ITT to Invest $11M for Pump Testing Capabilities Enhancement
ITT Inc. ITT recently announced its decision to invest around $11 million at three of its Industrial Process (IP) sites. Notably, the investment will boost the company’s pump testing capabilities at these sites, thereby supporting growth and capacity for large projects in its flow business.
ITT will make the proposed investments at its IP facilities, located in Obernkirchen, Germany, Dammam, Saudi Arabia and Vadodara, India. This will enrich the company’s power capacity in pump, motor and control systems testing, allowing it to test bigger and complicated pump packages locally. As noted, the investments will be completed in third-quarter 2024.
Post investments, the company’s Bornemann pumps site in Obernkirchen will be capable of replicating field conditions through complete unit multiphase fluid testing. The investments will also support the growth of its Goulds Pumps sites in Saudi Arabia and India.
Other Notable Investments
Management intends to become more competent on the back of innovation investments. It has been investing in product innovation across its friction technologies, connectors and pump businesses for a while. For instance, recently, ITT introduced connectors for applications in the energy storage systems market. In October 2023, it made significant investments in the testing facility of its Yellow Mountains site in Eastern China.
Also, in June 2023, the company made an initial investment of €50 million ($54.49 million) to expand a manufacturing facility in Termoli, Italy, and to enhance the research and development competence in Barge, Italy. With this investment, ITT boosted its position in the brake pad market for luxury and sporting vehicles.
Apart from expanding its state-of-the-art Friction R&D center, the company has also invested in the electric vehicles market. Also, the expansion of its manufacturing automation capabilities has been proving beneficial.
Existing Business Scenario
Strength in the end markets like industrial, aerospace and defense is driving ITT’s growth. The IP segment is benefiting from solid momentum in the aftermarket business, driven by robust demand for parts and services. A strong pipeline of awards in energy, mining and decarbonization projects, including a new contract with ExxonMobil, also bodes well for the segment. ITT expects organic sales from the IP segment to increase in the mid-to-high single-digit range year over year.
Growth in component sales within the commercial aerospace and defense markets is aiding the Connect & Control Technologies (CCT) segment. Solid momentum in the friction OE (original equipment) business is driving growth for the Motion Technologies (MT) segment. Organic sales for both CCT and MT segments are anticipated to increase in the low-to-mid single-digit range in 2024.
However, the company has been grappling with persistent softness in the global auto market. For 2024, it expects global auto production to decline from the year-ago levels, which is likely to affect its MT segment’s performance in the near term.
ITT also operates in the highly competitive pump and valve markets, comprising well recognised providers of engineered products and services. The company, which belongs to the Zacks Diversified Operations industry, faces stiff competition from several competitors like General Electric Company GE, Generac Holdings Inc. GNRC and Babcock & Wilcox Enterprises, Inc. BW.
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