Expansion in instrumentation with software, technology updates

Market update: Honeywell expands process automation and instrumentation products and channels to continue to augment growth in the next three years, according to Control Engineering China.

By Stone Shi July 8, 2017

With the slowdown in global economic growth, the growth rate of major new projects in the process automation market has decreased in recent years. To continue growth, various process automation manufacturers, including Honeywell Process Solutions (HPS), have made successive strategic adjustments. 

Vision in instruments

At a recent conference, Asheesh Arora, vice president of HPS global channel marketing, said that HPS would realize breakthrough growth in the next three years. In 2016, the sales volume of flow measurement and control business reached $650 million, fifth in the instrument field. By 2020, he said, HPS expects to achieve sales of $1 billion in its flow measurement and control business, and rank among the top three, globally, in the instrument field.

Arora said HPS determined five ways to leverage and promote growth in 2016: follow areas of growth, implement breakthrough strategies, expand the channel network, focus on large project opportunities, and introduce new products. In 2017, HPS will increase investment to continuously promote implementation. For 2015 HPS revenue, the service business accounted for 39%, project business accounted for 33%, products accounted for 17%, and Industrial Internet of Things accounted for 11%. By 2020, HPS expects the proportion of its products business to increase to 30%, and project business will be 16%, and IIoT will be about the same. 

Products: more customer value

While some manufacturers plan a shift from being primarily product providers to overall solution providers, HPS seems to emphasize breakthrough performance growth from product sales, with an increase in the product proportion from 17% to 30%.

Honeywell has prepared for growth in product innovations. In 2015, Honeywell completed its biggest acquisition to date, $5.1 billion for the gas heating, control, and metering system company Elster. In 2016, HPS integrated the Elster team and made the existing Honeywell department of Thermal Energy Solutions subordinate to it. HPS products for measurement control in the process industry include field instruments, gas measurement and control, tank field operation equipment, bottom-layer burner control, modularized middle-layer control systems, to application software in the upper layer.

"We will continuously make investments to increase more target markets, and realize the increase from $5 billion at present to $10 billion in 2020," said Arora. "In addition to the expansion of the scope of each product line and continuous introduction of new products, more software platforms and products based on Industrial Internet of Things will be provided." 

Channel: cooperation, benefits, help

Different from the business model of offering services mainly to major accounts and large projects, HPS attaches an increasing amount of importance to offering services for small and medium-sized clients. In particular, with a continuous increase of product lines, channel partners become more important. Arora said that HPS owns more than 200 channel partners in Asia-Pacific region, including more than 50 channel partners in China. In 2016, the channel business performance was better than the overall market. With year-on-year growth of 16% globally, channel business reached $248 million, and the Asia-Pacific region realized 14% growth. With strong growth in the second half of the year, personnel in the in the Asia-Pacific channel business manager team increased 50%.

Honeywell will provide the personnel support, tools, and software to "help distributors provide products for Chinese customers and carry out relationship management. Therefore, we expect that China’s channel business may surpass USA, and China will become the largest market globally in the next three years," Arora suggested. 

New growth: value chain

With the completion of Elster’s business integration, HPS has been able to provide service for the entire natural gas supply chain. Arora said he believes the natural gas industry has a rather long supply chain: upstream, midstream, and downstream. Even with different HPS products and solutions, the demand for Big Data is a common thread through the existing and future industrial environment, to make factories more intelligent. Honeywell has accumulated experience for more than 40 years in the industrial control field and, especially in products and in high-level applications across petroleum and natural gas exploitation, mature pipelines, urban gas, and the end user market, Arora said.

"We will further make more investments in the natural gas field, provide a safer, more effective and reliable solution to industrial applications of customers, and stimulate the growth of the entire business of HPS." Arora expects breakthrough growth within three years.

Stone Shi is executive editor-in-chief, Control Engineering China; edited by Mark T. Hoske, content manager, Control Engineering, CFE Media, mhoske@cfemedia.com.


Key concepts

  • Honeywell Process Solution outlines growth plans.
  • Flow measurement and control, instrumentation, channels, and products are growth areas.
  • Full support for the natural gas supply chain is offered with Elster acquisition, integration.

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