Cover story: Digital partner of choice

We are at the intersection of business and technology strategy, especially with the wave of digitalisation, including developments like artificial intelligence, Industry 4.0, big data, augmented reality, machine learning, drones, etc., says Per Erik Holsten, managing director, business unit for oil, gas and chemicals, industrial automation division, ABB, in an interview given to Martin Menachery.

Per Erik Holsten, managing director, business unit for oil, gas and chemicals, industrial automation division, ABB.
Per Erik Holsten, managing director, business unit for oil, gas and chemicals, industrial automation division, ABB.

ABB – the Swiss-Swedish technology front-runner creating the future of digitalisation in industry – holds a history spanning more than 130 years, operates in more than 100 countries and employs around 136,000 people. ABB’s operations are centred at a complete range of digitalisation, automation and electrical technologies.

With a heritage of more than four decades at the forefront of digital solutions, ABB is a pioneer in digitally connected and enabled industrial equipment and systems. Refining and petrochemicals industry units worldwide use the company’s solutions, equipment, systems and services for operational excellence.

Per Erik Holsten heads ABB’s business unit for oil, gas and chemicals in the industrial automation division as the managing director. Holsten started his career in ABB in 1986 as an engineer. He has an MBA in international business from the University of East London and studied engineering at South Trondelag University College in Norway.

The global downstream market is taking significant strides towards growth after a several-year period of low oil prices. With the dramatic price drop, petrochemical and refining operators are looking to increase efficiency and boost profit margins. Holsten is spearheading ABB’s drive to be the digital partner of choice for industrial players in the global downstream landscape.

“In most of our customer conversations recently, regardless whether it is with international oil companies, or national oil companies, we hear everybody trying to sharpen their strategies around digitalisation and automation and also the opportunities associated with them,” says Holsten.

We see a common pattern in the way they think about digital – all of them are talking about improving operations and supply chain, and going in for new business models. Many downstream companies now have dedicated innovation centres, or collaborative operation centres. All of a sudden, we see a very traditional industry gearing up to be innovative,” Holsten adds.

There is a massive impact of automation and digitalisation in the refining and petrochemical industry. It is advantageous to go for big data and use it for bringing in value. It is a transformation process. Most of the downstream companies ABB is working with are looking at optimisation of plant productivity. By collecting data, and using better data algorithms, it is possible to find potential problems in a refinery, or a petrochemical plant.

Better connected refineries and plants with accurate and timely information means companies are poised to take their performance and productivity to the next level of efficiency, safety and security.

ABB’s key digitalisation solutions

With a heritage of more than four decades at the forefront of digital technologies, ABB is a pioneer in digitally connected and enabled industrial equipment and systems. The company is on a journey to unlock productivity potentials for its customers through digital technologies.

“We are probing ever-new ways on how we can use technology advances to improve on cost, schedule and risk in projects. The core of this objective is our ‘Intelligent Projects’, where we see a potential to reduce both the capital and operational costs by 20% to 30%, compared to the conventional way of doing automation projects,” explains Holsten.

An important ingredient of ABB’s Intelligent Projects is a redundant Ethernet-based single channel I/O system called ‘Select I/O’ that the company has developed and is a technology which comes with great customer benefits. It provides efficiency improvement for automation projects, as well as faster start-ups while decreasing complexity, project delays and cost overruns.

‘ABB Ability System 800xA’ is another example that provides a secure way of connecting ABB’s customers to the opportunities of IIoT (Industrial Internet of Things) services and the expertise it offers. It sets the standard in automation engineering with the new technologies and methodology for faster and more cost-efficient project execution.

‘ABB Ability Collaborative Operations’ connects ABB’s customers in production facilities and headquarters with ABB experts around the globe and ultimately changes how they work together. Asset and operational information is collected and analysed 24/7 at ‘Collaborative Operations’ centres to identify, categorise and prioritise actions that help prevent failures and make the businesses of ABB’s customers more profitable.

On the sensor side, the developments ABB made in instrumentation and analytical areas are contributing to making better process data available in a real-time environment so that the operator gets a more informed perspective on where the process actually stands.

We spend almost $1.5bn on R&D every year. ‘ABB Ability’, our digital portfolio, is one of the prime focus areas for our R&D endeavours. It provides a full-range of digital solutions that help customers manage complexity. From equipment condition monitoring to full-fledged collaborative operations, ‘ABB Ability’ offers more than 280 tried and tested solutions across various industries,” Holsten claims.

