Roderik van Seumeren – CEO, Selmers – Netherlands
Roderik van Seumeren discusses Selmers’ long-standing reputation for excellence in equipment manufacturing for pipe coating, and onshore and offshore pipeline construction and the initiatives he has taken to increase the company’s footprint globally and in the offshore industry since its acquisition by his private equity fund, MeekMaken.
As an introduction for our readers, please give an overview of where the company stands today, and what the focus of your leadership directives have been since becoming CEO?
With almost 50 years of experience, Selmers has become an international leading supplier in equipment manufacturing for pipe coating, and onshore and offshore pipeline construction. So, when I became the owner three years ago, the company was already a staple in the industry, boasting a dedicated team of specialists and engineers alike that collectively, through extensive in-house R&D initiatives, produced our current expansive portfolio of pipe blasting systems, handling equipment, and coating solutions. That being said, however, the company was very much dependent on only one or two big jobs a year solely dedicated to the onshore sector, leading the company to experience successive downtime and vulnerable to market fluctuations. In other words, the company was working at a very fast pace during the projects and then standing still in between. Together, with the management team, we formulated a strategy that allowed the company to run at the same pace throughout the year, leveraging any latent capacities to maximize utilization rates among our resources. This could only be achieved by scaling up our assets—both from a human resources and physical infrastructure standpoint.
Under my directives, we’ve more than doubled the size of our staff across all verticals including sales, technical project managers, and engineers. We now possess over 150 people to manage approximately 20 mid-size jobs per annum valued around USD 1 to 2 million each. Furthermore, to help diversify our portfolio, we’ve begun to shift our focus towards offshore work, striving to structure a substantial percentage of our business to this particular sector by 2017. Although having only been in this position for three years, I am quite excited to take this company to new heights, and I think the fruits of our ambitions have already begun to materialize.
In terms of resources, capabilities and strategy, what is the significance of basing your operations out of the Netherlands?
The country’s significance is almost insurmountable. For starters, the origins of Selmers can be traced back to 1966, when we first started as an engineering company for cable and television networks, and then later pipeline manufacturers as the Slochteren gas fields were discovered. Given the country’s own longstanding history in oil and gas, the Netherlands possesses innate talent for innovation. The birth of many advanced techniques that are now used across the globe came from Dutch innovators—effectively highlighting the country’s formidable capabilities in R&D, but more so an attractive environment for operational excellence. In that respect, the Netherlands, as one of Europe’s energy hubs, serves key geographic importance for many companies looking for regional access to other parts of the world. Needless to say, Selmers’ progressive evolution from a modest engineering company to its current leading market position as a full service supplier to the global pipeline industry is mostly, if not completely, attributed to its heritage here.
In a recent article, you were quoted as saying there are two main objectives when making an investment decision: 1. Do we understand the business 2. Can we add value. What sort of added value did you envision for the company when you initially invested in Selmers back in 2012?
Selmers has wonderful people with an extremely positive and supportive working environment. An atmosphere that was perhaps instilled by the previous owner, a highly regarded person whose efforts ensured a seamless transaction and smooth transition during the change in management. To this end, our private investment company MeeMaken was very lucky to have been able to buy the company. Our added value encompasses two factors: from an operations standpoint, we’re capable enough to run the company, and from a business development perspective, my network, through years of experience in the industry, can produce a fluid stream of opportunities whether it’s for contracts, strategic partnerships, or general collaborative opportunities. Unlike perhaps the more traditional three to five year horizons and returns-centric focus of private equity firms, MeeMaken is truly invested in the long-term success of Selmers, and from a personal standpoint, I want to establish fruitful relationships and enable the long-term growth ambitions of the company’s greatest assets: the people. This is the type of added value that I envisioned when we came on board.
Due to cyclical dynamics of the oil and gas industry, many players are divesting non-core assets and implementing aggressive cost-reduction initiatives. Compared to your peers, what makes Selmers the ideal partner and solution for unlocking value in such a stringent operating environment?
