7 October 2009

Automation industry battles through global economy issues

By Gregory Hale

With the ebb and flow of the world's volatile economic environment, it comes as no surprise the economy was on people’s minds at ISA EXPO on Tuesday.

While no one has a crystal ball, it is clear the real winners are those companies and people that saw the economic disaster coming and made plans early so they did not have to react in a hasty manner.

Guillaume Coffinier from Dallas, Tex.-based Texas Instruments has felt the aftermath of the downturn.

“It has affected my company, but not my job. There were some layoffs that were big for some plants, but I don’t think it will affect me. It’s over—hopefully. I’m doing business development for semiconductors, selling to the automation market.”

It is easy to dwell on the negatives these days, but how about looking at the silver lining.

“With the economy slowing down, one of the good things is we are spending time teaching (users) how to use their technology,” said Rich Chmielewski, marketing manager Chemical and Biofuels Process Automation at Siemens.

“Before they would get it and put it in and operate right away. Now they have time.”

Even in a tight market, there are some companies that said they are doing well.

“We are up 10% for the year, but we are a small company around $20 million over last year,” said Kevin Finnan, vice president of marketing at Semaphore.

One of the advantages Finnan said his company enjoys is they are diversified. “No one vertical market is 25% of our company. We are working on emerging markets like solar, and it seems to be sticking.”

Finnan sees anything related to energy as a growth market for the future.

“People are wasting so much energy. It is all about getting organized. In the past year, people are seeing a pay back. People can save up to 25% with the right energy management plan. Green energy initiatives are not going away.”

But it all comes down to whether it is a profit or a loss. “Nobody is going to do much unless it affects the bottom line,” Finnan said.

“We haven’t seen the impact other companies have seen,” said Chris Martin, senior director of product management at security provider Industrial Defender. “At the end of the day, if companies have an incident that affects them, it is not an option.”

Martin said he has found if you can show you can generate a real return on investment that will always go in your favor. “Seven years ago when we started this, it was all evangelizing, but now it is a lot better as people have a lot more information available,” he said.

Even those companies that started the year off slow are starting to see some type of rebound.

“Up until the last three weeks, business has been down on a par with the other companies out there,” said Arun Sinha, director of business development at Opto 22, a networking and I/O provider. “In the last three weeks, though, business has been up to normal levels.” Sinha said earlier in the year business was down between 20% and 30%.

The same is true with Ron Seredian, vice president of marketing at Falcon Electric, a UPS provider.

“It has really slowed down, but we are just now starting to see more business pick up. We are actually starting to see business come in from university labs.”