A look back at the past 12 months shows how global the electrical aftermarket has become

Business activity over the past year indicates broadening markets, business consolidation, and robust sales

ANYONE LOOKING BACK on 2006 could be forgiven for thinking that the electromechanical service and sales business was all about globalization and consolidation this year.

A glance at news items appearing in "Business Briefs" over the past twelve months reveals a pattern of companies expanding their markets overseas. They've been doing this, for the most part, by buying and selling business units and acquiring or merging with one another for a better fit with overseas markets.

Domestically, companies have been forming alliances when they haven't been buying one another outright, expanding existing facilities, and building new ones. In several instances, record sales and earnings have been the result as well as the cause of .this activity. Much of these sales have been related to the real estate market and to Hurricane Katrina, recovery from which has taken longer than expected.

It's globalism, stupid

The global tone was set in March at National Manufacturing Week in Chicago, where organizers delivered, in their words, "more global manufacluring leaders than ever before." Keynote speakers included executives from Schneider Electric and Caterpillar, Inc.-international players that have benefited from the construction boom of recent years, much of it outside the U.S.

Nowhere has this construction boom been more evident than in China, where Pratt & Whitney Power Systems, a Connecticut business, reached an agreement this year to provide Guangzhou University-City with two gas turbine units for a combined-cycle cogeneration facility. Operation was expected to begin by the end of this month. Pratt & Whitney also sold a gas turbine to the French utility Électricité de France.

Unsatisfied simply to export products and services, several U.S. companies opened offshore plants or expanded existing ones. Methode Network Bus Products of Rolling Meadows, 111., opened a plant in Shanghai for the design and manufacture of bus bars. A.O. Smith announced plans to build a materials testing lab in Suzhou, China, and recognized A.O. Smith plants in Acuña and Juárez, Mexico, for their safety records.

China and Mexico weren't alone in seeing plant activity. Flowserve Corp., a Dallas provider of motion-control products and services, opened a regional sales and service center in Moerdijk, Netherlands.

Eased international distribution

The global flow of goods and services is being aided not only by new plants but also by new and flexible distribution agreements. So while Darby Electric of Anderson, S.C., has become a U.S. distributor of ABB motors and drives, for instance, RD. George has appointed Complete Resin Solutions as an authorized distributor of its impregnating resins in Mexico.

A Michigan maker of fiberglass enclosures, Stahlin Non-Metallic Enclosures, entered a partnership with Spelsberg UK, a British firm, under which Spelsberg will be Stahlin's U.K. stocking distributor.

American Sensor Technologies chose a Bangkok company to distribute its products throughout Thailand, and FISO Technologies of Québec, a Canadian maker of fiber-optic sensors, found a distributor in Mexico City. Heyco Products, a New Jersey manufacturer of wire-protection components, chose a distributor in India, Bossard India, that is a subsidiary of a Swiss company.

In recognition of this flurry of global distribution, the U.S. Dept. of Commerce secretary, Carlos Gutierrez, presented the President's E Star Award for Exports to John Stropki, chairman and CEO of The Lincoln Electric Co., "in recognition of its achievement in supporting exporting growth in the U.S. business community."

International acquisitions

Some companies aren't satisfied with doing business with companies overseas. Sometimes they prefer to buy them. Bain Capital, a New York venture capital firm whose primary activity is owning, bought FCI-Burndy Products, a French maker of connectors.

Bosch Rexroth, the Illinois manufacturer of industrial control products, bought Nyquist BV, a Dutch provider of motion control products. A Mexican supplier of automotive ignition products was acquired by General Cable Corp. of Kentucky. And so on.

Schneider Electric was particularly busy. Power Measurement, Inc., a Victoria, B.C., company bought by Schneider in 2005, was integrated as a "power monitoring and control group" under the Schneider name. On the other side of the world, Schneider Electric bought a 50% stake owned by a partner, CIH Ltd., in their Clipsal Asia joint venture, which develops and sells wiring devices and communication and automation products.

Regal-Beloit Corp., the Wisconsin manufacturer of such familiar motor brands as Leeson, Lincoln, and Marathon, moved boldly into Asia with its purchase of three Chinese motor manufacturers known collectively as Sinya.

Meanwhile, Littelfuse, the Illinois circuit protection manufacturer, bought two Taiwanese companies: Concord Semiconductor of Taiwan-a former supplier-for $25 million; and Song Long Electronics, a maker of metal-oxide varistors, for $5.5 million.