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with Alan Stothard, Managing Director, IQS International

16.03.2012 / Energyboardroom

Mr. Stothard, you founded the company in 1989. Can you first describe the environment back then, as well as the opportunity you recognized to set up IQS?
Strangely enough, the opportunity arose out of Mossgas. Back in the late 1980s, Mossgas was consuming huge resources and the entire industry jumped on the opportunities this brought along. As a result, I decided to stay in mining and develop the business on that side, which has been and still is our core business. Back then, we were up against a number of competitors, including TÜV and a company that is now called Moody. There were a number of smaller players too, most of which no longer exist today. Today, we are still strong in mining, but are also making inroads into the power generation, oil and gas industries, both locally and internationally.
Entry into the oil and gas business primarily came about through the relationships we built after establishing our Cape Town branch. We have been networking with customers and suppliers and are now positioned to leverage both formal and informal joint-venture relationships. The opportunities in this niche are still in their infancy stage, we work very closely with the South African Oil and Gas Alliance (SAOGA) to promote and ensure the availability of local resources.
In this way, we have been involved in different training initiatives to get the skills of various inspection personnel up to levels of international acceptance. We have done this quite well and have trained over 200 individuals in various disciplines of welding inspection and non-destructive testing in the past 2 years. IQS developed a training matrix and a resource development plan, in line with what the industry requires. Our focus is oriented towards the international acceptance of the qualification, which helps overcome certain stumbling blocks we may face, for example in the power industry. We try to target training in a way that is acceptable to everyone while – at the same time – we try to find people work.

Is there still work to be done in how South African capabilities –in non-destructive testing for example- are being perceived internationally?
As far as the non-destructive testing (NDT) side is concerned, there is room for significant improvement. From our perspective, we have identified an entire training program for our own resources, embracing more than 30 people. Across the board, we are training on various different disciplines and have earmarked ZAR 800,000 for training this year alone. The problem in NDT is that people require resources, while very few actually train the staff. Moreover, once they take on these people they do not remunerate them sufficiently –financially- to keep them. People are being brought on board for short-term projects and there is no investment into people.
IQS, however, is being recognized as a company the industry can turn to for quality resources as well as the skills that the industry needs. We have a long-term, rather than a short-term, view. Our Walvis Bay operations for example, have seen significant investments in getting our resources up to international requirements. Some of the other organizations, based in Walvis Bay, have tried to attract our resources to join their business, without any luck.
In turn, we do expect a lot of loyalty. We emphasize that the rewards will be there as long as the commitment is also there. At the same time, we also need to attract people with the necessary managerial capabilities. A challenge we face in this industry and going forward is ensuring are future management has the capability to continue and take over, when the opportunity arises. For example in 2002, the average age within IQS was in the early 40s. This until recently increased to around the age of 48, however we have since attracted a lot of new younger resources with varying degrees of experience, ability and qualifications, which we will further develop so that they can be the future leaders and management of IQS.

What can you tell the young talent considering joining this industry?
I receive a significant number of calls and emails on a daily basis. The focus remains on the international qualifications. It is crucial for young talent to deal with a recognised training provider and to make sure that the qualification is acceptable to the potential international customer, particularly in the oil & gas and power sectors. We try to point these people into the right directions as to which training provider gives quality education.
The biggest problem that a lot of individuals have is that, as soon as you start talking about the time, effort and money that is involved, it usually comes down to them being prepared to put in the time and the effort, but they will not necessarily have the money. Others that do have the money often try to enter the industry and fast track to a high income. IQS try to control the pace of resource development as we believe it takes at least 10 years to develop a good all round resource to the point where customers will recognize and respect such an individual. This being said, the engineering industry is forever changing and we are always learning new skills, techniques and product developments.

You mentioned that the oil and gas sector is still in its infancy at IQS. As this business is growing, does this also mean you have to reshape some of your organization’s skills and capabilities to better meet the needs of this particular sector?
As far as our experience and exposure is concerned, we do all projects from an engineering capability perspective, whether it is mines, petrochemicals, etc. The work is broken down to pieces of equipment and standards & specifications. You ultimately end up with a scenario where you put a good quality management process in place to do the job. If your resources are able to have these capabilities, there is no reason why they would not be able to adapt and apply such principals to any industry.
While there is a lot of terminology involved, at the end of the day you always speak about the same things: pumps, valves, gear boxes, structural steel pipes, etc. There are only different uses, applications and standards. Often, this will prevent people from breaking into a particular industry, because they are not prepared to give people the required exposure. In order to get experience, people have to be put on these jobs under the right guidance and mentoring.
From a South African perspective, a lot of people have traveled abroad, going to places such as Kazakhstan, Dubai, UAE, Nigeria, Ghana, Angola, and so on. While this gives them great experience, there still is a shortage of talent worldwide. IQS constantly have people from India enquiring for employment. While we may well recruit such talent, chances are high that they will eventually be deployed in Ghana, Tanzania, Mozambique or Angola, simply because our sector is still very much in its infancy.
In Ghana, we still focus strongly on our mining business. While there are opportunities in oil and gas, we are not particularly tempted to pursue this course until we can guarantee the right service.
When De Beers Marine invited IQS to Cape Town in 2005, they realized they needed assistance in executing their projects to satisfy their own customers’ requirements. IQS were appointed to provide project quality management and the inspection services. This as a result of IQS input on 2 marine diamond mining vessels which initially commenced at A&P Tyne Shipyard, UK in 2002 and 2006 respectively and then completed in Cape Town. Initially in Cape Town IQS had support from local companies providing NDT and hull gauging and inspection services. However our customer was not getting the required deliverable to satisfy the needs of it’s customer and the ships classification society which in turn put pressure on IQS as we were required to control such activities.
Reports were lacking in detail, resource response time and availability of equipment, were all impacting on the schedule. These are fast track projects and you always need to ensure that a ship can be out of the dock as quickly as possible.
Ultimately, we spoke to De Beers Marine about these issues and suggested that IQS would get the necessary accreditations e.g. ABS, BV and Lloyd’s. We have managed to establish very strong credible relationships with the classification societies and are able to provide a service which satisfies all stakeholders. As we have taken a lot of business from companies which were not able to deliver, Cape Town companies involved in shipbuilding such as Dormac, Hesper and Belmet recognize that IQS can also support them in their projects.

