2020 CEO Insights: Kathryn Wood-Enriquez
What key trends will have an impact on the growth of your industry in 2020?
In a word ‘Globalisation’. This is not a bad thing; the world is far more accessible than in the past and we are working more collaboratively with other nations than ever before. The interconnection of markets — as a result of massively increased trade and cultural exchange — has increased the production of goods and services. Large international engineering houses are centralising their procurement or engineering teams in countries where it is more economically viable in terms of transaction costs, staffing costs etc, but it does affect Australian business.
From a sales perspective, we have to be committed to go out there and lobby hard for companies to buy from Australian-owned companies, who can and do provide service, long after the project team has left. We have to adapt to ever changing procurement strategies, which are not always orientated towards ‘long-term’ solutions with a low cost of ownership; sometimes a short-term — 12 months and one day — solution works for a particular project.
And from a local manufacturing perspective, we face more competition from imported products, often sourced from low-cost countries. We need to follow the trends of nations much larger than we are, to buy Australian products and keep as much engineering and after-market service in Australia as reasonably possible.
What are the three biggest challenges facing your industry in 2020?
I am frankly very concerned about the lack of knowledge in our specialised field of engineered valves (control valves, regulators and safety devices) for a number of reasons. Firstly, we have had a real ‘brain drain’ in Australia: the experienced (mature-age) engineers are leaving the industry, without having sufficient younger engineers to mentor — or for the lack of willingness of many younger engineers to do the ‘hard yards’. Secondly, there is a critically reduced number of graduate engineers looking to enter this industry.
We all appreciate the saying that ‘knowledge is power’ but knowledge cannot be ‘gifted’. Knowledge comes through understanding and experience, a clear understanding of fluid dynamics and process control, product design and sizing, an appreciation for material application and functionality. It takes years to gain even a reasonable level of knowledge and this requires enthusiastic dedication to the task.
Planning is also an issue, both for projects and day-to-day MRO business. Forward planning of plant equipment purchases provides many opportunities to reduce costs, to secure the right equipment and to prevent unscheduled downtime. Planning and execution of routine maintenance is crucial to the reduction of unplanned outages and situations where the equipment is beyond repair. Again, this requires knowledge and a strong appreciation of the industry; engineered valves can take many months to deliver, after the design has been done.
The right people are the backbone of any business. The engineering industry needs to promote itself better to young people, as a career with excellent opportunities for personal growth, recognition and above-average remuneration, so that more school leavers will consider this field of employment. At the same time, companies need to offer more stewardship, whether that be through apprenticeships or other training programs, and younger engineers need to ‘want and commit to being mentored’.
How is your business planning to help Australia meet the 2030 climate change targets?
In conjunction with our engineered valve partners, our business is heavily involved in developing solutions for use in renewable energy plants within Australia and parts of South East Asia. We are active in hydro and geothermal power and have recently secured control valve orders for the new brown coal to hydrogen plant being constructed in the Latrobe Valley. We also have a wide portfolio of valves for use in concentrated solar thermal plants (CST) — and while the uptake in Australia and globally has been relatively low in comparison to solar PV and wind, we believe that this will change in the next decade or two. Further, we have proven solutions for use in waste-to-energy plants.
While there are a large number of ‘standard’ valves used in these plants, applications within geothermal, CST and hydrogen in particular require ‘tailor-made’ valves that are designed to provide low or zero emissions of contaminated or corrosive media, which are sometimes exposed to very high pressures. The use of bellows-seals or live-loaded packings, welded or RTJ bonnets and flange connections and superior trim tightness is of paramount importance. SIL certification is, without a doubt, critical, as is the use of high-quality materials and cutting-edge manufacturing processes.
In addition to this, we offer specialised valve controllers and monitoring devices that aid data collection and scrutiny of the performance of the device, as well as to provide much more accurate control than ever before. Effectively, these devices act as ‘sentinels’, protecting the environment against unwanted emissions, through proactive reporting.
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