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Interview

with Aguilar José C&C technologies

01.09.2011 / Energyboardroom

Mexico and Brazil are important subsidiaries for C&C Technologies. In our last interview five years ago you commented that Mexican operations were growing at 35% per year. Have you been able to keep this pace and how has business evolved over the past five years?

Growth has indeed continued in the same way and we have opened three new offices in Villahermosa, Mexico City, Dos Bocas Para­so. The Mexican offices are tending to the Tula refining and since January our Villahermosa office has been attending to all activities related to PEMEX‘s land work in the south. And of course, Carmen is working with everything offshore. Our three offices operate very independently and self-reliantly. They do their own work, produce their own incomes, and are governed by their own management. They have all been doing a good job in terms of generating new work.

In the past you expressed your ambitions to capture 90 percent of the market. However, ultra deep water exploration has been stagnant in Mexico and not evolving to the degree many expected. Can you explain how business has been growing?

We have been able to take business from many of our smaller competitors. While our main activity is deep water, there have been no substantial developments in that market in Mexico nor do I foresee any in the next five years. We are currently participating in, Lakach, the only deep water activity in Mexico by providing engineering services for various land facilities. Having also done work for Lakach five years ago we are proud of our long service to the only deepwater production site in Mexico.Despite all the doubters of Mexico‘s deepwater industry, PEMEX is certainly confident that deepwater will be a viable market…Our main income is from deep water and we certainly understand the process. You cannot go from “A to “C without having “B. But “B has not yet happened. There is no silver bullet for it. You just have to follow the steps as everybody does. It will come eventually and it is more so a question of time than money. Deepwater operations are a step-by-step process and we are just at the beginning phases of it.

What are C&C Technology’s cash-cow products and services in Mexico today?

They remain much the same as before. We are still working in the offshore and shallow water arenas and providing geotechnical services. Our key to success is our ability to offer a number of services in one package. We can offer a customer both onshore and offshore solutions and in that sense I can describe us as a “jack-in-the-box ” different stuff in one box. I believe in that strategy and it is very much working for us. We are a company with a “can do attitude. If a customer asks, “can you do this? or “can you start tomorrow? we are able to confidently answer “yes to both.

When interviewed by Focus Reports in Brazil your colleague, Carneiro, commented that the service portfolio has significantly increased for his subsidiary and provided substantial revenues through oceanographic and environmental monitoring. What is the situation here in Mexico? Has that area picked up as well? What are your expectations it?

C&C is a very traditional company and our owners hold a firm belief in the traditional model of what we do. It takes time to develop something other than the main and traditional business activities. Since we do not yet have substantial deep water operations here and need to do something to pay the bills we have found a way to offer PEMEX different types of services. We are a company that offers a whole package of services. We are also an immediate response company which I believe gives us an edge. We are a high tech company that is capable of bringing new technologies to the market which makes it difficult for our competitors to go up against.We have a 100 percent Mexican labour content and our most important human resources asset is the ability of our people to multi-task. I can engage in onshore work while my colleague is doing the same for an offshore contract. We can do everything which is part of our success. Our ability to multi-task affords us a full and immediate response to customers.

Do you think that a company like C&C Technologies has influenced the vision and operating model of marine service companies for the petroleum industry?

Although we have a very specialized niche I agree with that statement. Many of our competitors are now following our example in the way we do things and how we contract with customers. We do things differently. Since we are the new kid on the block we cannot compete with the same models as the rest of the guys.

You were mentioned in Petroleo & Energia magazine as one of the most influential people in the country. Why are you so influential in the Mexican oil and gas industry?

Because we are changing our offerings for clients in new and different ways. We have found a golden bridge between PEMEX, universities and C&C Technologies. We are getting trainees from local universities, providing technologies to the universities, and offering services to PEMEX with a local content. The universities are getting our technologies and we are able to connect PEMEX with top talent from high level universities. We recently worked with the University of Carmen and the University of South Louisiana (Sir, please confirm the name of the University is correct. Thanks) to provide them with technology and equip their labs. They have many trainees who are embarking on careers as petroleum engineers. We are preparing people in an enhanced way and as we get more trainees we are in a strong position to offer work. All parties stand to gain. I believe I was picked because of this bridge and because our ability to offer an enhanced service in a different way. This is a new offering of C&C Technologies since we were last here…This is a new company with new people and in many ways I am not the same person as before. I have more experience now and I have gotten more into the market. I was outside the market for many years and was able to learn from that time and see outside the box.

Having started this affiliate here what would you say has been your greatest satisfaction as CEO of C&C Technologies Mexico?

My greatest satisfaction has been in building this affiliate into a great place to work. People are proud to be here. There are a lot of people knocking on the door to be a part of this company which is a true sign that we have something special. We are doing exciting things and we are a company to look at. We may not be the top employer in the country nor pay the highest salaries, but we have something special and we are making a lot of noise.

What has been the most challenging aspect of bringing in new ideas?

It can sometimes be a challenge to convince people that the best way to do something is not necessarily the most expensive way; that there are better ways to make it cheaper, faster, and more accurate than what they are used to. For example, a big part of our success has been from land works in Villahermosa. We were hired to survey oil pipelines there which used to involve many companies. We started with a little bit of work but our customer soon noticed a drastic difference between our and the work of our competitors. I compare it to the difference between homework done by a primary school student and a college student. When the client immediately realized that we can do much better work for the same amount of money they offered us a huge contract and we surveyed their pipelines for three years. I learned from that experience that if we could change the way of thinking in one service, we could do it for other services that we offer.We can do the same things over and over, but more accurately and with more information. Additionally, we have more technology which works hand-in-hand with clients. While offshore work is normally our company’s cash cow, here in Mexico we are making the same amount of money for onshore work. We are benefitting from volume instead of bulk. We are also applying offshore technology to all land technology, which can be simple, but nevertheless it has never been done before.

What can we expect from C&C Technologies in the next five years?

I have a bunch of ideas. I am trying to make us one of the most complete companies in this industry and transform us into a “one-stop-shop. I want to be one vendor that is able to provide a whole product. I also want to offer a company the highest technology with a 100 percent Mexican workforce. We recently had our first international business meeting at the Offshore Technology Conference (OTC). We got a chance to chat with various partners and customers, share opportunities, and exchange SWOT analyses. I received many congratulations from various companies on the way that we are doing things. Every year we also offer universities the chance to join us in our OTC booth. This enables our people to link with universities. We send students to work in our facilities in the United States to learn about new systems, processes, and technologies and afterwards we offer them a contract with us. We train and retain them.

What advice would you give to our international readers when they come to Mexico to do business?

First and foremost is to get a Mexican company as a partner, perhaps through a joint venture. Without a Mexican partner it is almost impossible to penetrate the culture and understand its ins and outs. The learning curve without local content can be very steep. It is essential to have someone inside. All of the biggest foreign companies here started through a local entity.My second piece of advice would be to try and use as many Mexicans in the labor force as possible. We have very well educated and capable people. It is also a cost-efficient route and companies will pay substantially less for an equally educated and competent employee.

What would be your final message to convey to our readers on behalf of Mexico and your company?

There are opportunities here for everybody. While deep water operations might seem like a mirage right now it will eventually come to fruition. However, it will require new players, new skills, and a lot of money. Deep water therefore needs a lot of teams. Partnerships are key and no company can go it alone.

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