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Govt funding for Canadian filtration start-up
Filtration Industry Analyst
INDEX/NEWS
Filtration Company Index Ahlstrom 11,14,15 Alfa Laval 14,15 Amiad Filtration 6 Andritz 14 Asahi Kasei 15 BWT 14 Calgon Carbon 3,6 Ceco Environmental 3,15 Clarcor 6,9,15 Crane 8,15 Crown Andersen 15 Cummins 11,15 Donaldson 8,15 Dorr-Oliver Eimco 7 Dow Chemical 1,6 Dow Water Solutions 1 DuPont 15 Eaton 15 Eimco Water Technologies 7 Entegris 8,15 EnviroTower 8 Esco Technologies 15 Fedders 15 FilmTec 6 Filtration Puretech 3 Flanders 15 GE 15 GEA 14,15 GE Water & Process Technologies 2,4,7 GL&V 7,14,15 GUD 14,15 H20 Innovation 15 Hamworthy 7,14 Hyflux 15 Inge 14 ITT 1,8,10,15 Koch Membrane Systems 14 Larox 7,14,15 Lydall 12,15 3M 12,15 Mann+Hummel 14 Met-Pro 7,8,15 Metso 3,14 MFRI 15 Millipore 3,4,13,15,16 Mott 4 Niagra Screen Products 9 Nitto Denko 15 Novasep 5 Pall 15,16 Parker Hannifin 8,15 Peerless 15 Pentair 1,3,4,15 Porvair 14,15 Proctor & Gamble 5 Purolator EFP 9 Sartorius 14,15 Schroeder 14 Seychelle Environmental Technologies 15 Siemens 4,5,7,14,15 SPX 3,8,15 TangenX 6 Textron 6 Toray 15 Vokes-Air 4 Water Chef 4,15 Watts Water 13,15 Wavestream 4 Whatman 6,15 Zenon 8 Zhejiang Omex 1
2
October 2006
ITT TO SPONSOR CHINA NATIONAL KAYAKING TEAM ITT Corp will be the strategic partner of China’s National Kayaking Team as it prepares for the 2008 Olympic Games in Beijing. The sponsorship officially started on 1 September 2006 and will last until 31 December 2008. ITT’s sponsorship will focus on upgrading the kayaking team’s equipment and enhancing players’ training abilities to improve the team’s performance. China’s kayaking team won a gold medal at the Athens Olympic Games in 2004. ITT’s products and technologies have been used in the kayak courses for the Olympic Games held in Atlanta, Barcelona, Sydney and Athens. Recently, ITT began work on its award to help construct the kayaking course in Shunyi Olympic Water Park for the 2008 Beijing Olympic Games (see Pump Industry Analyst, June 2006). “We think our sponsorship of the Chinese Canoe Association is a great fit for ITT,” said Steven Loranger, chairman, president and chief executive officer (CEO) of ITT Corp. “China is a very important market for our company, particularly in the water and wastewater treatment areas.” ITT has 10 manufacturing sites in China in eight cities with 6500 employees. The company is currently working on a number of water and wastewater projects throughout China, including the Three Gorges Dam, the Yellow River Hydropower Station, wastewater treatment plants in Beijing, Shenyang and Kunming, and the Suzhou Creek restoration project. In the building trades market, ITT is involved in a number of large
construction projects in China, including the Beijing Oriental Plaza, the CCTV Building, Shanghai Pudong Airport, and the Shanghai World Financial Center. The company also serves the growing industrial market, with large installations for SECCO Petro-Chemical and Bao Steel, among others.
