with Amit Biswas, CEO, Ambico
You promoted Ambico about three decades ago. What are the main differences between the Indian O&G market from now and then, according to you?
There has been a lot of changes. When we started operating, we were one of the first companies in the private sector. I was the director of a company called BOSS (Bombay Offshore Supply Services), which was looking after the first rigs that came in to ONGC. Over the last fifteen years, a lot of Indian companies have come in, for exploration and production (E&P) of both onshore and offshore oil and gas.
I have seen them grow completely in terms of the technology they use. They know a lot more about the fields, and about new production technologies than ever before. The phases of bringing new technology have largely come to a plateau. Indeed, they know everything that exists, as opposed to the days where we had to introduce every technology we could provide them with, that could add value to their operations.
What were the initial steps in Ambico’s development?
We were not just a marketing company in the sense that myself, along with my partner, brought a lot of professional background to Ambico. He is a master mariner, I am an engineer, and we were doing marine management. That was the initial vision for Ambico: a business of arranging for vessels and getting them chartered.
In addition to that, we were looking after the interests of certain companies along with local logistics.
Did you see the entrance of foreign players in the Indian market as a threat or an opportunity?
It actually all started with a lot of foreign companies, considering there was no Indian company that had sufficient expertise. The crews of the vessels, along with the companies mastering the supply vessels, were foreigners. It took us some time to train local people and qualify them.
My partner was, in fact, the first ever Indian master to handle an offshore vessel. Slowly, Indian companies came in. Now we see some Joint-Ventures (JV) or full fledged Indian companies taking lump sum turn key jobs. Before, only foreign companies were doing it, and Indian companies were providing a bit of support.
In 2004, we can talk about a turning point for Ambico, when you signed a JV with IEV which has brought the Malaysian group’s full range of products and services to the Indian market. Could you elaborate on the role of this partnership?
We were working with IEV for quite some time. One of the first companies we have been dealing with was a Dutch company, Heerema, one of the largest installation contractors in the world. We realized that it would make more sense for us to form a JV with IEV so that we could both bring our respective expertise to the market. They had good engineering capabilities, and we had good marine capabilities. This has done very well so far.
How has this JV impacted your cash flows?
Unfortunately, as a service oriented player, in the kind of work that we do, the cash flows fluctuate to a great extent. There are times where I have many contracts; others where I do not have any. The season runs from monsoon to monsoon, and this affects the cycles a lot.
Are IEV and Ambico today two completely separate entities?
IEV, Ambico, Ambico Tech Services, along with FoundOcean – a UK company who are in a JV with IEV – are all different entities. We also have a JV with FoundOcean.
IEV is now going public. We thought it would be better to be separate, as we did not want to get into that, but we are still working very closely together. We take care of all the things that happen in India; they deal with everything that happens in Malaysia. It is independent in that respect.
Sometimes, in India, ‘agent’ can be a bad word. Agents are said not to bring anything that contributes to the technology or to the product. Therefore we have to work in a way that the customer realizes that Ambico is doing much more than just selling a product.
FoundOcean provides pipeline support bags and subsea pipeline stabilizers. We have the license with them to produce these products in India. They are marketed as Ambico FoundOcean, so that the product is also identified with India. A time will come where all of their products will be made in India, by us, we hope.
We understand the importance of international partnerships for Ambico, at the core of the company’s development. Why was it the right business model and what have you showcased as Ambico’s main strengths to be the partner of choice for an international company to enter the Indian market?
Ambico is a technically oriented company. Most of our staff has an engineering background. We are in a position to support contracts commercially, legally, technically as well as handling clients.
In addition to that, the technology advantage we are getting from our partners, understanding the products, is much more exciting for us than merely marketing a product.
What have been the most challenging projects or assignments for Ambico, and the most lucrative ones?
Every job is important; every job is different. There is no similarity whatsoever between two tenders, although it might be for the same thing. It does not replicate itself, as the equipment is different, the engineering is different, and the way to proceed is different.
Every job is challenging in the sense that it is time and cost bound. There is no escaping from that. We recently took up a sub contract to work on modifications on some platform- which turned to be good for the turnover. Normally we work along the lines of consultancy and support, but taking up a sub contract was definitely a good decision.
Are you looking into expansion?
We are interested, but we are picky. We are known less as Ambico and more for our JVs. People associate us with our partners and we pay attention to whom we collaborate with.
How do you brand yourself in the Indian market?
We are a service bound agency and we are offshore oriented, so what you see as different things, I see it as one job as going out, working on the vessels and coming back. The products are different but our support plan is similar.
We are working with the JVs and providing support so it really is not a diversified approach but more along the same lines.
A lot of companies have seen Ambico as a potential target, so how do you work along the succession plan?
A lot of people ask me that and they ask about the succession plan. I have not really thought about that. Yes, there is a plan, and we are expanding alongside companies like FoundOcean. A younger generation of people are now coming into our fold and will carry the torch forward and these are progeny that I am talking about and not outsiders.
There are products that have been manufactured and marketed here and so we are looking at continuing to make such products that can now be handled by the new lot.
In three to five years, where can we see Ambico in the Indian market and in the international market?
The company in five years will be even more stable with a good background in production, project management and service experience to cater to various offshore related activities with in-house engineering expertise and design capabilities with more recognition not just locally but in a much wider market.
What is your final message to our readers?
A lot of people are nervous about working in India, but it is a very professional country. Products and labour are not unreasonably expensive, yet of high quality.
Furthermore, I would like to see Indian companies working abroad, not only through collaborations but having direct physical presence there.