Tuesday, 21 February 2012

Episode Eight - Kodak, Motors in Hazardous Areas

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Episode 8 of the Australian Power Transmission Podcast

In this episode of the Oz PT Podcast:

                Kodak, pretty much gone, and

                Electric motors in hazardous areas

Thanks for tuning in, downloading, iTunesing or however you came to find the eighth episode of the Australian Power Transmission Podcast.  It’s Monday, February 20th, 2012.

My name is Damian Harris and you can contact me and the show via a heap of ways; namely twitter, e-mail, the website and social media platforms.  Simply use your search engine and the show comes up pretty high on the rankings now, not to be confused with the PT Podcast which is Erik the Physical Therapist from Oregon.  Hi Erik.

*Regal Beloit has acquired Milwaukee Gear Company for $80 million in cash.  Milwaukee Gear was foundered at the end of the First World War, expanding through continuous reinvestment to now recording revenues of over $60 million.  Specialising in bespoke gearing fabrication in niche markets such as oil and gas, Milwaukee Gear fits into the Mechanical segment of Regal Beloit alongside Hub City and numerous other brands.  The Mechanical segment represents around 10% of Regal Beloit’s total business.

Still on Regal Beloit, they have posted their result for the full year 2011. Sales were $2.8 billion, a 25 percent increase over 2010 and a direct result of an aggressive acquisition strategic policy. Net income was also up, growing 1.9 percent to $152.3 million, although profit as a percentage of sales was down, from 24.5% to 23.7%.

*The Australian Industry Group has ended speculation as to Reserve Bank of Australia-appointed Heather Ridout’s successor as Chief Executive, awarding insider Innes Willox the position.  Willox is an existing Ai Group heavyweight, serving as the current Director, International and Government Relations, which really is the backbone of the Australian Industry Group’s function.

The outgoing Ms. Ridout had been with the Ai Group for over 30 years, the last eight as Chief Executive, and whilst her departure will leave a big dent in the tacit knowledge of the manufacturing lobby group, Ai Group National President Lucio Di Bartolomeo is convinced that Willox will grow the organisation in coming years.  As manufacturing continues to slide in the wake of Australia’s unstoppable resources boom, Mr. Willox will have his work cut out for him.

*GlaxoSmithKline has announced it will invest $60 million to expand its Boronia, Victoria site, creating 58 new positions in manufacturing and drug development.  GSK’s investment has been welcomed by the Victorian government, praising the increase in production and the ability for the firm to contract-manufacture. 

Australia is fairly rich with pharmaceutical manufacturers, including Bristol-Myers Squibb, Sigma, Phizer and CSL, supplying a domestic market where sales surpass $11 billion annually.  


*One of the Heinz plants that was shut down at the start of the year, Girgarre, has had a committee of former employees make offers to take over the establishment and run it as a going concern.  Although it could be considered a bold move and central to keeping the town of under 700 alive, it would look as though the equipment is more valuable to Heinz in its New Zealand operations as they have already started gutting the plant.  Boilers and evaporators are already on their way across the Tasman, making any employee takeover worth much less as the plant is now merely a shell.

*SKF has picked up General Bearings in a deal of around $125 million.  Although headquartered in New York state, General manufactures its range of ball, tapers and sphericals in China and the purchase would appear to be nothing more than a big fish swallowing a smaller fish, as SKF plans to maintain the General and Hyatt brands.

SKF had a turnover of $8.5 billion last year and has embraced manufacturing in both China and India, opening its own plants in both countries.

*Also on the mergers and acquisitions front, David Brown has purchased Canadian gear manufacturer Unigear Industries as it looks to expand into what it deems strategically-important markets.  All of the key personnel of the hitherto privately-owned firm are staying on with the new enterprise, which is an obvious nod to David Brown’s North American expansion efforts.

David Brown already owns Cone Drive, the Michigan-based manufacturer that specialises in worm gearboxes right up to 50,000 Nm output, utilising the double-enveloping wormgear design.  Unigear has a full manufacturing workshop and the capacity to make some pretty big gearing, making it the perfect platform for David Brown’s Canadian operations. 
 

*In the mid 1980s, Eastman Kodak had 145,000 workers and was the clearly dominant player in the world of photography.  For all the kids out there, cameras used to take photos on film and you would get them developed and printed on photo paper.  Obviously, it’s a thing of the past, and it comes as little surprise that a company that does this for a living is not going to survive.  In fact, Kodak has resorted to litigation in support of its many patents as another source of income.   

