OPW FUELING COMPONENTS David J. Ropp President
OPW FUELING COMPONENTS
David J. RoppPresident
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One Company, One World, One Source
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Market OverviewMarkets Served
Retail Fueling (Major Oil, Convenience Store, etc.)Commercial Fueling (Truck Stops)Private Fueling (Municipal, Company Owned)
Served Market Size$750 Million Worldwide(6) Market SegmentsOPW Share Ranges from 10% to 50% by Segment
Market DriversEnvironmental RegulationsNew Station ConstructionInfrastructure ImprovementReplacement & Maintenance
Market DynamicsMajor Oil Consolidations - Slowed New ConstructionHigh Volume Retailers Entering MarketEnvironmental Requirements more stringent WorldwideSome Growth in Developing Countries
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Focus & StrategyBusiness Focus
Leading World Supplier of Fueling ComponentsMost Complete Product OfferingStrongest Global Presence
Business Segmentation WW Market PositionDispenser Products & Systems #1Environmental Systems #1Fuel Management Systems #2CleanEnergy Fueling #1
StrategyDefend strong North American baseExpand European business – Increased Local PresenceExpand South American and Asia Pacific business – Establishment of Local Presence
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Dispenser Products45%
Fuel Management20%
CleanEnergy5%
Environmental30%
Business Segmentation & Products
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EURO NOZZLES VAPOR RECOVERY NOZZLES
CONVENTIONAL NOZZLES
SWIVELS & BREAKAWAYS
MEMBRANE VAPOR RECOVERY SYSTEMS
AIR PRODUCTS
Dispenser Products
Markets-heavily regulatedOPW #1 in all markets except EuropeBroadest product offeringOPW recognized as technology leader
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FLEXIBLE PIPING AND SECONDARY
CONTAINMENT SYSTEMS
UNDERGROUND STORAGE TANK EQUIPMENT
ISLAND FORMS AND MANHOLE COVERS
VALVES & FITTINGS
Environmental Products
Markets-highly regulated by environmental andfire codesProducts highly localizedExpensive to shipDeveloping Countries offer growth markets
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COMMERCIAL FUELING SYSTEMS
TANK GAUGING
SYSTEMS & ACCESSORIES
Fuel Management Systems
OPW #1 worldwide in commercial fueling systemsOPW #2 worldwide in tank gaugesLocalized languageand technical support requiredRecently acquired Emco Electronics product line
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LPG FUELING PRODUCTS HYDROGEN FUELING PRODUCTS
CNG FUELING PRODUCTS
“CleanEnergy” Fueling Products
OPW only company to offer complete rangeMarket growing 10+% per yearPrimarily non-U.S. BusinessOPW working in early development major auto manufacturers on the fuel cell vehiclesRecently acquired LPG product line
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Strategic Initiatives
Develop and Implement Global Growth Plans (Local Manufacturing for Local Markets)Establish Six Sigma Culture WorldwideImplement Global Technical Support ModelLaunch “CleanEnergy” Fueling BusinessImplement an Integrated Sales and Marketing Program for “Station-In-A-Box”Introduce Steady Stream of New Products
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Global Operations
POMECOBuena Park, CA
MexicoOPW Sales/Service Office
Mexico City
CanadaDover Corp./Industrial Div. Ltd.
Strathroy
RichardsRockwood, TN
CorporateHeadquartersCincinnati, OH
OPW FMSChicago, IL
BrazilOPW de Brasil Ltda.
Sao Paulo
The NetherlandsOPW Fueling
Components EuropeZwanenburgPoland
OPW FMSKrakow
PhilippinesOPW ASEAN Sales
Sales OfficeManila
ChinaDover Corporation
of ChinaShanghai
IndiaOPW India
Sales/Service OfficeMumbai
OPW FMSCary, NC
ItalyBrevetti Nettuno
Bologna
United KingdomOPW Fueling Components
Market Harborough
Czech RepublicOPW
Chomutov
CanadaOPW FMS Strathroy
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Europe
Close manufacturing in Holland 4th quarter 2001Factory operation in Czech Republic started 3rd quarter 2001Scale-up underway
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South AmericaBuyout Brazil joint venture 1st quarter 2001Product line expanded 2002Strengthen sales & manufacturing 2002New Brazil facility under construction – will open 2nd quarter 2003Heavy emphasis / legislation on “New Environmental Standards” in Brazil
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AsiaOPW sales force to replace reps - in place 2000-2001Sourcing of components from China underway 2002W.O.F.E. Approved for China in 3rd quarter 2002Factory in China will open in early 2003
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Global Growth Achievements
Weighted average cost per hourly employee decreased 21% since 1998Annual cost reduction from China sourcing expected to exceed $1.0 million in 2003Sales in Asia Pacific/Latin America up 15% over 2001Local sales presence in all major global markets
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Six Sigma Process
Six Sigma – eliminates defects through consistent, predictable processes
Data driven processInitiatives focus on 80/20 ruleObjective – less than 3.4 defects per million opportunities
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Six Sigma Process
Top management drivenEducation:
Upper managementBlack BeltsGreen BeltsAll employeesSuppliers
Roll-outCincinnati – 1999Worldwide - 2002
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Six Sigma Training
12 Black Belts:2% of workforce200 hour training4 month process
103 Green Belts:17% of workforce20 hour trainingExpanding to 40 hour
12% of the supply base trained as Green Belts
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Internal Defects, Trend Chart(12V Vapor Recovery Nozzle)
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50000
100000
150000
200000
250000
300000
350000
400000
450000
2000 Avg 2001 Avg Jan Avg Feb Avg Mar Avg Apr Avg May Avg June Avg July Avg Aug Avg Sept Avg Oct 7
2002 TREND (PPM)
DE
FE
CT
S, P
PM
12V ORIGINAL GOAL (150000) 2002 REVISED GOAL (100000)
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Internal Defects, Pareto Analysis (12V Vapor Recovery Nozzle) October 2002
GUA RD
LIP SEA L
(A IR&FLOW TEST)
TEST GOOD
SPOUT O/R
FLOW TES TPOROSITY
MA IN & BLEEDER
POPPETB-CA P/ORING
SPOUT FLOW TEST
V /V ORING
5 5 5 81624253071 2.6 2.6 2.6 4.2 8.512.713.215.937.6
100.0 97.4 94.7 92.1 87.8 79.4 66.7 53.4 37.6
150
100
50
0
100
80
60
40
20
0
DefectCount
PercentCum %
Perc
ent
Cou
nt
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Six Sigma Results
Key Black Belt projects:7 completed5 underway$355,000 savings
Warranty cost reduced 41%Increase sales = “the real win”
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SummaryNew environmental regulations in California will positively impact OPW in 2003Major consolidations of oil companies slowed new constructionOPW target and won business in the high-volume retail segmentsOPW offset market declines by:
Market Share IncreasesProduct Line AcquisitionsNew Product DevelopmentGlobal Growth Initiatives
Initiatives to improve quality and reduce cost have provided funds for global growth and new product developmentOPW is structured properly and postured to benefit from any global growth in the industry