NSC: Industry Outlook Bright for 2012

During the industry's big meeting in Philadelphia, leaders in the PPE industry said they're doing well and are optimistic about business next year.

PHILADELPHIA -- Warm sunshine graced the final day of the expo at this year's National Safety Congress & Expo, giving the city a chance to shine before out-of-town exhibitors headed home. Leaders in the PPE industry who gathered here said their companies are doing well and are poised for growth next year -- a far cry from the caution dominating the past two years.

"The manufacturers' results -- the public ones we see -- are all positive," Mark Levy, president and CEO of Honeywell Life Safety (HLS), said in an Oct. 31 interview with OH&S. "There's growth in the market. And certainly the distributors that are pretty important in the industry, especially the U.S. ones that are important ... their results are really stronger than expected. They're really getting good results, which is good for everybody in the industry," he added.

Another positive sign mentioned by Levy and others who attended the A+A 2011 trade fair in Dusseldorf two week earlier was that its expo halls were packed with customers. (A+A is held in alternate years, so the previous trade fair had taken place in 2009.) "The Dusseldorf show was incredibly busy [and] energized," Levy said. "This year, the environment was different. You could tell that people were more flush with money. The exhibitors, the floor, the presentations were significantly upscaled. The important thing was, tons and tons of people showed up. This was really an important global event.

"This was our unveiling of the [HLS] business and the future state of the business. We had a two-story booth, and it was packed for four days," he said.

More than the global economy changed between 2009 and 2011. HLS now has several leading PPE brands as a result of its $1.4 billion acquisition of Sperian Protection and the earlier addition of Norcross, the parent company of North Safety. Asked how the Sperian integration is going at year one, Levy called it a "total success."

"No reservations at all," he continued. "Our expectations, we're meeting most but exceeding a lot. We have found that combining the two organizations -- Sperian had 6,000 people, so many people have joined us -- we've created this amazingly powerful organization and have picked the best people from both companies. Today we have an organization we couldn't be happier with and feel optimistic it'll be the future state [of HLS]."

International Investments
International markets, and particularly China, are increasingly important to U.S. PPE companies. Honeywell on Nov. 1 announced it had signed a definitive agreement to acquire King's Safetywear Limited, an international provider of protective footwear that is based in Singapore, for about $338 million. The purchase price is about 11.5 times KSW's estimated earnings before interest, taxes, depreciation, and amortization, according to Honeywell. The acquired company will be integrated into HLS. Bill Hayes, president of Honeywell Safety Products, said it now has 48 manufacturing sites, 16 R&D centers (including one in Shanghai), and 14 distribution centers and is number two in the Chinese market. "Going global is a big deal," he said. Other industry leaders making international acquisitions this year include Capital Safety Group, which acquired Uniline Safety Systems, a designer and manufacturer of engineered fall protection systems based in Worcestershire, United Kingdom. The company also has offices in Australia; Capital Safety will rebrand the Uniline products and some products of its own in 2012 into four lines: roofing systems, horizontal systems, vertical systems, and access systems.

Levy said Honeywell soon will release a new product for global customers that is now in testing at several trial sites. Named Safety Community, it will help users manage their PPE spending and contractor personnel while on site, he said. "This system often must be implemented through their IT departments. They want something seamless that will give them information, be affordable, and will elevate their level of ease of data gathering," he explained. "And find out what do we really spend, and where, and what's going on, and how do we train people?

"We haven't found anybody who says, 'That's really a bad idea.' The bigger the company, you know, the harder it is. We have had this entertained by some of the largest companies in the world; that's an audience that we can command, that is keenly interested in solutions -- not in, 'How much do these gloves cost?'"

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