Step inside Himoinsa's automated production plants

How has automation helped Himoinsa produce its latest hybrid genset?

ANALYSIS, PMV, Automated production plants

PMV travels to Spain to take a look at some of Himoinsa’s manufacturing plants, and to find out how automated production processes have enabled the manufacturer to produce a hybrid generator tailored for the Middle East’s telecoms sector

It’s fair to say that Himoinsa is still a relatively young player within the context of the global portable power market. At just 32 years of age, the Spanish manufacturer of generator sets and light towers cannot yet boast the long lineages enjoyed by its largest rivals. However, this isn’t to say that Himoinsa lacks experience. The company might still be in its youth, but it has achieved a great deal during the last three decades.

Founded in 1982 by Francisco Gracia, the firm has expanded from its hometown of Murcia, Spain, to encompass 10 subsidiaries across five continents, eight production plants across four continents, more than 1,000 employees, and an annual revenue of around $300mn. But why? And, more importantly, how?

To find out, PMV journeyed north to the Iberian Peninsula to take a look around some of the firm’s domestic production plants, and to quiz its senior management team about this steep growth trajectory.

When journalists enquire about market success, typical responses tend to refer to there being no simple answers, silver bullets, or sure-fire solutions. Refreshingly, this was not the case with Himoinsa.

We were told – in no uncertain terms – that there have been three primary drivers behind the genset firm’s growth. Himoinsa has succeeded because it has remained a family-run, vertically integrated manufacturer, with a strong commitment to automated production facilities.

Let’s start with the latter: Himoinsa’s robotic arm, if you will. During the course of our visit to Murcia, we were shown a selection of plants geared up for both manufacturing and assembly.

The company has by no means turned its back on conventional, human expertise, but the tools that its employees use to create Himoinsa products have a distinctly robotic flavour. Plate-handling punch presses, robotised bending and welding arms, water-jet Rockwool cutters, and magnetically guided materials carriers – or ‘rats’, as they are affectionately known – were just some of the autonomous gadgets in operation during the course of the tour.

Indeed, walking the lanes of Himoinsa’s production facilities was akin to reliving a scene from a 1980s science fiction movie, the difference being that robots are no longer the preserve of the silver screen. They are alive and kicking in Murcia.

This penchant for the automated, of course, has nothing to do with science fiction. The robotised nature of Himoinsa’s manufacturing facilities is the result of a conscious effort to engender consistent high quality across its product portfolio. The technologies being used in Spain are ubiquitous amongst the company’s global production plants, meaning that a generator set produced in China is guaranteed to be of exactly the same quality as one that leaves the production line in Brazil.

“Wherever the factory and whatever its purpose, we believe very much in automation,” explained Lydia Gracia, executive director of Himoinsa, and daughter of the company’s founding father.

“We don’t believe that we would be able to produce the highest quality products with non-automated processes,” she added.

Whether production, storage, or distribution, you will find Himoinsa has integrated automated processes of some sort. However, the most impressive machines are primarily concerned with metal processing.

“As a vertically integrated manufacturer, Himoinsa processes all of its own metal,” explained Gracia.

“This is where most of our automatic processes have been implemented. They require a lot of machinery; lots of robots. We have had to purchase many machines in order to establish metal processing facilities that meet our requirements,” she explained.

This push towards automation has – for the most part – taken place during the course of the last 15 years.
Himoinsa began installing robots on its assembly lines back in 2000, and in its metal processing plants four years later. The automated setup that is in operation today is the product of more than a decade of heavy investment.

Costly though this strategy may have been – not only in financial terms, but also in relation to expertise and time – Gracia is happy with the result. The automated nature of Himoinsa’s production operations has been commercially beneficial for the manufacturer.

“One of the advantages we have gained from the automation of our systems is the speed of production,” commented Gracia.

“Our ability to produce top-quality products within short timeframes means that we don’t have to keep many units in stock. Instead, we have developed an inventory. We keep parts in stock for different markets and applications. It’s not necessary for us to have large stocks of finished products. We prefer to have all of the elements available in order to produce products according to the specific requirements of our customers,” she told PMV.

So what does Himoinsa mean when it says that it’s a vertically integrated manufacturer? Essentially, this refers to the fact that the company produces all of its own components – with the exception of the engines that power its generators and light towers.

“Being a vertically integrated manufacturer is vital to Himoinsa’s business model,” Guillermo Elum, sales and marketing director at Himoinsa, told PMV.

“It means that we can adapt our products to the requirements of our customers, and the typical operating conditions of particular markets. If you are not a vertically integrated manufacturer, you cannot do this,” he added.

Himoinsa clearly takes great pride in the fact that it produces its own components according to its own standards and requirements. From canopies, to alternators, to control panels – everything except for the engines is designed and produced in house.

However, as Gracia explained, the firm does not have sufficient capacity to build its own engines at this juncture in its evolution.

