The Fafen Energia power station in South America is powered by three Rolls-Royce high-efficiency gas turbine packages.

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Any smart manufacturer knows investing in factors that make the business a success – mainly employees and facilities – is one of the best ways to grow a successful company. Not only has Rolls-Royce Energy followed this mantra, it has also focused on another key element to success: diversification.

The energy business of Rolls-Royce represents one of four global business sectors of the parent company, Rolls-Royce plc: civil aerospace, defense aerospace, marine and energy. Rolls-Royce Energy manufactures gas turbine power and compression packages for global energy markets. The product is derived from aero engine counterparts, which were introduced on aircraft including the Boeing 747 and 777.

“The energy business basically starts from a kit of parts from the aircraft side of the business,” Vice President of Operations Ralph Kirkpatrick explains. Design changes, primarily in the combustion and controls systems, are made by its energy gas turbine team in Montreal where engines are assembled and tested.

Most of the energy business' main revenue has been generated by relationships with oil and gas customers, including big-name players such as Shell, Exxon Mobil, Total, Petronas, PTT and BP. According to Rolls-Royce, more than 800 of its gas turbine packages have been ordered for operation on pipelines in 23 countries and more than 500 units have been used on global oil and gas offshore platforms. In total, the company has sold more than 3,500 industrial gas turbines and more than 1,800 natural gas compressors to energy customers across 80 countries.

Driven by continued high worldwide demand for oil and gas and a recovering power generation market, today the firm is working to develop the next generation of industrial gas turbine technology. For example, the company's Trent product addresses a market need for an industrial turbine that creates higher power output in a small footprint at a competitive cost per megawatt.

“[Oil and gas] has been a fairly stable market for us, but we're looking to grow the business, so we are looking to grow our participation in large oil and gas pipeline projects, as well as to expand into the power generation market, where we have historically been a relatively small player,” Kirkpatrick explains.

Key Investments
Rolls-Royce launched its energy business in 1999 when it acquired the rotating products segment of Cooper Cameron Corp., a United States oilfield-services company. At the time the company bought the business, it operated two gas turbine packaging facilities – one in Liverpool, United Kingdom, and a second in Mount Vernon, Ohio. “Over the last couple of years, to improve our competitiveness, we assessed both facilities and came to the conclusion that the best thing to do was consolidate,” he says.

In February, Rolls-Royce announced its decision to close the Liverpool location and operate out of a single location in Mount Vernon. As a result, the manufacturer will invest roughly $12 million in consolidating the business' energy products assembly and test capabilities in Ohio. An additional $11 million investment will go toward the expansion, which includes putting a pilot product assembly flow line into full production, expanding the gas turbine test facilities and reconfiguring the site to increase throughput while reducing cycle time. “We are investing heavily in a facility that dates back to the 1800s and has had very little investment put into it in the past decade,” Kirkpatrick admits.

As companies compete to manufacture, assemble and sell product at a lower price, Rolls-Royce had to create a more efficient facility and reduce cycle times by implementing lean manufacturing in 2005. “Once per week we were assessing what tasks could be accomplished based on what parts had been received,” he explains. “What we found was an inconsistent and inefficient process based on experience.”