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16 June 2009

Gilsdorf: Industry seeing 'little sparks of life'

EDITOR’S NOTE: Honeywell Process Solutions President Norm Gilsdorf took some time Tuesday during the Honeywell Users Group Americas Symposium in Phoenix, and sat down with InTech Editor Gregory Hale to discuss some of the hot topics around the industry today.

InTech: Since taking the helm at Honeywell Process Solutions in January, you have walked into a hornet’s nest of global economic issues affecting the industry. Do you see the recessionary times across the globe ending soon?

Gilsdorf makes a point during his keynote address.

Gilsdorf: I don’t know if there is an end to it. I think we are seeing some signs of life around the world where some of the projects that had gotten slowed down or significantly postponed; I see some signs a few of them are coming back to life. I think hopefully as the economic conditions continue to look a bit positive, those will continue moving forward. I wouldn’t call it an end to anything, but I would say we have got little sparks of life coming back out there.

InTech: What areas seem to be coming back now?

Gilsdorf: I think the oil and gas sector is coming back. And it really didn’t go away. It quieted down for a while as people tried to assess the circumstances, and now that the price of oil has come back a bit and people have let the dust settle on the crisis, they kind of feel a bit more stable about things. There are several people that want to get back in now to get in some projects before it potentially gets overheated again.

InTech: We have heard some experts say you should write off this year and even some saying next year. What do you think?

Gilsdorf: I don’t consider this year a wash out at all. First of all, we have a very strong installed base, and those customers continue to have things we need to deliver to them in terms of keeping their systems doing the things they need. At the same time, we provide a lot of advanced applications that help people further improve safety, reliability, or efficiency, and there are a lot things you can do without a significant amount of capital investment today to get more value out of your enterprise. In tough times, a lot of those things you need to focus on. We actually have a lot of activity from our customers to put these in place or for those that had it in place kind of getting them tuned up to improve their operations.

InTech: Do you see the U.S. coming out of this first, or will the major economies across the globe all come out around the same time?

Gilsdorf: I think actually some of emerging markets will come out of this first. Today, when you look at China, that is one area where you see some more activity as the stimulus in China is having some quick effect. I think when demand recovers in some markets, some of those emerging markets whether it is India, Brazil, or even Russia, which is driven by the price of oil, might recover faster than the U.S.

InTech: What part of your customer segments are doing well at this point? Is it just oil and gas?

Gilsdorf: I should have added earlier, the pharma side never really turned down that much. They continued through the downturn. They continued a fair amount of their investment plans. The oil and gas were there. Those were the primary two, though I would also add power continues to be a growing market because the emerging markets had such a demand for power. Those projects take many years to develop. Those had to continue despite the economic situation. Those there verticals had been fairly robust or at least not turned off.

InTech: Keeping the economy discussion in mind, what do you see as the biggest issue keeping manufacturers up at night?

Gilsdorf: I think it varies depending on where you are in the world and what industry. I think in some of the areas one of the big challenges is probably understanding the demand. A lot of industries, you look at the chemical industry or some of the refining segments, and they went from a period of high demand and good pricing to a significant drop in demand and unpredictable pricing over night. So, now you might have to operate your unit at lower capacity or might have to operate at periods of time with the unit shut down and then back on again. And that is a shift in how you control and operate the unit to a strategic philosophy to pushing a unit to now running it at a lower speed. That is where we come in and look at the optimization and advanced process control looking at some of the things that are helping with supply chain software and help them to adapt to those changes and get the unit operating the best it can either through reduced output or in on/off mode. That is probably the biggest. I think one of the other things customers have to face is they have cut costs or staff are on furlough or are doing other things. They are operating staff just like the rest of us are faced with the distraction of this crisis, so again, you need to help them keep their people trained and up to speed and work very close to them to understand exactly how they are dealing with it and how you can help.