Insights of the Week
The Water Treatment Chemical IIOT webinar is scheduled for May 10 at 10:00 A.M.
You can sign up for this and other webinars at Weekly IIoT Webinars.
Attemperators are causing major problems in gas turbine combined cycle plants.
The Gas Turbine Decisions, April 18 Update, provides the status. You can access
this at 59D Gas Turbine and Reciprocating Engine Decisions. This is the brochure
for the service, but the latest update is used as a sample. The service provides
the knowledge needs: Alerts, Answers, Analysis, Advancement. The April 18 Update
is the example of the Alerts. The service is a way to interface with gas turbine
owners and keep up with the latest developments.
McIlvaine has hundreds of thousands of links on Google. If you enter Google and
type in McIlvaine plus any word or words you can find a surprising amount of
information. For example when you type in McIlvaine IIoT and Remote O&M you get
pages of links to our Insights, but also access to YouTube webinars on IIoT for
air pollution control, wastewater, ultrapure water, etc.
Adding company provides additional focus. If you type in McIlvaine Company Weir,
you get two pages of links identifying Weir rankings in pumps, valves, and
activities in flue gas desulfurization.
McIlvaine believes that IIoT will make a huge impact on the world but only if it
is empowered by IIoW (Wisdom). The Global Decisions Orchard provides examples of
a structure for improving wisdom Free News and Analyses in the Global Decisions
Orchard
The McIlvaine market reports, databases, people directories, and decision
systems are all part of the IIOW fabric. The McIlvaine IIoT and Remote O&M is
the thread to strengthen the fabric.
• MARKETS
• DATABASES
• PEOPLE
• OTHER
• DECISIONS
• LINKEDIN GROUPS
Water Treatment Chemical Companies will play a Leading Rolein IIoT and Remote
O&M
Water treatment chemicals (WTC) companies presently derive substantial profit
from their process knowledge. This asset will be leveraged in the new world of
IIoT to create double digit profit growth for those who seize the opportunity.
The profit increase will include:
. Higher margins per pound of chemicals sold
. Broader sales penetration
. Global sourcing opportunities
. Feedback leading to faster product development and more profitable products
. Ancillary IIoT related products and services
. Reduced travel and sales expense
Water treatment chemicals companies have traditionally been selling a
combination of knowledge and product. Sales engineers have fulfilled a service
and advisory role. The value added has been process knowledge and the ability to
provide the right mix of chemicals.
Treatment chemical companies are already providing remote monitoring services.
Nalco has installed more than 1000 3D TRASAR boiler automation systems supported
by Nalco 360T Service, to provide 24/7 monitoring for boiler systems.
Solenis has its OnGuard Controller System also supported by 24/7 remote
monitoring.
GE TrueSense directly measures all three primary chemistries used in cooling
water treatment and interfaces with InSight, GE's cloud-based knowledge
management solution.
Kemira SMART chemical treatment of sludge enables the optimization of chemical
consumption but also delivers the best dewatering performance. This requires
knowledge of the different operational characteristics of centrifuges and belt
presses.
Ancillary IIoT Related Products and Services
IIoT and Remote O&M is much more than just optimization of treatment chemical
use. It is optimization of the entire process. Top management is recognizing
this opportunity. Danaher has embraced IIoT with the strategy of embedding its
equipment with sensors with the expectation of increased consumables sales
opportunities.
Danaher now owns Pall, Hach and Chemtreat. In the future Hach sensors can be
sending data to remote control centers operated by Pall, Hach, and Chemtreat.
This will supplement data on the plant which will be supplied by other vendors.
The plant and third party O&M providers will be viewing all the remote input.
The cloud-based system will provide the details which will allow decisions on
whether to replace a Pall filter element or just change the Chemtreat chemical
dosage to reduce the scale.
The enthusiastic proponents of IIoT tend to downplay the importance of what they
call "subject matter expertise". McIlvaine thinks that IIoW (Industrial Internet
of Wisdom) is even more important than IIoT. In fact, the potential should be
viewed in terms of IIoW empowered IIoT. The decision to change chemicals or
replace a filter element must be made somewhere. If the filter is purifying
condensate in a gas turbine combined-cycle plant, one needs to know how often
the unit is cycling and also the condition of the boiler tubes. Many plants are
upgrading filters due to contamination from ambient air through air cooled
condensers.
It can be argued that the water treatment chemicals division has the process
knowledge base to take the lead. In any case those companies with niche experts
who understand the processes and the relationship of the product to the process
efficiency will be the ones in demand.