The Middle East story

The uptake of new technology for downstream sector by customers in the Middle East is admirable. The region is ahead in the technology curve and is hungry for the implementation of the latest technology.

The best example to pick is Sadara Chemical Company, a joint venture developed by Saudi Aramco and Dow in October 2011. With an investment of over $20bn, Sadara is poised to change the game in the Middle East’s chemical industry. The complete automation and electrical system for Sadara was very complex, and was central to the success of the whole facility. ABB’s strengths in these areas led it being the Main Automation Contractor for the project.

“The region is certainly keen on taking on board new technologies when they make good business sense. It can be either a trend setter, or a trend follower but in general, we certainly see a willingness and a genuine appetite to use new technologies to improve outcomes, to give them more uptime, more production output, and better productivity. If you have the right technology that actually delivers the desired outcome, then customers are certainly very interested in it,” reveals Holsten.

“We are seeing a lot of growth here in the Middle East. For instance, SATORP, a joint venture between Saudi Aramco and Total, started shipments from its 400,000 barrels per day Jubail refinery in September 2016. This is just one of the three such massive facilities planned by the kingdom. Other Middle Eastern oil producing countries are also adding refining capacities, including the UAE, Kuwait and Oman.”

“The Middle East remains a strong focus for us. The region accounts for 20% to 25% of our global business volume. With a raft of international experiences to draw from, we feel that the region could benefit from technologies that have already proved successful elsewhere,” opines Holsten.

Challenges of digitalisation

Digitalisation, done well, allows chemical companies to get a highly realistic view of their assets which, when viewed in conjunction with data from more traditional business systems, can generate quicker and better insights to drive competitive advantage. It changes the way businesses are done, products are sold, services are enabled, and the interaction with customers.

“The main challenge for any company today is around the technology innovations in the consumer space. In the industrial space, people tend to be fairly loyal to their assets and they last a long time. Standing still, or doing nothing is not an option. So, as the digital wave progresses, we embrace it because it has become the new normal. It creates new opportunities and also new threats,” Holsten points out.

But to benefit significantly from the potential offered, companies will need to embrace digitalisation on a bigger, much more holistic scale encompassing end-to-end processes throughout plants and across the supply chain – not just in isolated pockets of change. Downstream companies must move quickly; otherwise, there is a risk of being surpassed by competitors who embrace the full potential of digitalisation to transform operations at the device, process, plant and enterprise level.


“The Middle East remains a strong focus for us. The region accounts for 20% to 25% of our global business volume. With a raft of international experiences to draw from, we feel that the region could benefit from technologies that have already proved successful elsewhere,” Says Per Erik Holsten, managing director, business unit for oil, gas and chemicals, industrial automation division, ABB.

Next level of efficiency, safety and security

The approach of downstream industry to digital transformation is evolutionary rather than revolutionary. However, developments in technologies such as the cloud, data management, big data and analytics are driving trends that have immense potential for refining and petrochemical sector.

“Better connected refineries and plants with accurate and timely information means companies are poised to take their performance and productivity to the next level of efficiency, safety and security. Increasingly, cost-effective digital technology facilitates improved monitoring, more collaborative and integrated operations and remote management to drive greater productivity at reduced costs and risks,” Holsten remarks.

Network-connected assets, when thoroughly integrated, can significantly improve risk, schedule and costs in new projects as well as brownfield sites. For example, ABB is working on providing a digital end-to-end solution to German chemical company BASF at their largest integrated site, which goes from wireless sensors up to advanced analytics and an enterprise dashboard for a fleet of                     rotating assets.

The solution aims to run complex fleet diagnostic algorithms to improve the overall fleet operation. This supports BASF operations to improve maintenance by detecting fault before failure, thereby offering an alternative solution to improve predictive maintenance.

A proven downstream track record

ABB has worked with many customers in the downstream sector, including global downstream companies like Yitai, Lanxess, Saudi Aramco, Dow, BASF, Arkema, Wacker Chemie, Trinseo, SABIC and Petrobras, and major EPC contractors like Petrofac, Technip and Saipem.

ABB collaborated with Trinseo to create CAFÉ software, which automates the process of creating MS Excel-based functional specifications for greenfield and migration projects. It uses a procedural automation-based control philosophy to turn functional specifications into control applications in the ‘ABB Ability System 800xA’.

In particular, it builds a reverse-engineered functional specification from the object-based legacy code. CAFÉ can be used to maintain code and provide updated design documents throughout the lifecycle of a plant going forward.

