24 August 2018
Time to go
It is harder to sell a box of motorcycle parts than it is to sell a motorcycle. It is not quite that bad for Siemens AG as it tries to let go of the remnants of its water business...
In its July issue, Global Water Intelligence (GWI) reported that Siemens Water Solutions (SWS) is for sale. Here are the parts for sale:
- Wet air oxidation (WAO) – most often applied on ethylene spent caustic, sometimes used on refinery spent caustic – usually the year’s biggest revenue generator
- Powdered Activated Carbon Treatment (PACT®) – a biological process that uses powdered carbon. Used in the U.S. at about ten refineries to meet toxicity testing. More recently applied in China where effluent limits are extremely low
- Oil/water separation equipment for oil refineries
- Oil/water separation equipment for produced water
- Flowback services for the Gulf of Mexico offshore
- Integrated solutions with key pieces of process equipment
Noticeably absent from the list are sulphate removal systems. SWS exited that business after realizing significant losses on projects. They have also reduced scope on their integrated solutions offer, where they limit their scope of supply to major pieces of process equipment. Given this shrunken scope, it is no surprise that revenues are reportedly down. GWI reported that they have fallen from around €60 million in 2016 to €40 million in 2017.
They do very little business in the US onshore upstream equipment market even though they have some of the right equipment. They have not extended their offshore services to the onshore market. They need a global reach to sell a portfolio with niche products.
To get the most for their money, the buyer will need to have complementary parts to the metaphorical motorcycle, and have a global perspective and an interest in both the upstream and downstream markets. That is a rare breed and will most likely be either Chinese or French.