Graham Young – Managing Director, Anticorrosion Protective Systems (APS), UAE
Graham Young, MD of APS, discusses becoming one of the leading providers of corrosion engineering and contracting services in the Middle East, the high-quality services and products they provide, and the importance of innovation.
Could you please provide an overview of APS’ evolution from a small Dubai company into one of the region’s leading providers of corrosion engineering and contracting services?
We are constantly pushing ourselves to retain … trust, and testament to this is the fact that we are approved by every major OPCO in the Middle East and the North African (MENA) region.
When I first began working for APS, it was essentially a typewriter, a desk and a telephone in Dubai. I initially served in the marketing and business development capacity, as I had connections with major operating companies (OPCOs) in the region, built through my UK career. Our core selling point was that we were introducing lining technology completely novel to the Middle East, from Europe.
Initially, as these lining systems were rapid-set products, our supplier company, Ceilcote, thought that they would not function in the hot and humid environment here, but we proved otherwise. The next hurdle we experienced was that we were a Dubai company while most of the OPCOs were based in Abu Dhabi, so it was a nine-month process to establish ourselves in Abu Dhabi as well. We had a relatively successful first year with some offshore projects from local OPCOs: we generated about $2 million worth of business from Ceilcote, which, along with installation costs, meant about $7million worth of sales for APS. Our workforce expanded fairly rapidly with the development of our business.
Our first major breakthrough came in 1981, when we were invited by Costain Group (UK-based engineering and contracting firm)to survey and repair the roofs on the old LNG and LPG tanks on Das Island in Abu Dhabi. Our success in a job of this magnitude solidified our reputation as a reliable, trustworthy partner and since then, we have embarked upon major projects with virtually all of the OPCOs in the region.
We are constantly pushing ourselves to retain this trust, and testament to this is the fact that we are approved by every major OPCO in the Middle East and the North African (MENA) region.
As a mid-size service provider, what differentiates APS from your competitors?
Over the past four decades, we have, through hard work, developed a reputation for delivering quality services, utilizing industry-leading products.
One notable example is our work with the large well stimulation companies like Halliburton and Schlumberger. When we first started, much of their equipment was rubber-lined. Rubber is costly, perishable and high-maintenance, particularly in the Middle East, so we developed a vinyl ester resin laminate system called Derakane as an alternative. It was first introduced in a tanker for Schlumberger in Oman and the client was so impressed that they switched permanently to the Derakane laminate system, which subsequently changed the industry standard– and this tanker in Oman is still running today!
We also work with our clients to develop products tailored to the needs of the client and in the case of the development of the Infield Liner (IFL) technology, to the offshore industry as a whole. Petronas had an aging subsea pipeline network and wanted an alternative to pipeline replacement.APS developed a unique layered flexible liner, comprising of a PVDF liner, highly impermeable and resistant to a wide range of hydrocarbon mixtures at high temperatures from specialty chemicals producer Solvay, a woven aramid core from DuPont and a thermoplastic polyurethane outer layer from BASF. The entire R&D process took over two years, funded entirely by Petronas. In 2013and 2014 we have undertaken multiple IFL installations for the rehabilitation of Petronas subsea pipelines, running from platform to platform. In November 2015 Petronas granted APS an exclusive license to engineer, produce and install the IFL liner technology globally. And as a confirmation of PETRONAS’ confidence in the technology and APS’s capabilities, we were awarded two multi-year contracts for IFL installations worth over 180 million USD. There is nothing else like it on the market, so we are really the industry leader here – there is effectively no competition.
Innovation and R&D requires a lot of investment. How do you ensure that APS maintains and develops this technical expertise?
Successful innovation is key to our growth. Our work with Petronas attracted the attention of basically all the majors present in Southeast Asia, the Middle East, Europe and North America. We are also currently completing a project for RasGas in Qatar. The project started out as a contract for installation of one product and now involves two additional products, with the potential for even more, and this is possible because of the reliable and high quality service that we bring.
