plans to go to the ‘knowledge’ layer through integration with platforms like SAP, for instance. Investment at this level will be largely customer driven I think.
Q: How does South Africa fit into the global E+H vision and what have you identified as the key industry segments and technologies?
A: South Africa is currently the biggest African market for us and the wealth of raw materials puts a lot of focus on the mining and mineral processing industries. The fact that they are large consumers of electricity creates a new opportunity in light of the way energy prices look set to increase. It is now essential to cut out any waste in order to remain competitive. Energy competence and renewable energy expertise are both market spaces where our technology can help to make a difference.
More generally, we believe that the potential of the African continent has been underestimated. Now that wealth is starting to accumulate and political stability is improving in a lot of areas, this could change. If it does, and foreign direct investment starts to flow more freely in the form of capital projects, then South Africa will be the hub for our growth in the region.
For more information contact Hennie Blignaut, Endress+Hauser, +27 (0)11 262 8000, [email protected], www.za.endress.com
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