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CUI Global's Clough on Capturing Global Gas Meter Market(Audio) · Bloomberg Intelligence

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  Speaker 1: You're listening to taking stock with pin Box and Kathleen
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  Speaker 1: Nays on Bloomberg Radio. The latest technology in so many areas.
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  Speaker 1: How about technology for gas measurement and analysis that has
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  Speaker 1: led to a very lucrative order with Italy's largest gas
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  Speaker 1: transmission company for the man and the company that we're
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  Speaker 1: going to talk about now. See u I Global. Bill
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  Speaker 1: Clough is a president and CEO of this firm. They
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  Speaker 1: have headquarters for electronics division in Twileton, Oregon. They have
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  Speaker 1: another headquarters in Stone, England in the United Kingdom, and
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  Speaker 1: then corporate offices in Houston. Bill, We're glad you could
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  Speaker 1: find a place to sort of land with us right
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  Speaker 1: here in our New York studio. Thank you so much. Okay,
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  Speaker 1: See you I Global? What are you? What do you do?
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  Speaker 1: We're basically a publicly traded company on the NASTAC were
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  Speaker 1: to business units. One, as you mentioned basin t Wallleton, Oregon,
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  Speaker 1: which is an electronics company, really a commodity driven company
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  Speaker 1: that delivers over twenty thou different products to as many
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  Speaker 1: as seventy four thousand discrete customers, so very large customer
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  Speaker 1: base and product base. And then I think the more
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  Speaker 1: exciting division is our Gas and Energy division, which as
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  Speaker 1: you mentioned, is based out of Stone in the UK.
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  Speaker 1: That division is designed to really deliver high tech metering
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  Speaker 1: and measurement devices to the natural gas industry, and we've
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  Speaker 1: been quite successful in really marketing a very differentiated manner
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  Speaker 1: of metering gas in the pipeline. That's the one you
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  Speaker 1: talked about with this Nambretta, which is the Italian gas
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  Speaker 1: transmission company. Tell us a little bit about how someone
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  Speaker 1: goes from being an air marshal and a lawyer and
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  Speaker 1: a police officer to running a company that is focused
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  Speaker 1: on gas metering technology. Well, I don't know how someone
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  Speaker 1: does that. I can tell you how I made a
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  Speaker 1: bad two million dollar investment in a company that I
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  Speaker 1: thought was something that wasn't in In In order to protect
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  Speaker 1: that investment and recover it, I ended up coming into
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  Speaker 1: the company originally as general counsel, and I ended up
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  Speaker 1: about eight years ago now becoming president CEO, and took
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  Speaker 1: the company from really the verge of bankruptcy to where
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  Speaker 1: it is today, which is a much more uh solvent,
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  Speaker 1: obviously much more a much stronger company than it was then.
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  Speaker 1: So you obviously have a very background. You bring so
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  Speaker 1: much to the table. I wanted to know specifically what
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  Speaker 1: your technology is in terms that you know non UH
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  Speaker 1: gas transmission technologists can understand. Because one thing is pretty clear.
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  Speaker 1: It's cheaper to use, and that's so important, particularly a
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  Speaker 1: time when the energy industry is under pressure than the old,
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  Speaker 1: more traditional technology. What's different? What's special about your technology, Kathleen,
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  Speaker 1: you've identified it exactly. The most important thing to an
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  Speaker 1: operator of a natural gas pipeline is the measurement of
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  Speaker 1: bt US of British normal units, which is how you
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  Speaker 1: build the gas. That British normal unity is composed with
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  Speaker 1: two different elements. One is volume and the other is
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  Speaker 1: energy content, and energy content is what we measure. Historically,
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  Speaker 1: energy content and gas has been measured the same way
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  Speaker 1: for sixty years. It's been done by really a lab
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  Speaker 1: instrument called a gas fromatograph, which is very expensive, not
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  Speaker 1: particularly accurate, and very high maintenance installation of around two
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  Speaker 1: d fifty thou dollars and about twelve or thirteen thousand
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  Speaker 1: dollars a year in maintenance costs. What we've done is
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  Speaker 1: developed the technology that replaces that gas gromatograph and does
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  Speaker 1: it in a way that is much more efficient, much faster,
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  Speaker 1: much more accurate, and most important, maintenance free, and about
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  Speaker 1: a fifth of the installation fee. So what we give
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  Speaker 1: the gas operated the ability to do is measure the
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  Speaker 1: gas much more accurately and therefore charge what they're actually
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  Speaker 1: delivering to the customer as opposed to an average, which
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  Speaker 1: in most cases means the operator is getting less than
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  Speaker 1: what they're actually delivering. If I was going to see
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  Speaker 1: one of these pieces of equipment, is it like a kiosk?
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  Speaker 1: Is it? What does it look like? It's much smaller
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  Speaker 1: than that. Actually, the analyzers themselves look like two water
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  Speaker 1: glasses about the size of a large water glass. One
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  Speaker 1: measures CEO two content and the other measures UM three
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  Speaker 1: components that are used to make to UH infer UH
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  Speaker 1: the calorier value in its final phase. Though in the
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  Speaker 1: way it finally looks on the pipeline, it looks like
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  Speaker 1: a box about two ft by three ft square that
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  Speaker 1: sits right on top of the pipeline with a probe
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  Speaker 1: that fits into the pipeline. So it's a very small
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  Speaker 1: footprint UH and and very amenable to UH locating it
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  Speaker 1: anywhere on the pipeline. Bill clef c I Global, you've
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  Speaker 1: got this new contract with this Italian gas company is
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  Speaker 1: one of their largest. Uh. How so this is an
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  Speaker 1: important step. How important of this step? How big is
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  Speaker 1: this market? How much of it do you want to overtake?
