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Firm hunts for electrical, power generation growth

The Swiss-Swedish conglomerate Asea Brown Boveri (ABB) is one of the world's largest corporations, specializing in power generation, power transmission and distribution, and industrial and building systems. Not only is it big, it's immensely profitable: last year ABB's worldwide network recorded $36.3 billion in revenue and a pre-tax profit of $2 billion.
While ABB is big globally, it's relatively new to Slovakia, setting up its first representative office in Banská Bystrica in 1991. But since then the company has moved fast, founding three daughter companies and consolidating all of its operations into a holding group. ABB Slovenergia (formerly ABB-PBS Montáže), one of the daughter firms, specializes in the delivery, installation, service and modernization of power generation equipment. ABB EZ provides services for electrical equipment and engineering. ABB Stotz is a manufacturing and trading company for low voltage appliances and electrical installation materials.



The Swiss-Swedish conglomerate Asea Brown Boveri (ABB) is one of the world's largest corporations, specializing in power generation, power transmission and distribution, and industrial and building systems. Not only is it big, it's immensely profitable: last year ABB's worldwide network recorded $36.3 billion in revenue and a pre-tax profit of $2 billion.

While ABB is big globally, it's relatively new to Slovakia, setting up its first representative office in Banská Bystrica in 1991. But since then the company has moved fast, founding three daughter companies and consolidating all of its operations into a holding group. ABB Slovenergia (formerly ABB-PBS Montáže), one of the daughter firms, specializes in the delivery, installation, service and modernization of power generation equipment. ABB EZ provides services for electrical equipment and engineering. ABB Stotz is a manufacturing and trading company for low voltage appliances and electrical installation materials. Last August, these firms were grouped into a holding group.

While the ABB's reorganization in Slovakia continues, the company has plans for further expansion, said its country manager for Slovakia, Remko Hellenberg.

"Slovakia is a good opportunity for us," Hellenberg, a 35-year-old Dutch native, said. "We want to maintain our presence on the markets where we are already well established, but at the same time we are looking for emerging markets with potential for growth. We have full confidence in the Slovak economy, which is now very strong compared to some of its neighbors, and we expect to take part in many good projects here in the future."

On the whole, Hellenberg said some growth can be expected in the installation of power generation equipment, but more significantly in services, refitting and industrial installations.

ABB also is currently on the lookout for power generation projects, according to Hellenberg, who has been with the company since 1987. "We are able to take equity, Hellenberg said, "and if there are such projects, we would like to provide financing for them." He added that another field the firm wants to partake in are financial services.

Seeking partners

Hellenberg explained that in some fields ABB is trying to cooperate with local suppliers rather than compete with them. Using an example, Hellenberg said that one of ABB's partners in Slovakia is SES Tlmače, a manufacturer of power generation systems. According to Hellenberg, partnering with ABB would significantly increase the share of locally manufactured products, which today account for about 50 percent of installations. By the end of '98, Hellenberg said this share is expected to rise to 80 percent.

ABB's current activities in Slovakia involve partnering up with primarily industrial firms, Hellenberg said. ABB's main clients in Slovakia include the east Slovak steel mill VSŽ, the Podbrezová iron mill, the oil refiner Slovnaft, the SCP pulp and paper mill in Ružomberok, and the Slovalco aluminium plant in Žiar nad Hronom. Recently, ABB won the contract to fit electrical installations and ventilation systems for the Hotel Carlton in Bratislava, now under renovation. "We would like to go for bigger packages in this field," Hellenberg said, "and we plan to take on new employees in order to increase our presence in this market segment."

Stiff competition

ABB is not without stiff competition in Slovakia, though. The firm's main rival, especially in the power generation field, is the German giant Siemens; howver, the firm's other global rival, General Electric, is currently not engaged in areas in areas where the two companies would be in direct competition.

Nevertheless, ABB Group continues to bulk up, recently merging its transportation activities with Daimler-Benz [Mercedes car producers] to form the world's biggest and most complete supplier of railway equipment.

Hellenberg does not expect to nail down contracts in this field in Slovakia, but said that the company would be prepared to react flexibly if such an opportunity emerged. "We would like to cooperate in this kind of project," said Hellenberg, whose career with ABB included stints in Holland and Germany before coming to Bratislava. "We are not active in civil engineering, but we can deliver electrical equipment, and we can build and operate the system."

POSS ADDS

directly competing etitng or engaged in areas for not present in Slovakia. The Czech _koda is also an important company in power generation industry.


ABB Slovakia At a Glance (Projected 1997 figures unless otherwise noted)

No. of employees: 400
Turnover :1.7 Bil. Sk
Gross profit: 49.5 million Sk
Net profit: N/A
Total assets: N/A
Share capital: N/A
No. of subsidiaries:4
Ownership:100% ABB Group

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