Rotork plc

Rotork House
Brassmill Lane
Bath, Avon BA1 3JQ
United Kingdom
Telephone: ( + 44) 1225-733-200
Fax: ( + 44) 1225-733-381
Web site: http://www.rotork.com

Public Company
Incorporated: 1968 as Rotork Controls plc
Employees: 1,021
Sales: £107.88 million ($161 million)(2000)
Stock Exchanges: London
Ticker Symbol: ROR
NAIC: 333995 Fluid Power Cylinder and Actuator Manufacturing

Rotork plc is the world’s leading manufacturer of valve actuators—devices that provide remote control of valves for pipelines and other systems. The company’s products combine electronic control capabilities with mechanical, hydraulic, pneumatic, and other systems to provide on-off and graduated control of typically fluid flow systems. The company also manufacturers companion process control systems and components, but actuators remain its primary product, accounting for nearly all of its £108 million in revenues. Based in Bath, England, Rotork has long been active internationally, with manufacturing facilities, service and sales centers, and other subsidiaries located in the United States, Canada, Venezuela, Japan, Singapore, China and Malaysia, Australia, France, Germany, and elsewhere. Approximately half of the company’s sales are achieved outside of the United Kingdom. The company’s principal market has long been the oil and gas industry; since the late 1990s the company has sought to protect itself from that industry’s cycles by stepping up its activity in other industries, notably in the water and wastewater sector, power generation industry, and pulp and paper industry. Rotork is traded on the London Stock Exchange and is led by CEO William H. Whiteley.

Specialization and Innovation in the 1950s and 1960s

Rotork operated as a small electrical and mechanical engineering workshop in Bristol, England, during the mid-1940s, when it was acquired by the Frenchay Products Group, owned by the Fry brothers, David and Jeremy. Under Frenchay, the Rotork company was given the task of developing valve motorization devices, a more or less undeveloped market at the time. Yet Rotork soon came under the wing of Jeremy Fry himself, who saw the potential in building a company focused on valve actuators. Rotork was reformed as a separate company, Rotork Engineering Company Ltd., and began buying and motorizing valves in the early 1950s. Soon after the company began designing its own valve actuators, and in 1952 released the first design featuring the Rotork name. In 1957, Fry brought Rotork to new quarters, a workshop established in his own home. The company continued to operated primarily on the research and design side, contracting out for its manufacturing requirements.

Fry’s intuition was quickly validated. The massive increase in demand for oil products in the postwar era, stemming not only from a dramatic increase in automobile use but also in the rebuilding and modernization of Europe’s industry, had created a vast new market for actuators. Rotork’s steady innovation, including the development of flameproof actuators in the mid-1950s, gave it an edge on competitors and the company was soon winning large-scale orders from such petroleum industry heavyweights as BP and Shell.

The nature of Rotork’s products made it an international company from the start as it sought out customers in the world’s major port cities. The company established its first foreign sales agent in 1958, in Australia. By then, it was producing nearly 600 actuators per year, not only from oil companies but from a growing number of valve manufacturers. The company now began to take on its own production needs, establishing a manufacturing facility in an old mill.

Rotork achieved a breakthrough in 1960 when it introduced an O ring seal that enabled the company to produce its first environmentally sealed actuators. Another breakthrough at the time was a simplified switching mechanism, dubbed the Syncroset. These innovations were incorporated into Rotork’s new A range of Syncroset actuators, which was to remain the company’s core product line for many years.

By 1962, orders for the A range forced the company to expand its manufacturing capability, and the company built a new plant, in Bath, which quickly became Rotork’s headquarters site as well. By then, the company had entered the European continent, drumming up sales in Germany and France. One of the company’s largest-ever orders came from France, where the government’s Atomic Energy Authority placed an order for 1,000 actuators for a new uranium isotope production plant. This order led the company toward setting up a dedicated service facility in that country.

The next major step in Rotork’s actuator design was the introduction of the Syncropak in 1964. This design built on the company’s O ring seal—which protected components from harsh environmental condition—to feature integrated starter and control systems. With reduced installation and operation costs, as well as greater reliability and control, the Syncropak became the company’s next big seller. By 1966, Rotork’s production had ramped up to 4,000 units per year, and by the end of the decade had topped 6,000 devices per year, more than half of which featured Rotork’s Syncropak technology.

Rotork continued to eye international expansion in the late 1960s. The company found a manufacturing partner in Japan, then in the midst of a industrial boom. Rotork also began to eye entry into the highly lucrative U.S. market, the site of much of the world’s oil and petroleum industry. In 1968, the company opened its first United States, Rotork Inc., in New York. In order to finance its expansion in the United States, Rotork went public in 1968, listing on the London stock exchange as Rotork Controls Ltd. The successful stock offering gave the company an initial value of more than £2 million. The majority of Rotork’s shares remained controlled, however, by Jeremy Fry.