Arkema was looking to fix inefficiencies in its boiler operations at its Kentucky plant. The featured equipment was many decades old; ABB used a digital fingerprint analysis to examine the condition of hardware and controls, tested the stability and operation of site’s boilers, performed combustion load trials, and executed dynamic step response tests. This resulted in reduced OPEX savings for the plant through energy savings.

Wacker Chemie wanted to increase the operational efficiency of its 30-year old Bavarian ketene cracking plant in order to increase operational efficiency and move from planned and reactive maintenance to predictive interventions based on the actual state of the equipment.

“Using ‘ServicePort’ technology, remotely and onsite, to analyse Wacker’s complete automation system and control loops, ABB’s digital solution saved significant  analysis time, facilitating faster corrective action with less downtime risk and 20% OPEX savings,” mentions Holsten.

Journey of innovations spanning 75 years

The world of technology is evolving rapidly. Being successful requires a commitment to continuous innovation. Besides the numerous breakthroughs created in its own labs, ABB also pursues what is known as open innovation.

“We are scouting for, investing in, and forming partnerships with innovative start-up opportunities around the world, especially in the emerging fields in areas such as machine learning, distributed energy and intelligent buildings,” Holsten observes.

ABB Technology Ventures (ATV), the company’s strategic venture capital investment arm, is part of ABB’s R&D organisation. Headquartered in Switzerland and with offices in Silicon Valley and India, ATV identifies start-ups that have the potential to be leaders in their sector and thus drive strategic value for ABB. Once ATV has mapped out how the start-up can be beneficial to ABB, it will invest equity in the start-up, purchasing up to 20% of the company with investments ranging from $250,000 to $20mn.

Successful innovation integrates what is possible with what is necessary, thereby yielding the greatest business value. ABB focuses on identifying those needs, and transforming them into opportunities, especially in energy and other mission critical industries that want to work faster, and more flexibly, responsibly, and profitably like the oil, gas and chemical industry.

Modern production facilities must manage costs, ensure safety, maintain product quality and meet sustainability goals while also accommodating faster production rates, shorter product cycle times, unexpected changes in the market and special requests for product variants,” declares Holsten.

These challenges can be met by agile manufacturing, which is a production philosophy that concentrates on fast reaction to unpredictable and rapid changes in the product landscape by introducing better integration between business-level resource planning and local process controls.

‘ABB Ability Manufacturing Operations Management’ is a comprehensive, scalable and modular suite that enables manufacturing to become more responsive and adaptive by connecting the people, assets and systems involved in the production process.

It enables effective decision-making and reliable, lean production execution by fully integrated operations. ABB relies on ‘Manufacturing Operations Management’ to support lean and agile principles in more than 60 of its own manufacturing plants worldwide.

ABB can look back at 75 years of innovation in the field of continuous gas analysis – working to improve production efficiency and measurement performance. Introduced in 2017, ABB’s new ‘Magnos28’ paramagnetic oxygen analyser with its patent-pending microwing technology, is the all-in-one sensor device leveraging ABB’s technology leadership. It is the newest product in the palette of the ‘Advance Optima’ and ‘EasyLine’ continuous gas analyser series.

The ‘ABB Ability Smart Sensor’ is a ground-breaking product developed for monitoring and analysing condition parameters on rotating motors. The solution can reduce downtime by 70%, extend motor lifetime by up to 30%, and reduce energy consumption by up to 10%.

ABB was recently named #8 in Fortune magazine’s ‘Change the World’ rankings for the company’s efforts to speed up adoption of clean-energy electric transportation.


Asset and operational information is collected and analysed 24/7 at ‘Collaborative Operations’ centres to identify, categorise and prioritise actions that help prevent failures and make the businesses of ABB’s customers more profitable.

The digital road ahead

Automation done in the right way will further improve the uptime, productivity, energy efficiency and safety in process industries.

“At ABB, we have fully invested in improving automation excellence for our customers. In fact, ABB is set to invest $118mn in Austria to build a state-of-the-art innovation and training campus at the home of B&R Industrial Automation,” Holsten confirms.

“It is the largest organic investment in industrial automation in ABB’s more than 130-year history and lays the foundation for around 1,000 new high-tech jobs in Austria. The new innovation and training campus will develop technologies for the factory of the future, based on ‘ABB Ability’, in which production will be undertaken autonomously by smart and cloud-connected machines and robots,” testifies Holsten.

“I foresee a massive impact of automation and digitalisation in the refineries and petrochemical facilities by 2025. We will reach much further down the road in our technology development in terms of not only connecting systems but also running them in a collaborative way with an increasing degree of autonomy,” Holsten concludes.

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