Industrial Systems

Sergey SleptsovReliable Industrial Power Protection for shop floor applications, automation control and critical processes

About Industrial SystemsIndustrial MarketAIS Vertical Market SegmentsIndustrial Products ApplicationsTop Companies by AIS SegmentsBusiness & Technical DriversSummary - Questions

Industrial SAA (Strategic Applications Area) Product line group within APC, exists since January 2003

Facilities in Wettingen, Switzerland and in WK, RI

Focus on general industrial markets

Development of industrial UPS product line for APC CTO Business

MANAGEABILITYAVAILABILITYLOWER COST

Provides Local and Remote Level Management:

SNMP-OPC ServerNMS / Web monitoringEnvironmental MonitoringIntelligent Battery Monitoring

User-Friendly Graphic Interface

Lower Total Cost of Ownership and Long Product Life

Standardized Modular Design minimizes one-time Engineering and Service Costs

Configure-to-Order Approach accelerates Delivery and Installation

Built-In Maintenance Bypass eliminates Separate Purchases and Installations

Proven Technology increases Reliability

Factory Pre-tested System reduces Downtime

Shortened Mean-Time-To-Repair

About Industrial Systems MessagingReliable industrial power protection for shop floor applications, automation control and critical processes

*What are the Main Challenges which industrial UPS are confronted with in the manufacturing facility?We can divide them intoThree categories: Business challenges, Challenges encountered by the Plant Managers, and IT Challenges.

Trends / Market opportunity

PharmaceuticalChemicalSemiconductorFood & BeveragesTransportationOther Industrial ProcessesTotal 3 Phase Industrial UPS Market > 5kVA*: Expected to reach $600 million by 2005. Standardized industrial UPS products is expected to be 75 % of the total market

* Source: VDC , Frost & Sullivan

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UPS sizepercentagerevenueHome officeCorporateTelecomSmall officeOtherIT / datacomIndustrialInstitutionsNAMEuropeASIARest of world

0-2kVA30.4%$1,799,680,000$660,482,560$782,860,800$223,160,320$0$134,976,000$0$0$0$ 930,400,000$ 409,500,000$ 352,100,000$ 104,200,000

2-5kVA20.9%$1,237,280,000$0$624,826,400$262,303,360$259,828,800$90,321,440$0$0$0$ 594,500,000$ 323,100,000$ 246,900,000$ 70,900,000

5-15kVA13.0%$769,600,000$0$0$0$0$26,936,000$507,166,400$154,689,600$80,808,000$ 406,100,000$ 163,700,000$ 169,100,000$ 33,200,000

15-75kVA11.4%$674,880,000$0$0$0$0$24,295,680$414,376,320$121,478,400$114,729,600$ 387,400,000$ 114,800,000$ 150,400,000$ 23,700,000

75-200kVA7.1%$420,320,000$0$0$0$0$15,131,520$256,395,200$102,558,080$46,235,200$ 212,000,000$ 108,500,000$ 77,300,000$ 23,600,000

Above 200kVA17.2%$1,018,240,000$0$0$0$0$27,492,480$605,852,800$228,085,760$155,790,720$ 540,500,000$ 200,200,000$ 233,400,000$ 46,200,000

total100.0%$5,920,000,000$660,482,560$1,407,687,200$485,463,680$259,828,800$319,153,120$1,783,790,720$606,811,840$397,563,520$5,920,781,440$ 3,070,900,000$ 1,319,800,000$ 1,229,200,000$ 301,800,000$ 5,921,700,000