Growth in the 1970s; Microelectronics in the 1980s

The company’s steady growth had led it to add new manufacturing space at its Bath facility. By 1970, that plant had doubled its original size—by 1975 the facility had grown again by another 50 percent. Meanwhile, Rotork was adding manufacturing capacity elsewhere, especially in the United States, where it opened a dedicated facility in Maryland in 1970. At the same time, Rotork offered the next step in its actuator design, releasing a double-sealed actuator that provided superior environmental protection.

The company faced new problems during the 1970s, however, as the number of its competitors—many of which were now imitating Rotork’s own designs—sprang up, offering lower priced but lower quality products. Rotork’s own commitment to quality, highlighted by its quality assurance program called Controlled Manufacturing System, helped win approval for use of its actuators in the nuclear power program in the United States. Meanwhile, despite unrest at home and a gloomy economic climate, Rotork continued to book increases in orders. By 1974, the company had reached an annual production of 13,000 units, building up its actuator sales to more than £5 million per year. Nonetheless, the economic turmoil of the second half of the decade, notably within the company’s core petroleum market, hit the company hard and Rotork struggled to stay profitable.

In 1977, the company entered a new market, quickly industrializing India, where it entered a joint-venture manufacturing agreement. Two years later, Rotork opened a manufacturing subsidiary in Germany. The company was also expanding its actuator range to include smaller, lower-cost and lower-margin electrical actuators. They then added large-scale electrical actuators and a series of partial-turn actuators, enabling it to extend its product range to include nearly the entire spectrum of actuator demand.

Despite continued difficulties in a number of its markets in the early 1980s—including the accident at Three Mile Island which placed a pall of the nuclear power industry in the United States—Rotork continued to record steady increases in product orders. Part of this increase came in the company’s continued international expansion. In 1983, the company entered a number of new markets, including Spain and Singapore. The following year, it opened a subsidiary in Saudi Arabia, marking its presence in 11 countries.

In 1984, however, Rotork achieved a new breakthrough. The launch of the newest A range actuator, the 1600 Series, introduced the company’s first product incorporating solid-state electronics as part of its control systems. The success of the 1600 Series encouraged the company to abandon its attempt to cover the lower-end of the market and instead concentrate its efforts on developing high-end and high-margin lines. By the end of 1984, nearly half of all new orders were for the solid state 1600 Series. That year, Jeremy Fry retired, having built Rotork into a business producing revenues of £21 million per year.

Rotork had been developing its own dedicated control systems for its valve actuators, a process which was speeded up in 1985 with the acquisition of a company specializing in instrumentation and control systems. By 1986, Rotork was ready to launch its latest product, Pakscan, which offered microprocessor-based control over multiple actuator arrays. Pakscan quickly became one of Rotork’s principal products, generating roughly a quarter of its sales. Other new products turned out during the 1980s were the AQ quarter-turn actuator, which was followed up the by smaller Q range, both of which incorporated electronic control technology.

Company Perspectives:

Rotork designs, manufactures, and markets actuators and related products. The company is an international business and enjoys an excellent reputation for its products. It has become the largest single supplier of heavy-duty valve actuators in the world and is a growing force in fluid power and manual gear operated actuation markets. Rotork’s success in these international markets is won by ensuring that its products and every aspect of its organization are of the finest quality and meet the highest environmental standards.

Boosting IQ for the Turn of the Century

During the 1980s, Rotork’s international expansion continued, now with an emphasis on the booming Asian Pacific region. The company established a dedicated subsidiary in Australia, replacing its former sales agent. The company’s Singapore office became the hub for Rotork’s expansion into Malaysia, Thailand, Indonesia, Hong Kong, and then later into China as well.

In 1992, Rotork achieved a new product breakthrough with the release of its new IQ range. This new product range represented a step forward in the integration of microprocessor technology, enabling the company to reduce the number mechanical components by more than half over the A range. The IQ actuators also featured such innovations as hand-held infrared setting tools, which enabled actuators to be commissioned from a distance and under otherwise hazardous conditions.

The IQ series represented the most significant event in Rotork’s history since the launch of the A range nearly three decades early. The new product line quickly asserted itself, establishing Rotork at the forefront of the world’s actuator technology and enabling Rotork to boost its sales past the £100 million mark by decade’s end. The IQ series gave the company a long head start on its competition, and it was not until later in the decade that Rotork began to meet serious competitive response.

In the meantime, Rotork moved to expand its operation a bit, in part to reduce its reliance on the petroleum industry by attracting more business from other sectors, especially the water and wastewater management industry and the power generation industry. As part of this effort, Rotork established a specialized Fluid Power Division, operating from manufacturing plants in Rochester, New York; Leeds, England; and Singapore in 1995.

In the late 1990s, Rotork took advantage of the strength of the British pound and the economic turmoil affecting Asia and South America to make a series of acquisitions in 1998 and 1999, including Exeeco Ltd., Alecto Valve Actuators (based in the Netherlands), and Fluid System Sri (based in Italy). The company was also building up its interests in gearboxes as it sought to extend its reach across a wider array of components touching its core actuator business, buying up Valvekits Group Ltd. in 1999. That year, the company’s sales topped £117 million. The following year, Rotork bundled its gear manufacturing business under a new division, Rotork Gears.

