2008 Annual Report - Hubbell Wiring Device-Kellems

P O W E RIncreasing electrical demand and America’saging infrastructure are the factors drivinginvestment in transmission and distributionsystems. Transmission, in particular, has seenstrong growth that propelled the domestic marketfrom about $4 billion earlier in the decade to $10billion in 2008. Hubbell Power Systems (HPS)benefits from this trend, as it provides 90 percentof the components used on a transmission towerand 80 percent of those used for the constructionand maintenance of a distribution pole. Recentgrowth has been fueled by several utilities’high-voltage transmission line projects – in therange of 500 to 765 kV – to meet higherelectrical demand in various parts of the country.Unconventional sources of power, such as windfarms, hold promise for the future. At a large windfarm in the Midwest, HPS provided cable and wireconnectors, steel hardware, high voltage fittingsand lightning and station arresters. HPS salesoutside of North America – principally in LatinAmerica and Asia to upgrade existing electricalinfrastructure – represent its most rapidly growingbusiness, reaching a record high level in 2008.business is expected to remain strong owing toglobal reliance on energy and commodities.Hubbell’s subsidiary Austdac, based in Australia,recently opened an office in Pittsburgh to leverageits expertise in harsh and hazardous products forthe coal mining industry. The high voltage testbusiness is another source of strength based on theneed to rebuild electrical grids in many countries.This business appears to be in an historically longgrowth cycle, with demand growing in bothdeveloped and developing countries. Hubbellrecently received the largest single order inCompany history, $118 million, from Cepel, theBrazilian utility, for an outdoor test system tounderstand the effects of high voltage transmissionon the rain forest. GAI-Tronics, a leading providerof industrial-quality communications systems, hasbuilt a growing business in security systems forcollege campuses, parking facilities and similaroutdoor applications. Now it has developed aspeaker system that can be retrofitted to existingcampus infrastructure to permit targeted broadcaststo specific areas of campus by radio, Voice overInternet Protocol or landline in the event of anemergency.E L E C T R I C A L P R O D U C T SHubbell’s harsh and hazardous business –represented principally by the oil and gasexploration and production and mining markets –continues to prosper. Even with the recent declinein the price of crude and other commodities, the16