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with Garry Farquhar, Director/Dogsbody, Vector Supplies Limited

03.04.2009 / Energyboardroom

Vector is coming up to its 22nd year, having been created in 1987 by myself and two colleagues, Edward Beedie and Geoff Shand both of whom worked for the same major Well Testing Company as I did. I stumbled into the oil industry in 1976 after college. I had 2 job interviews one day – one was to become a financial advisor, the other a Well Test Operator. I chose the latter even though I had little idea what the job entailed. Aberdeen was expanding in those days, and at that time early recruits could quickly rise through the ranks while still being quite young. As a consequence, I ended up in senior management in operations here in Aberdeen. After 10 years with the company in 1986, there was a request by management for major redundancies. At that time, I was totally against this action because I didn’t feel the downturn in the industry would last long – and in the end I was proved right.
Nonetheless, those who decided to take the redundancy offer, which was a good package, were the best people. Some of them went on to build up businesses of their own which became successful and still operate within the industry today.
Because I was in operations management, I was faced with the prospect of being left with less talented people, which would have made my particular job more difficult, so I decided to leave as well. It was a big gamble, but I decided to take it, and kept contact with all the people who had left. Within a year, around 50 of them were working for me, under our new company, PACE LTD, for their former employer, which had started hiring back workers on a day-rate basis. The success of PACE created the finance we needed to start Vector Supplies Limited.
As a result of so many companies cutting their workforce in 1986 we realized that the amount of head -cutting that had occurred globally had a big impact on their field support systems, which were mainly based in Europe in those days. With Well Testing companies finding it difficult to supply their field operations with essential spares, coupled with the fact that it was the kind of equipment we at Vector were familiar with, the company started offering a spares service to these companies, and the company just took off from there.
Vector has created and still occupies very much a niche market, and I don’t feel the company has anyone that could be called an absolute direct competitor, because there is a different angle to the business with our combination of personal expertise and sound knowledge of standard Well Testing equipment. Vector doesn’t just buy and sell things, any company can do that. We have the added benefit of total equipment knowledge, which only comes from our years of hands on experience in different locations all over the world. Our background and knowledge enable us at times to go back to our clients and question if they know they are perhaps not looking at the right piece of equipment, and sometimes they discover they aren’t. That is a hidden value Vector offers its clients that is very very hard to put a price to.

What would you highlight as the main milestones and achievements of Vector since its inception?

There have been a number of changes which have been mainly driven by company growth, as Vector takes on more and more personnel and the years go on. Currently, Vector represents three companies as main distributorships: Balon Valves an American ball valve manufacturer; De Wit, a Dutch pressure gauge and instrumentation company; and Resato, also a Dutch company, who specialize in high pressure technologies and equipment.
One particular major milestone was converting major Well Testing companies to the Balon valve which is ideally suited to the industry due to its reliability and ease of field maintenance. Since then, these companies have become major users of the product. It was a win-win outcome, and Balon really appreciate that we brought to them a whole new sector of the business, in Europe and globally, of which they weren’t even aware.

How did Vector become the partner of choice for these companies?

De Wit and Resato at one point had a joint company based in Aberdeen called Tapic, which was used as a product outlet. At that time, Vector was starting off and growing, and was actually buying a lot of equipment from both of Tapic’s parent companies. When De-Wit and Resato decided to go their separate ways and dissolve Tapic, Vector jumped in as one of their larger clients and offered to take on the representation here in the UK. Vector hired the one remaining employee, who is now a Director of Vector Supplies Limited, and today the company continues to represent the two companies, providing a strong relationship and good synergy between products.
Vector has long-term supply agreements with many major service companies. Which would you highlight as flagships?
Vector is very proud to be working with the majority of companies involved in well-testing or production-testing operations. Our major clients include Schlumberger, Expro Group, Halliburton and numerous other companies in the testing and production industry worldwide.

Working with such a wide array of companies, how would you characterize Vector’s client relationships?

One of the single most important things we have is a very strong client relationship, an understanding of our client’s requirements and, importantly, their urgencies, and how our clients operate. Clients can’t always plan ahead as well as they would like to, so issues sometimes become urgent that wouldn’t otherwise be. That being said, Vector has become accustomed to the working patterns of its clients, and can sense and assess urgency levels, which makes it extremely important to know our clients, and really know them well.

Trying to answer these client needs means meeting them wherever they are. How does Vector reach across a large range of geographies, and what is the approach to market and sell in different locations?

Vector is trading everywhere, with the exception of North America for obvious reasons. Vector deals from Aberdeen directly with operating locations; regardless of where in the world, there’s a good chance Vector talks daily to people who have had a 20 + year relationship with our company. And even if that’s not the case, it’s not long before new clients realize what we can do for them and soon they are dealing with us in turn, and our relationships grow on that basis. As a result, Vector doesn’t go traveling around the world and knocking on doors, the business has a tendency to come to us.

