Siemens Struts its Stuff in the Windy City

"The 500-ton exiderdome is built on a barge for the first part of its nine-city U.S. tour that kicked off in Chicago. Housing some 137,000 products, the exiderdome is 'Siemens’ way of saying that our portfolio is unparalleled in the marketplace,” said Raj Batra, vice president, Automation & Motion, for Siemens Energy & Automation Inc., (www.sea.siemens.com) Alpharetta, Ga., during the users conference opening session.

Executives from Siemens corporate headquarters in Germany noted the importance of the U.S. market to Siemens during remarks at the user conference, and at an earlier, July 21 exiderdome tour press event. The United States is the largest market for Siemens’ Industry Sector, which had revenues of about €40 billion (or about $63 billion) in 2007, accounting for about 51 percent of overall Siemens sales. U.S. Industry Sector sales were about $10 billion last year.

Growth drivers

Despite a slowing economy, Heinrich Hiesinger, Ph.D., Siemens Industry Sector chief executive officer, said that the company expects global gross domestic product (GDP) to grow at a rate between 1.9 percent and 3 percent this year. He cited a number of underlying industry trends that will help drive this growth, including resource scarcity, environmental issues, increasing demand for energy, productivity improvement and urbanization/mobility growth.

Siemens has positioned its businesses to capitalize on these trends, Hiesinger said, and holds number-one or number-two market positions in multiple affected businesses. Siemens is the largest producer of wind turbine gear drives, for example, and Siemens Energy & Automation recently announced a $20 million expansion to significantly increase production of these drives at its Elgin, Ill. location, Hiesinger noted. The market for wind power is expected to grow by 20 percent, he said, and “the growth is only limited by capacity.”

As a result of the underlying trends and Siemens’ strong market positions, “we believe that we in the Industry Sector can grow by at least twice GDP and can achieve best-in-class profitability” between 2007 and 2010, Hiesinger told editors during the July 21 press event.

Active energy

Dennis Sadlowski, president and chief executive officer for Siemens Energy & Automation, reinforced those comments during an interview with Automation World prior to the users conference. “We’ve definitely seen some slowing in the last quarter, overall. But everything [relating to] energy is still very active,” said Sadlowski. The list ranges from alternative energy markets such as wind and solar, to anything relating to efficiency improvements, as well as clean energy and environmental solutions, he observed.

Among other things, “we’ve seen quite a significant tail wind in the whole field of motors and drives applications” associated with improved energy efficiency—an area in which Siemens has made significant investment, Sadlowski said. “There’s a strong market there, and one that we don’t see slowing down any time soon.” He noted that economic factors associated with improving energy efficiency have “turned significantly,” meaning that “what might otherwise be considered environmentally conscious now also has a pretty good payback.”

In terms of promising North American market opportunities for Siemens Energy & Automation, Sadlowski cited automotive, and food and beverage as areas in which “there are still opportunities for us in the U.S. And if you look at where some of the next opportunities will be, water is a big one,” Sadlowski said.

Siemens doesn’t break out financial results for Siemens E&A. But during the exiderdome press event, Sadlowski posted a slide showing year-to-year sales growth for Siemens E&A of 7.5 percent in 2005, 47.6 percent in 2006 and 23 percent in 2007. The company has moved from a position of number five or lower in many of the U.S. markets it serves in 2001 to the third or fourth position in many segments in 2008, as well as selected leading market positions achieved mainly by acquisitions, he said. The vision is to achieve leadership in core North American markets including factory automation, process automation, solutions and services for industries, and power distribution systems, in the 2010 to 2012 timeframe.

Share grabbing

“We have targets to outgrow our competitors here, for a lot of them, on their home turf, and as we benchmark their U.S. or North American results, we’re quite pleased with our performance over the last several years,” Sadlowski told Automation World. “And we think that another boost that we’ll get from our exiderdome tour is only going to help that.”

In some ways, he said, the current economic downturn and energy price issues will help Siemens Energy & Automation to grab more market share from entrenched U.S. competitors. Times of economic uncertainty and transition often present the best opportunities, because “people are looking for new ways of doing things,” said Sadlowski. “It’s the C-level executives who are talking about how to save energy or reduce their carbon footprints. These are top-level issues, and as we continue to help people solve those, it’s going to drive our continued growth,” he concluded.

Siemens Energy & Automation Inc.
www.sea.siemens.com