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  Speaker 1: What have your revenues from the United States about a
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  Speaker 1: third from the UK? What's next? Well, I can tell you, Kathleen,
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  Speaker 1: that you hear of companies talking about inflection points a lot. Well,
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  Speaker 1: I can tell you that this contract for us is
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  Speaker 1: just that an inflection point. We've spent five years convincing
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  Speaker 1: the industry that this technology works number one and number two,
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  Speaker 1: that wee can to liberate accurately and in numbers. We've
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  Speaker 1: done that in conjunction with getting certification throughout Europe and
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  Speaker 1: getting safety certification throughout Europe, and in improving basically to
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  Speaker 1: the largest pipeline company in Europe that were so good
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  Speaker 1: that they have decided to change the entire way they
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  Speaker 1: measure gas on their pipeline. They have, in essence, put
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  Speaker 1: forth a hundred and seventy million euro project in three
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  Speaker 1: years to deploy thirty three hundred of our devices throughout
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  Speaker 1: their system that they believe will allow them to much
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  Speaker 1: more accurately build a gas that they're delivering they're so
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  Speaker 1: convinced of that that they've done this really in the
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  Speaker 1: face of a changing sixty year old technology, changing these
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  Speaker 1: gas fromatographs to the new gas PTR device. How do
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  Speaker 1: you say that gas gas cast gas chromatograph like that word? Allrkay. Well,
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  Speaker 1: I'm gonna ask you about liquefied natural gas and terminals
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  Speaker 1: that import l G. What role do you see playing there? Well,
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  Speaker 1: we play a big role with them. In fact, that's
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  Speaker 1: how our technology was originally developed. It was originally developed
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  Speaker 1: to be on the wharf to measure liquefied gas as
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  Speaker 1: it's re gassified. Because what happens is when a gas
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  Speaker 1: has been liquefied and then is regasified, it's very very
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  Speaker 1: hot because the inerts, the nitrogens, the C twos have
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  Speaker 1: burnt off, they're gone. So what happens is it comes
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  Speaker 1: off the ship, it's regasified, one of our devices measures
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  Speaker 1: it in essence sets forth the calorifer value. It's then
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  Speaker 1: injected generally speaking with nitrogen to cool it down, and
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  Speaker 1: then it goes to another one of our devices to
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  Speaker 1: very quickly show that it's in the right range, and
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  Speaker 1: it's then injected into the network. So we were originally
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  Speaker 1: applied to liquid natural gas, but the applications we find
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  Speaker 1: now in the pipeline for example STAMRATDA are much more,
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  Speaker 1: much broader and much much larger. What's your next step, Well,
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  Speaker 1: I think our next step is really to seek out
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  Speaker 1: the next big customer. We're now dealing with the French
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  Speaker 1: company on G. We have some very good inroads into
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  Speaker 1: a TransCanada up in Canada UH, and we're looking at
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  Speaker 1: some of the bigger pipeline companies in the US. To
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  Speaker 1: really make moves into those pipeline companies like we have
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  Speaker 1: with Snamretta, you need to it also expanded distribution agreements.
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  Speaker 1: You've been doing that as well. We have actually we
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  Speaker 1: have about forty distribution agreements now worldwide. We just signed
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  Speaker 1: recently a very big one for US which is with
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  Speaker 1: a company called Oto Kim, which is a very respected
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  Speaker 1: French company that really helps us UH credibility wise and
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  Speaker 1: otherwise with the French pipeline company on G. What's your
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  Speaker 1: biggest challenge Is it that you you've got kind of
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  Speaker 1: a global presence as you try to get through this works.
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  Speaker 1: This is great buy from US. What's your biggest challenge
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  Speaker 1: in Europe? In Asia, even in the US. My biggest
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  Speaker 1: challenge is really simple, the inertia of sixty year old
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  Speaker 1: technology that's not broken. It's not very accurate, it's not
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  Speaker 1: very fast, it's expensive, it's old, but guess what it works.
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  Speaker 1: And I can't tell you how many times I've had engineers,
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  Speaker 1: both in Europe and the U S tell me we
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  Speaker 1: love your technology. It really looks like something we'd be
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  Speaker 1: interested in. But I gotta tell you, no one's ever
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  Speaker 1: been fired for buying a gas gromatograph, and that of
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  Speaker 1: all the things that we faced, that inertia is really
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  Speaker 1: the most difficult to overcome. And that's why Stambretto was
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  Speaker 1: such a big deal for us, because it's the first
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  Speaker 1: step in overcoming that inertia. I can ask you about
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  Speaker 1: Brexit and the vote to leave the European Union by
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  Speaker 1: the voters of the United Kingdom, how's that going to
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  Speaker 1: affect your business? I actually live a halftime in the UK,
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  Speaker 1: so I was there for the Brexit vote and for
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  Speaker 1: the the politics leading up to that, and it was,
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  Speaker 1: without a doubt, a very traumatic event. Seriously, though, as
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  Speaker 1: it's beginning to roll out, first and foremost, we don't
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  Speaker 1: believe it will affect as much at all for the
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  Speaker 1: first two or three years, because frankly will take at
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  Speaker 1: least that long to negotiate the UK out. Secondly, all
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  Speaker 1: of our safety and our ability and accuracy certifications are
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  Speaker 1: both EU and UK specific, so that's not gonna affect
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  Speaker 1: us at all. Really, the near term effect has been,
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  Speaker 1: in essence, a a lowering of the value of the pound,
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  Speaker 1: and we're a UK company that deals in pounds, so
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  Speaker 1: in that sense we have face a little bit of ahead.
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  Speaker 1: We're gonna leave it there, thank you very much. Bill
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  Speaker 1: Coffee is the president and the chief executive of c
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  Speaker 1: u I