In order to augment its footprints in the microgrid market, ABB Ltd. ABB recently collaborated with the leading lithium-ion batteries provider – Samsung SDI. In this regard, a Memorandum of Understanding (‘MOU’) was signed by the two companies to promote microgrid solutions on the global platform.
However, ABB shares dropped around 0.61% during regular trading session on Mar 26 due to broader market concerns.
Coming back to the news, ABB and Samsung SDI will form a strategic microgrid alliance to create and market modular and scalable microgrid solutions, using lithium-ion batteries for energy storage purpose, globally. In particular, ABB will offer technological aid for control optimization, electrification, expert consulting services and stabilization, while Samsung SDI will supply the batteries and battery management system.
The deal is a win-win situation for ABB and Samsung SDI, as it will aid both the parties in enhancing their capabilities of offering advanced microgrid solution, amid thriving microgrid applications market.
Moreover, the ABB–Samsung SDI team will offer microgrid solutions as a feasible option to improve the access to electricity in emerging markets and remote regions while offering power efficiency to the developed ones.
Notably, the deal is in line with ABB’s ‘Next Level strategy’ announced in 2014. Per this plan for the period 2015–2020, the company will remain focused on three primary areas – profitable growth, relentless execution and business-led collaboration – forming the base for future growth.
ABB intends to leverage its PIE (penetration, innovation and expansion) initiatives to expand and enhance its business in high-growth sectors like utilities, industry, transport and infrastructure, among others. Apart from this, the company has been optimizing its operations and revamping its management structure. Most importantly, ABB projects to increase operational earnings per share at a CAGR of 10–15% within 2015-2020 and deliver attractive returns on investments. These changes will be implemented and monitored through the novel concept of 1,000 day programs to drive growth.
ABB currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the industry include ESCO Technologies Inc. ESE, II-VI Inc. IIVI and AO Smith Corp. AOS. All the three stocks carry a Zacks Rank #2 (Buy).
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