Business reality has caught up with Kodak internationally, causing it to file for bankruptcy protection at the end of 2011 as it looks to significantly change the business that it does.  Strategic planning requires more than simply doing things right, it means doing the right things.  They have been given a financial lifeline to start doing the right things by this time next year.

Kodak has closed its camera manufacturing business, as well as over 130,000 printing kiosks, although it still maintains 100,000 printing kiosks throughout the world.  With the closure of its camera business, these kiosks now represent over ¾ of its new business model.  It expects to continue making money from its range of home printers, commercial printers and Business Process Management software.

Kodak shut its manufacturing doors in Australia back in 2004, when it closed the film production plant in Coburg that employed 600.  The plant itself was reasonably technologically advanced but it simply produced something that nobody wanted anymore.

The main problem for supplier businesses in situations where a major manufacturing customer shuts its doors is that business ends, normally pretty abruptly.  Kodak had scaled back its Australian operations prior to closing so the impact to suppliers was not as harsh, but was still felt nonetheless.  Component and raw materials suppliers would have no doubt been made aware of Kodak’s intentions prior to the closure announcement, but indirect suppliers such as bearing, power transmission, air handling and compressor companies are all normally the last to find out.


*Electric motors available for operation in hazardous areas have to comply with different levels of certification, dependent on where they are used.  In Australia, local standards were developed and used both here and in New Zealand from the 1960s, but as the world gets smaller, it also looks to standardise.

The IEC has set up a system for certification to standards relating to equipment for use in explosive atmospheres, called IECEx.  IECEx has developed a Conformity Assessment System to ensure that equipment from IEC member countries meets strict guidelines, allowing a reduction in compliance costs, improved safety and instant verification.

ATEX is an existing European set of standards which seeks to achieve the same outcome as the IEC in European Union countries.  The IEC’s standards and ATEX are similar but not the same.

Primarily, hazardous or explosive areas are straightforward and predictable, such as oil and gas refineries, chemical processing plants, coal mining and fuel distribution.  There are some industries, however, that are just as hazardous but less straightforward.  Consider printing, textiles, grain handling, woodworking, sugar refining, metal grinding and even water treatment.  Many have chemicals or dusts that are explosive but not considered so and can get under the radar.

In order to deal with the various differences in interpretation of what constitutes a hazardous area, the IEC has standardised the following classifications...

Gases, vapours and mists are referred to as Class 1, whilst dusts are known as Class 2.  Gases are further defined, with methane in coal mining called Group 1 and other gases called Group 2.  Group 2 gases are subdivided even further, dependent upon the temperature of ignition.

The probability of explosive gases being present in the atmosphere that the motor is operating in is dealt with by a zonal classification, of which there are three...

Zone 0 refers to an area where explosive gases are or as good as continuously present.  Zone 1 is an area where explosive gases can be expected in normal operating conditions.  Zone 2 refers to an area where explosive gases are not likely to appear and if they do, will not be around for long.

The major and most common rating for motors in hazardous areas is known as EX’d, which is a certification commonly known as flameproof and mainly used in explosive gas or dust applications with a Zone 1, Class 1 requirement.  EX’d motors are designed to contain explosions, so that they are not transmitted to atmosphere.  Its design includes a flamepath, which is a route for exploding gas to escape through, whilst cooling.  They are certified, and any repairs or rewinds must also be performed by certified rewinders.

EX’e motors are used in scenarios requiring increased safety, using special windings to help alleviate temperature rise, backed with some other features that help prevent sparks and arcs. 

EX’n motors are known as non-sparking variants, normally suitable for Zone 2 operations.  Non-sparking characteristics are achieved by basic design features, alongside the optional use of thermistors and thermal overloads which prevent overheating.

DIP motors are Dust Ignition Proof, used primarily in grain handling but also available for operation in wood, chemicals and plastics industries.  DIP motors sport a metal or other non-static producing material cooling fan and carry different ratings for different ignition temperatures.

Motors used in variable speed drive situations also require special consideration; normally the manufacturer of both is matched and certified.  Heat rise is always a factor, as is the instance of bearing currents which cause sparks.

Not all motor manufacturers have got involved with hazardous area motors, and not all have got involved with matched VSDs to their motors.  Any situation where there is even the remotest possibility of explosive gases being present requires the utmost diligence from the engineering staff and sales people involved. 

That brings an end to proceedings for episode eight of the Australian Power Transmission Podcast. 

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