(The original version of this article stated that Rockwell is seeking 6%-8% revenue growth in 2010. That figure is Rockwell's long-term growth projection. In fiscal 2010 Rockwell expects revenue in the range of a 5% year-over-year decline to a 2% increase.)
More than ready to put an extremely challenging 2009 behind his company, Chairman and CEO Keith Nosbusch took the occasion of Rockwell Automation’s 2009 Automation Fair customer conference in Anaheim, CA, to lay out the company’s strategy for reclaiming growth.
After a recession-wracked 2009 saw Rockwell’s revenue fall 24% to $4.33 billion, Nosbusch said his goal is for the automation hardware and software vendor to return in the long term to an annual revenue growth rate of 6% to 8% and a return on invested capital of more than 20% per year. For 2010, the company has said it expects revenue of $4.1 to $4.4 billion, essentially flat compared to 2009.
Rockwell will get there, Nosbusch said, by continuing to drive its expansion into process industries, growing its manufacturing software business, taking advantage of growth in developing economies of the world, and focusing on products that support sustainability and safety.
A U.S. manufacturing sector that experts say has already started to rebound should help. Jeremy Leonard, an economist consultant at the Manufacturers’ Alliance/MAPI, told the Automation Fair audience that the U.S. economy is expected to grow 2.4% in 2010 and manufacturing production is expected to be up 4.6% after falling 11.3% in 2009.
“Automation is still a growth market,” Nosbusch said in an interview with Managing Automation. “Companies have to continue to become more competitive. There’s more global competition than ever, and the demand for higher quality and lower cost — those never go away.”
A major component of Rockwell’s growth strategy will be continued expansion into process manufacturing industries. So far, Nosbusch said, the process push has met his expectations. In fact, he said, process industries, such as oil and gas, have not suffered as much as other industries during the recession, partially offsetting declines in other markets, such as automotive, that historically have been important to Rockwell.
“We’ve been able to find opportunities and continue to grow [in process] at a rate faster than Rockwell Automation as a whole,” Nosbusch said. “So it’s a very important part of our future and our growth.”
Already the company’s ICS Triplex product has helped it gain significant market share in process manufacturing safety. Rockwell’s next push, Nosbusch said, will be into continuous process manufacturing verticals, such as chemical, oil and gas, and power production. Rockwell plans not only to extend the functionality of its PlantPax DCS product line to address those markets, but also to focus on building up its domain expertise in those markets.