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Interview

Omar Flores – President, Damgas, Argentina

14.11.2016 / Energyboardroom

hector-flores-damgas

Damgas president, Omar Flores, describes the secrets behind the company’s success in Neuquén, new projects in the Damgas agenda and his plan to create new partnerships.

Could you please introduce yourself to our international readership?

“The goal of our company is to be a versatile and functional SME, thus becoming a link between industry and the community, working in urban areas of the province.”

I worked for many years in Camuzzi Gas del Estado as managing director and decided to set-up my own company in 2009, thus creating Damgas. I was interested in the execution of gas network constructions reaching the end user and, because I saw a great need within the region, I decided to startmy own company.

Damgas, comes from the name of my sons: Damian and Gaston. The goal of our company is to be a versatile and functional SME, thus becoming a link between industry and the community, working in urban areas of the province. We specialize in gas infrastructure in urban areas in both new and old districts.

After being in business for seven years, to where have you grown Damgas?

We have not stopped growing since we started. At first, we had four employees and after the first two years we had already reached 18 employees. Moreover, in 2015 we achieved USD 15 million in revenue. This represents a tremendous growth because we started on a fairly low capital basis. This growth was the result of profound capitalization of equipment, tools and vehicles to respond appropriately in our projects.

Our aim is to be as versatile as possible so that we can respond quickly and take advantage of arising opportunities. We understand that gas is vital and the companies that hire us want short and efficient runtimes of the construction works. That’s why all our projects have an average time span of two to six months. We place all of our resources into one project in order to carry them out in a short period of time; one of our flagship achievement was to lay 12,000 kilometers of pipelines in just two months! 90 percent of our activities are based on gas related works and building gas networks is our strength.

How difficult was it for Damgas to create a name for itself in the gas industry?

Given my 20 years of previous experience it really was not a challenge. During my years in Camuzzi Gas del Estado I believe I built a splendid reputation for working excellence, so when I decided to open my own business, people already knew the quality of my work. I worked on a multitude of different projects and works in Camuzzi with many companies, building relationships and gaining a reputation within the whole province; today these companies are my clients. Creating good and long lasting relations has been vital for our development. In my previous job, I did not struggle to treat all my customers well regardless of the title they had, whether it be a governor or someone who needed gas at home and this philosophy is now reflected in my success.

Speaking of governors, Omar Gutiérrez told us that Neuquén is the land of opportunity. Has this been the case for Damgas? Why did you choose Neuquén as the base for your operations?

I was born and raised in Neuquén. Neuquén is my home, where I know everyone and they know me. And since there is a severe lack of gas networks, it makes the ideal combination for me. In my previous jobs, I completed projects throughout the provinces, from Buenos Aires throughout to Tierra del Fuego. Nonetheless, Neuquén being my province and moreover having the need for local development, I decided to settle here.

Rogelio Frigerio, Minister of Interior and Public Works recently closed a tender for a project of 900 million pesos (USD 60 million) in Neuquén in which Damgas will be participating. How big is this new project for you?

Mainly, this project will bring a lot of infrastructure to Neuquén capital and throughout the province. It will expand existing networks and develop new networks thus allowing gas to reach the people who need it most. It is a project where many companies are participating to complement the different aspects of the work needed. In Neuquén Capital, there are about 16 companies with the same services as Damgas, but because of our good name and resources we are very competitive. Our versatility and speed has given us many projects and has helped us demonstrate that we are capable and efficient. In each project, we deploy as much machinery and personnel as possible to finish fast with utmost quality.

We also have a policy where we split our profits with our employees to motivate them to give the best possible results. In our last project, they wanted to work seven days a week because they knew they would be very well paid; if I’m doing well, my employees are also going to be fine. Therefore, I strive to create an environment with equipment, machinery, and adequate work environment knowing that they will be satisfied and happy workers, thus giving better results.

Does this leadership style create a competitive advantage for Damgas?

