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Pieter Arie Kraaijeveld – Managing Director, VSF – Netherlands

21.07.2015 / Energyboardroom

Pieter Arie Kraaijeveld describes VSF’s role as a safe and reliable provider of quality heavy and complex steel structures and foundation techniques and VSF’s move into the offshore oil and gas and offshore wind sectors in a meaningful way. 

Please describe how the industry landscape has evolved over the years, and what type of objectives companies such as VSF are focusing on today in response to that evolution.

To VSF, offshore is a relatively new sector. Mainly, we are an onshore contractor doing near-shore work, which is where our capabilities have been originally rooted. We started off operating in piling, and steel construction, and the company eventually evolved into higher-level work with regulations such as NORSOK and doing suction piling together with SPT Offshore. At a certain point, the company also started as a subcontractor to execute piling works for companies within the offshore industry. We have completed two or three jackets every year, mainly in offshore wind, where we do the piling and very often the grouting for lifting companies. They put in place the jacket and the topside, and then we do the piling and grouting.

Compared to onshore, the offshore market is quite large. It’s an extremely dynamic and interesting market due to the different types of contracts and different ways of cooperating with the clients. As opposed to 10 years ago, we feel like we’re getting more and more into offshore. Although we’re relatively small in scale as a company, we’ve started to invest in more fixed assets. For instance, we just recently rented a spot in Vlissingen to build the test jacket for the Pioneering Spirit (PS). From our perspective, there are limitless possibilities to cooperate with other service providers in the offshore industry—further appealing our interest. On the other hand, we know about all the challenging times in oil and gas. At the moment our portfolio is quite balanced between sectors and are thus marginally influenced by the short-term swings in the market.

Positioned as Europe’s energy hub, in terms of resources and capabilities, how much of an impact has the Netherlands had on the company’s development?

There are a lot of resources available in the Netherlands and Dutch resources internationally as well. As an international colleague once said, “You’re a small country, but the Dutch are everywhere. If you are on some spot in the world, there will most likely be a Dutch man there.” The way the Dutch people see business opportunities brings them all around the world. The country boasts a plethora of those types of individuals with an inner hunger for self-improvement and professional development in the context of an increasingly globalized economy. On the other hand, we’ve also recognized the importance of employing foreign nationals that reside here in the Netherlands who provide unparalleled value in the form of differing perspectives and alternative experiences—two factors that serve as core components in producing more creative and effective engineering solutions. In varying functionalities within the company, there’s a significant portion of employees from Eastern and Southern Europe, and they’re all doing an excellent job. Together with the wealth of intellectual capital and the country’s regional access, the Netherlands will continue enabling the healthy growth of our operations, especially regarding quality, safety, and performance.

What is the significance of basing the structural steel manufacturing facilities here locally in Rotterdam, as opposed to cheaper geographic regions such as the Far East?

Building offshore steel for clients in the Netherlands is only of interest for clients if there are time constraints, or for companies that don’t fully trust quality from other markets. We’ve seen a large spectrum in quality when dealing with countries such as China. Going back to capabilities, basing our manufacturing facilities in the Netherlands has fostered favourable characteristics that have enabled us to cater towards local demands, while effectively prospecting international business. We have an extensive amount of competencies available locally, but on the other hand, we’re keen on recognizing our shortcomings and outsource accordingly.

VolkerWessels is a Dutch construction group consisting of approximately 120 subsidiaries that span several sectors including construction & real estate, infrastructure, energy, and telecom. In your opinion, what are the main competitive advantages of being a part of such a globally diversified conglomerate?

The challenge of VolkerWessels is actually the fact that it is comprised of over 120 active companies. The biggest company in VolkerWessels is only generating approximately 600 million euros in gross turnover out of approximately 4.5 billion euros for the Group. In line with a more decentralized and independent structure, all the small entities within the VolkerWessels group are responsible for their own turnover, their own results, and their own cash flow. The inherent issue in this type of ownership comes to surface when considering effective coalition building—cooperating together to establish collaborative opportunities and more effectively tackle the larger contracts. It is very much within the focus of my initiatives now to encourage an evolution in the siloed mindsets of VolkerWessels member companies. Within offshore oil and gas and wind, there exist three or four companies operating within those sectors— VSI, SPT Offshore, VBMS (where VolkerWessels holds a 50 percent share), and VSF. The breakthrough will come when we’re able to come together as a VolkerWessels collective, encourage the transfer of best practices, and combine competencies from all parties to create new synergies and provide an unprecedented level of value for our clients in terms of innovative and cost-effective solutions. The board of VolkerWessels will not mandate its subsidiaries to procure products or services from other sister companies. They do, however, encourage pairing with the right partner that possesses superior capabilities to have help execute whatever type of venture is being pursued.

Parlaying its expertise in structural steel and foundation work, the company has made significant strides in establishing its presence within the offshore industry. From your perspective, which geographic regions are truly driving demand?

