Results show a huge jump in revenue and orders

February 28th, 2014, Published in Articles: Energize

 

ABB South Africa, a subsidiary of the global power and automation group, has reported a remarkable increase in revenue in its year-end results to December 2013 on 13 February 2014.

 

Leon Viljoen

Leon Viljoen

The company’s 2013 revenue jumped by 66% (compared to 6% for ABB globally) to R5,9-billion on increased demand for renewable energy, with 90% of the revenue from South Africa and 10% from cross-border activities (mainly Botswana, Kenya, Mozambique, Zambia, Zimbabwe and Namibia). Orders increased by 22% to R5,3-billion, with large orders reported in solar, and solid-base order development up 19% to R3,9-billion. Export orders comprised approximately 14% of total orders for 2013. The company continues to focus on contract execution and productivity. The order book backlog stands at R3,7-billion. The current results were mainly achieved through the increased demand for renewable energy. Future business is largely expected from the southern African region. Since the successful integration of various sites in Johannesburg into one premises at Longmeadow, the company now also hosts a new capacitor factory, a turbo charger service site in Walvis Bay and premises in Milnerton, Cape Town.

 

Major projects for 2013 include:

  • EPC contract with Sun Edison for the construction of two solar PV plant near Polokwane
  • Production of the charger facility for the Nissan leaf electric vehicle
  • 40 kA rectifier plant for a minerals processor in Africa
  • Walker Bay substation
  • City of Cape Town 11 kV switchgear

ABB Southern Africa CEO Leon Viljoen is particularly optimistic about opportunities arising from a potential integrated transport system for the subcontinent.

“The knock-on effect of an inter-regional rail network for the region’s economic development is immense. Besides the fact that it will allow Africa to be more competitive in the global economy, it will also be a major source of employment,” Viljoen said.

Rail development into Africa provides a challenge and opportunity for localisation of the propulsion systems. The company has control systems for traction equipment and has supplied to Bombadier and other companies, and is seen as a preferred supplier to Transnet.

“ABB remains an innovative company,” Viljoen said. A number of new products  have found acceptance in the market. Notable among these is the AC/DC breaker, which is being installed successfully at several sites. Innovation is necessary to maintain leading market position. Pressure from governments to beneficiate raw materials, which requires power, has resulted in power refurbishment and build plans for African countries particularly Zimbabwe and Zambia, where there is a steady demand for power equipment. The mining industry in other countries have well defined rules and regulations and this is attracting investment in mining in these countries, which is resulting in a demand for power products.

More than R200-million will be invested into extending and upgrading the motor facility in Alrode, which will improve capability and increase capacity, while reducing lead times and maintaining high on-time delivery and quality. The investment, which will bring about significant enhancement in the company’s offering particularly to the region’s growing rail industry, was supported by a contribution from the Department of Trade and Industry as part of its manufacturing competitiveness enhancement programme.

Viljoen remains positive about prospects based on South Africa’s Integrated Resource Plan (IRP), which projects a significant portion of future energy generation emanating from renewable energy projects. “The predictions from the IRP correlate with the feedback we have received from our customers and business partners, all looking at investing into renewable energy over the next few years”, he said.

In the transmission sector a number of HVDC links are envisioned in Africa. Long term contracts with Eskom and the municipalities for the supply of high and medium voltage equipment continue to contribute to the company’s order book. Large municipalities are embarking on upgrade and expansion projects and smaller municipalities are struggling with funding.

Globally, the company acquired Power-One, a provider of renewable energy and of energy-efficient power conversion and power management solutions, positioning it as a leading global supplier and manufacturer of solar inverters. The company is considering manufacturing a range of Power-One inverters locally. “The capacity to do this already exists at the Longmeadow facility and we have the necessary abilities to manufacture the product,” said Viljoen.

The comapny is well equipped to serve the private renewable market (rooftop solar) too. It was awarded the contract for rooftop solar on an unspecified government building, after being  awarded the contract for the energy efficiency system for the same building. The company has a full range of balance-of-plant equipment including inverters, through Power-One,  to supply both the utility scale and medium scale private renewables market.

To support its growing business in southern Africa, the company will be investing heavily into skills development. Its School of Maintenance promotes high levels of knowledge and skills among practitioners across all disciplines. The school applies generic principles using recognised maintenance experts to provide quality training that is innovative, and combines theory, research and practice. In this way it develops trainees who have a broad range of generic skills that will not only equip them to contribute to the economic development of an organisation, but also to compete successfully in the international job market.

Additionally, it is launching an integrated training centre in Longmeadow which will deliver learning solutions to employees and customers as a holistic endeavour, integrating sophisticated learning aids, such as simulators, product cut-outs and demonstration units. “We have further selected 20 graduates from various tertiary institutions in the areas of project management, controlling, and engineering for our 2014 internship programme, who will be put through a career development plan consisting of a combination of intensive theoretical training and practical experience”, said Viljoen.

The company’s orders from southern Africa have already increased and are expected to increase even further over the next five years as a result of the continent’s need for accelerated transport, communication, water and power infrastructure development. “We are optimistic about the future business opportunities in the 12 African countries in which we currently operate. By growing and improving our own skills base, while simultaneously investing into more efficient and innovative infrastructure, we are gearing up towards even better servicing our current and future customers”, Viljoen concluded.

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