Quality and reliability are key, says ABB chairman and CEO

"Research and development is the lifeblood of all technology-based companies."

ABB’s history of innovation stretches back more than 100 years and includes many real breakthroughs: the world’s first three-phase power transmission system; the world’s first self-cooling transformer; the world’s first high-speed locomotive using a direct drive system; even the world’s first synthetic diamond.

It is a history we pride ourselves on and is the reason ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact.

According to recent studies, the top 600 international companies increased their investment in research and development last year. Even industries that were subject to poor market conditions, like information technology, telecommunications and media, increased R&D spending in 2001.

We invest roughly seven percent of revenues – US$ 1.6 billion – in research and order-related development each year. We monitor this spending carefully, and all future research is knitted into the fabric of our business strategy – to help industry and utility customers become more competitive while keeping an eye on the environment.

Topnotch technology
ABB’s customer base cuts across many industries. It consists of consumer goods companies like Ford, Volvo and DaimlerChrysler, brewers Heineken and Carlsberg, and mobile phone makers Nokia and Ericsson. There are utilities like Endesa of Spain, Pacific Gas & Electric Company of the U.S. and RWE of Germany; oil giants like BP, Shell and ChevronTexaco; pulp and paper makers like StoraEnso and mining companies like Inco; chemical makers like DuPont and Dow, and pharmaceutical companies like Merck and Pfizer.

This abbreviated list is made up of market leaders who stay on top because they produce excellent products. To do so, they need excellent technologies that surpass expectations for efficiency, cost, productivity and environmental standards, among other things. That’s where we come in – as a true technology partner, in good times and bad, reliable to the core.

Capital expenditures in most of our customer industries will remain depressed in the short to mid-term. As a result, customers are looking for ways to optimize the technologies they already have in place, to get more out of existing operations and extend the lifetime of their assets.

Cleaner power, fewer emissions, faster production
In power technologies, this means a greater focus on high quality, cost effective products and processes that help power producers and distributors extract the greatest value from existing plants or grids.

For example, new ABB software called GridView simulates the way power markets work. Operators of large grids get a complete overview, which allows them to analyze fuel, costs, capacity of power plants and energy conversion efficiency. Another good example is our package substation, which builds high-quality products into a modular design that is delivered faster and costs less to maintain.

In automation, this means creating new processes to optimize existing production lines and squeeze more value from the supply chain. For instance, our new high-voltage motors and direct drives are slashing costs and improving efficiency in pulp and paper, aluminium, chemical and petrochemical plants, while our new heavy duty robots are lifting cars, heavy forged parts in foundries, and even crates of beer and champagne.

The same also holds true for the oil and gas industry, where environmentally-friendly technologies are needed to more efficiently exploit resource reservoirs and lower the cost of refining raw materials. ABB’s clean fuel technology, developed in a joint venture with a leading oil and gas company, reduces harmful emissions by using a new process for making alkylate, the key ingredient in gasoline.

ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance – from supply chain management to energy usage and people – while reducing environmental impact.

The brand and what it stands for
The ABB brand is built on strong technology and our pioneering spirit. We try to take the best ideas and turn them into tangible products and solutions as fast as possible. Take a look at our intensity of innovation figures – on average 75 percent of our products have been developed in the last five years. That’s a pretty remarkable figure.

It is a testimony to our people, the researchers and scientists, the engineers and programmers, the sales staff, factory workers and management, who make this great company what it is today.

Technology outlook
Our technology spending will continue to match customer demand. Technology is the foundation of our prosperity, and the source of so much that is good in our lives. It brings power to our homes and keeps us warm at night. It is the enjoyment of watching a factory hum with clockwork precision, the pleasure of driving a car or settling back to read a favorite book.

It helps you get what you want, when you want it.

Sincerely,


Jürgen Dormann, Chairman and CEO, ABB Ltd