11.2%23.8%8.2%4.4%5.4%30.1%10.2%6.7%100%52%22%21%5%

IndustrialrevenuePercent

total$606,811,840100%

Oil & Gas$ 84,953,65814%

Power Generation$ 66,749,30211%

Industry Processes$ 455,108,88075%

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World Wide UPS Revenue 2000

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Market share per region

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Industrial Market

*Estimated total industrial market growth 5-8% for 2003 2007 Increased levels of power protection investments on behalf of consuming industries to protect and prevent large-scale data loss and / or the interruption of mission critical operations 75% of the industrial Market is represented by the above mentioned segments (Pharmaceutical etc), this are the KEY Segments for AIS The Market segments with the biggest growth / investments is Pharmaceutical (app.418 Billion USD, 7.8% annual growth rate) and

the Chemical segment (485 Billion USD, 3.9% annual growth rate). The fasted growing Segment is Semiconductor with an annual growth rate of 11.8 . In the NAM UPS Market over 5 kVa systems APC No. 4, Market Leader is Powerware, followed by Liebert and MGE.

3 Phase standard Industrial UPS Market > 5kVA Expected to Reach $450 Million by 2005.Trends / Market opportunity$234 Million* VDC forecast 5-8% CAGR growth for 2003 - 2007.$99 Million$94,5 Million$22,5 Million

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UPS sizepercentagerevenueHome officeCorporateTelecomSmall officeOtherIT / datacomIndustrialInstitutionsNAMEMEAJPAARest of world

0-2kVA30.4%$1,799,680,000$660,482,560$782,860,800$223,160,320$0$134,976,000$0$0$0$ 930,400,000$ 409,500,000$ 352,100,000$ 104,200,000

2-5kVA20.9%$1,237,280,000$0$624,826,400$262,303,360$259,828,800$90,321,440$0$0$0$ 594,500,000$ 323,100,000$ 246,900,000$ 70,900,000

5-15kVA13.0%$769,600,000$0$0$0$0$26,936,000$507,166,400$154,689,600$80,808,000$ 406,100,000$ 163,700,000$ 169,100,000$ 33,200,000

15-75kVA11.4%$674,880,000$0$0$0$0$24,295,680$414,376,320$121,478,400$114,729,600$ 387,400,000$ 114,800,000$ 150,400,000$ 23,700,000

75-200kVA7.1%$420,320,000$0$0$0$0$15,131,520$256,395,200$102,558,080$46,235,200$ 212,000,000$ 108,500,000$ 77,300,000$ 23,600,000

Above 200kVA17.2%$1,018,240,000$0$0$0$0$27,492,480$605,852,800$228,085,760$155,790,720$ 540,500,000$ 200,200,000$ 233,400,000$ 46,200,000

total100.0%$5,920,000,000$660,482,560$1,407,687,200$485,463,680$259,828,800$319,153,120$1,783,790,720$606,811,840$397,563,520$5,920,781,440$ 3,070,900,000$ 1,319,800,000$ 1,229,200,000$ 301,800,000$ 5,921,700,000

11.2%23.8%8.2%4.4%5.4%30.1%10.2%6.7%100%52%22%21%5%

IndustrialrevenuePercent

total$606,811,840100%

Oil & Gas$ 109,226,13118%

Power Generation$ 91,021,77615%

General Industry$ 406,563,93367%

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Industrial Market

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APC Industrial Systems focus => 10kVA to 100kVA (approx 70% of the market)Today EMEA UPS Market ShareIndustrial Market

European market summary

69.6 % of the European market for > 5.1kVA is between 5.1 and 100kVA

The top 5 vendors in Europe is:

MGE23.5

Powerware11.7

Socomec10.7

Chloride9.1

APC8.5

The Top 5 countries are:Vendor by Top 5 country

Powerware with 21.5%

MGE with 19.2%

Chloride with 14.4%

APC with 8.5%

Liebert with 6.6%

MGE with 48.3%

Socomec with 21.1

Chloride with 8.8%

Liebert with 5.9%

Powerware with 2.1

AEG with 24.9%

MGE with 14.9%

APC with 10.8%

Chloride with 10.7%

Piller with 10.5%

Socomec with 25.6%


Liebert with 13.2%

MGE with 10.0%

Riello with 9.8%

APC with 22.7%


MGE with 16.3%

IMV / GE with 14.7%

Liebert with 6.7%


European market size by vendor

European Market size 2001 for UPS systems > 5.1kVA =599.2Million US$

NameEuropean market share in %Market share in Mill. US$

APC8.5%50.9

MGE23.5%140.8

Powerware11.7%70.1

Riello2.4%14.4

Liebert5.9%35.4

IMV / GE7.8%46.7

Chloride9.1%54.5

Piller4.7%28.2

Socomec10.7%64.1

AEG5.8%34.8

Total90.1%539.9

Source: VDC The 2002 Power Protection Market Intelligence Program


European market share in %

European Market share in %

European market size by country


CountryEuropean market share in %Market share in Mill. US$

Italy10.7%64.1

Greece/Turkey/Cyprus2.4%14.4

Estern Europe10.7%64.1

Switzerland3.8%22.8

Germany13.6%81.5

UK/Ireland23.3%139.6

Benelux5.9%35.4

Scandinavia/Denmark4.5%27.0

Spain/Portugal7.9%47.3

Austria1.9%11.4

France14.5%86.9

Other0.8%4.8

Total100.0%599.2



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European market size by kVA


kVA ratingEuropean market share in %Market share in Mill. US$

5.1 - 20kVA31.8%190.5

21 - 50kVA21.2%127.0

51 - 100kVA16.6%99.5

101 - 250kVA15.2%91.1

251 - 750kVA13.2%79.1

> 750kVA2.0%12.0

Total100.0%599.2





European vertical market size


Vertical marketEuropean market share in %Market share in Mill. US$

Financial Services7.3%43.7

Security2.2%13.2

Telecom16.4%98.3

Residential/consumer0.3%1.8

Industrial15.5%92.9

Gov't / Military6.7%40.1

Education/Utilities1.8%10.8

Datacom16.5%98.9

Point of sale1.3%7.8

IT22.5%134.8

Medical/laboratory5.9%35.4

Other3.6%21.6

Total100.0%599.2





Today EMEA UPS Market Share


69.6 % of the European market for > 5.1kVA is between 5.1 and 100kVA

The top 5 vendors in Europe is:

