ADT 2002 Annual Report Download - page 9

The security business in North America is highly competitive, with a number of major firms and
some 12,000 smaller regional and local companies. Similarly, Tyco competes with several national
companies and several thousand regional and local companies in Europe, the Middle East, the
Asia-Pacific region, Latin America and South Africa. Competition is based primarily on price in
relation to quality of service. We believe that the quality of our electronic security services is higher
than that of many of our competitors and, therefore, our prices may be higher than those charged by
our competitors.
Fire Protection Contracting and Services
We design, fabricate, install and service automatic fire sprinkler systems, fire alarm and detection
systems and special hazard suppression systems in buildings and industrial plants, as well as respiratory
systems and other life-saving devices. Tyco’s fire protection businesses utilize a worldwide network of
sales offices, operating globally under various trade names including SimplexGrinnell, Wormald,
Mather & Platt, Total Walther, O’Donnell Griffin, Dong Bang, Zettler, Ansul, Scott and Tyco.
We install fire protection systems in both new and existing structures. Our fire protection systems
are purchased by owners, architects, construction engineers and mechanical or general contractors. In
recent years, the retrofitting of existing buildings has grown as a result of legislation mandating the
installation of fire protection systems, especially in hotels, healthcare facilities, educational
establishments and other buildings accessible to the general public. We continue to focus on system
maintenance and inspection, which have become more significant parts of our business.
The majority of the fire suppression systems installed by Tyco are water-based. However, we are
also the world’s leading provider of custom designed special hazard fire protection systems which
incorporate specialized extinguishing agents such as foams, dry chemicals and gases. These are often
especially suited to fire protection in certain manufacturing, power generation, petrochemical, offshore
oil exploration, transportation, telecommunications, mining and marine applications.
In Australia, New Zealand and Asia, Tyco engages in the installation of electrical equipment in
new and existing structures and provides specialized electrical contracting services, including
applications for railroad and bridge construction, primarily through its O’Donnell Griffin division.
The majority of the mechanical components (and, in North America, a high proportion of the
pipe) used in our fire protection systems are manufactured by Tyco’s Engineered Products and Services
division. We use computer-aided-design technology that reduces the time required to design systems for
specific applications and coordinates the fabrication and delivery of system components. We also have
fabrication plants worldwide that cut, thread and weld pipe, which is then shipped with other
prefabricated components to job sites for installation.
Our Ansul subsidiary manufactures and sells various lines of dry chemical, liquid and gaseous
portable fire extinguishers and related products for industrial, government, commercial and consumer
applications. Ansul also manufactures and sells special hazard fire suppression systems designed for use
in restaurants, marine applications, mining applications, the petrochemical industry and confined
industrial and commercial spaces housing electronic and other delicate equipment. Ansul also
manufactures spill control products designed to absorb, neutralize and solidify spills of hazardous
materials.
Competition in the fire protection contracting business varies by region. In North America, Tyco
competes with hundreds of smaller contractors on a regional or local basis for the installation of fire
protection, alarm and detection systems. In Europe, Tyco competes with many regional or local
contractors on a country-by-country basis. In Australia, New Zealand and Asia, we compete with a few
large fire protection contractors, as well as with many smaller regional or local companies. Tyco
competes for fire protection systems contracts primarily on the basis of price, service and quality.
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