HISTORY

The history of ABB is truly a chequered and fascinating one. The ABB Group originated as two separate businesses in two different countries, both of which were founded within 8 years of each other in the late 1800s. In 1883 Ludvig Fredholm established Elektriska Aktiebolaget in Stockholm, Sweden, to manufacture electrical lighting and generators. Seven years later, this Company was merged with another, to form Allmanna Svenska Elektriska Aktiebolaget, or Asea for short. A year later, in 1891, Charles E. L. Brown and Walter Boveri established Brown, Boveri & Cie (BBC) in Baden, Switzerland.

From studying their Historical Tree, it appears that prior to their merger, the two Companies were going head-to-head, in competition with each other. Developments in one Company, were mirrored very shortly in the other. In actual fact, they operated in different countries, although until the early 1900s at least, they were both in the power generation and transmission industries. Then, in 1926, Asea branched out by supplying locomotives and power converters for the Stockholm to Gothenburg railway, whilst BBC still remained in the power generation and transmission industries.

Both Companies enjoyed rapid horizontal and vertical growth in the ‘30s and ‘40s, opening up representative offices in many countries in Europe, and also in the U.S.A., Canada and South America. They also penetrated new industries such as steel, mining and transport. Innovation too, was a hallmark of the development of both of these Companies. BBC, for example, built the first combustion gas turbine for generating electricity in 1939, and in 1944 developed the first high-speed locomotive with driving shafts fitted exclusively in bogies.

The fifties’ and sixties’ brought more of the same. Asea built the first 400kV transmission line in 1952, and a year later became the first Company in the world to manufacture synthetic diamonds. More ‘firsts’ for Asea followed in quick succession. In 1954, Asea built the first High Voltage Direct Current (HVDC) transmission line, and by the ‘60s, the Company had built the first nuclear power plant in Sweden.

The first data transmission at carrier frequency is performed by BBC in 1963, over a 735 kV high-voltage line to the power station control unit. By the same year, it had expanded its’ operations to cover Brazil, Mexico, South Africa and India. Another ‘first’ for BBC was recorded in 1969 with the development of the world’s first gearless cement drive.

The ‘70s and ‘80s were decades marked by growth for both Companies, with Asea achieving a turnover of Skr 46 billion by 1987, and BBC reaching Skr 58 billion in revenues the same year. In short, they had, as individual Companies, become industrial giants in the century since their founding. When the two giants merged in 1988 to form Asea Brown Boveri Ltd. (ABB), it was a move which created one of the world’s biggest electrical engineering Companies.

Three characteristics mark the period between the start of the 1990s, and the current time. First, there was business and geographical expansion on a massive scale, with the acquisition of businesses which made the ABB Group global leaders in various industries. An example of this was the purchase of Elsag Bailey Process Automation in 1998, which made ABB the leader in the global automation market.

Second, a period of rationalization followed, starting in 1999 and ending in 2004, where for strategic and business purposes, the ABB Group disposed of business units which were not synergistic with its’ core activities. Examples of this can be found in the disposal of units dealing with nuclear power, rail businesses, financial services, and joint venture businesses such as ABB Alstom Power. The Group was listed on the New York Stock Exchange in 2001, by which time, it was ranked first in sustainability for three years running.

Finally, ABB has put into practice the principles of good corporate governance. Targets set for 2009 in 2005, include not only business targets, but also sustainable development.

ABB TODAY

The business focus of the ABB Group today is on five product divisions. They are :

1. Power Products
2. Power Systems
3. Automation Products
4. Process Automation
5. Robotics

Operating in around 110 countries, the ABB Group employs more than 110,000 people. For the year 2007, ABB enjoyed a turnover of US$29 billion, with earnings before taxes of approximately US$4 billion. Comparing the figures from 2006, the Company has greatly improved its’ performance in 2007.

In furtherance of its’ objective of being a good corporate citizen, ABB has identified seven sustainability priorities – areas of work where the Group can make a significant difference through its’ products, policies and practices. These priorities reflect growing concern over climate change and what the Company can do to mitigate it through energy efficient products and systems, innovation, and how the Group manages its’ own environmental impact. Responsible behaviour towards different stakeholders includes the health, safety and security of the Company’s employees and contractors, how it works with the supply chain in different countries, and how human rights issues are embedded into business practice. For ABB, sustainability is about balancing economic success, environmental stewardship and social progress to benefit all its’ stakeholders. The seven sustainability priorities are :

1. Energy Efficiency – lower costs, less emissions
2. Climate Change – how ABB cuts emissions
3. Managing Environmental Impact – how ABB seeks continuous improvement
4. Health and Safety – managing risks, training people
5. Corporate Responsibility – committed to all stakeholders
6. Product Innovation – sustainability is a key to success
7. Sustainability In The Supply Chain – seeking higher standards

The priorities listed above are reinforced by the Company’s insistence on good management practice. Hence, even a lucrative business deal will be turned away if it does not include elements of transparency, integrity, ethics, honesty and win-win situations for all the stakeholders. Furthermore, to ensure that VALUE, PERFORMANCE & LEADERSHIP are built into ABB, all staff are instilled with the characteristics of RESPONSIBILITY, RESPECT & DETERMINATION.

All of the above means that the ABB Group represents a formidable presence in the industrial world as we know it today.