GE ESTABLISHES WATER R&D CENTRE IN SINGAPORE GE Water & Process Technologies is investing S$130 million over the next 10 years to establish a world-scale GE Water & Process Technologies Global R&D Centre in Singapore. Comprising five Centres of Excellence, this R&D Centre will employ 100 top-tier researchers who will build up a full range of R&D capabilities. Hosted at the National University of Singapore (NUS), the new research centre will leverage on the university’s broad research infrastructure in engineering, science and medicine. Specific areas of research will include water treatment and systems integration, fundamental chemical and membrane applications and ion-exchange technology. “Our decision to invest in Singapore is due to the strong commitment from the government in developing the water industry. This, coupled with the easy availability of skilled manpower and the strong enforcement of intellectual property rights regulations makes Singapore the ideal platform to launch this R&D centre,” said Jeff Garwood, president and CEO of GE Water & Process Technologies. “Singapore has a long term water strategy by looking at ways to diversify water supply sources and to conserve demand. This approach is reflected in the Four National
Taps Approach. The Singapore government is also committed to make Singapore a Global Hydrohub. At GE, we recognise this vision, we want to embrace it and we are committed to help Singapore achieve it,” Garwood added. Professor Shih Choon Fong, the president of NUS, said: “NUS is privileged to be chosen to host GE Water’s R&D Center. I see this initiative facilitating interaction between GE’s leading scientists and our researchers and students, enhancing the vibrancy of our research environment and capabilities.” “The new Centre will promote the growth of an environment and water technology ecosystem spanning the entire value chain. This partnership between GE and NUS holds promise for adding a new dimension to integrating basic and applied research with commercial application for NUS and Singapore,” Prof Shih added. NUS’s research strengths in membranes, biological processes, nanomaterials, catalysis and sensors related to water security, should complement GE’s technical expertise and industry experience in water and process technologies. Setting up the centre is in line with GE Water & Process Technologies’ goal of expanding its R&D capabilities throughout Asia in order to best support and meet growing demands in both established and emerging Asian markets. Recently, GE completed an expansion of facilities in Shanghai, China and in Bangalore, India.
GOVT FUNDING FOR CANADIAN FILTRATION START-UP Canada’s new government has made a C$100 000 repayable contribution to
Filtration Puretech, a Pontiac-based start-up producer of air filters for ventilation systems. The money will be used to purchase equipment to manufacture air filters. This announcement coincides with the inauguration of Filtration Puretech’s manufacturing facility in Pontiac, which required a total investment of C$1.3 million.
PENTAIR LOWERS PROFIT FORECAST Pentair has revised down its earnings per share (EPS) guidance from continuing operations for the third quarter of 2006 and for the full year 2006 to reflect the impact of the soft pool equipment market on its Pool & Spa business. The company’s third quarter 2006 EPS guidance is now US$0.30–0.32 to include a severance charge of approximately US$17 million and the impact of lower volume in the Pool & Spa business. Pentair’s previously issued guidance for the third quarter 2006 EPS was US$0.46–0.50. The company is also revising fourth quarter 2006 EPS guidance to US$0.33– US$0.35. This results in revised full-year EPS guidance from continuing operations of US$1.72–1.76. “Third quarter 2006 Pool & Spa business sales are projected to be flat with 2005 levels and approximately US$20 million lower than mid-year expectations. This adjustment reflects the effect of the housing slow-down on spa and bath markets and on new pool starts, and the resulting channel inventory adjustments due to reduced pool equipment demands,” said Randall Hogan, Pentair chairman and CEO. “Fourth quarter 2006 pool equipment sales are projected to be
Filtration Industry Analyst
lower than previous expectations and below 2005 levels,” Hogan added. Fourth quarter 2005 pool equipment sales were especially strong due to the success of its early buy program, an incentive program to level-load production during the traditionally slowest time of the year. “Given the inventory draw-down we are now experiencing, as well as continued softness in key pool equipment markets, particularly Florida and Southern California, sales from the fourth quarter 2006 early buy program are now projected to be below our previous expectations and US$30 –US$60 million lower than the fourth quarter 2005,” Hogan said. “While we continue to monitor conditions closely, we believe this inventory drawdown will be essentially complete by the end of the fourth quarter and, thereafter, we should track more closely to the market,” he added. Pentair also said it does not currently expect that economic conditions during the fourth quarter will worsen to the point that the company’s commercial, industrial and municipal markets will be affected. Hogan stated: “We believe the expected inventory draw-downs are shortterm, and that the pool equipment business remains attractive long-term. However, given current conditions, we are repositioning the pool business for improved performance in this uncertain environment and redoubling our efforts to reduce costs and accelerate growth in all of our Water businesses.” The company also announced a number of actions in response to current market conditions. “First, we are streamlining the leadership structure at the corporate and business segment levels. This new structure will more effectively deploy leadership,
create greater efficiencies and generate savings,” Hogan said (see News, page 1). “Second, we are driving for margin improvements in the Water businesses through the aggressive deployment of lean enterprise disciplines, and by sourcing and manufacturing in low cost countries.” Pentair is also incurring a one-time charge of approximately US$17 million for severance costs in the Water Group and Corporate, and to increase reserves for accounts receivable, inventory and warranty in the Pool & Spa business. The company expects to generate US$35 million of profit improvements in 2007.