“At the present time, establishing an engine factory simply isn’t feasible, bearing in mind our current resources,” she said.

“To manufacture engines, you are talking about a huge investment. Prestigious companies like Scania, FPT Industrial, and Yanmar, have production capacities that reach hundreds of thousands of units per year. These are companies worth billions of dollars so they are equipped to make the necessary investments.

“An annual capacity of 60,000 units is not enough to justify an investment of this magnitude. It remains a dream, but it’s simply not possible for Himoinsa at this time,” she added.

Even so, as Gracia explained, the company goes to great pains to ensure that it procures engines from suppliers that pose no threat to its commercial autonomy.

“One thing for which we have constantly striven has been independence, both in terms of our products and our distribution network,” she explained.

“We have to grow as much as we are able; not as much as other companies allow us to grow. Our policy is to retain independence, and our engine procurement strategy reflects this,” added Gracia.

For now, engine production might lie beyond Himoinsa’s reach, but for a 32-year-old company to achieve a situation in which it produces all of its other components is no mean feat. Few other generator manufacturers could lay claim to such home-grown produce. This leads us to the third component that Himoinsa ascribes to its ongoing success; the fact that the company remains family owned and operated.

“Himoinsa is 100% family owned, and many members of our family are still involved in the business,” said Gracia.
“We’re now in the second generation of the business. The first generation think they are retired, but they are not. Nowadays, however, the second generation is primarily involved in the day-to-day running of the business.

“One of the benefits of this model is that the business can remain fast and flexible. We have the influence to positively affect projects. This market moves very quickly, so it is obviously advantageous to be able to make quick decisions. Also, we are a young company, but we are very much focused on investing resources back into the business – to make the business grow,” she added.

The executive director’s father, Francisco Gracia, certainly agrees with his daughter on this point. Moreover, despite Himoinsa’s rapid expansion, he sees no reason why the firm’s familial foundation cannot be retained for years to come.

When PMV questioned him on this point, the company’s founder said: “Why not? Why can’t we keep this model? Big organisations have boards of directors, and this is one way to manage a company. However, from our point of view, this model is very expensive and very slow. One of the positive things that we have been able to bring to the market is speed. This is something that we are still able to offer, and for us, time is very important.

“If Himoinsa were to lose its speed and flexibility, it would lose part of its strength. I think that if one day we do lose these attributes, it will be because the company has become too large. Even so, I also understand that this is the standard evolution of a successful company.

All businesses grow from small beginnings, but being a big company is different. It’s not the same to manage 1,000 people as it is to manage 10,000. This is something that we recognise, and for the moment, Himoinsa’s size remains one of the strengths of its business model,” he added.

The three facets that Himoinsa ascribes to its success are intricately connected to one another. The fact that the company is family owned means that decisions can be made quickly, and without the need to consult shareholders.

In turn, the vertically integrated nature of the manufacturer means that it has been able to retain its flexibility when responding to individual customer requirements. Finally, automated production ensures that the quality of Himoinsa products remains high and consistent, regardless of where in the world they are produced.

But what does this mean in real terms? Solid foundations aside, a manufacturer is nothing without products that stand out from the competition. As you’d expect, Himoinsa has an impressive – if short – history of innovation, and fortunately, the company has no intention of resting on its laurels.

During the course of the Murcia visit, Himoinsa unveiled a product that is the culmination of its aforementioned tenets; a variable speed, hybrid generator tailored to meet the needs of the Middle East’s telecommunications sector.

“Himoinsa’s hybrid unit is a combination of technologies,” explained Augustín Rodrigo, the firm’s network development manager.

“We’ve combined a variable speed genset with batteries and renewable energy sources. This combination means that the genset’s running time is minimised, resulting in reduced emissions and significantly lower operational costs,” he said.

By selecting a variable speed Yanmar engine with a range of 1,300 rpm to 3,000 rpm, Himoinsa has created a unit that can optimise its performance and fuel consumption according to the energy requirements at any one time.
Moreover, the batteries – which can be charged by either the genset or renewable energy sources – are able to provide power during low-load demand, negating the need for the diesel generator to run. The result: power product with a variable output of 5kW to 15kW.

Himoinsa’s vertically integrated industrial model really shines through with this machine. Barring the Yanmar engine, all of the unit’s components – from the control system, to the canopy, to the alternator – have been designed and manufactured using the firm’s automated production facilities.

“The hybrid’s electronics are 100% Himoinsa,” commented Rodrigo.

“We use a single CEM7V control unit to oversee all of the hybrid’s components. This one controller is able to adjust the rpm of the engine according to the load, optimally charge the batteries, monitor the unit’s temperature levels, and much more.

“By connecting the hybrid to a renewable energy source – be it wind or solar – users are able to minimise dependence on the diesel genset and maximise fuel economy,” he added.

