It is the season of investor conferences, annual result announcements, shareholder meetings and the issuance of guidance on prospects for earnings in the year to come. To coincide with this activity, a 25% discount is being offered on all the BZ Engineering Briefings reports for the months of March and April.
Order the 2009 Pump Industry Briefing, the Rotary Positive Displacement Pump Briefing or the Guide to the Italian Pump Industry during the next two months and enjoy considerable savings on the normal retail price. The reports provide unique coverage of the pump industry and offer a real insight into the activities and strategies of the world's industrial pump makers.
Individual pump company profiles are also available from BZ Engineering Briefings. These are not included in this deal but represent excellent value for money at just £45 each.
Full information is available at www.bzengineeringbriefings.com/products.htm
Wednesday, 3 March 2010
Wednesday, 16 September 2009
Leadership issues
Cardo's President and CEO, Peter Aru, has stepped in as head of Cardo’s Wastewater Technology Solutions division, for a second time, as the company struggles to recruit a suitable replacement for Tomas Wängberg.
Wängberg had headed the Wastewater Technology Solutions division, which includes the ABS pumps brand, since April 2007. He left Cardo in February 2009, moving out of teh pump industry. In the first instance, Ulf Liljedahl, Cardo’s CFO and Executive Vice President, took over as acting head of the division while attempts were made to find a suitable replacement. With that search proving unsuccessful, Aru has taken back control of the main pump-manufacturing division he had passed on to Wängberg in 2007.
The company faces another recruitment headache following the news that the head of the Pulp & Paper Solutions division, Peter Uddfors, is leaving Cardo. Uddfors is set to become CEO of the listed company Micronic Laser Systems AB. He had joined Cardo in 2003 and was appointed head of division in 2006.
There are no such problems with succession planning at Flowserve. Mark Blinn, 47, has just been named as its next President and Chief Executive Officer, beginning October 1, 2009. He replaces Lewis M. Kling, whose retirement is scheduled for his 65th birthday in February, 2010. Kling will take up a role as Vice Chairman of the Board from October and so will be well-placed to ease Blinn's transition into one of the pump industry's top jobs.
Blinn joined Flowserve in 2004 as Chief Financial Officer after serving in the same capacity at Kinko’s prior to its acquisition by FedEx. In addition to his role as CFO with Flowserve, Blinn has also been in charge of Latin America operations for the company since October, 2007.
Before we get any negative comments about accountants running pump companies, I should point out that Blinn’s first degree was a B.S. in engineering, although he went on to add a J.D. in law and an M.B.A. at Southern Methodist University in Dallas.
Wängberg had headed the Wastewater Technology Solutions division, which includes the ABS pumps brand, since April 2007. He left Cardo in February 2009, moving out of teh pump industry. In the first instance, Ulf Liljedahl, Cardo’s CFO and Executive Vice President, took over as acting head of the division while attempts were made to find a suitable replacement. With that search proving unsuccessful, Aru has taken back control of the main pump-manufacturing division he had passed on to Wängberg in 2007.
The company faces another recruitment headache following the news that the head of the Pulp & Paper Solutions division, Peter Uddfors, is leaving Cardo. Uddfors is set to become CEO of the listed company Micronic Laser Systems AB. He had joined Cardo in 2003 and was appointed head of division in 2006.
There are no such problems with succession planning at Flowserve. Mark Blinn, 47, has just been named as its next President and Chief Executive Officer, beginning October 1, 2009. He replaces Lewis M. Kling, whose retirement is scheduled for his 65th birthday in February, 2010. Kling will take up a role as Vice Chairman of the Board from October and so will be well-placed to ease Blinn's transition into one of the pump industry's top jobs.
Blinn joined Flowserve in 2004 as Chief Financial Officer after serving in the same capacity at Kinko’s prior to its acquisition by FedEx. In addition to his role as CFO with Flowserve, Blinn has also been in charge of Latin America operations for the company since October, 2007.
Before we get any negative comments about accountants running pump companies, I should point out that Blinn’s first degree was a B.S. in engineering, although he went on to add a J.D. in law and an M.B.A. at Southern Methodist University in Dallas.
Monday, 7 September 2009
Sine pumps switch from Sundyne to Watson-Marlow
In the latest edition of the Pump Industry Briefing, we looked with interest at United Technologies Corporation’s Sundyne pump portfolio in the light of recent divestments (of the canned motor pump business to Nikkiso) and acquisitions (of the Spanish Marelli Pumps range of heavy duty centrifugals). In particular, we remarked at the lack of overlap between the specialist centrifugal pumps for process and hydrocarbon duties, and the Maso range of sine pumps, manufactured in Germany.