CECO LISTED ON NASDAQ GLOBAL MARKET The NASDAQ Stock Market has approved Ceco Environmental Corp’s application for upgrading its listing to the NASDAQ Global Market, formerly known as the NASDAQ National Market. Ceco is now trading on the NASDAQ Global Market under its old symbol CECE. The company had been trading on the NASDAQ Capital Market under the same symbol. “Meeting the more stringent requirements for a NASDAQ Global Market listing is another important milestone for Ceco that underscores the tremendous growth we have experienced and is another strategic goal our board and senior management targeted to position the company to continuously maximise shareholder value,” explained Phillip DeZwirek, chairman and CEO of Ceco. “We remain extremely excited about our market position and the growth prospects ahead which we are confident will
IN BRIEF • Metso Minerals (Tampere) Oy has been chosen as the most supportive workplace for personal development and training in Finland. The honour, awarded by Finland’s Ministry of Labour, recognises that the company has significantly enhanced opportunities for adult learning while at work. Initiatives include training, grants, study leaves and financial support for completing studies. Metso Minerals (Tampere) manufactures jaw and cone crushers, as well as trackmounted and wheel-mounted crushing and screening plants. • SPX Corp hosted a meeting for investors and analysts on 19 September 2006 in Ocala, Florida. The meeting featured the company’s Flow Technology segment and included presentations by a number of business unit leaders. • Calgon Carbon Corp’s board of directors has approved the redesign of the company’s US salaried pension plans. Effective 31 December 2006, the company will freeze its defined benefit pension plans for salaried employees and will replace them with an enhanced 401(k) program going forward. The company had previously closed those pension plans to employees hired after 1 July 2005. “Our new enhanced 401(k) plan should improve our competitive position in the marketplace and, at the same time, will align our pension program with the national trend,” said John Stanik, Calgon Carbon’s president and CEO. • A webcast of Millipore Corp’s 21 September 2006 Investor Analyst Day, can be accessed via www.millipore.com.
3
NEWS/IN BRIEF
October 2006
INDEX/NEWS
Filtration Company Index Ahlstrom 11,14,15 Alfa Laval 14,15 Amiad Filtration 6 Andritz 14 Asahi Kasei 15 BWT 14 Calgon Carbon 3,6 Ceco Environmental 3,15 Clarcor 6,9,15 Crane 8,15 Crown Andersen 15 Cummins 11,15 Donaldson 8,15 Dorr-Oliver Eimco 7 Dow Chemical 1,6 Dow Water Solutions 1 DuPont 15 Eaton 15 Eimco Water Technologies 7 Entegris 8,15 EnviroTower 8 Esco Technologies 15 Fedders 15 FilmTec 6 Filtration Puretech 3 Flanders 15 GE 15 GEA 14,15 GE Water & Process Technologies 2,4,7 GL&V 7,14,15 GUD 14,15 H20 Innovation 15 Hamworthy 7,14 Hyflux 15 Inge 14 ITT 1,8,10,15 Koch Membrane Systems 14 Larox 7,14,15 Lydall 12,15 3M 12,15 Mann+Hummel 14 Met-Pro 7,8,15 Metso 3,14 MFRI 15 Millipore 3,4,13,15,16 Mott 4 Niagra Screen Products 9 Nitto Denko 15 Novasep 5 Pall 15,16 Parker Hannifin 8,15 Peerless 15 Pentair 1,3,4,15 Porvair 14,15 Proctor & Gamble 5 Purolator EFP 9 Sartorius 14,15 Schroeder 14 Seychelle Environmental Technologies 15 Siemens 4,5,7,14,15 SPX 3,8,15 TangenX 6 Textron 6 Toray 15 Vokes-Air 4 Water Chef 4,15 Watts Water 13,15 Wavestream 4 Whatman 6,15 Zenon 8 Zhejiang Omex 1
2
October 2006
ITT TO SPONSOR CHINA NATIONAL KAYAKING TEAM ITT Corp will be the strategic partner of China’s National Kayaking Team as it prepares for the 2008 Olympic Games in Beijing. The sponsorship officially started on 1 September 2006 and will last until 31 December 2008. ITT’s sponsorship will focus on upgrading the kayaking team’s equipment and enhancing players’ training abilities to improve the team’s performance. China’s kayaking team won a gold medal at the Athens Olympic Games in 2004. ITT’s products and technologies have been used in the kayak courses for the Olympic Games held in Atlanta, Barcelona, Sydney and Athens. Recently, ITT began work on its award to help construct the kayaking course