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Interview

Ramon Menendez de Luarca Bellido – CEO, EIA 21, Spain

Ramon Menendez de Luarca Bellido, CEO of EIA 21, discusses Spanish and Basque engineering excellence, how people rather than products impact the success of a company, the cultural synergies between Spain and Latin America, as well as his intentions to grow the company even further internationally.

Can you tell us about the choice to buy a majority stake in EIA 21? Why did you choose such a risky investment and why, within the engineering sector, the precise choice of EIA 21?

Leaving out the vocational part and my interest in the industrial world, I believe three things influenced my decision to buy a majority stake in EIA 21. First is the hypothesis that Spanish engineering will return to the leading position it held prior to the crisis. Indeed, from 1990 onwards, Spain has been home to some of the most sophisticated technologies and respected engineering firms in the world. The Spanish government invested highly in state of the art infrastructure and resources across the country, which allowed local companies to develop incredible capabilities.

Secondly, Spain is home to a very well equipped and talented pool of people capable of using complicated engineering tools, especially in the Basque region. In an age where most calculations and engineering are done by computer, I think a company has a better chance of success if it employs experienced talents in this field. Similarly, many investors think that people, more than the products, matter most when it comes to a successful venture, particularly in service based industries.

Last, Spanish professionals have shown good project management skills and very good capabilities at handling complicated logistics. To me, this skill appeared essential in the engineering world. Shipyard projects consist more of handling the project’s logistics to ensure everything can work together in a timely manner than technology. My prior experience with the company proved their ability to deliver projects at the right time, at the right moment, at the right cost, with limited resources in a cohesive manner.

With regards to your financial background and analytical expertise, what managerial edge do you bring to EIA 21?

Well, I did follow an MBA in science administration and conducted most of my career in consulting and finance, but I don’t think you can personalize the success of EIA 21. It would be a selfish mistake. As a manager, I don’t rely solely on financial literacy, though it is true my analytical mind-set helps me manage difficult circumstances. So long as the books are well kept, and the gearing neat, success depends on the alignment of the people to the strategy and their ability to deliver something that is of interest to the final customer. Of course, we produce blueprints and calculus before we can get to the final product, but at the end, our clients want something they can use. Producing calculus for the sake of it would be irrelevant. Our intermediary steps have to be aligned with the final purpose of our contract with a client.

Additionally, my role here is to make sure we have the right talent paid for and that this pool of talent is constantly keeping the customer’s needs in mind. In fact, as a manager, people skills are much more important than what one can imagine before taking the position. As you take office, the priority is to understand: Who is everyone? What is their role? And how you can fit in to serve them? At the end of the day, my proudest achievements with the company are my employees telling me they feel closer to me than they did to their previous bosses.

What are the main challenges you have encountered since acquiring a majority stake at EIA 21?

Before the shareholders approached me to take EIA 21’s lead, it appeared the corporate culture was not suited to entering the globalized market. The corporate culture was not positive enough. Precisely, employees were not forward-looking and had lost the taste for challenge. The overly paternalistic ethos and cultural conservatism present in the company would challenge the change management I wished to operate in. Indeed, with regards to these traits, empowering people and making them accountable both for themselves and other people was tough. Training tools have increasingly improved the way we function as an EPC. Today, the environment is more appropriate to foster dialogue and innovation, and I think we have come a long way since I joined… but the culture is still evolving for the better.

What sectors do you operate in and which services are in your portfolio?

We cater to three main sectors. Our strongest division is Oil & Gas. Power is also a strong segment of our company in which we hope to grow abroad. Water treatment is the third sector we concentrate on. EIA21 offers a wide portfolio of services ranging from product valuation, analysis, concept engineering, basic engineering, detail engineering and engineering integration in all three of these sectors. Detail engineering is one of our strongest product lines. Also, we are looking at intensifying our concept engineering services because of the high margins the market offers. However, selling in this segment is not as easy as in others. Our last area of focus for future growth is engineering integration. We are starting to be valued for the logistic supervision of many projects and expect to increase our foothold in this segment of services. More specifically, our role as integration engineers is to ensure all the solutions provided by suppliers and providers in a construction project can function in a consistent manner. This logistic supervision is not as capital intensive as engineering at large and has some strong implications for the long-term success of many projects. Indeed, properly integrated infrastructures are quicker to set up and cheaper to maintain.

What has been your approach to internationalization, and what are your intentions for the future?

Most of our clients are Spanish. In a similar way to many other national EPC companies, we have followed our local clients on international projects. Our first international operations were in Latin America because of the cultural fit with the Iberian Peninsula. Our clients, however, have a global presence of which we intend to take advantage of in the coming years, (e.g. Indonesia, Bangladesh and Africa). We opened an office in Lima, Peru and worked with Repsol and Tecnicas Reunidas in Peru but the Peruvian market has been slow. Unfortunately, President Pedro Pablo Kuczynski has not managed to create the expected investment impulse for which he was elected because of an unsupportive congress. Despite the disappointing state of the economy, we do not intend to close the office.

The decision to go to Latin America was intuitive, just like the French have a connection with West Africa, opening a project in Chile or Mexico was easier for us even though profit wise it might not have been the most rational decision. We are currently looking at broadening the base of clients we have, looking beyond Spanish companies. As a matter of fact, we are involved in tenders in Algeria, the USA, Trinidad and Tobago, Guyana and Colombia.

What few words do you wish to address to such potential clients?

EIA 21 is a very young company, determined to provide innovative solutions to our clients. Our employees are now committed to challenging the status quo and providing better-fitted solutions to clients using state of the art tools. EIA 21 will be increasing the geographical scope of its operations and develop proprietary solutions.

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