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Antonio Fernando Krempel, CEO, Intertechne, Brazil

Antonio Fernando Krempel, CEO of Intertechne, talks about company’s well known presence in Brazil, why hydropower is at the core of its capabilities, and some of the future challenges he expects to see for the country and the industry.

Intertechne has been active on several fronts, from designing major hydropower plants and dams, to large infrastructure projects in Brazil. How would you define the potential of Intertechne in Latin America?

Intertechne is 100 percent a design company with 670 employees in Brazil and abroad. We have production offices in Sao Paulo, Rio de Janeiro, Salvador, Manaus, Neuquen (Argentina), our head office in Curitiba and commercial offices in Mexico City, El Salvador and Lima.

Our company is well known in Brazil because in 2012 we were the 20th biggest design company in a Brazilian ranking, including some that play also as EPC contractor, owners engineering firms and design companies. Solely in terms of design, we were ranked 12th amongst more than 120 companies.

Indeed, hydro represents the core of our business. In terms of installed capacity, our market share for hydropower plants under construction in Brazil is 95 percent in terms of “installed capacity”. Since we participate with Brazil’s largest hydropower projects like Belo Monte or Santo Antonio (11,233 MW & 3,150 MW) this market share result is easy to attain. However, excluding installed capacity figures, we participate in nine out of 16 projects under construction, which represents a 56 percent market share. We are proud to be the design leaders of Brazil’s most significant projects such as those at Belo Monte, Santo Antonio and Teles Pires.

We also operate internationally, and are currently working in Mexico, El Salvador, Honduras, Guatemala, Dominican Republic, Peru, Argentina, Angola and Turkey. Our expansion in Latin America is steady and will allow us to serve existing clients and pursue new business outside of Brazil.

Brazil today is only using one third of its hydro potential. Nevertheless, with the latest developments on reservoir issues and projects being delayed, hydropower seems to be put on hold. How can this source of power regain its confidence?

Hydropower is essential for Brazil and we must take advantage of the natural hydro resources in Brazil to build a sustainable and renewable energy model. When our industry partners and the government speak about potential from other renewable energies such as wind or solar power it is vital to be realistic and observe facts. For instance, one wind tower can generate maximum 6 MW and lacks the ability to store energy, whereas Teles Pires, relatively small in comparison to Belo Monte, already has a 1800 MW installed capacity. Our country needs an additional 6000 MW to be connected to the grid annually; therefore, we must focus on the easy to reach fruit given that hydropower, alongside with thermal power represent the best options to reach this target effectively.

To what extent do you feel thermal generated power plants can support Brazil’s hydro generation projects? 

Gas-fueled thermal power plants are the best realistic alternative if gas becomes more accessible. In fact, access to cost-efficient natural gas will mainly depend on the results of the pre-salt auctions. Liquid natural gas (LNG) on the other hand, will be dependent on prices incurred through importing it from other countries—Bolivia, for example—as transport through long pipeline systems has a cost. Even more significantly, cities in Brazil do not receive the same amount of gas because of telescopic pipelines used for long distance gas distribution. For example if, per day, Sao Paulo were to receive 30 million cubic meters of gas, Porte Alegre would only receive 2 million cubic meters of gas as it is located very far away from Sao Paulo and its main gas source. Of course, the fastest solution for large gas transmissions throughout the country would be to install LNG gas terminals in the principal areas of consumption, especially in the south. Another feasible idea would be to construct a pipeline parallel to the existing one to increase the pipeline network, including to more distant cities.

In the end, the future of gas related projects in Brazil will depend on three variables: the price of gas, dependence on gas imports, and which stakeholders will pay for the pipeline distribution networks or LNG gas terminals. Until we sort out these issues, the prospects for further gas-fueled thermal plants are uncertain.

In 2011, the company was generating around USD 65 million revenues, representing a 40 percent growth from the previous year. What has been on your agenda as the CEO of Intertechne to reach this performance?

Currently, our hydropower design work in Brazil accounts for 50 percent of our revenues. The other half of our revenue comes from international operations and other infrastructure projects.

For example, non-hydro infrastructure projects currently represent 25 percent of our revenue and this is growing fast. We are working at this moment on the new Viracopos airport and are in charge of the designing of subway lines in Sao Paulo and a research reactor in Sao Paulo state.

Revenue from non-hydro infrastructure projects will increase further in the future, particularly abroad. Hydropower designs, however, will remain our main focus in Brazil, as these projects require a long-term perspective. Belo Monte, for example first saw light in the 1980s and is yet to be completed.

Intertechne is participating in some of Brazil’s most important hydropower projects such as Belo Monte, Jirau and Santo Antonio—11233 MW, 3750 MW and 3150 MW respectively. What have been some of the challenges in taking on such large design projects?

The most challenging design project so far besides Belo Monte was Irapé, located in Minas Gerais state. This dam 208 meters high is the tallest construction of its type in the world. It will be capable of generating 360MW. Despite the challenges of designing such a superlative dam, including building a 100 meter long bridge and laying 34 kilometers of access roadways, we have made this project a true success.

Belo Monte on the other hand is impressive due to its size, the incredible amount of power it generates and the level of investment necessary to push the project forward. For instance, water flows over the Iguaçu falls at 1,500 cubic meters per second whereas the river at the Belo Monte site carries 14,000 cubic meters per second. This represents nine times the flow of Iguaçu falls. The width of Belo Monte’s channel is 210 meters, which equals two Maracana soccer stadiums put together. The original designs required 200 million cubic meters of excavation in the channel. Our rethinking of this has managed today to reduce this to 120 million cubic meters.

Every project raises different problems but having successfully designed these unique projects we have great confidence in our ability to accept any new challenge.

Intertechne has been working on large projects with the most active clients in the energy industry like Eletronorte, Cemig or Tractebel and contractors like Odebrecht, Andrade Gutierrez, Camargo Corrrea, Alstom and Andritz. What makes Intertechne the partner of choice?

Since the foundation of our company 25 years ago, we have emphasized commitment and understanding of our clients’ needs. As a company we have been innovative, adding value as well as creating new and tailor made solutions for our customers. These conditions are essential to become a recognized player in project design. Our experience and long track record with some of the most important hydropower plant designs in the world, including Belo Monte, proves us to be a robust and reliable engineering company. Our projects are 100 percent designed with 3D model software. Our competition is still limited to creating 2D plans. This makes our designs far more complete and valuable to our customers.

Overall, our technical and managerial expertise as well as our vision gives us a competitive advantage over the competition in any dam building project.

If we were to come back in five years’ time, where would you like us to find Intertechne?

We will continue our focus on hydro design given that this has always been at the base of our company. Moreover, since our clients are expanding abroad, we will go with them to undertake new and exciting projects, including a 2000 MW plant in Angola. We will, of course, also retain an emphasis on infrastructure projects and increase our geographical presence.

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