Focus on Leon Viljoen, new CEO of ABB

February 9th, 2014, Published in Articles: Vector

 

by Mike Rycroft, EE Publishers

ABB CEO Leon Viljoen talks about his appointment, the market in southern Africa, infrastructure development on the subcontinent, and the way forward for the power and automation technologies giant.

Leon Viljoen

Leon Viljoen

How would you describe your experience of your new position so far?

I have enjoyed it tremendously. I worked for ABB previously, I studied through ABB, then left in 2000 and now I am back with ABB. I think it is a very exciting company with a huge future. We have a growing market and huge opportunities in upgrading and extending the electrical infrastructure in southern Africa.

From that perspective, I enjoy what I am doing. The company has a good strategy set by my predecessor and we are following it with only small tweaks here and there in response to changing circumstances.

How do you see industry’s prospects in South Africa?

I think our industry is positive. It is growing, not just in the South African market, but things are starting to happen outside of South Africa as well. We see growth in a lot of southern African countries. ABB views southern Africa as the entire region south of the equator, with South Africa as the hub country for this cluster.

Business should, however, be a lot more involved in discussions with government to determine the direction and future of this country. Business is sometimes quick to blame and to point fingers, but we are not involved enough in discussion. Personal experience has taught me that government is prepared to listen if you approach them with facts and valid suggestions.

How is the market developing in neighbouring countries?

We already have eleven offices outside South Africa. ABB saw Africa as the next huge opportunity many years ago and opened many offices on the continent, perhaps too early. Some of these offices have been down-scaled, but not closed, so we have a presence in Angola; Botswana; the DRC; Kenya; Mauritius; Mozambique; Namibia; Tanzania; Uganda; Zambia and Zimbabwe. All these offices are functional and I think it is extremely important to have a presence in those countries: “parachuting” business into those countries doesn’t work; you must be present there. To me, service is a localised business. You must be present in these countries to provide service. I don’t believe we will move manufacturing into Africa. Those offices provide sales and service.

Do you see maintenance and service as important evolving markets?

Service is a huge focus of ABB globally and we view service as a big potential market, specifically in southern Africa. There is a large installed base of ABB equipment throughout the sub-continent, and the expertise is being lost as far as dealing with this equipment is concerned.

We have a number of full service contracts where we have actually taken over the customers’ maintenance staff, and are running maintenance at full service level. Our latest contract involves a smelter in Namibia where we have a full service agreement. We do the maintenance and some of the replacement and refurbishment with very strict measures (KPIs) in place. We receive either an annual bonus or a penalty, based on the levels of service achieved.

How do service and maintenance in Africa differ from other parts in the world?

In some parts of the world, equipment is kept in service for many years. In many southern African countries, equipment is perhaps not maintained as well as it would be in Europe, for instance, due to lack of skill. This is where we have identified a market – to train people or to do the maintenance work on their behalf.

I think there is a general shortage of skills and this is becoming more prevalent in South Africa. We are planning a new training facility in South Africa for high and medium voltage equipment within the next twelve to 18 months.

How has the recently-launched transformer total health care programme been received?

The initial uptake has been reasonably slow. We see this not only in transformers, but also in high and medium voltage switchgear, drives and motors. This is really due to a lack of understanding of exactly what can be achieved with our product offering. It is up to us to sell the concept, and to demonstrate what can be achieved. We have over 2000 service offerings within ABB globally, and we have determined our customer base and which of our offerings are applicable in each country.

Based on this, we put together a country-specific portfolio of service offerings to present to our customers. A lot of back-office work has been done, and it is now up to us to ensure that our products and services are implemented to the satisfaction of the customer.

We have upskilled and made sure that we in South Africa have the skills to provide whatever offering we are putting on the table locally. My estimate is that we can handle 80% of the work locally at the moment. In terms of the remaining 20%, we will enhance our skills as we aim to look after southern Africa from South Africa, not from Europe or anywhere else.

To what level is ABB South Africa allowed autonomy in that respect?

