Miners' woes 'filter through' to other areas
The post mining-boom era of contracting investment was filtering through to the energy technology sector, Jean Pascal Tricoire chief executive and president of French giant Schneider Electric said. "We are a big supplier of automated energy systems to the mining industry, so when mining stops investing, we stop also."
Listed on the French stock exchange, Schneider Electric has 150,000 employees, 4000 of them in Australia, and yearly turnover of €24 billion ($35 billion) from energy management hardware, software and systems.
Schneider had benefited from the resource boom in Australia but was globally positioned to handle any downturn, generating most of its revenue in US and Chinese markets. As head of a company spanning 100 countries, Mr Tricoire (below) takes a frequent reading of the voltage of the global economy.
The world was on the path "to a slow but sure recovery" after the financial crisis but "we are not yet at the turning point", he said.
There were positive "dynamics" in the world's two largest economies, the US and China. Japan was also more dynamic and Europe has "done many of the right things", he said, during a visit to the company's Melbourne office.
"We are doing better this year than last year and better than we were doing at the end of 2011."
Australia needed to focus on developing and adapting to new technologies and training for "renewable energy, energy efficiency, connected buildings and connected cities," Mr Tricoire said.
Frequently Asked Questions about this Article…
The mining downturn in Australia is having a substantial impact on associated industries like energy technology. When mining companies cut back on investments, suppliers of automated energy systems, such as Schneider Electric, also see reduced demand, which trickles down through other sectors.
Schneider Electric supplies automated energy systems to the mining industry, so when mining investment contracts, Schneider’s business in that sector slows too. This direct link means the mining slowdown filters through to energy technology companies and their revenue streams.
Yes! While Schneider Electric benefited from Australia’s resource boom, it is well-positioned globally to manage downturns. Most of its revenue comes from larger markets like the US and China, giving it diversification that cushions the impact of any one regional slowdown.
According to Jean Pascal Tricoire, Schneider Electric’s CEO, the world is on a path toward a slow but sure economic recovery post-financial crisis. While we haven't hit a clear turning point yet, positive dynamics in the US, China, Japan, and Europe signal better economic conditions ahead.
Australia is focusing on developing new technologies and training in renewable energy, energy efficiency, connected buildings, and connected cities to adapt to the changing economy and reduce reliance on mining investments.
Technology is key! Investing in renewable energy systems, smart energy management, and connected infrastructure are priorities for Australia to build a more sustainable and efficient energy future beyond the mining boom.
Schneider Electric is a huge player with 150,000 employees worldwide, including 4,000 in Australia. The company generates around €24 billion (about $35 billion) annually from energy management hardware, software, and systems, operating across 100 countries.
It’s wise to be aware! The mining slowdown can affect industries connected to mining, like energy technology companies. However, diversified global players and Australia’s pivot to new energy technologies mean opportunities still exist for savvy investors looking beyond mining.
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