ABB, T&B and MegaTrends

Last week I had the opportunity to attend ABB’s Automation and Power World (this is a link to the show blog – overviews a number of the sessions) in Houston.  Impressive event. Had over 5000 customers, 1000 sales partners, 500 workshops (including 75 customer case studies) and 130,000 square feet of exhibit space – their biggest show ever.  While the show covered all of ABB, including Baldor and other divisions that operate under their own name, it was very educational.


Joe Hogan, CEO of ABB, and Enrique Santacana, U.S. region manager, had some interesting things to say about ABB’s future which, considering the trends, represent significant opportunities for electrical distributors and many other manufacturers.


Some key points from Santacana’s short presentation:

• ABB expects industrial automation and electric power to be robust markets for 2012 and beyond due to:
• continued productivity improvements
• grid infrastructure modernization
• data driven processes … the more we go digital with information (and tools like smartphones and tablets), the more data centers will be needed and the more electricity will be used
• natural gas investments, which generate new fuel sources, lower generation costs
• initiatives and interest in energy efficiency

Economic and Industry MegaTrends
Seth Rao, VP Industrial Automation and Process Control at Frost & Sullivan presented megatrends, and how they project key impacts to the world, especially industrial automation and process control.

Mr. Rao used an acronym called “DEEP-KIC”, which explains the key factors impacting business:

• DEEP – Demographic, Environmental, Energy, Politicial
• KIC   – Knowledge, Innovation, Collaboration

Additionally, by 2050, 50% of the world population will live in cities – hence the need for transportation, electrification adn digital information.

He opened his presentation with a graphic of Thomas and Betts products. Explained that this is a “game changer” for ABB, that TnB helps ABB in Europe and China, that TnB has a “world class distribution system” (in reference to its 6000 distribution locations) – this created some consternation for some distributors, that ABB Low Voltage Products could benefit from TnB’s “fast cycle” logistics and that the products were complementary.  He cautioned that it will be a process integrating the two companies and that people shouldn’t expect much change initially (the deal was approved by T&B shareholders today and the Department of Justice has given its blessing this week.  Government approval from other countries should happen shortly.)

Nothing was said about the name change but we’re betting that there is no change.  Probably will be Thomas and Betts, a Member of the ABB Group (like Baldor and some other companies they’ve recently acquired.)

He emphasized the importance of the US to ABB explaining that the ABB is the largest growing market and that ABB has invested $11 billion in North America in the past 3 years.

In looking towards the future (2015), Hogan stated that the strategy is to:

• Drive competitiveness (cost, design, products, existing business relevancy)
• Capitalize on megatrends
• Expand the core business, especially with services
• Opportunistically consider acquisitions
• Identify disruptive opportunities

As expected, much couldn’t be said regarding TnB due to the deal not having closed, but the event shared some insight into the “why” of the acquisition and shared some cool case studies, applications and product exhibits.

And I’m sure that TnB will be exhibiting at Automation and Power World next year in Orlando.

But, more to the point, as an electrical distributor, what are your concerns about ABB’s acquisition of TnB? What opportunities do you see? Or will it make you make some changes?