WEBVTT - CUI Global's Clough on Capturing Global Gas Meter Market(Audio)

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<v Speaker 1>You're listening to taking stock with pin Box and Kathleen

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<v Speaker 1>Nays on Bloomberg Radio. The latest technology in so many areas.

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<v Speaker 1>How about technology for gas measurement and analysis that has

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<v Speaker 1>led to a very lucrative order with Italy's largest gas

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<v Speaker 1>transmission company for the man and the company that we're

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<v Speaker 1>going to talk about now. See u I Global. Bill

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<v Speaker 1>Clough is a president and CEO of this firm. They

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<v Speaker 1>have headquarters for electronics division in Twileton, Oregon. They have

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<v Speaker 1>another headquarters in Stone, England in the United Kingdom, and

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<v Speaker 1>then corporate offices in Houston. Bill, We're glad you could

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<v Speaker 1>find a place to sort of land with us right

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<v Speaker 1>here in our New York studio. Thank you so much. Okay,

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<v Speaker 1>See you I Global? What are you? What do you do?

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<v Speaker 1>We're basically a publicly traded company on the NASTAC were

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<v Speaker 1>to business units. One, as you mentioned basin t Wallleton, Oregon,

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<v Speaker 1>which is an electronics company, really a commodity driven company

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<v Speaker 1>that delivers over twenty thou different products to as many

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<v Speaker 1>as seventy four thousand discrete customers, so very large customer

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<v Speaker 1>base and product base. And then I think the more

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<v Speaker 1>exciting division is our Gas and Energy division, which as

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<v Speaker 1>you mentioned, is based out of Stone in the UK.

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<v Speaker 1>That division is designed to really deliver high tech metering

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<v Speaker 1>and measurement devices to the natural gas industry, and we've

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<v Speaker 1>been quite successful in really marketing a very differentiated manner

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<v Speaker 1>of metering gas in the pipeline. That's the one you

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<v Speaker 1>talked about with this Nambretta, which is the Italian gas

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<v Speaker 1>transmission company. Tell us a little bit about how someone

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<v Speaker 1>goes from being an air marshal and a lawyer and

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<v Speaker 1>a police officer to running a company that is focused

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<v Speaker 1>on gas metering technology. Well, I don't know how someone

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<v Speaker 1>does that. I can tell you how I made a

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<v Speaker 1>bad two million dollar investment in a company that I

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<v Speaker 1>thought was something that wasn't in In In order to protect

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<v Speaker 1>that investment and recover it, I ended up coming into

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<v Speaker 1>the company originally as general counsel, and I ended up

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<v Speaker 1>about eight years ago now becoming president CEO, and took

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<v Speaker 1>the company from really the verge of bankruptcy to where

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<v Speaker 1>it is today, which is a much more uh solvent,

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<v Speaker 1>obviously much more a much stronger company than it was then.

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<v Speaker 1>So you obviously have a very background. You bring so

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<v Speaker 1>much to the table. I wanted to know specifically what

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<v Speaker 1>your technology is in terms that you know non UH

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<v Speaker 1>gas transmission technologists can understand. Because one thing is pretty clear.

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<v Speaker 1>It's cheaper to use, and that's so important, particularly a

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<v Speaker 1>time when the energy industry is under pressure than the old,

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<v Speaker 1>more traditional technology. What's different? What's special about your technology, Kathleen,

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<v Speaker 1>you've identified it exactly. The most important thing to an

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<v Speaker 1>operator of a natural gas pipeline is the measurement of

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<v Speaker 1>bt US of British normal units, which is how you

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<v Speaker 1>build the gas. That British normal unity is composed with

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<v Speaker 1>two different elements. One is volume and the other is

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<v Speaker 1>energy content, and energy content is what we measure. Historically,

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<v Speaker 1>energy content and gas has been measured the same way

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<v Speaker 1>for sixty years. It's been done by really a lab

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<v Speaker 1>instrument called a gas fromatograph, which is very expensive, not

