with Andy Pedersen, HSE Supplies
HSE Supplies exists for over 20 years now. From your point of view, what exactly did the company’s growth path look like in these 2 decades?
HSE Supplies was founded by George Correvon 20 years ago, initially as an electrical wholesaler and supplier of consumables to the oil and gas industry. As time went by, HSE Supplies has grown from 3 people to 32 staff today. Along with that came an expansion of our facilities and the inclusion of a warehouse for storage. In 1995 the company also started providing personnel to meet the demand of its customers. Still today, we supply personnel services to companies such as Pride –now Ensco-, Transocean, etc. in terms of contractors, drilling crews, foremen, and so forth.
That must be quite a different business!
The company actually hosts 3 different branches: offshore supplies (engineering and general consumables), electrical wholesale (supplies to local on- and offshore), and our contracting division that serves as a technical recruitment company. If one branch is not doing too well, our diversified portfolio essentially provides us with more stability.
Quite some work has been done on drill ships and –rigs in the Port of Cape Town, yet it has been argued that more could be done. How have you observed oil & gas activities in the Port of Cape Town over recent years?
From a port operator perspective, there is still a strong orientation towards container activities. There are many drillships and –rigs in West Africa countries that neither has the facilities nor the capabilities to address the needs to the industry. In Cape Town, you find engineering companies right at quay side as well as the necessary skills and expertise. If the costs for a company to come here is too high however, it will obviously choose to go elsewhere. As a result, there has indeed been a decrease in oil and gas activity in the Port of Cape Town.
Do you see this picking up again?
There needs to be a shift in the mindset of the Transnet National Ports Authority (TNPA) about the importance of the oil and gas sector. At present, we are losing a lot of work to other places, such as Walvis Bay in Namibia.
One strategy could then be to expand beyond the South African borders. How successful has HSE Supplies been in that regard?
We do a lot of work for companies that face problems with suppliers in Angola, Congo, Equitorial Guinea, Mozambique, etc. We supply them by exporting our products through our freight forwarding agents. This has been good business for us, most particularly because local west African suppliers are often less reliable or less attractive in terms of pricing etc.
With 20 years of existence, we have a strong track record and build up a good relationship with our suppliers. We deliver on our promise, have a good reputation and are proud of what we do. Our clients always come first!
How do you define the secret to success in this line of business?
Honesty and integrity are essential to be able to build a strong track record. Another key aspect is our staff. Treat them as your family and they will treat you the same. Satisfied & happy staff creates a successful company and –at the end of the day- a satisfied & happy customer.
A few weeks back, MSA Africa’s CEO Luis Fernando Flores –a PPE equipment supplier- expressed his concern over the fact that many clients still consider lower quality-lower cost products over a strong brand. What can be done to further promote the importance of good quality?
HSE Supplies is fortunate to be the sole agent for Jallatte and DBI Sala. Jallatte, for instance, is a specialized French safety footwear company whose products we exclusively distribute in Sub Saharan Africa (up to Angola). The use of this particular type of shoes is included in the safety specifications on the oil rigs. It helps a lot to have a brand within the portfolio that is internationally recognized for its quality. At the same time, it does remain challenging to compete with local products or imported products from the Far East. At the end of the day, however, the industry should not compromise on quality!
Big incidents –such as the 2010 Deepwater Horizon blowout- have a tendency to shake up the international industry with regards to safety regulations. Have you felt such changes over the past few years?
The industry has become increasingly stringent on safety priorities. There have been improvements in their requirements, as many companies increasingly ask for the best products and equipment to be used on board. In any meeting with one of our customers, the first aspect of discussion is safety, both on- and offshore.
Apart from Jallatte, what are some of the other cashcow products sitting in HSE’s portfolio?
We are also the dedicated agent for DBI Sala, which manufactures safety harnesses & fall arresters (blocks) for work at heights as well as rope access-related work. HSE Supplies is DBI Sala’s accredited repair & service centre, and has a certified technician to service & repair these products.
What steps do you have to take in order to have principals such as DBI Sala or Jallatte on board?
Having identified the need in the market, we approached these companies ourselves. After reaching a mutual agreement, we sent our technicians to France to obtain the required certificates. We meet on an annual basis to ensure ongoing training, either in France or in South Africa.
Taking a look at service delivery and the warehouse you have, it is important to find the right balance between the right stock levels and customer flexibility in terms of demand and delivery times. What flexibility does HSE Supplies offer in this regard?
We are quite flexible and carry a decent amount of stock. We always try to deliver within the shortest possible times. As we tend to say “this industry always wants everything yesterday.” We have a good network and good relationships within the industry that allow us to respond rapidly to urgent client needs.
You briefly mentioned HSE’s contracting branch that started around 1995. How successful have these services been?
While our activities tend to fluctuate, our contracting services have been very successful so far. Today, there is a healthy balance in terms of performance of our different branches. We are currently in the final stage of signing a final agreement with a big drilling company.
Considering the fact that you supply qualified personnel, what procedures do you have in place to verify their capabilities?
After receiving their curriculum vitae, we ask for proof of qualifications and references. After verifying these references, we conduct tests related to their specific qualifications. We will also provide more candidates than requested by the client, so that they can also follow up with a final screening and selection.
What programs do you have in place to develop your own people?
With regards to our contracting services, our staff goes on regular training courses every year. The South African labour law is very strict and we need to ensure that our staff is aware of the regulatory framework. On the technical and IT side, we also provide ongoing training with regards to our accounting, payroll, etc. courses. Whenever new products are launched, our staff also attends the product launch and receive additional technical product knowledge and sales training. At present, we are sending 10 of our people on an international training course.
Historically, South Africans have been going to Houston, Europe and the Middle East to receive training. Does South Africa have the opportunity to increase its training offering on its own grounds?
The potential certainly is there and will require the involvement of all the key stakeholders, including the South African government and associations such as the South African Oil and Gas Alliance (SAOGA). Bigger players need to be involved to set up the necessary facilities. We do have some basic facilities, such as SA Maritime’s Academy, although this is not entirely oriented towards the oil and gas industry. The Cape Peninsula University of Technology provides accredited training courses at 2 facilities oriented towards offshore survival. As far as specialized fields are concerned, we still need to go to places such as Aberdeen, France, Houston or Singapore.
The Western Cape has traditionally aimed to position itself as an offshore supply hub to the Sub Saharan continent. In your view, can South Africa keep this positioning as new regional hubs –such as Walvis Bay in Namibia- start to develop?
South Africa has the expertise and the facilities. Whether the government will help to facilitate in creating more awareness of this potential, remains the question. Compared to places such as Angola or Nigeria for example, the quality of life and the environment is far more enjoyable in Cape Town. SAOGA is spending significant efforts on making clear that we as a Port are missing out on some of these opportunities.
Do you have a final message for our international readers and investors, as well as the South African stakeholders?
South Africa and the Western Cape in particular, have the facilities and skilled people. The world needs to be aware that this business and engineering hub exists in Cape Town.