There is the offshore side and then the onshore side, which both play into a different set of dynamics in terms of evolution. Innovation plays a huge part regardless of the sector. What is interesting about Selmers is that we innovate together with our clients. None of the equipment that we sell to our clients is completely the same. This is because every client is different: they have their own demands and their own ideas about what kind of equipment they require. Our job is to listen and understand what they want, and then translate it into robust and cost-effective solutions. Given the traditionally conservative nature of the industry, convincing our clients of the added-value benefits of our products and services is certainly a challenge in and of itself. But, throughout the years, we’ve seen that the players in this industry, who possess a drive for incremental innovation and self-improvement, are the ones that truly thrive and build up a track record of success. A prime example that comes to mind was for an offshore pipeline laying company that put in a purchase order shortly before Christmas, requesting a very constrained turnaround time with the ultimate shipping destination in Houston. Together with our other partners in the Meemaken Group, Eurorigging we were able to utilize our resources at the Istanbul office (HLTS) creating a streamlined project plan that encompassed all the requested features, and delivered the equipment within budget and earlier than the requested date.
So far, it’s been quite encouraging to receive only words of praise regarding Selmers’ efficiency and reliability, and it’s very much within the scope of my responsibilities to preserve that hard-earned reputation moving forward.
Which segments of your product portfolio have exhibited the most promising growth prospects among your clients? What types of applications have been in most demand?
Over the years these segments are changing, of course, with new technologies and the locations of oil and gas fields. Historically, the promising growth has been in pipe coating plants for 3-layer Polyolefin coatings and internal liquid epoxy coatings, which have always been in high demand. These plants are used to produce coated line pipe for long distance oil- and gas transport pipelines.
In the last decade, with the development of deep water fields, we have achieved a high growth in equipment for field joint coating application, pipe spool welding and special insulation foam coatings.
Through our long term know how in coating process application and continuous equipment innovations, we offer our clients benefits in optimizing their operations as well as consultancy in setting up their coating venue, even if they have no experience on the subject. This is an aspect in our activities that answer to the demand of today’s clients without a doubt.
Our interview with Jan Tegelaar of PPG depicted the importance of incremental innovation for coatings companies, especially in the realm of more advanced and total-package protective solutions. To this end, what type of R&D projects is the company focusing on to accommodate the growing demands in the market?
The biggest innovation we did in the last two years was a wheel abrader to grit blast field joints as well as a heat & coat machine for field joints. These machines are a next step in automating and speeding-up the field joint blasting & coating processes, compared to previous technologies. In the past there were many different steps to this: blasting with manual interaction and mounting/demounting, then heating with manual mounting/demounting, followed by powder coating with manual mounting/demounting. Now, with these machines we can mount/demount from the pipe with almost no human interference and in less steps. A further advantage is that these machine offer a better consistency and repeatability of the application at a faster speed, creating high potentials for operators. The remarks we got from the operators on board were of surprise and appraise at the quickness and efficiency with which these machines do this now. It’s been very encouraging.
Safety is always one of the primary concerns for everyone across the value chain. What policies and procedures has Selmers implemented to communicate its conviction towards HSQE?
In our case, our responsibilities are huge, because other people are working with our equipment. We have to make sure that during the whole process, from sales to delivery and installation on the clients’ side, that all people wo are involved are also trained in thinking about risk. Especially since it is not our own people working with the delivered equipment we have to take all care from all perspectives. It’s in our blood to think about these issues.
During your time as CEO, what have been some of your biggest achievements and milestones over the past three years? Where would you like to bring the company in the next five years?
Our biggest milestone is that we have grown the company two-fold while maintaining the same spirit. We have a new management team in place. When I took over the helm back in 2012, Selmers was generating approximately 20 million USD in annual turnover with 70 employees on payroll. The business plan for 2017 has focused on effectively doubling the size of the business in terms of revenues and staff. Perhaps as testament to the plan’s vitality so far, we currently stand at 50 million USD in annual turnover with over 150 people now working for the company. My efforts in the coming years will focus on the scaling up our competencies, refining the value-added nature of our products and services, and strengthening the company’s global footprint—all of this while also catering to the positive wellbeing of our people by promoting the utmost standards and health and safety.