in Shunyi Olympic Water Park for the 2008 Beijing Olympic Games (see Pump Industry Analyst, June 2006). “We think our sponsorship of the Chinese Canoe Association is a great fit for ITT,” said Steven Loranger, chairman, president and chief executive officer (CEO) of ITT Corp. “China is a very important market for our company, particularly in the water and wastewater treatment areas.” ITT has 10 manufacturing sites in China in eight cities with 6500 employees. The company is currently working on a number of water and wastewater projects throughout China, including the Three Gorges Dam, the Yellow River Hydropower Station, wastewater treatment plants in Beijing, Shenyang and Kunming, and the Suzhou Creek restoration project. In the building trades market, ITT is involved in a number of large
construction projects in China, including the Beijing Oriental Plaza, the CCTV Building, Shanghai Pudong Airport, and the Shanghai World Financial Center. The company also serves the growing industrial market, with large installations for SECCO Petro-Chemical and Bao Steel, among others.
GE ESTABLISHES WATER R&D CENTRE IN SINGAPORE GE Water & Process Technologies is investing S$130 million over the next 10 years to establish a world-scale GE Water & Process Technologies Global R&D Centre in Singapore. Comprising five Centres of Excellence, this R&D Centre will employ 100 top-tier researchers who will build up a full range of R&D capabilities. Hosted at the National University of Singapore (NUS), the new research centre will leverage on the university’s broad research infrastructure in engineering, science and medicine. Specific areas of research will include water treatment and systems integration, fundamental chemical and membrane applications and ion-exchange technology. “Our decision to invest in Singapore is due to the strong commitment from the government in developing the water industry. This, coupled with the easy availability of skilled manpower and the strong enforcement of intellectual property rights regulations makes Singapore the ideal platform to launch this R&D centre,” said Jeff Garwood, president and CEO of GE Water & Process Technologies. “Singapore has a long term water strategy by looking at ways to diversify water supply sources and to conserve demand. This approach is reflected in the Four National
Taps Approach. The Singapore government is also committed to make Singapore a Global Hydrohub. At GE, we recognise this vision, we want to embrace it and we are committed to help Singapore achieve it,” Garwood added. Professor Shih Choon Fong, the president of NUS, said: “NUS is privileged to be chosen to host GE Water’s R&D Center. I see this initiative facilitating interaction between GE’s leading scientists and our researchers and students, enhancing the vibrancy of our research environment and capabilities.” “The new Centre will promote the growth of an environment and water technology ecosystem spanning the entire value chain. This partnership between GE and NUS holds promise for adding a new dimension to integrating basic and applied research with commercial application for NUS and Singapore,” Prof Shih added. NUS’s research strengths in membranes, biological processes, nanomaterials, catalysis and sensors related to water security, should complement GE’s technical expertise and industry experience in water and process technologies. Setting up the centre is in line with GE Water & Process Technologies’ goal of expanding its R&D capabilities throughout Asia in order to best support and meet growing demands in both established and emerging Asian markets. Recently, GE completed an expansion of facilities in Shanghai, China and in Bangalore, India.
GOVT FUNDING FOR CANADIAN FILTRATION START-UP Canada’s new government has made a C$100 000 repayable contribution to
Filtration Puretech, a Pontiac-based start-up producer of air filters for ventilation systems. The money will be used to purchase equipment to manufacture air filters. This announcement coincides with the inauguration of Filtration Puretech’s manufacturing facility in Pontiac, which required a total investment of C$1.3 million.