Challenges and Threats
Need for Internal Interconnection
In order to maximize the potential, WTC companies will need to copy the Buckman
example. Process knowledge must be cultivated. Buckman Laboratories led the way
in the 1990s with the bestselling book "Building a Knowledge Driven
Organization". Sales people posted questions into a company intranet system. The
priority of personnel from top management down was to provide answers. Twenty
years later this effort can be made much easier and better with IIoW. The scope
of each niche expert should become smaller as knowledge expands. This means
adding 8 percent more niche experts each year after the base of thousands of
experts is developed.
Need to Interconnect with Process and Component Suppliers
The potential importance of this interconnection was demonstrated at Municipal
Flow and Treatment GdPS at WEFTEC.
Competition
The treatment chemical companies are potentially facing some pretty stiff
competition. Let's says Accenture or Genpact supplies complete digital process
management and strategic sourcing systems for all the BHE facilities comprising
7 percent of U.S power generation and gas transmission. Basic chemicals could be
purchased and mixed for all the plants. Genpact is already supplying process
management for several Duke wind facilities. If Genpact was contracted with AEP,
Duke and BHE it would be purchasing 25 percent of the U.S. power plant water
treatment chemicals.
The large strategic procurement firms are making a practice of hiring experts
from industry. Seven percent of the knowledge workers retire or change jobs each
year. However, their expertise is higher than average. As a result, 15 percent
of the industry knowledge is in play each year. A treatment chemicals company
can have a knowledge advantage today but lose it tomorrow. On the other hand, a
company which adopts a robust IIoW program is not dependent on the knowledge of
the few and makes superior decisions with the niche expertise of the many.
The system suppliers are either customers or competitors. MHPS has remote
control centers in the Philippines and Orlando providing support for power plant
rotating equipment. A sister company, Mitsubishi Electric is in water treatment.
The transition to becoming a strategic procurement source is a goal that many
system companies have selected. IIoT and Remote O&M is a springboard to this
goal.
Specific Opportunities
IIoT and Remote O&M can be viewed in terms of a pyramid of bits of data.
But in terms of profitability wisdom and knowledge will be even more important
than the information and data. WTC companies can leverage this in their core WTC
and non-core businesses to add revenues of $30 billion in 2025.
Water Treatment Chemical IIoW Empowered IIoT Opportunity
Category 2025 Revenue
($ billions)
Percent
Conventional Treatment Chemical Revenue 39 2.8
IIoT Supplemental Opportunity 30 2.2
Sub Total 69 5
Total Specialty Chemical 1400 100
The $69 billion is only 5 percent of the specialty chemical opportunity. For
companies such as Suez the larger opportunity is measured in tens of billions of
dollars. In the McIlvaine IIoT and wastewater webinar the power of the
combination of GE Water with Suez remote monitoring and operation of water and
wastewater treatment facilities was demonstrated.
BASF has an opportunity even larger than that of Suez. In the broadest sense, it
is investing heavily in sustainability. As a result, BASF can offer clients
improved "sustainability" and not just higher profits. (McIlvaine has developed
a simple metric to measure sustainability based on individual life quality
impacts (Sustainability Universal Rating System). BASF can leverage its IIoT
efforts in its manufacturing plants with its WTC IIoT efforts.
The core market includes chemicals to treat water, wastewater, steam and
slurries. Here is the current market.
WTC Market - $ Millions
Subject 2017
Total 27,585
Activated Carbon 772
Chelants 663
Corrosion Inhibitors 6,111
Defoamers 608
Inorganic Flocculants 3,459
Ion Exchange 903
Odor Control 956
Organic Flocculants 4,497
Other 1,389
Oxidizers & Biocides 2,993
pH Adjusters 1,486
Scale Inhibitors 3,748
Pulp and paper making is a unique market for many treatment companies. Water
treatment chemicals are part of a larger category labelled specialty chemicals
or performance chemicals. The market for this broader category is $1 trillion
per year. Large players include Dow Chemical, BASF, Bayer, INEOS Group and
DuPont.
The major markets for specialty chemicals are:
. Agrochemicals
. Polymers & Plastic Additives
. Construction Chemicals
. Electronic Chemicals
. Cleaning Chemicals
. Surfactants
. Lubricants & Oilfield Chemicals
. Specialty Coatings
. Paper & Textile Chemicals
. Food Additives
. Adhesives & Sealants
The IIoT and Remote O&M market for these major chemical companies is huge. This
effort can be combined with the IIoT efforts at their manufacturing plants. BASF
has taken a further step and offers industrial wastewater treatment as a service
in an area surrounding one of its German plants.
For more information on:
• N026 Water and Wastewater Treatment Chemicals: World Market
• N031 Industrial IOT and Remote O&M
Bob McIlvaine
President
847-784-0012 ext. 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com