MGE23.5

Powerware11.7

Socomec10.7

Chloride9.1

APC8.5

The Top 5 countries are:Vendor by Top 5 country


MGE with 19.2%

Chloride with 14.4%

APC with 8.5%

Liebert with 6.6%

MGE with 48.3%

Socomec with 21.1

Chloride with 8.8%

Liebert with 5.9%

Powerware with 2.1

AEG with 24.9%

MGE with 14.9%

APC with 10.8%

Chloride with 10.7%

Piller with 10.5%

Socomec with 25.6%


Liebert with 13.2%

MGE with 10.0%

Riello with 9.8%

APC with 22.7%


MGE with 16.3%

IMV / GE with 14.7%

Liebert with 6.7%




NameEuropean market share in %Market share in Mill. US$

APC8.5%50.9

MGE23.5%140.8

Powerware11.7%70.1

Riello2.4%14.4

Liebert5.9%35.4

IMV / GE7.8%46.7

Chloride9.1%54.5

Piller4.7%28.2

Socomec10.7%64.1

AEG5.8%34.8

Total90.1%539.9







CountryEuropean market share in %Market share in Mill. US$

Italy10.7%64.1

Greece/Turkey/Cyprus2.4%14.4

Estern Europe10.7%64.1

Switzerland3.8%22.8

Germany13.6%81.5

UK/Ireland23.3%139.6

Benelux5.9%35.4

Scandinavia/Denmark4.5%27.0

Spain/Portugal7.9%47.3

Austria1.9%11.4

France14.5%86.9

Other0.8%4.8

Total100.0%599.2







kVA ratingEuropean market share in %Market share in Mill. US$

5.1 - 20kVA31.8%190.5

21 - 50kVA21.2%127.0

51 - 100kVA16.6%99.5

101 - 250kVA15.2%91.1

251 - 750kVA13.2%79.1

> 750kVA2.0%12.0

Total100.0%599.2







Vertical marketEuropean market share in %Market share in Mill. US$

Financial Services7.3%43.7

Security2.2%13.2

Telecom16.4%98.3

Residential/consumer0.3%1.8

Industrial15.5%92.9

Gov't / Military6.7%40.1

Education/Utilities1.8%10.8

Datacom16.5%98.9

Point of sale1.3%7.8

IT22.5%134.8

Medical/laboratory5.9%35.4

Other3.6%21.6

Total100.0%599.2







Biotech / Pharmaceutical Transportation Chemical Food & Beverage Semiconductor Automotive Water & Wastewater Metal & Mining

*Go through the vertical. These are only exmaples. AIS products focus general on industrial market.

TransportationTunnels, Airports, SignalingAutomatic train control Signaling lampsTrack shiftersLightningEmergency systemsPharmaceutical / Biotech & Chemical - Production process control equipment -Control roomsSealed roomsUtilization pre-processing systemsManufacturing support equipmentLaboratoriesMaterial AnalysisSemiconductor-Clean rooms -Chip production linesAutomation systems for TFT, Plasma, LCD Production-Manufacturing support equipmentFood & BeveragesMaterial & Packaging handling-Production lines-Automatic process control-Safety systemsPackaging RobotsFillersPanel feeders/stackers

ChemicalAkzo Nobel, Bayer AG, BASF AG, Total, BP, Royal Dutch/Shell, Degussa, Food & BeverageNestl SA, Group Danone, PepsiCo, Coca Cola, Unilever, Heineken N.V, Cadbury Schweppes plcSemiconductorIntel, ST Microelectronics, Toshiba, Texas Instruments, Samsung, Hitachi, Motorola, NECPharmaceutical Bayer AG, GlaxoSmithKline, Aventis, Novartis, AstraZeneca, Sanofi-Synthelabo, Merck, Pfizer

*Few examples

TransportationSkanksa AB., British Airways,Grupo Ferrovial, Arriva, Lufthansa, Air France/KLM, SAS, DHL, FedExAutomotiveFiat, Volvo, Audi, Mercedes, Chrysler & Daimler, Opel, Volkswagen, Peugeot, Renault, CitroenMetal & MiningMittal Steel, Anglo American, Boliden, Kali und Salz, LKAB, Lisheen Mine, RAG AG, UK Coal PlcWater & Wastewater ABB Utilities, Analytik Jena, Anglian Water Service, AVK International, Berson UV, Copa Ltd, DHI, Carus Nalon

*Few examples

Increased awareness about Power Quality

Unstable AC Power Promotes Demand for UPS Solutions for Process Control Applications (Frost and Sullivan 2005).Digitalization of Processes raises Interest in Ensuring Optimal Power Quality.

Keen Sensitivity to Power Outages

It is estimated that industrial and digital firms lose $45.7B to utility outages. (2001 Study, EPRI, and the Electricity Innovation Institute)Massive Power Outage in the last years throughout Europe

Improve productivity

Just In Time (JIT) Manufacturing requires highly available manufacturing processes & network of communication

Safety Regulations

Liability manufacturing

New Government regulations

FDA 21 CFR Part 11US Sarbanes Oxley Act 2002

Proliferation of IT networks into manufacturing production

*Speakers notes:

Increased awareness about Power QualityLocal internal power disturbances & failures Unknown cause of downtime due to power abnormalityHarsh industrial environmentDirty Power Due to Inductive Loads (motors)One Large UPS does not mean every parts of the plant floor is safe (many single points of failure between the upstream UPS and downstream application)Human errorsExternal major blackout in US & EU affecting the overall business continuityNortheastern USA (New York) and central Canada, August 14th 2003, power was lost for 24hLondon, August 28th 2003, power lost affected 250.000 people for 34minDenmark and southern Sweden, September 23th 2003, 5 million people affected for >1hWhole of Italy except Sardinia, September 28th 2003, more than 56M people affected for 4hMoscow, May 25th 2005, 10M people were affected, power was restored within 24hSwitzerland entire state railway, June 23th 2005, 100.000 people affected for approx 3h during rush hour

