For Kevin McMillen, Artificial Intelligence is a key area for every company. The difference for the President and CEO of Yokogawa Corporation of America is the Japanese firm’s focus on industrial autonomy.
For some time, Yokogawa Corporation of America has been actively investing beyond its traditional oil and gas business.
“The Japanese company that recently became a pioneer in the use of Artificial Intelligence in water services is now fully committed to becoming the best AI and industrial automation partner and transforming day-to-day operations for its clients in North America. “Artificial Intelligence is a huge area of focus that every CEO is going to be cautious about. The difference is how Yokogawa utilises AI to move more into industrial autonomy versus industrial automation. AI is a key part of it,” stated Kevin McMillen, President and CEO of Yokogawa Corporation of America.
With operations in 61 countries, Yokogawa is a globally known business partner providing industrial automation and control business solutions. “We are making investments in areas outside of the traditional oil and gas industry. In the water industry, we implemented AI and machine learning to reduce energy and chemical use in California. For this we were recently awarded by the Water Reuse Association,” McMillen told us in his exclusive interview with CEO North America.
Leading an affiliate company – the century-old Yokogawa Electric Corporation, which relies on cutting-edge technology, has been a big responsibility for McMillen since taking the chair position in March 2021.
For the CEO, the path to follow is clear; just keep successfully adapting to the changing times by identifying shifts in the marketplace and making the right decisions in each of their core businesses. “Energy and sustainability is our core business. We also have the pharma and life science area and the chemical business on the material side. Lastly, we have a long return seed-planting business, which is where we are investing right now,” McMillen notes.
Yokogawa Electric Corporation is listed on the Tokyo Stock Exchange and reported a revenue of US $3.5 billion (JPY389.9 billion) in FY2021, with the North American region representing 8.5% of the total sales for the second quarter of the year.
Only the right partnerships
According to McMillen, to succeed in the energy transition it is essential to focus on smart partnership acquisitions. “In January 2022, we purchased a company called PXiSE Energy Solutions (pronounced “pice”) to work on renewable and distributed energy management. They are using real-time data with AI to optimise and manage distributed grid assets on the renewable energy side,” McMillen details. In the same month, Yokogawa was selected by ExxonMobil as the system integrator for the first field trial of an Open Process Automation system, designed to operate an entire production facility. “One of the big struggles of processes industries right now is integrating all the property systems from level one (field instrumentation and analysers) to level four (control systems and advanced solutions) in the process area. We are proud to have been selected as the global system integrator for that process automation effort, because of our IT/OT expertise and commitment to co-innovation,” McMillen told us.
The growth opportunity is clear for McMillen, who joined the Texas-based company in 2016 as Sales Director before jumping to Sales Vice President only two years later. “In 2018, we rolled out a plan to double the size of our business for 2023, and we are on track to meet that in spite of Covid and other challenges,” the CEO explains.
A diamond in the rough
When McMillen first had contact with Yokogawa many years ago, he saw the huge potential ahead. He knew the Japanese conglomerate had a much larger presence globally than in North America, and that there was a lot of work to do. “We probably missed the window of opportunity 50 years ago when there was a big green field expansion in various projects of refining and petrochemicals,” he says.
The team heading Yokogawa’s regional operation quickly took advantage of the broad portfolio of products and services, which was larger than what he had seen before in his career. “Yokogawa was like a diamond in the rough,” McMillen recalls. “When I decided to take the opportunity to become CEO, a lot of those things had developed somewhat, but we still had a long way to go, and a lot of up-side to go.”
According to McMillen, the world has changed dramatically in the past six years, since he joined the company. “The opportunities are very different today, what we require from our people, how we support our team, what our goals are, the company’s long-term involvement and nurturing the passion for what we do.” McMillen says the company is commercially positioned better than it has been in the last 20 years, as they are taking advantage of new market opportunities. “We have a very long-term view of not just the market, but of the company and our goals. I believe the short-term up-and-downs don’t impact us as much as others because we are not driven by a stock market and a quarter-to-quarter mentality,” he explains.
Focus on the future
The CEO feels confident about significant business opportunities ahead in the next five, 10 or 20 years. “These are the new investments we are making, the seed planting I said before.”
The goal is to strengthen and expand the company’s footprint in North America. “We are investing in the energy transition. We are moving forward in the water industry and renewable energy, and the life science business as well. I think we are better positioned because of our ability to invest in long-term returns,” McMillen stresses.
The company continues to see a lot of investment opportunities in areas such as LNG, where Yokogawa is the global leader. “In addition, we have been really focused over the past two years on RPA (robotic process automation), utilising technology to automate a lot of manual processes in our operations as well as our customers. We are going to continue focusing on that,” he explains.
For the Yokogawa Corporation of America head, the future looks bright. One of the things that he loves most is welcoming engineers straight out of college who want to focus on the areas where Yokogawa has a strong presence. “Today’s young engineers are the ones asking the hard questions, they want to know how companies are planning to change the world. To them, we speak about water and renewable energy and our sustainability goals. Those folks coming out of college are the type of talent that Yokogawa is looking for to fulfil our responsibilities for the future of our planet.”