Rotork closed out the century with a number of developments, including the construction of a new manufacturing plant in Rochester, New York. The company also established its first wholly-owned subsidiary in China in 2000, as that market took on growing importance to the group. That year the company acquired the actuator division of Skil Controls Ltd., bringing the company a new line of Skilmatic actuators. This acquisition fit in with the company’s determination to extend its actuator expertise across a wider range of applications. Rotork continued to work toward this objective with the launch of a new line of electro-hydraulic actuators, the EH range. By the end of 2000, the company had successfully launched the latest generation of IQ actuators. Nonetheless, as many of its major markets slowed down in what was feared to be the start of a new global recession, Rotork’s sales slumped as well, dipping back to £108 million for the year.

Rotork bounced back at the beginning of 2002, announcing the acquisition of Jordan Controls, based in the United States. That company’s process control actuators, allowing control over both valve opening range and timing, fit in with Rotork’s ambition to establish itself as an across-the-board actuator supplier. Given the company’s long history at the forefront of actuator innovation, Rotork seemed certain to retain its leadership position well into the new century.

Principal Subsidiaries

Rotork Controls Ltd; Exeeco Ltd; Valvekits Ltd; Rotork Controls Inc. (United States); Rotork Controls (Canada) Ltd; Rotork Motorisation SA, (France); Rotork Controls (Italy) Sri; Rotork Fluid System Sri (Italy); Rotork Controls (Singapore) Pte Ltd,; Rotork Ltd, (Hong Kong); Rotork Japan Co Ltd; Rotork Controls (Germany) GmbH; Rotork Controls (Spain) SL; Rotork Controls (Singapore) Pte Ltd; Rotork Australia Pty Ltd; Rotork BV (Netherlands); Alecto Valve Actuators BV (Netherlands); Rotork Arabia Ltd (Saudi Arabia); Rotork Controls Ltd (India); Rotork-Controls de Venezuela SA; Rotork Ltd (Hong Kong); Rotork Controls Co, Ltd. (South Korea); Rotork Controls Ltd, (China); Shenzhen Sinopec-Rotork Actuation Co, Ltd, (China; 35%); Rotork Africa (Pty) Ltd (South Africa); Rotork (Thailand) Ltd; Rotork Sdn Bhd (Malaysia); Rotork Japan Co Ltd; Rotork Control & Safety Ltd; Rotork Inc (United States); Rotork Overseas Ltd; Graphics Interface Ltd. (25%).

Key Dates:

1945:

Rotork, a small mechanical and electrical engineering firm, is acquired by Frenchay Products, owned by David and Jeremy Fry.

1952:

Jeremy Fry orients Rotork toward the design of valve actuators, releasing the first Rotork-branded actuator.

1960:

Rotork develops an O ring seal and Syncroset.

1962:

The company builds a manufacturing facility and its headquarters in Bath, England.

1968:

Rotork goes public as Rotork Controls pic.

1970:

The company opens a manufacturing plant in the United States.

1984:

Rotork launches 1600 Series A range actuator, the first featuring solid state electronics.

1992:

The release of the IQ range represents the company’s biggest product breakthrough since the 1960s.

1999:

The company acquires Fluid System Sri, based in Italy, and the U.K. firm the Valvekits Group.

2002:

Rotork acquires the U.S. company Jordan Controls.

Principal Competitors

Asco Joucomatic Ltd; British Engines Ltd; Technologies Ltd; Crane Stockham Valve Ltd; Dairy Pipe Lines Ltd; PCX Manufacturing U.K. Ltd; Fisher-Rosemount Ltd; Goodwin International Ltd; Guest & Chrimes Ltd; Holdings Ltd; Hender Ltd; Hopkinsons Ltd; IMI Bailey Birkett Ltd; Kent Introl Ltd; Keystone Valve (UK) Ltd; Metso Automation Ltd; Reiss Engineering Ltd; Severn Glocon Group PLC; Engineering PLC; Truflo Marine Valves Ltd; Tyco Valves Ltd.

Further Reading

Anderson, Simon, “Shares Rise on Rotork’s Confident Forecasts,” Daily Telegraph, March 28, 1998.

Blackwell, David, “Rotork Acquires US Valves Group,” Financial Times, January 9, 2002.

Foley, Stephen, “Rotork,” Independent, August 9, 2001, p. 17.

Murray-West, Rosie, “Stay a Spell with Rotork’s Wizardry,” Daily Telegraph, August 9, 2001, p. 38.

Pickard, Jim, “Rotork Benefits from Recovery in Oil Industry,” Financial Times, August 9, 2001.

Rotork: 40 years in Control, UK: Rotork plc, 1997.

—M.L. Cohen