From a service level, we go to the highest level locally and we will do the training in South Africa, so we have full autonomy on the service side, and have the expertise locally to perform this function. The programme is driven locally. In some cases, head office puts in place the products and does the development, but how the rollout is done is a local matter. It is up to us in South Africa to ensure that we understand the market, and that we give the market what it needs.

How is ABB gearing up to get involved in new infrastructure projects?

We are continuously developing new products for transmission and distribution, and I think we are in an excellent position to capitalise on all infrastructure spend in southern Africa, from a product perspective.

In terms of projects and execution, we are training our people continuously to ensure that project execution is done correctly and on time. I think we need some improvement in this area – we need a solid base of people and we are bringing in a pool of people directly from universities, technicons and FET colleges as of this year. We place them on contract, train them and select the best among them for employment in the company. In this way, we are creating a pool of project managers, project engineers and project controllers to ensure that we can execute projects from South Africa.

How do your products cater for distribution network exponsion?

We are upgrading quite a lot of systems, specifically medium voltage systems, where we can replace or upgrade equipment, and our product offering allows us to take an old circuit breaker from a medium voltage panel and replace it with a new one, in the same panel. We’ve replaced a lot of switchgear which had been in the system for 40 or 50 years with new circuit breakers using the same panel, and we upgrade them so that there are minimal interruptions at the customer side.

There has been talk about high voltage DC (HVDC) into Africa and about Eskom’s intention to use HVDC to extend the existing network. Would ABB establish a local HVDC expertise team if this comes about?

In terms of flexible alternating current transmission system (FACTS) devices (which include HVDC), we have a centre of excellence in Sweden with which we co-operate closely. We were involved in the Columbus stainless steel SVC and the Saldhana SVC many years ago. We have project managers and some technical expertise locally, but the lead will come from Sweden. I don’t see us building up that expertise for the southern African market. We will build up enough technical expertise to support the centre of expertise in Sweden. That is the beauty of being part of a multi-national organisation. We did this successfully in Namibia with the HVDC link.

Where do you see ABB going in the renewable energy market?

The renewable market and solar PV specifically are key to ABB. We are involved in wind generation, but not to the same extent as solar PV. We are currently executing five large solar projects on phase one of the roll-out, but we are also doing a lot of smaller installations, such as for the Department of Environmental affairs. We actually won the order for the building automation and, based on that, we also won the rooftop solar project. All our renewable products fit extremely well, particularly with the acquisition by ABB of an inverter manufacturer. We now have the full range of inverters for projects of all sizes. Our product range fits very well into the solar PV market and we are can also call on expertise from ABB Spain. We are ensuring that knowledge transfer takes place to South Africa during the project so that we can handle future projects ourselves.

There has been a lot of knowledge transfer from a technical and project management perspective. There are huge challenges on all these projects – deadlines on these mega projects are tight. To us, smaller projects throughout southern Africa are a huge opportunity. We are now more competitive in that sector with Power One coming on board.

We are also looking at the IPP market, but only as far as control and instrumentation is concerned. ABB has done the control and instrumentation work on many power plants worldwide.

Where is ABB going locally with smart grid?

In terms of “smart grid”, we are really talking about intelligence in the grid. ABB is a leader in automation and this, to me, is exactly what a smart grid is – taking power and power equipment and making sure that automation is applied to those sectors of the network.

In the past, power stations fed electricity to the end-user. It was one-way traffic. Today, renewables and other items feed power back into the grid. Managing this flow of power requires intelligence. Our products have that capability so we are in the best position to enter this market from a product perspective. In terms of automation and control, we have the products which allow the power products to “speak” to one another and to control centres.

The ABB headquarters in Longmeadow was planned as an energy-efficient green building. Has this been successful?

I think it has been very successful, but I think we should define “green”. Our building has energy-saving lighting systems, a grey water recycling system, solar water heating, natural lighting etc., but to me one its biggest benefits is that we have combined most of our activities in one centre.

We used to have factories all over Gauteng, and had to travel between these buildings. The new building has eliminated this waste of energy and the resulting CO2 emissions. This, to me, is the biggest advantage of the green building.

We have already extended this principle to other sites. The Cape Town office has been designed along similar lines by the same developer and ABB is following similar practices in all their buildings internationally.

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