How significant were these accreditations to boost not only the recognition but also the growth potential of IQS?
While it helps from a marketing perspective, both management and technical capabilities remain key to our success. We are developing relationships based on these successes. For example, yesterday I received a call from a client we worked with in Ghana 2 years ago, looking for our advice and assistance in a new project. We have earned respect in the industry and our clients remember us.

What do you now see as the key growth markets in Africa?
At the moment, we have projects in Ghana, Namibia, Botswana, Mozambique and throughout South Africa. In the short term, we are still mainly looking at mining locations while the oil and gas opportunities are more looked at from a long term perspective. It takes time to develop these fields, the required infrastructure, the right connections and local resources.

As Warwick Blyth of SAOGA was saying, East Africa is moving and an entirely new sector is developing from scratch there. How positive are you about these developments from an oil and gas perspective?
One of our senior colleagues is from Tanzania, we have discussed and recognize the potential in this region. We feel there is the need for the services IQS can provide, we will soon establish a company in this region. I am positive about such potential however, the right people need to be brought in first. We have developed a system whereby we can roll out what we do in Johannesburg to Cape Town, Walvis Bay, etc. What we do is the same worldwide, and it is only a matter of tailoring it to comply with local rules and regulations.
In certain areas, however, you need to ensure that the people that are carrying out the work, are capable of understanding the technology that is involved. Within inspection, quality management and NDT, there are very different levels of technology. Some are very basic and simple, while others are quite complex. With complexity comes cost, as well as a need for better trained resources and capabilities. As far as Mozambique and Tanzania is concerned, it is all about finding the people with those capabilities. But there is high market potential and we will make sure that we get the share that we require.

You already mentioned that De Beers Marine pulled IQS to Cape Town. Looking ahead, what will you look for in future partnerships?
First of all, if our customer is not happy, we do something about it. If we are not pleased with the service a supplier delivers to the customer, we also make sure they are aware of such issues. We are quite passionate about meeting customers’ expectations. People often do not understand what quality requirements really are, or are not prepared to comply. You need to find the right mix of suppliers and service providers, which is a common problem around the world. For example, we once had ship in the UK where the work was not progressing at all. Their target was to complete the job in 18 months. We brought the ship to Cape Town and completed the job in 6 months!

How do you aim to be perceived by the industry?
The people at De Beers Marine, for example, value our input and recognize that we have a tough job to do, taking into account the necessary commitment, the timeframes, etc. We have quite a number of recommendations from various customers and several of our staff have won awards and bonuses in the different projects they have been working on in the past few years. We are an integral part of our customers operations and are recognized as such. With reference to our industry, we are an enterprise which is respected and will continue to give others a run for their money.

Looking at the talent shortage alone, the industry certainly has its challenges! What keeps you motivated to run the business after all these years?
I enjoy what I do! To me, it has gone from earning a living to competing in a global market. Initially, all of our business was being handled from Johannesburg, while we have now become a global player. For example, we now have a joint-venture going with a specialist NDT company Singapore. We further receive enquiries from locations such as Canada, Spain, Asia etc. Overall, we are seeing a lot more interest in South Africa and South African capabilities. From my perspective, it is all about the challenges and the excitement. I enjoy the fact that we are growing and that we are being recognized.

Wrapping up, you mentioned the oil and gas sector is a long term plan while various international opportunities present themselves. In the coming 5 years, what will have changed and ideally achieved with IQS?
You will find that we will have a lot more resources. These will be key to the success of the company. They will be more experienced and qualified with a lot more “street credibility.” In addition, our facilities and capabilities will have improved, while we will have established various different locations throughout Africa and possible as far afield as Asia and Australasia. We will be bigger and have local representation.

Do you have a final message to add?
On a final note, it needs to be pointed out that quality counts, whether it is about people, materials or the final product! The industry, however, is not always willing to pay for quality, and “fitness for purpose” remains a challenge for a lot of companies. Apart from quality, it remains absolutely essential to satisfy the customers’ needs.



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