Wednesday, February 22, 2012

Munich-based Siemens long-term growth strategy for Western Canada focused on Saskatchewan as plans for further expansion in the province move ahead

In November 2011, Munich, Germany-based Siemens, one of the largest and most diversified companies in the world operating in the energy and mining sectors, acquired Regina, Saskatchewan-based Prairie West Technical Services. Less than 4 months after acquiring Prairie West, Siemens annouced earlier this month they are aiming to expand the operation, which specializes in large electric motor repair and service for the mining and oil and gas industries in Saskatchewan.

“For us, it’s really the start of the investment,” said Michael Gross, senior vice-president, industry sector, Siemens Canada, referring to the German company’s decision to acquire Prairie West — its first major investment in Saskatchewan — rather than start from scratch.

“At the speed the economy in Saskatchewan is developing, it would have taken, from our point of view, way too long. That’s why we decided to go with an M&A (mergers and acquisitions) strategy and buy a company and grow that company.’’

With the acquisition completed in November, Gross and his staff have been working to make Prairie West and its 60 employees part of Siemens Canada, which has 4,000 employees and annual sales of $3 billion. “We’re in the process of integration,’’ Gross said in an phone interview from Siemens Canada headquarters in Toronto.

That integration process included a visit to the Prairie West facility in January by Ralf-Michael Franke, CEO of the drive technologies division, industry sector, of Munich-based Siemens AG. (Siemens, Europe’s largest electronics and electrical engineering firm, is divided into three sectors — industry, energy and health care. The industry sector has three divisions, one of which is drive technologies.)

While a small acquisition for Siemens, Prairie West, which has branch operations in Saskatoon and Sudbury, is an integral part of the company’s plans to expand into the mining and oil and gas sectors. “Prairie West is very strong in terms of potash mining ... Prairie West was, for us, the perfect target to have a significant entry into that market and form the nucleus to grow the business.”

Gross said mining and oil and gas development figure highly in Siemens Canada’s plans. “We’re defining a detailed strategy and growth plan for our vertical minerals (business) and one of the core areas is going to be Saskatchewan. We’ve already had the first discussions on how fast we can grow.’’

In fact, one of the challenges facing Siemens is going to be staffing its facilities as they gear up for expansion. “One of the (problems) here is how to get skilled labour. You might be willing to grow faster, but you just don’t get the people.’’

Siemens has already undertaken projects in Saskatchewan, In 2010 Nokia Siemens Networks was awarded a significant contract to upgrade SaskTel's 3G mobile phone infrastructure. Nokia Siemens Networks is based in Espoo, Finland.

In addition to being involved in the mining, oil and gas and IT sectors, Siemens is a global player in the renewable and conventional energy sectors. It is expected that in the future Siemens will make further moves into this area in Western Canada from their Saskatchewan base of operations.

Source: (in part) Leader Post, Bruce Johnstone

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