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Yokogawa interview: Brand evolution, not revolution

While Yokogawa Australia’s industrial automation solutions hide behind the scenes, the company’s philosophy does anything but. Sarah Falson spoke with leading man John Hewitt at their offices in Sydney.

The mood in the automation market might be subdued after companies Australia-wide have resolved to tighten their belts against ensuing financial trauma, but not Yokogawa Australia — one of the country’s leading power and process suppliers which, with the help of its managing director, John Hewitt, has made a pact to avoid “resting on our laurels”.

“The only way you can win is to keep achieving in the market place and this is what we’re doing,” Hewitt told PACE in his first major press interview since joining the company as managing director in March 2005. “We are proud of ourselves and we want to move forward.”

Hewitt is referring to the two major gongs the company received this year from Frost & Sullivan, which named Yokogawa the Asia Pacific and Australia/New Zealand distributed control system (DCS) company of the year for its strong market share.

“We’re probably one of the only true DCS suppliers across all industries in power and process,” he said.

A new identity

Hewitt comes to Yokogawa Australia from his post as the executive director and general manager of engineering firm, Rolls-Royce Australia Limited, and also acted as a commercial projects officer with Yokogawa Australia on a short-term basis before this. So he’s well-briefed in the areas of engineering and project control.

Keeping almost completely out of the spotlight since taking the helm at Yokogawa Australia, Hewitt is all the more grounded for it.

“The focus for us over the past few years has been on re-sizing and re-directing the business to take it forward. It involved a lot of hard work including looking at existing engineering processes, sales procedures and even the IT systems in-house — which were newly-installed just before I arrived,” he said.

“The very basics of the structure, including how we manage our projects, how our engineering team relates to project management personnel and how various people interact within the organisation were overhauled.”

That’s wasn’t a small job for Hewitt and his management team, but one that proves he’s committed to the company, which has been a wholly-owned subsidiary in Australia since 1988. According to Hewitt though, it’s only in the last few years that Yokogawa Australia has really come into its own and begun to take on major projects, or ‘mega-projects’ as coined by Hewitt.

“We only started taking on mega-projects in the last five to seven years. A mega-project can have a duration of up to five years and can cost anywhere from $30 million to $40 million. Before this most of our projects were around the $20,000 to $30,000-mark,” he said.

Yokogawa Australia is functioning mainly in three areas — power, mining and oil/gas. And while the company plans to remain strong in all these areas, its main focus for growth in the future is in the oil/gas sector — especially providing automation and control solutions for upstream LNG projects.

“There’s an enormous amount of activity in Australia on both sides of the country in these areas, and we are very, very well-placed to capitalise here,” said Hewitt, while also revealing that Yokogawa Australia is on the cusp of securing a few ‘mega-projects’ in this area, working in partnership with the company’s regional head-office in Singapore.

“Our office in Singapore has typically been a centre of excellence in this area. We are really going to be tapping into their expertise and resources to make the job here a whole lot easier.” And a whole lot more worrying for competing solutions providers if the company’s website is anything to go by, stating that 38 LNG carriers worldwide, including in Spain, Indonesia, Japan, UK and Italy, are now powered by Yokogawa solutions.

But Yokogawa Australia doesn’t need its Singaporean counterpart to make it shine. The local group is seen as the “leader” in mining out of all Yokogawa subsidiaries worldwide, partly due to the resource-rich nature of the Australian landscape. In the power generation market, Yokogawa Australia is one of two leading the pack, according to Hewitt.

All about the customer

Hewitt is incredibly supportive of the Yokogawa brand and staff, praising the company’s technical services manager who was recruited six years ago to focus on customer support.

“He has achieved year-on-year growth of the technical services division, sometimes as high as 30 per cent, and in the meantime has become a major contributor to the business,” said Hewitt, also taking the opportunity to share Yokogawa’s product achievements.

“We are fortunate because Yokogawa hardware is incredibly reliable. We have had instances in Sydney where our hardware is 20 years old and there hasn’t been any lost time. This has allowed our technical group to focus on a lot of value-add, and allowed our customers to get a lot more out of the installation,” he said.

“Plus, we go through a technical refresh cycle with our clients to keep their system up-to-date and working well. This is a very important part of our business. We also undertake an annual customer service satisfaction survey. Unless we know what the market is telling us, and unless we address any issues they’re coming up with, we can’t grow. The growth we have experienced in the last several years is testament to the fact that we are doing things quite well.”

