With a new acquisition announced today, Schneider Electric adds much needed online analysis capabilities to its process portfolio to help it compete in hydrocarbon. Expanding on an existing partnership, Schneider Electric has acquired Applied Instrument Technologies (AIT), which makes process analyzers for the hydrocarbon, petrochemical, chemical, pharmaceutical and steel-making industries.
Based in Upland, Calif., AIT has a wide installed base of spectroscopy and chromatography products, including a comprehensive portfolio of process analyzers and associated implementation services. Its technology improves process optimization, asset protection and compliance with environmental regulations, allowing customers to better manage and improve their operational profitability.
With a more integrated and scalable portfolio, the acquisition should help Schneider Electric extend its penetration into markets such as fuels blending, petrochemicals and gas processing. AIT’s value proposition is its large footprint in refineries, in particular. “There are multiple points where we deliver key measurements for customers,” said Joe LaConte, AIT’s president and founder, pointing to multiple points in a refinery that “AIT can blanket with product.”
The capabilities that AIT brings to the table fill a significant gap that Schneider Electric has had compared with competitors, noted Russ Barr, director of strategy and program management, process automation, for Schneider Electric. “The acquisition will help us provide better, more integrated solutions to our customer base,” said Barr, who led the acquisition team. “We believe there are a lot of new opportunities that we can pursue that we haven’t been able to do in the past. … We certainly have some strategic accounts that this type of portfolio will really help.”
AIT is best known for its work in fuel blending and its ability to analyze the finished product, LaConte said. “Going forward, we’ll be able to work with Schneider to reach out to more refineries, and more locations,” he added. “We’ll be able to integrate into the control system, and customers can deal with a single end point and know that the risk isn’t there.”
Schneider Electric has done some analysis of the fuels blending market, and sees potential for some 40 projects a year, mostly brownfield, with a market size in the range of $365 million “with some good growth,” Barr said. “Each project presents really great potential for us to offer the integrated systems—process analyzers and advanced software solution—in one project.”
The addition of AIT improves Schneider Electric’s competitiveness and its ability to deliver broad, multi-stream, multi-component analytical systems with less project risk and execution time. As a single-source provider, the combined offering provides additional flexibility in terms of how the company can price, position and package its process automation solutions.
Barr pointed to the size of the opportunities for process analyzer projects. “There are large ethylene projects that can be in the range of $20 million,” he said. “There’s a significant amount of lifecycle type of services that are also part of these type of opportunities. It’s a great opportunity for us to work with our customers even closer and drive more value for them and deliver more projects like these to us.”
The acquisition builds on a strategic alliance that the two companies formed a little over a year ago, combining Schneider Electric’s process automation systems and safety instrumented systems with AIT’s spectroscopy and chromatography products. It was somewhat of a trial marriage. “It provided us the opportunity to work together, and develop joint value propositions for our customer base,” Barr said. “It helped give us more information and data in terms of the fit for a potential acquisition target. It has been a critical partnership for us, and it has resulted in this acquisition.”
“We look forward to capitalizing on and strengthening the synergies we have cultivated with Schneider Electric over the years,” said LaConte, who will be made vice president of Schneider Electric’s analytics business with the acquisition.
AIT and its offerings will be fully integrated by late 2017 into Schneider Electric’s Process Automation business.
