Bresolin – CEO, Eiffage Metal – France
The newly appointed CEO of Eiffage Metal, a global leader in turnkey metal construction, discusses the importance of the oil and gas sector to his company’s success. He also provides insight into the strategies adopted by Eiffage Metal to respond to current market trends and growing competition stemming from emerging markets.
As a world leader in turnkey metal construction, Eiffage Metal embarks on projects in a variety of sectors: infrastructures, buildings, nuclear energy, civil engineering, wind power etc. According to your website, oil related sectors represent 47 percent of your turnover. Historically, how did your Oil & Gas activity progressively become a cornerstone of your global business?
The industrial component is inherent to Eiffage’s activity. We are approached for turnkey projects, spare parts and punctual studies to revamp equipment on offshore installations across the world. We were among the first companies to erect offshore installations in India, in the Middle East and Africa, 50 years ago. The business has obviously been subject to various economic cycles, but we are successful in adapting to the needs of the market. We are the only company that maintains a yard on French territory which is a good way to maintain a core team of internal high level competencies. Eiffage is a prominent player, always answering to the needs of our prestigious clients: Technip, Total, Chevron, ENI, Samsung. Although it is difficult to compete with low production costs found in Asia, we have the capacity to react to market trends under tight deadlines with renowned levels of safety and quality.
In 2013, Eiffage Metal’s turnover reached €557 million (approximately USD 600 million). During an interview, Eiffage Metal deplored the slowdown in the company’s activities throughout the course of 2014, essentially due to the lack of major infrastructure projects in France. How have your Oil & Gas related activities performed in 2014 amid the economic downturn? What is the outlook for 2015?
In 2014, our oil and gas activity resisted very well to the general slowdown because we were simultaneously completing the OFON 2’s living quarter and it’s hook-up in Nigeria. These offshore activities carried our growth levels all throughout 2014. Unfortunately prospects for 2015 are less promising. We therefore maintain an activity in Fos-sur-Mer in relation to smaller projects. These activities, which represent 150,000 working hours a year, sustain our profitability. The oil and gas activity in the industrial sector is not only offshore however. We provide onshore services too.
Eiffage Metal offers a wide range of services to the oil and gas industry, ranging from the construction of oil and gas rigs to transportation and storage. Current plummeting hydrocarbon prices are allegedly more severely impacting upstream activities. Does this imply that your downstream activity will prevail as your dominant stream in the future?
We are indeed committed to further develop our downstream activity, especially since it will be difficult to consolidate the same level of activity in the offshore sector. First, we are qualified to provide excellent onshore services, illustrated by the gas compression station built in Sauveterre-de-Guyenne, France for TIGF. Secondly, our competencies in Oil & Gas coupled with the global group’s world-renowned civil, electrical and marine activities, can help us prevail as an EPC partner of choice, particularly in regions like West Africa or Eastern Europe where we are well established.
The Fos-sur-Mer yard is very much focused on serving the offshore sector. From a North American standpoint, it doesn’t always seem economically viable to sustain a plant in France, amid for example, a rigid labor market. Given the cyclical nature of our industry and its therefore fluctuating HR needs, why is Eiffage Metal firmly committed to preserving this plant?
First of all, we must remind our audience that when we conduct offshore projects we consistently rely on yards abroad to fulfil our objectives. In complex EPC projects like in Nigeria for instance, we depended on two different local yards too. The yard in Fos-sur-Mer increases our flexibility and enables us to respond promptly to challenges we may face with local yards abroad. The Fos yard is relatively small but has all the capacity to complement or assist other yards responsible for production. Our yard in France serves as a center of excellence from one project to the other. In Fos, we hire talented graduates, train them for future projects and dispatch them internationally on spot missions.
Your prestigious clientele comprises the world’s leading Exploration and Production companies: Chevron, Total, BP, Statoil and Petrobras to name a few. In light of the current situation in regards to hydrocarbon prices, how is Eiffage Metal coping with its customers’ intensifying demands, expectations and budget cuts?
Our objective is to increase subcontracting, provided that our subcontractors align with our safety, environmental and quality standards. We will progressively rely on our yard in Antwerp to win additional offshore projects. Lastly, to remain competitive in the long run, we must remain at the vanguard of innovation especially in relation to project management and engineering. I would also like to underline our pledge to unfailingly deliver quality, safety and planning to our clients.
We understand that Eiffage Metal has built a substantial network in Africa. We also noticed your presence in the Middle East via your subsidiary in Qatar. Could you please say a few words on Eiffage Metal international presence?
Albeit the current geopolitical turmoil, we want to maintain an activity in Libya, where we revamp existing installations. We are now active in Algeria. We have deep historical ties with Nigeria and Congo and were recently awarded several $5 million projects (Technical modules for Total Moho Nord oilfield, Congo and Padeyes for the EGINA FPSO, Nigeria). In the Middle East, we will try to exploit the success of Eiffage Metal to promote our Oil & Gas services. In the Americas, we recently completed the acquisition of two contractors located in Colombia and Canada, which will enable us to gradually implement our Oil & Gas services. Lastly we are contemplating the idea of expanding towards Southeast Asia.
Your website broadcasts the motto “Defying complexity”. What does it really translate into?
“Defying complexity” illustrates our perpetual commitment to engineering in steel construction in general. It is within this context that we seek the brightest engineers and develop lasting partnerships with foreign engineering offices. I have one goal for the coming years: Excellence! Our capacity to deliver will warrant our survival.