| ABB Canada: Running Like the Wind |
| Cover Story | |||
| Written by Eric Slack | |||
| Wednesday, 31 March 2010 | |||
 Even the worst economic conditions in decades couldn’t stop the power and automation technology juggernaut that is ABB Canada.
 “Our customers know the quality of our products, systems, and solutions, and they know we can execute on large projects,” said Sandy Taylor, president. “We are committed to expanding our local capabilities and using our global resources to bring the latest technologies to the country.” ABB Canada is part of the ABB Group, which conducts operations in about 100 countries and employs roughly 117,000 people. In 2009, the global entity was 230th on the Fortune global 500. As for ABB Canada, it has 44 locations and employs more than 2,300 people. Similar to the wider ABB Group, ABB Canada’s operations are focused on working with customers to increase the efficiency of their electrical power in ways that are simultaneously sustainable and profitable. Historically, the five operating divisions within ABB were power products, power systems, automation products, process automation, and robotics. However, that makeup changed somewhat as of January 1, 2010 when automation products and robotics were rearranged to form the discrete automation and motion division and the low voltage products division. To be sure, taking advantage of the size of a global company such as ABB has advantages for ABB Canada. At the same time, the drive is to be locally focused within each market. By building on its competencies and expertise for engineering and project management solutions in Canada, the company balanced the relationship between size and economies of scale with highly localized resources that allow ABB Canada to execute within the markets it serves. Many ways to grow Strategic acquisitions are one method ABB Canada uses in pursuit of organizational improvement and growth. When last we met with Taylor in the summer of 2009, he talked about several acquisitions the company made between 2006 and 2008 that helped ABB Canada increase its presence in the western region of the country. More recently, the company made some additional acquisitions, but on a smaller scale meant to target specific white spaces in the company’s portfolio. Last October, ABB acquired the assets of Sinai Engineering Corporation, which was another piece of the puzzle for Western Canada operations. Taylor said the move enhanced the company’s capabilities in electrical engineering, particularly in the high voltage space. Although not as large as other acquisitions, it was an indication of the targeted approach to grow in certain niches of the industry and geographic locations. “Alberta has an aggressive plan to invest in their infrastructure,” said Taylor. “This helped improve our position and overall capacity there.” In mid-February, ABB announced it acquired the turbocharging service activities from Nova Scotia’s ABCO Industries Limited. Previously, ABCO was the approved, licensed service station for ABB’s turbocharging service in Canada’s Atlantic provinces. “This acquisition improved our turbocharging service, which is primarily focused on the marine sector,” Taylor said. “These acquisitions were relatively small, but they are complementary products and services to our existing portfolio,” said Taylor. “We will continue to look for strategic acquisitions in the future, but we take a methodical approach to acquisitions to ensure they are in the best interests of the company.” These acquisitions have also come at a time when marketplace contraction has curtailed organic growth. Some of the major market sectors have been heavily affected by the global economic downturn, and while ABB Canada sees organic growth as an important part of its overall long-term strategy, market conditions beyond its control have made that growth a little harder to come by. Taylor believes the approach of becoming an even more comprehensive solutions provider, taking advantage of its technological superiority, and ensuring a high level of customer service allowed the company to keep its business fairly robust, even in difficult market conditions. Finding the breaks The company was fortunate that one of its target markets, the transmission and distribution side of its business, hasn’t been hit as hard. Either because of the internal needs of Canadian utilities or the availability of government stimulus funds, there are still record spending levels across Canada in the utility sector, particularly around transmission. As systems age, demand grows, and renewables become a bigger part of the transmission picture, Canada’s utilities find themselves in a position where investments in transmission grids created a significant demand for service from a company like ABB. “We are the strongest in this area of the market, and that has been good for us,” Taylor said. “Other areas, like oil, gas, mining, metals, aluminum, and manufacturing, saw periods where the markets slowed down significantly with major capital expenditures in 2009. But we’ve been very active in building our ability to provide comprehensive solutions that expand the two core areas of what we manufacture, which are automation and power technologies.” Some areas where ABB Canada sees specific opportunities include smart grid applications and renewable technologies. On the smart grid side, Taylor said ABB Canada has found from working with customers that there are diverse opinions on what smart grid actually means. The increased intelligence of smart grid applications has the ability to improve efficiency from generation through distribution all the way to the end user. When looking at what ABB Canada provides throughout the supply chain from power generation to transmission and distribution, the company is in position to be seen as the go-to partner for customers looking to make their grids and networks more intelligent. Its power, automation, communication, and information technologies are designed to help customers improve decisionmaking and address issues around reliability and cost, valuable and powerful tools for customer throughout ABB Canada’s service area. On the renewable side, ABB Canada doesn’t manufacture equipment like wind turbines itself, but it does make a lot of technology for the major suppliers that are directly involved in manufacturing that machinery. Globally, ABB is very active in terms of working with the OEMs making wind turbines. “We provide equipment like generators, switch gear, and protection and control systems for wind turbines,” said Taylor. “We also provide integration support for bringing power generated by renewables into the grid. For example, we’ve been involved in some very big projects providing high voltage DC transmission technology to run power from offshore to onshore.” From British Columbia to Newfoundland and beyond, ABB Canada is on the job. Whether it is installing two Static Var Compensators at Hydro-Québec’s Chenier station or retrofitting station service equipment at BC Hydro’s G.M. Shrum power generation station, ABB Canada’s vast national footprint and global resources have the company in position to serve and succeed. For Taylor, the critical differentiation point for the company in the future is maintaining its lead not only in size and scope, but also in human capital. “We know the market needs to recover, but that is an external situation we can’t control. For ABB to continue to grow its business and build on the growth initiatives we have, it takes good, talented people,” he said. “We need to continue to develop our organization to take advantage of the opportunities that will come our way when the markets pick up.” |
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