Keen Sensitivity to Power OutagesSource: HEWLETT PACKARD, Columbia University

IndustryApplicationAve cost per hour of downtimeFinancialBrokerage operations$7,840,000FinancialCredit card sales$3,160,000IndustrialAutomotive$1,500,000Industrial Pharmaceuticals$1,082,000IndustrialFood and Beverage$804,000IndustrialInjection Molding$100,000RetailCatalogue sales$109,000TransportationAirline reservations$108,000EntertainmentTele-ticket sales$83,000

Improve productivity Just In Time (JIT) Manufacturing requires highly available manufacturing processes and network of communication Serviceability and uptime Maximizing availability and efficiency of production lines Meeting supply chain management needs Visibility and remote management while maintaining production line stability Reducing operating and TCO costs (proprietary technologies are costly to maintain)

Improve productivityReal Time Information is crucial for competitive advantage

Manufacturing & Industrial ApplicationLegacyeManufacturingHeavy IndustryLight industrial Distribution/AssemblyStand AloneEthernetSingle Shift7x24Proprietary CommunicationOpen PlatformProprietary SystemsWeb BasedCapital IntensiveApplication Service ProviderInventorySupply Chain ManagementInvoicesElectronic Transfers

Safety Regulations Safe and secure production Environment Liability manufacturing / Product liability Restricted production areas (Mainly food & Beverage, Semiconductor and Pharmaceutical) Safety and security : Reliance on disparate networks (data, device, control networks) Real-time predictability Operational paralysis due to lack of visibility

New Government regulationsAsset tracking - safe and secure production environmentRestricted area / Limiting system access to authorized individualsUse of operational system checksUse of device checks / authority checks

FDA 21 CFR Part 11 (Food and Drug Administration)Requirements related to electronic Records; electronic Signatures Ensure that system maintains "irrefutable link" between documents, metadata, and electronic signatureDisaster recovery

Proliferation of IT networks into manufacturing production

eManufacturingAutomation equipment vendors are implementing Ethernet-based protocols as an alternative or replacement of traditional proprietary and legacy networks

Proliferation of IT networks into manufacturing productionNetwork Reliability Expands Beyond ITWith the increased use of embedded processor technology, industrial computers and networked control systems, the reliability of the industrial network is paramount to many Industrial Automation Customers. Real-time information Remote management Open and standards-based Integration with back office engineering Enterprise-wide visibility

Downtime is too costly to ignore Back up power supplies designed as heavy-duty, ruggedized solutions can withstand harsh industrial environmental conditions.APC provides the most comprehensive solution to the industrial customer needs through APC Industrial SystemsAn industrial grade design is essential to maintaining highly available and manageable solutions on the factory floor and other industrial applications.Reliable industrial power protection for shop floor applications, automation control and critical processes

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Reliable industrial power protection for shop floor applications, automation control and critical processes

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*What are the Main Challenges which industrial UPS are confronted with in the manufacturing facility?We can divide them intoThree categories: Business challenges, Challenges encountered by the Plant Managers, and IT Challenges.*Estimated total industrial market growth 5-8% for 2003 2007 Increased levels of power protection investments on behalf of consuming industries to protect and prevent large-scale data loss and / or the interruption of mission critical operations 75% of the industrial Market is represented by the above mentioned segments (Pharmaceutical etc), this are the KEY Segments for AIS The Market segments with the biggest growth / investments is Pharmaceutical (app.418 Billion USD, 7.8% annual growth rate) and


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*Go through the vertical. These are only exmaples. AIS products focus general on industrial market.*Few examples*Few examples*

*Speakers notes:*

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Documents

Industrial Systems