Willem van Geenhuizen – Member of the Board and the former CEO, A.Hak – Netherlands
The former CEO and board member of A.Hak speaks about the complementary nature of the businesses that come under the A.Hak umbrella, and the importance of international growth for the pipeline-focused company.
Can you tell us about the early movement of A.Hak into the gas pipeline business?
Arie Hak, founder and namesake of A.Hak, owned a transport and rental company. In the decades after World War II he rented out a large part of his equipment for the renewal of underground infrastructure. A.Hak quickly became one of a handful of companies able to transport pipes with a large diameter. These pipes were unloaded by hand and then lowered into the trench. Repeating these tasks over and over again, Arie Hak came up with a new plan. Why shouldn’t he found his own pipeline firm? This is how A.Hak Pipelines started, in 1963.
I joined the company in 1974. After my education as a civil engineer, I’d been working in countries such as Madagascar and Libya. I returned to the Netherlands in 1969 and started working as an associate director for a French company that built gas transport pipelines for Gasunie. In 1973, Gasunie decided to terminate the cooperation with the French. A.Hak was one of the Dutch companies that moved into the domestic market and Arie Hak offered me a job in which I could put my international experience and knowledge of pipeline construction to good use. In 1985 A.Hak Transport, which is still owned by the Hak family, went its separate way, and I became the owner of A.Hak Pipelines.
Nowadays, A.Hak’s activities span a range of products and services. Can you tell us where the varying emphasis of your activity lies?
At present, A.Hak is a cohesive group of independently operating companies. The binding element between them is our privately owned holding. From locations on all five continents, we deliver global solutions for the transport and distribution of oil, gas, water and electricity, data and telecommunications traffic, public lighting and renewable energy. Our activities are all interconnected. For instance, we don’t just lay pipelines, but we also have specialized companies that perform diverse services such as dewatering, drilling, internal and external coating of pipes and a full range of industrial services. This joining of forces doesn’t just go for our pipeline activities in the oil, gas and water market but across the board in the entire group.
We bring water and energy from source to end user and are active in the entire life cycle of their infrastructure, above and below ground. On top of that we are an all-round partner in the telecommunications market and offer several products and services in public lighting, including our own production facility for lighting poles. The complementary strengths of our companies allow us to be a one stop shop for our clients.
What is your strategy for growth?
First of all, our entrepreneurship and continuous innovations are the driving forces behind our growth. We always keep an open mind to acquisitions that can further complement our already impressive range of interconnected services. A.Hak is a household name in the Netherlands and in large parts of Europe. In the pipeline industry we can call the Middle East our second domestic market, while our operations in the field of industrial services are truly global, after adding Australia to the list of subsidiaries. In the years to come we aim to further expand our position as a global player in all our existing activities. On top of that we invest in new technologies in the field of renewable energy. Both as part of our own operations and by participating in innovative companies like REDstack (Blue Energy) and Torrgas (torrefaction of biomass).
Having said all that, it’s my firm conviction that our most valuable asset is our workforce that will continue to go out of its way to offer our clients the best possible service. We’ve come this far by listening intently to our clients and provide useful innovations. For example, at this moment we are building a new coating plant that will cater to the demand for deep sea coating services and we participate in the development of Extended Reach Drilling, which will allow for horizontal drillings of exceptional length.
In 2013, you acquired a nitrogen services company. Can you tell us about prospects for further M&A activity?
The company you refer to is Linde Gas. A.Hak has taken on their nitrogen pumping capabilities. This allows us to cool down cracking towers in refineries in a very short period of time, thereby decreasing the down-time of the refinery considerably.
Our pipeline coating business is another example. Responding to the demand for tar-coating of pipes, we were able to complete a limited run of hand-turned and coated pipes, after extensive in-house research and development. To capitalize on this opportunity, we followed up by purchasing a company to properly address this niche. From there, we obtained further assets and are creating a new facility in Moerdijk. As of now, we are expanding to provide coatings for offshore purposes and also carry out coating jobs for companies in Egypt, Iran and further afield. Teaming up with Vallourec we will be able to double or triple joint pipes and coat them as a whole.
This is what we are seeking in our acquisitions. A new capability, something of use to the client which we (and preferably everyone else) have not been capable of offering before.
What is your strategy to mitigate risk?
As a group we have to offer a good variety of options. For example, in the pipeline business we don’t just focus on large diameter transport pipelines but also cater to distribution companies. We further spread risks by being active in a large number of countries and in several markets. By being an all-round pipeline company, that is qualified to construct systems for the oil, gas, chemical and water industry, but also by offering services in the fields of electricity, lighting, communications and renewable energy.
What principally fuels A.Hak’s international growth?
First of all, our track record. We find ourselves in the privileged position of being able to expand our international portfolio based on existing relationships. This recently allowed us to secure work in Mexico, the Middle East, Central Asia and the Far East. A sound reputation, based on proven reliability, is especially important in the highly interconnected oil and gas industry. However, this very valuable asset comes with a great deal of responsibility. A good reputation is something that needs to be earned over and over again with each successive project.
What is your management style; how do you keep A.Hak continuously rolling towards these high standards?
First of all, as I mentioned before, our focus on a truly client-centred attitude. Secondly, we have always been able to attract a highly motivated and skilled workforce, which works as a team and enjoys being challenged under all circumstances. Usually our employees stay with us for a long period of time. Twenty-five, forty or even fifty year anniversaries are no exceptions.
Finally, A.Hak has always been a family owned company. This allows us to let the company benefit from every cent of profit we make. As a father, I’m very proud to say that my son and daughter have stepped up to the responsibility of managing the company, with my wife and myself as their chief advisors. After 51 years, in which we expanded from a modest local firm to a global player to be reckoned with, A.Hak looks forward to a challenging future, as a family business.