Quietly, but well, according to Hewitt, who agrees with Yokogawa’s global president and CEO, Isao Uchida, who said Yokogawa is “quiet and boring” in an interview with PACE in March this year. Both managers clearly believe in allowing their products and solutions to speak for themselves.

“Yokogawa has adopted a policy of evolution rather than revolution. If you look at our growth and the development of our DCS systems since inception, there is a continual path of evolution. This is evidenced with the CENTUM brand name — we have rarely needed to pull out and replace this DCS system, only needing to upgrade it instead.

“I believe we would be the only DCS vendor in the market place that could do that — the others tend to start afresh each time,” he said.

Having a reliable product such as the CENTUM allows Yokogawa Australia to perform maintenance work more efficiently and cost-effectively, says Hewitt. It also means that the technical support staff are not required to learn a new operating system or interface every time an upgraded version of the CENTUM is developed.

“Our operations staff are highly competent with the existing system rather than having to re-learn from scratch, which is important.”

Hewitt also likes to see Yokogawa staff achieve greatness in the workplace by reaching their potential, which is the mark of a good manager.

“Seeing our staff members deliver our solutions to customers and providing those customers with high quality outcomes gives me an enormous amount of satisfaction. It keeps me jumping out of bed with a bounce each day,” he said.

Hewitt sees at least three customers face-to-face each week. “I spend most of my time out of the office. It’s the only way you can really stay on top of things and see what the market is doing and what your customers are asking for,” he said.

The year at large

Yokogawa Australia has a number of major projects underway for 2009. The Loy Yang Power station control and monitoring refurbishment contract, which the company won in 2006, is still ongoing, and will be for a “number of years to come”, according to Hewitt.

Also ongoing is an upgrade project with Babcock and Brown to refurbish their Northern power station in Port Augusta. “This is still underway and progressing very successfully,” he said. Another contract with an unnamed South Australian-based power station is in the final stages of contract consolidation, too.

Yokogawa Australia looks set for a steady 2009 at least, which is the best position to be in right now. But Hewitt isn’t blasé about the potential risks ahead.

“We will be coming up against a lot of challenges next year, especially with the recent uncertain economic times. We have been moving as a company very fast to become very strongly-focused on providing solutions,” he said.

“In very uncertain economic times, one of the major challenges we face will be to maintain our core competency, which is all people. We have an aging workforce as well — with a number of people approaching retirement, how do we address this on an ongoing basis?”

Hewitt has implemented a graduate program which he says has worked successfully. He is also involved in an industry group with a local university, and Yokogawa Australia employs an intern and is involved with a number of university scholarships.

“There are some incredibly talented young people out there, and all they need is a break, which is what we’d like to provide them with,” said Hewitt.

This ‘can-do’ attitude is a recurring theme, with Hewitt confident that the company is well positioned for any blows it may receive in the year ahead as a result of the deteriorating economic landscape.

“I’m happy to say Yokogawa Australia is quite well-placed. In fact, our order book is as strong as it has ever been. We have enough work to keep people well and truly occupied. We have done a lot of hard work over the past several years to achieve the position we’re in now — and now its time to consolidate. Whilst the economies of the world have taken a savage hit, eventually we will come out of it and I want us to be well-positioned for the next phase of growth,” he said. “Some people see a lot of problems for the future but I see a lot of opportunities to offer good solutions to both existing clients and potential customers.”

Yokogawa power

While the company’s main focus is industrial automation, Yokogawa has its finger on the pulse in a variety of industries, which also contributes to leveraging the group financially against financial strain.

With a global portfolio including medical instruments, scanning microscopes, DNA testing, and LCD display screens, Yokogawa should be a more well-known name on the streets — but Hewitt prefers to keep it ‘behind the scenes’.

“For anyone who drives a car, uses fuel, spreads margarine on their bread, goes down some of the toll roads in Sydney, uses electricity, and uses the water and sewerage systems, chances are that the process that’s driving that is being controlled by a Yokogawa system,” he said.

“We touch everybody’s lives every day, but the beauty of it is that no-one knows about it. Yokogawa is a very silent organisation and that is how we like to be.”

Yokogawa Australia

John Hewitt, managing director

02 8870 1100

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