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<v Speaker 1>particularly accurate, and very high maintenance installation of around two

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<v Speaker 1>d fifty thou dollars and about twelve or thirteen thousand

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<v Speaker 1>dollars a year in maintenance costs. What we've done is

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<v Speaker 1>developed the technology that replaces that gas gromatograph and does

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<v Speaker 1>it in a way that is much more efficient, much faster,

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<v Speaker 1>much more accurate, and most important, maintenance free, and about

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<v Speaker 1>a fifth of the installation fee. So what we give

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<v Speaker 1>the gas operated the ability to do is measure the

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<v Speaker 1>gas much more accurately and therefore charge what they're actually

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<v Speaker 1>delivering to the customer as opposed to an average, which

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<v Speaker 1>in most cases means the operator is getting less than

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<v Speaker 1>what they're actually delivering. If I was going to see

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<v Speaker 1>one of these pieces of equipment, is it like a kiosk?

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<v Speaker 1>Is it? What does it look like? It's much smaller

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<v Speaker 1>than that. Actually, the analyzers themselves look like two water

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<v Speaker 1>glasses about the size of a large water glass. One

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<v Speaker 1>measures CEO two content and the other measures UM three

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<v Speaker 1>components that are used to make to UH infer UH

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<v Speaker 1>the calorier value in its final phase. Though in the

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<v Speaker 1>way it finally looks on the pipeline, it looks like

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<v Speaker 1>a box about two ft by three ft square that

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<v Speaker 1>sits right on top of the pipeline with a probe

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<v Speaker 1>that fits into the pipeline. So it's a very small

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<v Speaker 1>footprint UH and and very amenable to UH locating it

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<v Speaker 1>anywhere on the pipeline. Bill clef c I Global, you've

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<v Speaker 1>got this new contract with this Italian gas company is

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<v Speaker 1>one of their largest. Uh. How so this is an

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<v Speaker 1>important step. How important of this step? How big is

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<v Speaker 1>this market? How much of it do you want to overtake?

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<v Speaker 1>What have your revenues from the United States about a

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<v Speaker 1>third from the UK? What's next? Well, I can tell you, Kathleen,

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<v Speaker 1>that you hear of companies talking about inflection points a lot. Well,

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<v Speaker 1>I can tell you that this contract for us is

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<v Speaker 1>just that an inflection point. We've spent five years convincing

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<v Speaker 1>the industry that this technology works number one and number two,

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<v Speaker 1>that wee can to liberate accurately and in numbers. We've

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<v Speaker 1>done that in conjunction with getting certification throughout Europe and

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<v Speaker 1>getting safety certification throughout Europe, and in improving basically to

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<v Speaker 1>the largest pipeline company in Europe that were so good

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<v Speaker 1>that they have decided to change the entire way they

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<v Speaker 1>measure gas on their pipeline. They have, in essence, put

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<v Speaker 1>forth a hundred and seventy million euro project in three

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<v Speaker 1>years to deploy thirty three hundred of our devices throughout

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<v Speaker 1>their system that they believe will allow them to much

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<v Speaker 1>more accurately build a gas that they're delivering they're so

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<v Speaker 1>convinced of that that they've done this really in the

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<v Speaker 1>face of a changing sixty year old technology, changing these

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<v Speaker 1>gas fromatographs to the new gas PTR device. How do

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<v Speaker 1>you say that gas gas cast gas chromatograph like that word? Allrkay. Well,

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<v Speaker 1>I'm gonna ask you about liquefied natural gas and terminals

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<v Speaker 1>that import l G. What role do you see playing there? Well,

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<v Speaker 1>we play a big role with them. In fact, that's

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<v Speaker 1>how our technology was originally developed. It was originally developed

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<v Speaker 1>to be on the wharf to measure liquefied gas as

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<v Speaker 1>it's re gassified. Because what happens is when a gas

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<v Speaker 1>has been liquefied and then is regasified, it's very very

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<v Speaker 1>hot because the inerts, the nitrogens, the C twos have