VolkerWessels has a strong focus on three main geographies: the Netherlands, United Kingdom, and Canada. To a certain extent, the holding group has not widely penetrated the rest of the world. That being said, however, there are plenty of opportunities for small companies such as VSF to participate in the market, even given the current climate with low oil prices and regulatory pressures. In terms of regions, we’re mainly focusing on the Dutch companies, such as Heerema and Allseas, and also together with SPT Offshore we’re targeting a broader range of companies within the market. For example, several years ago, we helped successfully install the F3FA platform for a Centrica development in the North Sea. We are constantly evaluating jobs that might be of interest to not only VSF, but also us together as a joint venture with other VolkerWessels companies. Although we have received some initial questions from outside Europe, we’re still primarily looking at the North Sea region. We plan on starting from the smaller jobs focused around the trends in offshore wind farms and topside lifts within oil and gas, evaluate our success, and then pivot accordingly from there.

Considering factors such as price volatility and regulatory pressures, oil and gas and offshore companies are constantly looking for ways to unlock further value. In what way is VSF the ideal solution for these companies looking to reduce their bottom line and maximize productivity?

VSF is a very technical-driven company, also boasting commercially driven ambitions. Our technicians are always striving for the utmost standards in quality and design, and we’re constantly tasked with balancing those quality standards in line with market prices. Furthermore, we’re quite accustomed to contracts that require creative solutions and out-of-the-box thinking—whether it’s in the realm of engineering or cost-efficiency execution. Companies within the offshore wind sector have demonstrated their concern in lowering project lifecycle times, and we’ve responded accordingly. For instance, one of our offshore installation managers in the West of Duddon Sands project managed to execute the grouting of a set of monopile and transition piece in a cycle time of approximately eight hours. Although we were still new in the market at the time, our client was extremely impressed with the quick turnaround time—especially given the industry’s abysmal reputation for delays. The wealth of VSF’s technical experience allows us to exhibit flexibility when adapting to impromptu changes in client demand, even in complying with stringent regulatory standards.

Given VSF’s recent participation in the offshore wind segment, how would you evaluate the continued vitality of such offshore wind projects?

I believe that, despite fact and figures, offshore wind is a serious part of our economy, and at a certain stage there will be an influx of maintenance, reinforcements, and replacements, which will ultimately bolster our offshore operations. I’m not sure about the long-term prospects, but I’m confident that offshore wind will be a core component of our business portfolio for the next 10 – 15 years.

Can you elaborate on the some of the R&D initiatives that the company is currently pursuing to further refine its core products and services?

At the moment, R&D is relatively small in scale, due to the fact that the market is still client-driven from an engineering standpoint—they know exactly what they want and need. In offshore wind, up until now, we‘ve only focused on reducing cycle times. In terms of onshore, where we’ve long established our presence, the company has made significant R&D developments encompassing injections, freezing, pneumatically sunken caissons but considering the more tailored nature of such technology, we currently do not perceive any extendable and practical applications in the offshore industry. That said, however, as we further establish our exact role in the offshore sector, the extent of our ambitions, and where the current set of capabilities and experience can take us, we will invariably start to pursue more R&D initiatives to refine the value-added attributes of our products and services.

Spanning your time with the company, can you highlight one or two examples in which VSF helped a client overcome an extremely difficult challenge and truly showcased the company’s slogan: “Everything Under Control.”

The most notable one that comes to mind is our efforts in the West of Duddon Sands project. Our specialists were involved during tender and execution phase in various responsible. From the VolkerWessels companies, there were a several people involved in the offshore project, but I’m proud to say VSF’s capabilities had truly served as crucial factors in facilitating the success of the project. The same dedication of resources applies with all of our collaborations with Scaldis Salvage Marine Contractors. Through years of success, we’ve managed to secure their trust as a reliable and efficient contractor for any type of piling work. Additionally, we are now in the challenging process of building the test jacket for Allseas, which has incorporated a myriad of scope changes over the contract lifetime, but we’ve managed to continue delivering excellence at every possible opportunity;. The sheer proximity of our offices to Allseas has truly allowed VSF to become the flexible and accommodating partner of choice, exhibiting pristine standards in quality and functionality.

Where do you envision the company in the next five years?

We’re still in our early stages of development within the offshore sector. We’re very much focused now on harnessing all the existing talents, resources, and capabilities within the company that will help foster further success in this field. This year, approximately 40 percent of our turnover will be attributed to offshore activities. In the next five years, with small strategic strides, we will be able to continue our dominant positioning within the onshore market, while simultaneously growing our presence within offshore by focusing on safety, profit, cash flow, and turnover, and all-encompassing variables within those pillars. We strive our best to create a productive and stable working environment that produces a unified conviction towards safety from top to bottom and also encourage open discussions of any type of pressing concern. Within the coming years, the focus on tendering, looking abroad, having the context to meet international demand will be there. Collectively, we will be cultivating the necessary proficiencies to effectively compete on a larger scale in the offshore industry.

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