Johnson Controls has acquired Gordon Brothers Industries, one of Australia’s largest and experienced industrial refrigeration companies. CCN editor, Sandra Rossi, talks exclusively to Johnson Controls general manager for buildings (Pacific), Craig Buettel, about the buyout and what it means for Australian customers.
CCN: Can you explain the impact of the buyout locally, how will it impact staff numbers?
JCI: The strength of more than 160 from Gordon Brothers have become part of Johnson Controls worldwide.With business growth, the number of staff will increase accordingly to meet business and customer needs.
In terms of products, it will benefit from a portfolio expansion of products and services mix with more offerings and coverage for local services and installations, including a range of energy-efficient products using low and ultra-low global warming potential (GWP) refrigerants.
Gordon Brothers Industries was founded in 1917 and has more than 100 years of history in industrial refrigeration. With this acquisition, Johnson Controls seeks to expand its industrial refrigeration solution business into the mining, chemical, and food and beverage verticals, further enabling strong sales growth in the Asia Pacific region.
CCN: How will the two organisations be combined?
JCI: This acquisition equips Johnson Controls with a well-established engineering and service team in Australia and enables further expansion of the industrial refrigeration solution business into the mining, chemical and food and beverage verticals. Similarly, this acquisition also extends Gordon Brothers access to the new energy, mining and metals verticals by leveraging Johnson Controls’ high-efficiency chillers, heat pumps and digital technology offerings.
Four new divisions will also be incorporated into the Gordon Brothers business: York ® Process Systems, Gas Compression, Navy, and Sustainability.
The Gordon Brothers team will be trained to design, engineer, select, and price Johnson Controls equipment for its industrial refrigeration systems. Its technology team will also undergo specialised training in installation, commissioning, and service of Johnson Controls products.
CCN: What is the growth strategy for Australia and the region?
JCI: Overall, Johnson Controls is focused on vertical growth in the areas of healthcare, data centres, industrial refrigeration, and HVAC. On top of that, we look at providing integrated solutions enabled by digital that deliver desired outcomes in sustainability and efficiency. In Australia, the key areas of growth are in digital transformation, outcome-based services through planned service agreements (PSA), and sustainability. We are also looking at geographical and service expansion, enabling localisation of services and faster customer response.
CCN: How will it impact customers? Will you be targeting specific industries?
JCI: There is no impact on customers in this integration and transition process. In fact, it adds a competitive edge for Johnson Controls in areas that were previously not explored like mining, chemical, and the food and beverage industry.
CCN: Is there a particular product you will be targeting for this market? Where are the growth areas that offer the most potential.
JCI: This acquisition will considerably expand localised assembly capacity in food and beverage, and mining, extending Gordon Brothers capacity and existing solution offerings.
CCN: I am assuming there will be a lot of staff training to get everyone up to speed with Johnson Controls’ products, when will that training begin?
JCI: The training has already begun, having started in July. Various training sessions are planned to introduce the core capabilities and product offerings of both Johnson Controls and Gordon Brothers companies, and in order to better equip the front-line sales team to better drive cross-selling opportunities and service growth.
Team members will also be trained to design and engineer select Johnson Controls equipment directly, both industrial refrigeration and HVAC, from a dedicated program. Self-paced learning opportunities are also available via the Learning Management System which includes technical and soft skills training options.
CCN: How does Australia compare to the rest of the Asia Pacific region?
JCI: Australia is a developed country, and the market is mature. It has its own dynamics yet some of the key issues we face relate to labour shortages, impacting talent acquisition and retention. Similarly, there is rising energy prices and investor pressure to invest in capabilities that deliver decarbonisation, net zero, and a more sustainable built environment.
CCN: Has JCI targeted Australia for a reason, what is that reason?
JCI: Australia has a very strong background in mining, agriculture, and food. These industries require solid refrigeration solutions and represent long term growth opportunities. Gordon Brothers fits into these macro trends very well with their strong position in these growth markets.
Australia is also a leading country in sustainability and digitalization. It was an early adopter of Johnson Controls’ digital solutions like OpenBlue and its connected chiller program. Hence, it is only natural that we look at these facts, commit to investing in Australia, and continue to grow our presence in the country.
Fiscal year 2024 and beyond
Johnson Controls International reported fiscal third quarter 2023 earnings this
month.
Sales in the quarter of $US7.1 billion increased eight per cent compared to the prior year on an as reported basis and grew nine per cent organically. Net income from continuing operations was $1.05 billion. Adjusted net income from continuing operations of $706 million was up 19 per cent versus previous year.
JCI chair and CEO, George Oliver, said the company delivered strong third quarter results led by double-digit growth in sales and orders for its service business.
"We remain confident in our longer cycle Building Solutions segments supported by our healthy order pipeline and resilient backlog,” he said.
Chief financial officer, Olivier Leonetti, said great progress has been made to improve margins this fiscal year.
“We believe there remains
runway for further margin
expansion in fiscal
2024 and beyond,”
Leonetti added.