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<v Speaker 1>burnt off, they're gone. So what happens is it comes

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<v Speaker 1>off the ship, it's regasified, one of our devices measures

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<v Speaker 1>it in essence sets forth the calorifer value. It's then

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<v Speaker 1>injected generally speaking with nitrogen to cool it down, and

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<v Speaker 1>then it goes to another one of our devices to

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<v Speaker 1>very quickly show that it's in the right range, and

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<v Speaker 1>it's then injected into the network. So we were originally

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<v Speaker 1>applied to liquid natural gas, but the applications we find

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<v Speaker 1>now in the pipeline for example STAMRATDA are much more,

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<v Speaker 1>much broader and much much larger. What's your next step, Well,

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<v Speaker 1>I think our next step is really to seek out

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<v Speaker 1>the next big customer. We're now dealing with the French

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<v Speaker 1>company on G. We have some very good inroads into

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<v Speaker 1>a TransCanada up in Canada UH, and we're looking at

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<v Speaker 1>some of the bigger pipeline companies in the US. To

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<v Speaker 1>really make moves into those pipeline companies like we have

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<v Speaker 1>with Snamretta, you need to it also expanded distribution agreements.

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<v Speaker 1>You've been doing that as well. We have actually we

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<v Speaker 1>have about forty distribution agreements now worldwide. We just signed

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<v Speaker 1>recently a very big one for US which is with

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<v Speaker 1>a company called Oto Kim, which is a very respected

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<v Speaker 1>French company that really helps us UH credibility wise and

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<v Speaker 1>otherwise with the French pipeline company on G. What's your

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<v Speaker 1>biggest challenge Is it that you you've got kind of

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<v Speaker 1>a global presence as you try to get through this works.

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<v Speaker 1>This is great buy from US. What's your biggest challenge

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<v Speaker 1>in Europe? In Asia, even in the US. My biggest

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<v Speaker 1>challenge is really simple, the inertia of sixty year old

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<v Speaker 1>technology that's not broken. It's not very accurate, it's not

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<v Speaker 1>very fast, it's expensive, it's old, but guess what it works.

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<v Speaker 1>And I can't tell you how many times I've had engineers,

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<v Speaker 1>both in Europe and the U S tell me we

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<v Speaker 1>love your technology. It really looks like something we'd be

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<v Speaker 1>interested in. But I gotta tell you, no one's ever

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<v Speaker 1>been fired for buying a gas gromatograph, and that of

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<v Speaker 1>all the things that we faced, that inertia is really

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<v Speaker 1>the most difficult to overcome. And that's why Stambretto was

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<v Speaker 1>such a big deal for us, because it's the first

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<v Speaker 1>step in overcoming that inertia. I can ask you about

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<v Speaker 1>Brexit and the vote to leave the European Union by

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<v Speaker 1>the voters of the United Kingdom, how's that going to

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<v Speaker 1>affect your business? I actually live a halftime in the UK,

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<v Speaker 1>so I was there for the Brexit vote and for

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<v Speaker 1>the the politics leading up to that, and it was,

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<v Speaker 1>without a doubt, a very traumatic event. Seriously, though, as

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<v Speaker 1>it's beginning to roll out, first and foremost, we don't

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<v Speaker 1>believe it will affect as much at all for the

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<v Speaker 1>first two or three years, because frankly will take at

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<v Speaker 1>least that long to negotiate the UK out. Secondly, all

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<v Speaker 1>of our safety and our ability and accuracy certifications are

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<v Speaker 1>both EU and UK specific, so that's not gonna affect

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<v Speaker 1>us at all. Really, the near term effect has been,

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<v Speaker 1>in essence, a a lowering of the value of the pound,

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<v Speaker 1>and we're a UK company that deals in pounds, so

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<v Speaker 1>in that sense we have face a little bit of ahead.

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<v Speaker 1>We're gonna leave it there, thank you very much. Bill

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<v Speaker 1>Coffee is the president and the chief executive of c

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<v Speaker 1>u I