ADT 2008 Annual Report Download - page 107

Flow Control
Our Flow Control segment designs, manufactures, sells and services valves, pipes, fittings, valve
automation and heat tracing products for the water and wastewater markets, the oil, gas and other
energy markets along with general process industries. The global flow control market is highly
fragmented, consisting of many local and regional companies and a few global competitors. We believe
we are the world’s leading manufacturer of flow control products. We believe our market share in the
global water, process, and energy-related markets is approximately 5%. With 2008 net revenue of
$4.4 billion, our Flow Control segment comprises 22% of our consolidated net revenue. In 2007 and
2006, net revenue totaled $3.8 billion or 20% of our consolidated net revenue and $3.2 billion or 18%
of our consolidated net revenue, respectively.
Strategy
We intend to further align with our customers’ needs by focusing our sales and marketing resources
along key vertical markets, including water and wastewater, oil and gas, food processing and general
industrial. We plan to continue expanding our product offerings through increased R&D investments in
developing technologies, as well as through selective acquisitions and partnerships. By continuing to
invest in our service and repair capabilities, we expect to capitalize on strong industry demand for parts
and after-market services in our recurring revenue business. We intend to leverage the breadth of our
product portfolio and our geographic capabilities to enhance our ability to meet customer requirements
for global projects. We intend to capitalize on growth opportunities in key emerging markets by
accelerating our investment in sales and marketing. We also intend to focus on improving profitability
through the optimization of our manufacturing footprint and product offerings.
Services and Products
Flow Control designs and manufactures a wide variety of valves, actuators, controls, pipes, fittings
and heat tracing products. Valve products include a broad range of industrial valves, including on-off
valves, safety relief valves and other specialty valves. Actuation products include pneumatic, hydraulic
and electric actuators. Control products include limit switches, solenoid valves, valve positioners,
network systems and accessories. For the water market, Flow Control offers a wide variety of pipes,
valves, hydrants, house connections and fittings for water transmission and distribution applications.
Flow Control is also a global provider of heat tracing services and products. In addition to these core
products, Flow Control makes a variety of specialty products for environmental (emissions monitoring,
water flow and quality monitoring, dust filter cleaning systems), instrumentation (manifolds, enclosures,
isolation valves) and other applications. We manufacture these products in facilities located throughout
the world.
Flow Control products are used in many applications including power generation, chemical,
petrochemical, oil and gas, water distribution, wastewater, pulp and paper, commercial irrigation,
mining, food and beverage, plumbing and HVAC. Flow Control also provides engineering, design,
inspection, maintenance and repair services for its valves and related products.
Flow Control products are sold under many trade names, including Anderson Greenwood, Biffi,
Crosby, Keystone, KTM, Raychem, Sempell, Tracer and Vanessa. Flow Control sells its services and
products in most geographic regions directly through its internal sales force and in some cases through
a network of independent distributors and manufacturers’ representatives.
Customers
Flow Control’s customers include businesses engaged in a wide range of industries, including power
generation, oil production and refining, chemical and petrochemical, pharmaceutical, food and
beverage, gas, water, marine and shipbuilding and related process industries. Customers include end
4 2008 Financials