The benefits of this variable speed, hybrid genset are manifold. First and foremost, fuel consumption is slashed. However, this also precipitates a number of advantageous side effects.

For example, not only does Himoinsa’s hybrid boast 500-hour maintenance intervals, but a unit fitted with the optional 1,000L fuel tank – 500L being the standard format – can power a modern telecoms repeater for a month without the need for refuelling. And that’s assuming that the operator hasn’t connected the hybrid to a renewable energy source.

The potential applications of this product are clear to see, especially in the Middle East and North Africa (MENA) region, where repeaters are often situated at remote locations. If a telecoms provider chooses to power its repeaters with Himoinsa’s hybrid units, its fuel, maintenance, logistics, and labour costs will fall significantly, compared to conventional off-grid generation methods.

“Operational costs are one of the most important considerations for telecoms companies,” explained Rodrigo.
“Here, we are speaking not only about fuel consumption. Providers have to send their employees out to these very remote areas, so the fewer times that this is necessary, the better.

“One of Himoinsa’s variable speed hybrid units will cost approximately two-and-a-half times more than a conventional genset, but you will recover those costs in as little as two years if you make use of renewable energy sources,” he concluded.

As it’s new to the market, Himoinsa’s hybrid has yet to prove itself in the field. However, Rodrigo and his colleagues seemed supremely confident that their variable speed power source could dramatically improve the bottom lines of end users in the telecoms sector.

What’s more, it’s the company’s business model that has made the development of this model possible. If Himoinsa wasn’t a family owned company, the production of the hybrid might never have been approved. If it wasn’t a vertically integrated manufacturer, it might not have been able to procure components of sufficient quality to build such a generator. And if the firm hadn’t spent the last 15 years investing in automation, it might never have had the production capabilities required to realise such a concept.

The hybrid represents an affirmation of the company’s governing philosophy. If it succeeds in the market, it will be proof that the firm has been wise to resist the temptation to invite third-party, non-industrial funds.

So, will the hybrid help Himoinsa to continue its success over the coming three decades? In the words of the company’s founding father, why not?

Regional focus: Middle East
Himoinsa is currently ringing in its second decade in the Middle East with buoyant a positive outlook for growth. Although the firm’s 2014 turnover has not yet been published, it anticipates sales volumes similar to those achieved in 2013 – which, in turn, were 25% higher than those of 2012.

In conjunction with its primary regional partner, FAMCO, the Spanish manufacturer has succeeded in securing a number of high-profile orders of late, including the supply of 36 gensets for the Haramain High Speed Rail Project. The partners have also enjoyed significant success in the light tower segment.

“FAMCO – as our main partner in the Middle East – is Himoinsa’s number-one dealer in the world for light towers,” said Guillermo Elum, sales and marketing director at Himoinsa.

“In fact, I believe that FAMCO has achieved a market-leading position for lighting towers in the region,” he added.

Since establishing Himoinsa Middle East in 2004, the partners have delivered approximately 4,000 generator sets and lighting towers to the region. The Middle East now accounts for 10% of the Himoinsa’s global sales, and according to Keith Webb, general manager of Himoinsa Middle East, there is much more to come.

“This year, we’ve opened a warehouse in the UAE to supplement our existing office,” he told PMV.

“We’ve also doubled our local workforce. In conjunction with FAMCO, we’ll be launching a number of initiatives during the coming year, including conferences and seminars with key consultants in the UAE and Qatar, and several product and facilities launches across Saudi Arabia,” Webb revealed.

Global generation
After only 32 years in business, Himoinsa boasts 10 subsidiaries, with branches in the UAE, Mexico, Panama, Argentina, Portugal, Poland, Germany, Singapore, Angola, and the United Kingdom.

What’s more, the firm has significantly expanded its global manufacturing operations during the past 25 years, with production plants in Spain, China, the United States, France, Brazil, and India. At present, Himoinsa boasts an annual production capacity of 60,000 gensets and light towers.

Last year, the firm supplied units for a 25MW power plant in Angola, provided 500 gensets for the Belarusian Railway, sold bespoke models to the French Air Force, and agreed to deliver generators to power 28km of infrastructure along the bridge that joins Saudi Arabia with Bahrain.

This level of activity has only been possible due to the family run, self-sufficient nature of Himoinsa’s business model, according to Elum.

“One of the most important things to note is that Himoinsa is a vertically integrated manufacturer,” he explained.
“As you are aware, this is rare. Even the major genset manufacturers purchase canopies and then assemble their units. Here, however, it is totally different. With the exception of engines, Himoinsa produces all of its own components. This means that we are able to adjust our products very quickly.

“As such, we have been able to grow quickly. This, for us, has been the real resource behind our success. Himoinsa is only 32 years old. To establish a presence in more than 100 countries; there must be something behind that. The key factor has been our position as a vertically integrated manufacturer,” concluded Elum.

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