DAC 2021_12

n NEWS November/December 2021 www.drivesncontrols.com 8 THE ELECTRIC MOTORS and mechanical power transmission manufacturer Regal Beloit has completed its merger with Rexnord Process and Motion Control (PMC) to create a new business, Regal Rexnord Corporation. The combined business, employing about 29,000 people and with manufacturing facilities on five continents, is predicted to generate revenues of around $5bn in 2022, with an adjusted Ebitda of more than $1bn. The merger is expected to generate synergies worth at least $120m over the coming three years. The planned merger was announced in February this year. The new company will have four business segments: Motion Control Solutions; Climate Solutions; Commercial Systems; and Industrial Systems. Its headquarters will be in Milwaukee, Wisconsin, but it will keep a strong presence in in Florence, Kentucky. Global subsidiaries such as Regal Beloit America and Rexnord Industries will not change their names at this time. Regal Rexnord will offer customers an expanded range of products spanning the industrial powertrain. It brings together brands from both Regal and Rexnord PMC, including Regal’s Browning, Grove Gear, Hub City, Jaure, Kop-Flex, McGill, ModSort, Sealmaster and System Plast, and PMC’s Berg, Cambridge, Centa, Falk, Rexnord and Stearns. As well as hardware, Regal Rexnord will offer IIoT (Industrial Internet of Things) and digital technologies that combine Regal’s Perceptiv and Rexnord’s DiRXN platforms. Regal Rexnord says that while the benefits from the merger may initially may be more pronounced in the power transmission business, it expects all of its customers to benefit over time. The merger will create a more balanced portfolio with mechanical power transmission products accounting for nearly half of its future sales – twice as much as before. At the same time, motors will drop from 55% of sales to around 38%. www.regalrexnord.com/regal-rexnord- integration www.regalrexnord.com Rexnord’s merger with Regal creates a $5bn giant GLOBAL SALES OF low-voltage AC drives fell by about 8.9% during 2020, with the EMEA region being hit hardest with sales plummeting by 17.8%, according to new data from Interact Analysis. The Americas experienced a 11.9% contraction, but in the Asia-Pacific region sales actually grew by 1.1%, driven by the Chinese economy which expanded despite the pandemic. But Interact now expects global revenues for LV drives to overtake pre-pandemic levels as soon as 2022. It predicts that the global market will grow with a CAGR of 4.8% between 2020 and 2025. The first half of 2021 saw a significant increase in order volumes for LV drives – by up to 20-30% in some cases. Most of these orders were for delivery in the second half of the year, indicating that there has been significant stockpiling. Interact therefore expects the high rate of orders to level off, and predicts that global sales of LV drives will expand by 7.7% for the whole of 2021 – similar to the expected growth rate for global manufacturing as a whole. Blake Griffin, a senior analyst with Interact, points out that the performance of the LV drives market is tied closely to global manufacturing output. In “normal” economic crises, manufacturing tends to suffer a sharp contraction, followed by a strong rebound, before plateauing. But the Covid-19 crisis has been different, with the slow vaccine uptake, labour shortages and supply chain disruptions coming together to result in a much slower recovery in the manufacturing sector – and therefore in the LV drives market – than might have been expected. Turning to prices, Griffin says that historically, drives prices have fallen steadily by about 1–2% per year as a result of fierce competition among vendors and the fact that Chinese customers have developed a taste for less-functional, lower-cost drives. In 2019-2020, prices stayed flat, with the average selling price for a drive being $543.60. But since then there has been an uptick in pricing, with global prices rising nearly 2.5% during 2021, lifting the average selling price to $556.60. This rise has been driven by the shortage of semiconductors, and is likely to remain at that level. There are also two other price drivers – the shortage of raw materials and high shipping costs. As a result, gradual price erosion will not resume until 2024 at the earliest, Interact predicts. EMEA LV AC drives sales fell by 17.8% in 2020, but global sales are set to rebound by 2022 The gobal market or LV AC drives by regions, showing revenues (in $1,000) on left-hand axis and growth (%) on right-hand axis.The Asia-Pacific region survived the Covid pandemic well, while EMEA and the Americas saw significant dips in revenues. Interact expects a steady recovery, not a V-shaped bounce-back. Source: Interact