While the group’s products division is still a major revenue contributor, the share of the service and software portfolio is gradually increasing.
In late 2016, ABB launched Stage 3 of its Next Level strategy to unlock value for customers and shareholders. This included: shaping ABB’s divisions into four units: Electrification Products, Robotics and Motion, Industrial Automation and Power Grids. These divisions were effective 1 January 2017 and are fully operational.
ABB’s traditional markets such as utility/heavy industries and power transmission and distribution continue to remain lucrative, but the group is now witnessing significant growth in non-traditional markets, such as food and beverages, data centres and renewables. Food and beverage is a major industry in Australia and we have strengthened our focus on that industry in recent years, said ABB Australia Managing Director Tauno Heinola on the sidelines of ABB’s recent Digital Transformation Summit in Brisbane. Heinola, who was appointed MD of the group’s Australian operations in September 2016, brings 33 years of ABB knowledge and expertise to his role in Australia.
In the food and beverage market, ABB offers a range of segment-specific products, solutions and services for diverse processing and packaging needs across the industry. This includes, but is not limited to, control systems, motors, drives and controls, scalable PLCs and robotic automation solutions, and power monitoring and energy efficiency solutions.
Similarly, as the global dependence on data continues to rise, ABB continues to use its industrial heritage and electrification and automation solutions portfolio to help businesses meet their data demands, offering products and solutions for power distribution, intelligent grid connections, critical power and infrastructure management.
Data centres require a lot of power, electrical equipment and automation systems and that’s where ABB plays a major role — the group offers a range of solutions and systems for the entire life cycle of a data centre. ABB’s data centre solutions include: intelligent grid connection; electrification solutions; industrial automation and DCIM amongst others.
The group is seeing strong growth in the data centre around the world, a trend which is also reflected in Australia.
It’s a significant market, said Heinola, who joined ABB as a sales engineer in the drives business, later becoming the unit’s export manager. After moving to the drives business in Canada in 1990, he founded ABB Beijing Drive Systems with a local partner in 1994, before being given responsibility for ABB’s largest profit centre in the drives business in 1998 based in Finland. He then returned to China to lead the drives business in 2003. Heinola has a Master’s Degree in Electrical Engineering from Helsinki University of Technology.
Compared to the other markets Heinola has worked in, the Australian market is relatively small — this presents a unique set of challenges. The domestic market is not very big and the export markets are geographically far from Australia; and what is even more challenging is that the closest export markets are low-cost countries, said Heinola. The other challenge is high manufacturing costs and declining manufacturing industry.
While the group faces enormous challenges, there are also opportunities, pointed out Heinola’s colleague ABB Australia Sales and Marketing Manager, Power Grids Bill Strohecker. ABB has a substantial footprint of service operations in Australia and still manufactures in the local market. The group has two manufacturing sites in Australia and also operates three major motor/generator repair centres. “One of the other areas where the ABB business has transformed over the years is in the area of software. We do substantial software development here in Australia for the entire world,” said Strohecker.
The group has software development divisions in Darwin and Brisbane — these divisions develop solutions for local as well as international clients. In 2011, the group acquired Powercorp, an Australian renewable power automation company. This acquisition strengthened ABB’s portfolio of control technologies used to manage the integration of renewable energy sources. The group is now going big on renewables and storage but remains concerned about the future of the industry. The lack of national energy policy and clear direction is keeping major infrastructure money from being invested in Australia, said Strohecker. “Lack of policy is keeping the billions of dollars that are being invested in other parts of the world from getting invested in Australia,” concluded Strohecker.