Constant innovation is a necessity to stay ahead of competition. We innovate by developing unique products and services and we know that competition is always trying to replicate our successes. For instance, glass-flake products for lining vessels is the current industry standard but in the 1980s, we were the first to develop it. A gas separator we completed for the Abu Dhabi National Oil Company (ADNOC) in 1981 is still functioning well today, over three decades later!
We continue to develop our products and services offering in order to stay ahead of the game. For instance, the IFL technology is mainly aimed at pipeline rehabilitation for subsea pipelines. . However we are looking at adapting the technology to suit the onshore market as well. Many onshore companies, like Abu Dhabi Company for Onshore Oil Operations (ADCO) are facing similar problems with their pipelines and have approached us for help.
The current oil price climate is placing a lot of downward pressure on cost, and this can affect smaller service providers negatively as their clients start demanding price reductions. How does APS meet client needs without sacrificing quality?
What is most important, even with current market conditions, is to stay true to our values and focus on delivering the best value for money to our clients. Meeting our clients’ demands in pricing has never been and will never be at the cost of deliverance of quality. The current market price pressure has triggered us to look internally and aim for higher production efficiencies and at the same time we are re-negotiating prices with our main product suppliers.
We also invested in the ISO 9000 certification system very early on, and then we added the ISO 18001 and ISO 14001 giving our clients quality assurance.
APS has an established reputation for quality, which is how we have won some of the flagship projects in the UAE, most notably the Burj Khalifa and the Burj Al Arab, the two most recognizable buildings in Dubai. For the Burj Khalifa, there was initial resistance to our proposed flame-spraying of the interior in addition to the exterior; our client wanted to use a simple coat of primer. However, we persuaded the client to go for the far more superior thermal metal spray system, for reasons that during the hot, humid summer months, condensation in the interior of the building would ruin a simple one-coat primer system in a matter of months. Cheap solutions may appear very attractive in the short-run, but are very costly in the long run.
Another example of the type of support we are providing to our clients is the corrosion specification we have written for the Zayed National Museum in Abu Dhabi, for whereby Foster Partnership requested a 100-year life estimate. This is an incredibly ambitious target for a coating system, however we proposed three different systems – a flame-sprayed aluminum system, a glass-flake with a top coat, and a standard epoxy coating – and extrapolated the lifecycle maintenance costs for each system, in order to provide the clearest picture of the various options available. This is the sort of comprehensive support we provide our clients.
For the next couple of years, what do you see as the growth drivers for APS?
Pipeline coating and rehabilitation in general are driving a lot of growth, most notably in the MENA region. We recently entered our first major onsite project in Africa with a major LNG project in Nigeria, requiring over a million square meters of corrosion protection. We are having a collaboration agreement in place with CAPE PLC and a local company on this and the project is progressing well.
Kuwait is also a very significant, albeit challenging market. Another area we are looking at for expansion is Jordan, where we have the potential to work on a major pipeline project there.
Besides oil and gas, infrastructure is also a significant growth driver for us, especially airports, where we have seen tremendous growth in the past five years. For instance, we are completing a project in Jeddah at the moment and we recently finished work in Doha, Dubai and Bangladesh, to name just a few.
Having witnessed and contributed to APS’ growth over the past 30 years, from a small crew of 23 people into a successful company of over 400 employees, what explains APS’ success?
I have already discussed the need for innovation and the need to cultivate a network of clients through quality, honest work.
The final key is the workforce, which is the lifeblood of the company. We look after our workforce and we reward them for their hard work. This creates a great work environment and fosters loyalty within the company, which serves to promote hard work and dedication. We are a business, but a happy workforce is a productive workforce. Personally, it also explains why I have stayed with the company for over three decades! This has become like a family to me and I suspect, even after I retire, I will stay on in a consultancy role.
Overall, despite the current difficulties, we are expecting growth in the next six to nine months and for the longer term, we have a full pipeline of projects. I am confident that APS will continue to grow while remaining true to its roots.