ITT Corp.'s Goulds Pumps has signed an agreement with Shell Global Solutions International BV, a subsidiary of the energy giant, and the deal is expected to provide further momentum for an increase in hiring at Goulds Pumps headquarters in Seneca Falls that started last year.
The enterprise framework agreement calls for Goulds Pumps to provide American Petroleum Institute centrifugal pumps in several configurations to Shell operations and affiliates worldwide.
The five-year agreement, signed last month, has an option for an additional five years, ITT said. The agreement includes the development of common specifications, terms and conditions, and pricing.
There is no set dollar amount in the agreement, ITT officials said. Shell successfully has audited the Seneca Falls plant, as well as several of its global sites. The company said it expects business to come through these facilities.
ITT employs more than 800 people at its Seneca County campus. The increase in demand for the pumps, as well as from the sale of other Goulds Pumps products, led to the hiring of more than 50 employees in 2011.
Company leaders said the business is looking for additional workers, mainly people with engineering degrees or technical backgrounds.
Shell Global Solutions is a network of independent technology companies in the Shell Group that provide technical consultancy and licensed technologies for the Shell Group and third-party customers in the energy industry. It is a subsidiary of Netherlands-based Royal Dutch Shell PLC, one of the largest energy companies.
Robert Pagano, president of ITT's Industrial Process group, said oil and gas now make up the largest segment of business for the unit. In addition to making and installing the pumps, Industrial Process also provides a number of aftermarket services.
ITT's Industrial Process group, of which Goulds Pumps is part, serves customers in the oil and gas, mining, chemical, power generation, biopharmaceutical and general industrial markets. Its product lines include pumps, valves, monitoring and control systems, water treatment and aftermarket services. The Goulds Pumps location is the headquarters for the division.
Goulds Pumps has more than 40 years of experience in engineering, manufacturing, repairing and upgrading pumps. It serves multinational companies and national organizations.
Industrial Process had 2011 sales of $767 million, up 11 percent from 2010. The increase was due in part to gains in the North American chemical, oil and gas and power markets and the South American, Eastern European and Middle Eastern oil and gas markets.
Adjusted operating income was $94 million, up 18 percent from the previous year, and was driven by increased sales volume and net cost reductions from productivity and sourcing initiatives.
James Krapfel, an analyst with Morningstar Inc., wrote in a recent research note that he was excited about ITT's prospects within the oil and gas market.
Oil prices above $100 a barrel should drive demand for ITT pumps, he said. Krapfel noted that the company continues to increase its business across South America and the Middle East. Recent acquisitions, as well as the agreement with Shell, are bolstering that growth.
"ITT is increasingly taking on larger projects that initially carry lower margins but generate meaningful and more profitable aftermarket revenue soon after installation," Krapfel wrote. "This should provide a nice long-term margin tailwind."
ITT, which is based in White Plains, acquired Goulds Pumps in May 1997 in a $37-a-share friendly takeover, melding Goulds into its own fluid-technology group. That October, the firm moved Goulds' corporate headquarters from Fairport-where it had been for three years-back to its original location in Seneca Falls and branded the division Industrial Process.
Last October, ITT spun out some of its operations, including Rochester-based Geospatial Systems, which is now part of ITT Exelis Inc. ITT also spun off its water business as Xylem Inc.
The Goulds Pumps operation in Seneca Falls remained part of ITT Corp. A facility in Auburn, Cayuga County, that makes pumps for residential and commercial water applications became part of Xylem.
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