MANAGEMENT

As with most successful Companies today, the management team is a lean one, which allows for quick decision-making and reaction to changing market conditions. ABB’s management team consists of a Board of Directors, and an Executive Committee. The former is generally responsible for policy decisions, whilst the latter is answerable for the Group’s operations. In keeping with the status of the Group as a Multinational Company, the management of the Company at both, Board and Executive Committee levels, is multiracial.

1. Board of Directors

The Board of Directors of ABB Group consists of eight individuals, each a distinguished person in his own right and, in all cases, they are also respected leaders in other organizations. They range in age from 49 to 69 years of age. The Chairman of the Board of Directors is Hubertus von Grunberg.

2. Executive Committee

The Executive Committee is made up of ten members, who are collectively responsible for overseeing the operational aspects of the Group. Michel Demare is the Chief Executive Officer and Chief Financial Officer of the ABB Group. Although each of the other Executive Committee Members is responsible for one aspect of the operations, they have huge tasks, considering the incredible size of the Company.

PRODUCTS

As already mentioned above, the ABB Group is divided into five product divisions. Each of these divisions showcases a multitude of products as can be seen below. Customers of the Company, when considering solutions to their needs, basically have a one-stop solution centre when dealing with the ABB Group.

1. Power Products

Power Products are the key components to transmit and distribute electricity. The division incorporates ABB’s manufacturing network for transformers, switchgear, circuit breakers, cables and associated equipment. It also offers all the services needed to ensure products’ performance and extend their lifespan. The division is sub-divided into three business units.

2. Power Systems

Power Systems offer turnkey systems and services for power transmission and distribution grids, and for power plants. Substations and substation automation systems are key areas. Additional highlights include flexible alternating current transmission systems (FACTS), high-voltage direct current (HVDC) systems and network management systems. In power generation, Power Systems offers the instrumentation, control and electrification of power plants. This division is sub-divided into four business units.

3. Automation Products

This ABB business serves customers with energy efficient and reliable products to improve customers’ productivity, including drives, motors and generators, low voltage products, instrumentation and analytical, and power electronics. More than one million products are shipped daily to end customers and channel partners, spanning a wide range of industry and utility operations, plus commercial and residential buildings.

4. Process Automation

The main focus of this ABB business is to provide customers with integrated solutions for control plant optimization, and industry-specific application knowledge. The industries served include oil and gas, power, chemicals and pharmaceuticals, pulp and paper, metals and minerals, marine and turbo-charging. Key customer benefits include improved asset productivity and energy savings.

5. Robotics

ABB is a leading supplier of industrial robots – it also provides robot software, peripheral equipment, modular manufacturing cells and services for tasks such as welding, handling, assembly, painting and finishing, picking, packing, palletizing and machine tending. Key markets include automotive, plastics, metal fabrication, foundry, electronics, machine tools, pharmaceutical and food and beverage industries. A strong solutions focus helps manufacturers improve productivity, product quality and worker safety. ABB has installed more than 160,000 robots worldwide.

ABB IN MALAYSIA

ABB has had a presence in Malaysia since 1904, when an associate Company, MFO Oerlikon, installed the first power generator in the country. Today, it is part of the ABB Group, which operates three Companies in Malaysia, ABB Holdings Sdn. Bhd., ABB Malaysia Sdn. Bhd. and ABB Manufacturing Sdn. Bhd. All three are wholly-owned subsidiaries of the parent Group, and employ a total of 550 staff. Its growth during the last years has been phenomenal.

Operations in the country are headed by Mr. Per Magnusson, the Country Manager, who also heads the Power Systems Division. IA News recently interviewed Mr. Denver Ng, the Senior Manager who heads the Robotics Division, at his office in Subang Jaya.

The 41-year old Denver, a married man with three children, is an Engineering graduate from Bradford University in the United Kingdom. Born at the other end of the Federal Highway in Klang, Denver joined ABB in 1995 as an Engineer.

When asked what motivated him at ABB, his two word reply was, “Job satisfaction”. Pressed to elaborate further, he said that he enjoyed working in an environment where helping the customer solve their problems brought its’ own rewards, and that he enjoyed continuously learning about the Company’s products and services through their applications in real life scenarios.

To explain the Company’s success in Malaysia, Denver stated that besides the superior quality products and services offered by the Company, it also practiced good corporate governance and good corporate citizenship. This resulted in a concern for the environment, high ethical standards, observance of human rights issues and looking after the health and safety of staff and contractors.

Another key success factor is that the company has managed to combine the global R&D, knowledge, quality products and experience with the local customer interface, production, engineering and cost level.

Despite the fact that ABB is a huge conglomerate, Denver explained that all customers, regardless of size, were catered for either through the services of agents, channel partners or systems integrators. In the case of capital intensive projects such as power plants, senior management staff dealt with the principals involved.

Speaking on the business environment generally, he did not feel that the financial crisis in the US would have much of an impact on the Group’s activities in Malaysia. On the labour front, however, he echoed a common sentiment of others in the industrial automation industry, that it was difficult to recruit good quality graduates locally. Speaking from the point of view of his division, Robotics, he felt that as the country reduced its’ dependence on foreign workers, there would be a corresponding increase in demand for the products of his division.

CONCLUSION

From the foregoing, it appears that owing to its’ superior practices, products and services, the ABB Group is destined for even greater success. And from a reading of its’ commitment to various issues relating to good corporate governance, one can only conclude that the ABB Group is, indeed, a good corporate citizen.

Courtesy of ABB