It appears that Sundyne has now acknowledged the lack of fit for the hygienic pump specialists and has sold its Maso/Sine business to Watson-Marlow (part of Spirax-Sarco Engineering plc). The purchase price is €25 million (subject to a final valuation of the net tangible assets on completion of the deal), and will be financed from a newly agreed €25 million loan facility.
Maso/Sine products are sanitary positive displacement pumps for the food and beverage, pharmaceutical and industrial applications. The sinusoidal rotor pump technology is used by manufacturers to process and package liquids and semi-solids such as whole strawberries for worldwide distribution. The existing Maso sales operations serving Germany, the USA and the UK will be merged into existing Watson-Marlow Pumps Group sales companies, and its manufacturing plant in Ilsfeld, Germany will be maintained. The company will be known as the MasoSine brand within the Watson-Marlow Pump Group.
Sundyne paved the way for this change when it announced that Colin Guppy from its senior management team would be taking over the management of Maso/Sine in 2008, replacing Martin Sommer the son of the company’s founder. MASO had been originally founded in 1961 by Manfred Sommer to develop machines for the gentle transfer of grapes in the wine and beverage industry. In 1981 the Maso Sine pump was developed to handle viscous and shear sensitive products. Sundyne acquired Maso in 1998.
The deal provides an additional growth opportunity for Watson-Marlow, which had been exclusively a peristaltic pump maker in the past. Watson-Marlow has been very successful in leveraging its leading position in peristaltic pumps to expand the peristaltic share of the rotary positive displacement pump market. Could this move signal ambitions to establish the company across a broader technology base? Will the acquisition of other rotary positive displacement pump specialists follow? Such a strategy could conflict with the company’s unambiguous position as a champion of peristaltic pumping technology ahead of all others. It will be interesting to see how it copes with this potential identity crisis.
It appears that Sundyne has now acknowledged the lack of fit for the hygienic pump specialists and has sold its Maso/Sine business to Watson-Marlow (part of Spirax-Sarco Engineering plc). The purchase price is €25 million (subject to a final valuation of the net tangible assets on completion of the deal), and will be financed from a newly agreed €25 million loan facility.
Maso/Sine products are sanitary positive displacement pumps for the food and beverage, pharmaceutical and industrial applications. The sinusoidal rotor pump technology is used by manufacturers to process and package liquids and semi-solids such as whole strawberries for worldwide distribution. The existing Maso sales operations serving Germany, the USA and the UK will be merged into existing Watson-Marlow Pumps Group sales companies, and its manufacturing plant in Ilsfeld, Germany will be maintained. The company will be known as the MasoSine brand within the Watson-Marlow Pump Group.
Sundyne paved the way for this change when it announced that Colin Guppy from its senior management team would be taking over the management of Maso/Sine in 2008, replacing Martin Sommer the son of the company’s founder. MASO had been originally founded in 1961 by Manfred Sommer to develop machines for the gentle transfer of grapes in the wine and beverage industry. In 1981 the Maso Sine pump was developed to handle viscous and shear sensitive products. Sundyne acquired Maso in 1998.
The deal provides an additional growth opportunity for Watson-Marlow, which had been exclusively a peristaltic pump maker in the past. Watson-Marlow has been very successful in leveraging its leading position in peristaltic pumps to expand the peristaltic share of the rotary positive displacement pump market. Could this move signal ambitions to establish the company across a broader technology base? Will the acquisition of other rotary positive displacement pump specialists follow? Such a strategy could conflict with the company’s unambiguous position as a champion of peristaltic pumping technology ahead of all others. It will be interesting to see how it copes with this potential identity crisis.
Wednesday, 2 September 2009
Order trends in the pump industry
A year ago, when we published the first Pump Industry Briefing, the world's pump makers were enjoying almost universal success. Most had just posted record order books, record sales and profit margins as high as at any stage in the twenty years I've been writing about the pump industry.
Of course, there was already concern at that time about the prospects for 2009 as the rate of growth in orders was slowing for most companies at the same time as the scale of the crisis in the banking sector began to become apparent. There was, however, great uncertainty about the length and depth of the downturn and its impact on the industries in which pumps are used. It was far too soon to contemplate the timing and nature of any recovery.