PENTAIR LOWERS PROFIT FORECAST Pentair has revised down its earnings per share (EPS) guidance from continuing operations for the third quarter of 2006 and for the full year 2006 to reflect the impact of the soft pool equipment market on its Pool & Spa business. The company’s third quarter 2006 EPS guidance is now US$0.30–0.32 to include a severance charge of approximately US$17 million and the impact of lower volume in the Pool & Spa business. Pentair’s previously issued guidance for the third quarter 2006 EPS was US$0.46–0.50. The company is also revising fourth quarter 2006 EPS guidance to US$0.33– US$0.35. This results in revised full-year EPS guidance from continuing operations of US$1.72–1.76. “Third quarter 2006 Pool & Spa business sales are projected to be flat with 2005 levels and approximately US$20 million lower than mid-year expectations. This adjustment reflects the effect of the housing slow-down on spa and bath markets and on new pool starts, and the resulting channel inventory adjustments due to reduced pool equipment demands,” said Randall Hogan, Pentair chairman and CEO. “Fourth quarter 2006 pool equipment sales are projected to be
Filtration Industry Analyst
lower than previous expectations and below 2005 levels,” Hogan added. Fourth quarter 2005 pool equipment sales were especially strong due to the success of its early buy program, an incentive program to level-load production during the traditionally slowest time of the year. “Given the inventory draw-down we are now experiencing, as well as continued softness in key pool equipment markets, particularly Florida and Southern California, sales from the fourth quarter 2006 early buy program are now projected to be below our previous expectations and US$30 –US$60 million lower than the fourth quarter 2005,” Hogan said. “While we continue to monitor conditions closely, we believe this inventory drawdown will be essentially complete by the end of the fourth quarter and, thereafter, we should track more closely to the market,” he added. Pentair also said it does not currently expect that economic conditions during the fourth quarter will worsen to the point that the company’s commercial, industrial and municipal markets will be affected. Hogan stated: “We believe the expected inventory draw-downs are shortterm, and that the pool equipment business remains attractive long-term. However, given current conditions, we are repositioning the pool business for improved performance in this uncertain environment and redoubling our efforts to reduce costs and accelerate growth in all of our Water businesses.” The company also announced a number of actions in response to current market conditions. “First, we are streamlining the leadership structure at the corporate and business segment levels. This new structure will more effectively deploy leadership,
create greater efficiencies and generate savings,” Hogan said (see News, page 1). “Second, we are driving for margin improvements in the Water businesses through the aggressive deployment of lean enterprise disciplines, and by sourcing and manufacturing in low cost countries.” Pentair is also incurring a one-time charge of approximately US$17 million for severance costs in the Water Group and Corporate, and to increase reserves for accounts receivable, inventory and warranty in the Pool & Spa business. The company expects to generate US$35 million of profit improvements in 2007.
CECO LISTED ON NASDAQ GLOBAL MARKET The NASDAQ Stock Market has approved Ceco Environmental Corp’s application for upgrading its listing to the NASDAQ Global Market, formerly known as the NASDAQ National Market. Ceco is now trading on the NASDAQ Global Market under its old symbol CECE. The company had been trading on the NASDAQ Capital Market under the same symbol. “Meeting the more stringent requirements for a NASDAQ Global Market listing is another important milestone for Ceco that underscores the tremendous growth we have experienced and is another strategic goal our board and senior management targeted to position the company to continuously maximise shareholder value,” explained Phillip DeZwirek, chairman and CEO of Ceco. “We remain extremely excited about our market position and the growth prospects ahead which we are confident will
IN BRIEF • Metso Minerals (Tampere) Oy has been chosen as the most supportive workplace for personal development and training in Finland. The honour, awarded by Finland’s Ministry of Labour, recognises that the company has significantly enhanced opportunities for adult learning while at work. Initiatives include training, grants, study leaves and financial support for completing studies. Metso Minerals (Tampere) manufactures jaw and cone crushers, as well as trackmounted and wheel-mounted crushing and screening plants. • SPX Corp hosted a meeting for investors and analysts on 19 September 2006 in Ocala, Florida. The meeting featured the company’s Flow Technology segment and included presentations by a number of business unit leaders. • Calgon Carbon Corp’s board of directors has approved the redesign of the company’s US salaried pension plans. Effective 31 December 2006, the company will freeze its defined benefit pension plans for salaried employees and will replace them with an enhanced 401(k) program going forward. The company had previously closed those pension plans to employees hired after 1 July 2005. “Our new enhanced 401(k) plan should improve our competitive position in the marketplace and, at the same time, will align our pension program with the national trend,” said John Stanik, Calgon Carbon’s president and CEO. • A webcast of Millipore Corp’s 21 September 2006 Investor Analyst Day, can be accessed via www.millipore.com.
3
NEWS/IN BRIEF
October 2006