A lot can happen in nine years, and in the case of the leading process and control suppliers that have made CONTROL Magazine's TOP 50 list since 1995 this is especially true. Considering the roller-coaster ride the industry's been on, it's worth noting just how many have continued their climb, or maintained their positions relative to their peers in spite of market dynamics that have changed the way many of these companies will do business forever.
This is also the ninth consecutive year CONTROL Magazine has published its ranking of the TOP 50 leading process control suppliers to North American customers. In 1995, we decided to expand the article's TOP 25 format to encompass the TOP 50 North American suppliers. To pursue this goal I assembled a blue-ribbon panel of advisors. But that was then, and this is now.
Meet the Panel
Remarkably, the panel has remained relatively stable over the ensuing years (Table I). Wil Chin and Larry OBrien are senior-level analysts at ARC--a highly respected firm well known for its advisory services to users and suppliers of process and automation technology. In September 2003, ARC was retained by Morgan Stanley to develop a comprehensive report on automation industry investment opportunities. Cynthia Esher manages MCAA, the leading trade association of process controls manufacturers. Ken Lacy is a partner at Acquest, a leading financial services and investment banking boutique serving the industrial instrumentation community.
Indrek Grabbi is the principal instrumentation industry analyst at the International Trade Administration. Steve Walton is a highly-respected name in process control business analysis and the principal investigator for many DMCW reports on process control markets. Steve and I are also collaborators in PAI Partners whose recently published report on worldwide process analyzer markets (PAI/2004) that should be on everyones book shelf.
It Starts in July
The procedure for assembling the list generally starts in July with a request for updated financial data on process control revenues (North America and worldwide) for the preceding year. This years list (2003) is based on calendar 2002 financial results. The product/service coverage is defined in the request. This definition has evolved, particularly in the area of services, as the market has evolved.
As for any supplier company who believes that they should be considered for listing, please provide me with an e-mail contact and I will be happy to add you to our survey list. Companies are also urged to respond to the survey promptly insuring the highest degree of accuracy for the benefit of CONTROLs readers.
Mergers and Consolidations
Since 1995, Emerson has headed the North American list with applicable revenues exploding from $1.1 billion in 1995 to $2.9 billion in 2003. Following Emerson in 1995 was Honeywell, and they maintain their number two position this year with North American revenues TOPping out at $1.9 billion.
Other TOP 10 firms have changed considerably since 1995. ABB (No. 3 in 1995) absorbed Elsag Bailey (No. 5). Siebe (No. 4) became Invensys in 1999, while Rockwell Automation (No. 6 in 1995) remains on the list. Westinghouse Process Control (No.7) was acquired by Emerson. Dresser Industries (No. 8 that year) is now a private business and has dropped below the TOP 10.
Then Johnson Controls (No. 9) was purchased by Japanes parent company Yokogawa Electric. Neles-Jamesbury (No. 10) is now a part of Metso Automation.
Newcomers to the TOP 10 include Danaher, Siemens Energy & Automation, Schneider Electric, and GE. in 1995, Danaher was not even on the radar screen and failed to make the 1995 TOP 50. Today, Danaher's 2002 revenues of approximately $1.3 billion put it firmly in the No. 5 spot--not too shabby. Similarly, Siemens North American process control revenues jumped from $50 million in 1995 to $911 million this year. Schneider went from $21million to $825 million and GE from $30 million to $500 million. Nearly half of the original December 1995 TOP 50 have disappeared via acquisition (40%) or have undergone a restructuring or changed their names (about 10%).
Revenues More Than Doubled
In 1995, worldwide revenues of the TOP 50 were $17.8 billion with the worldwide market estimated at $23 billion. For 2003, TOP 50 worldwide revenues nearly doubled to $43.3 billion with the worldwide market number estimated at $60 billion. This growth has been decidedly TOP-heavy. While Emersons leading North American total has expanded by over 150% from 1995-2003, the bottom of the list has bounced from a low of $16 million in 1995 to a high of $22 million in 1999, settling at $17 million this year. All of which seems to indicate that while industry consolidation continues at a rapid pace, enough new process control ventures are being formed to balance the consolidation trend.
Clearly the scope of the survey has widened. Nonetheless, burgeoning spending and the corresponding jump in revenues is good news for control professionals and others seeking opportunities in the North American market and in lucrative markets around the world.
Table I: TOP 50 ADVISORY BOARD
ARC Advisory Group
Dept. of Commerce
Acquest International L.P.
ARC Advisory Group