With the publication of our second Pump Industry Briefing (2009 Edition), a year later, the picture has become much clearer. Every company profiled has had to adapt its strategies to cope with an altered marketplace and changing shareholder expectations. Manufacturing facilities have been closed, recruitment halted and staff laid off. The impact of the recession varies hugely from company to company, depending on each one's exposure to particular industrial and geographic sectors, but the pain has reached every corner of the pumping universe.
The most responsive market indicator is order input, since sales and earnings figures have been protected by the substantial order backlogs enjoyed by many pump makers at the end of 2008. To try and understand where we now stand, I have plotted the quarterly order intake of ten leading pump makers over the past two years, relative to the orders booked in the first quarter of that period (i.e the three months ending of September 2007).
Not surprisingly, the picture is complicated by seasonality in certain markets and the impact of large one-off orders. Nevertheless, we can identify a general upward trend, reaching a peak in the middle of 2008, followed by a decline late in 2008 and into 2009.
What does this chart tell us about what is likely to happen in the coming year?
The good news is that some manufacturers are seeing growth in orders in 2009. The bad news is that some are still seeing orders decline, for example Robbing & Myers' most recent quarterly order bookings for its pump operations were almost 45% down on the 2007 reference point. This variation reflects the dependencies of different companies on markets with different cycles. Robbins & Myers depends strongly on North American oil & gas demand, a notoriously short-cycle market and the rapid slowdown in that sector has had a dramatic impact on its suppliers.
There is no room for complacency amongst those who appear to be riding out the storm in industries with longer cycles. The short-cycle industries (like oil & gas and pulp & paper) are directly reflecting stagnation in overall industrial output. Without a return to higher levels of general industrial activity, the money will run out for the major infrastructure investments in water and power generation that are keeping many companies afloat.
The pump industry as a whole should be looking for an upturn in orders for Colfax, Sulzer, Robbins & Myers and Ebara by the end of the year, as an indication that the global economy is truly on the road to recovery.
© BZ Engineering Briefings 2009
Of course, there was already concern at that time about the prospects for 2009 as the rate of growth in orders was slowing for most companies at the same time as the scale of the crisis in the banking sector began to become apparent. There was, however, great uncertainty about the length and depth of the downturn and its impact on the industries in which pumps are used. It was far too soon to contemplate the timing and nature of any recovery.
With the publication of our second Pump Industry Briefing (2009 Edition), a year later, the picture has become much clearer. Every company profiled has had to adapt its strategies to cope with an altered marketplace and changing shareholder expectations. Manufacturing facilities have been closed, recruitment halted and staff laid off. The impact of the recession varies hugely from company to company, depending on each one's exposure to particular industrial and geographic sectors, but the pain has reached every corner of the pumping universe.
The most responsive market indicator is order input, since sales and earnings figures have been protected by the substantial order backlogs enjoyed by many pump makers at the end of 2008. To try and understand where we now stand, I have plotted the quarterly order intake of ten leading pump makers over the past two years, relative to the orders booked in the first quarter of that period (i.e the three months ending of September 2007).
Not surprisingly, the picture is complicated by seasonality in certain markets and the impact of large one-off orders. Nevertheless, we can identify a general upward trend, reaching a peak in the middle of 2008, followed by a decline late in 2008 and into 2009.What does this chart tell us about what is likely to happen in the coming year?
The good news is that some manufacturers are seeing growth in orders in 2009. The bad news is that some are still seeing orders decline, for example Robbing & Myers' most recent quarterly order bookings for its pump operations were almost 45% down on the 2007 reference point. This variation reflects the dependencies of different companies on markets with different cycles. Robbins & Myers depends strongly on North American oil & gas demand, a notoriously short-cycle market and the rapid slowdown in that sector has had a dramatic impact on its suppliers.
There is no room for complacency amongst those who appear to be riding out the storm in industries with longer cycles. The short-cycle industries (like oil & gas and pulp & paper) are directly reflecting stagnation in overall industrial output. Without a return to higher levels of general industrial activity, the money will run out for the major infrastructure investments in water and power generation that are keeping many companies afloat.
The pump industry as a whole should be looking for an upturn in orders for Colfax, Sulzer, Robbins & Myers and Ebara by the end of the year, as an indication that the global economy is truly on the road to recovery.
© BZ Engineering Briefings 2009
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