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Siemens grows local competence through acquisition

11 July 2007 News

A spate of acquisitions, both in South Africa and internationally, has significantly boosted the local competence of electrical engineering multinational Siemens, particularly in the fields of power generation, transmission and distribution as well as industrial solutions, two sectors critical to South Africa’s future economic growth.

Commenting in the company's latest Business Review on the impact that international acquisitions have on local operations, Sigi Proebstl, CEO of Siemens South Africa cites the example of the joint venture with Nokia for telecommunications infrastructure, saying this will have a huge upside for the regional market as the technology offering to telecommunication operators will increase substantially.

"Similarly, our medical customers in South Africa will benefit from the international acquisition of Bayer Diagnostics, as will customers of Siemens Business Services which has undergone a global realignment to form a new group to be known as the Siemens IT Solutions and Services Group. Its focus is on IT solutions, IT services and software competencies," he says.

Proebstl cites several other examples of increased local competence following acquisitions, including the company's purchase of Siemens Demag Delaval Turbo-machinery (SDDT), which was locally represented by Turborep, a turbine repair facility in Wadeville on the East Rand as well as a manufacturing and service facility in Kyalami Park for medium voltage switchgear that has been integrated into Siemens Southern Africa.

"This competence, in addition to excellent engineering, project and service teams for high and medium voltage switchgear, power transformers as well as for control and instrumentation systems, has resulted in a new degree of customer confidence that has led to a satisfactory position in terms of new orders," he says. "The company can now provide power generation mechanical services such as the repair and manufacture of new turbo-machinery locally through this plant. With medium voltage as a growth area, including switchgear specific projects as well as turnkey substation projects, power transmission and distribution-type transformers, more acquisitions are being considered."

Following the acquisition of Voest Alpine of Austria, that company's Metallurgy Division was merged locally into the Siemens Industrial Solutions and Services business unit.

"Through its large mechanical workshop in Meyerton, this has resulted in a greater measure of in-house expertise for process technology for the steel industry ranging from design and engineering to installation, project management, commissioning and maintenance," he says.

Proebstl adds that the needs of Siemens regional customers also led to the acquisition of Marqott, a manufacturer of medium voltage switchgear situated in Kyalami.

"This acquisition strengthens the Siemens Power Transmission and Distribution competence in providing completely integrated solutions across the energy chain, which is another step closer to supplying energy to Africa and its people through the power of technology and diversity," he says.

Another local acquisition was in the transportation industry when Siemens purchased Railcom in Kya Sands, northwest of Johannesburg. This plant is used for the manufacture of lens and plastic enclosures as well as panels for rail communication and integrated rail communication.

As a consequence of these acquisitions and mergers, nearly 400 employees have been integrated into Siemens while the order book was boosted by around R700 million. Plans were approved and preparations started to expand the existing low voltage switchboard and panel production at Siemens in Pinetown for delivery to broad-based and marine industries.

"The mix of organic manufacturing growth and manufacturing through acquisition leads to many new prospects and improved value for existing and new customers, and further strengthens the Siemens portfolio," he concludes.

For more information contact Greg Gibbons, Siemens Southern Africa, +27 (0)11 652 2000.





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