Of course, it does! In the latest project with Camuzzi, I received a call from Camuzzi, warning me they were going to take two of my people who had worked on this project because of the good results they had achieved. They said they would hire more staff and they liked those two because they were highly responsible and had already been instructed by me. I congratulated both, because I knew this was a very good opportunity for them. I give all employees the same training opportunities. In our library, you can find the work standards issued by Camuzzi for instance. Also, they serve as reference for my employees of which many are now in a better position due to the good work they had done. The incentive is to improve, and I’m glad when they go to other companies, as this represents a tremendous growth for their careers.

How easy is finding the right staff in Neuquén, being a much smaller city than Buenos Aires?

In the past, I preferred to take older people who had a lot of experience. However, the problem was that they brought preconceived ideas and many arguments were created due to their lack of flexibility. Now, I take younger people, mostly referrals from my employees, who are more open to learning and working as per our requirements. A certain level of commitment to your co-workers is also created, as they are acquaintances and friends.

Due to the upcoming development in Vaca Muerta and the need to create new infrastructure, is Damgas planning to increase the portfolio of services by adding installation of pipe lines from deposits to the gas distribution plants?

At the moment, we do not plan to participate in that aspect as it is subject to very tight regulations which make it difficult to penetrate this market. For that reason, I prefer to work outside of this circle, even when the installation of pipe lines on the deposits are way easier to do because they are done in cross country, while we have to make sure we do not affect electric lines, water pipes, and phone lines among others. At this moment, due to the methodology of this segment, we cannot participate, but we expect to take part in the future. We are not regulated by the restrictions imposed by the unions, which allows us to do be more efficient with time management and work.

Overall, how well is Damgas prepared for the development of Vaca Muerta?

We are equipped with the right tools and machinery and we are also working to obtain the ISO 9001 certification, which is the international standard that specifies requirements for a quality management system (QMS). Today we are working in Añelo and Rincon de los Sauces, two of Neuquén’s major cities within the Vaca Muerta basin; in this area we are also focused on urban development and not on the deposits, because it is more beneficial for the moment.

How have the political changes under the new administration, focused on bringing investments into Argentina, impacted your business thus far?

It is still too early to see the impact of these investments although they have already begun; an example of this is the project that was recently opened by Interior Minister Rogelio Frigerio. The first six months was the planning phase of all the works that were to run and now we are witnessing the beginning of these works.

Currently, many new companies are considering settling in Neuquén province. Does this represent a challenge or an opportunity for Damgas?

I see this as an opportunity to develop our society because this will contribute to faster growth. I understand that other companies can provide capital, contacts and experience that can benefit Damgas. I’m not afraid of competition, because the social filter in the province is very comprehensive and we already have a genuine track record of excellence with which we have built a good name. We are completely open to partnering with the right companies.

What would you consider to be your competitive advantages?

We are advisors of several public institutions, which has helped us to create close relationships with the public sphere at large. Moreover, I also keep good relations with Camuzzi, which creates a double need to present my work to the highest standards, as I represent Camuzzi in the common projects we carry out together with Damgas. My benefits are the good relationships we have, our versatility and our quality.

How important is your attainment of the ISO 9001 certification?

It gives the world a historic reference that a small company can perform high quality work. Our goal is to demonstrate that to the community: work hard and you get far.

What projects over the last seven years best represent Damgas?

One project was the laying of 12,000 kilometers of pipelines in just two months. No other company in the area and of our size is capable of doing that amount in such a short time. All the people now have gas thanks to our work. This defines what we are, a highly efficient company, committed to our partners and the community. It was a very important project because we fulfilled the goal and earned the respect of government and industry.

Why is Damgas the ideal partner for foreign companies?

Argentina has much to offer, because it is a country with a vast territory and a lot of wealth, but very empty. Foreign investments with a social conscience to create profit for the company and the community alike are always welcome. Damgas has an impeccable track record, local knowledge and willingness to work with companies that are willing to develop Patagonia.

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