To what extent does Aberdeen play a role as a hub in developing these activities abroad?

Vector doesn’t have to be based from Aberdeen, and could operate from anywhere with good transportation and logistics infrastructure, because there are significant imports from the US, Europe, and exports to all over the world. There is no particular need for Vector to be located in Aberdeen, apart from the fact we have close contact with some of our larger clients who have a very large presence in the city, often with responsibilities extending as far off as the Former Soviet Union, and Africa where we deal extensively. So realistically I suppose Aberdeen does have its benefits, with all the majors being located here.

You mention Vector’s global presence; what is the division between local and international business and how do you see the evolution of this share?

It’s a hard figure to put numbers on, but 60-70% of Vector’s business is overseas, and those figures have always remained fairly steady. Since our beginning, Vector has been different from many other Aberdeen companies in its international dealings. In fact, the company had a far greater international market than a local market in the early days. We set out to deliberately target the overseas locations simply because they were the ones suffering the most from the breakdown in the supply chains, and we started helping them straight away.

How do you ensure a rapid response to clients worldwide from an Aberdeen headquarters?

As Vector grew, it recognized that many of the existing supply chains had broken down, and the internal in-house sources were being phased out. As time and finance allowed, Vector began stocking critical spares and equipment, offering immediate supply in comparison to manufacturers potential 16-week delay. The company mainly targeted equipment that was long-delivery and critical, and without which jobs are impossible to complete. Vector concentrated on that niche, and the market was extremely responsive. Companies always knew they could purchase parts cheaper by going directly to the original supplier, but they soon realized they would have to wait up to four months. The supplies Vector held were common to all of our major clients, and a great deal of their equipment uses the same components, valves, instrumentation, types of meters, etc., and this is exactly the type of product Vector focuses on. Consequently, our considerable investment in our stock wasn’t only being held for one particular company because all our major clients have very similar regular requirements.

In being able to get closer to your clients, has Vector considered opening satellite offices?

Yes, simply because it would enable Vector an even quicker response time to our existing markets. However, there must be a balance between spreading our strengths too thinly and the true benefit brought by expansion in this way. Currently, it’s in the evaluation process, because sometimes it appears to make sense to be on-site to oversee sales and purchases in high-volume areas, to see satellite clients on a more regular basis and strengthen relationships, but as with everything else, when you’re flat-out busy, as we currently are, these decisions never come quickly. Skills shortages are a constant difficulty, because Vector is very particular about the kind of people recruited, and finding the right individuals to mould into the proper mindset to strengthen and develop the business. Vector has a unique way of doing things and responding to client needs. Before anyone is employed, Vector looks for long-term commitment, because the company invests a lot, not necessarily financially but in passing on our ideas and expertise, to continue the company’s mindset of 20 odd years ago: the client is always NUMBER 1, help them as much as you can, and go well out of your way to do so if required. That philosophy must be built into all our employees’ way of thinking from the bottom to the top.

What does Vector stand for today in the oil and gas industry?

Vector’s reputation with so many clients worldwide is very positive. We’ve always managed to help someone somewhere, and people never forget that. If you can get someone out of a serious problem by your extraordinary efforts, not only is there a fantastic feeling of satisfaction, but people always remember it, and our reputation for our ability to achieve that is probably the single most important asset Vector Supplies Limited has.

Is there further room for improvement in this regard, more markets to explore, or new products and capabilities?

Vector always keeps its eyes open for new products or anything that would be compatible with our existing operations. For example, valves are used extensively in the well testing business, and so are pressure gauges, alongside pump testing units. They go hand-in-hand with the business Vector services, and the company would definitely look at additions deemed compatible, toward the goal of adding even more value to what we do. The important thing is to keep these efforts focused, and to have the right people behind them.

What is your vision for the company in five or 10 years’ time?

Vector has experienced a phenomenal period of growth in the last few years, and I’d like to think we can maintain it, but there are two constraining factors. Firstly, our current premises, which are beginning to become a limiting factor, and secondly our current personnel and their abilities to cope with increased business. I envision Vector carrying on in a similar fashion to the present day, but in closer relationships with our major clients, becoming more of a partner. For example, in some situations Vector deals with anything from ten to thirty locations for a given company, but not the eleventh or thirty first, where that particular location decides to choose to go somewhere else or tries to do the job internally. Vector would like to develop closer relationships with our major clients, and provide an even better, and more comprehensive range of services. That’s the way we’d like to build the company.

What is your final message to OGFJ readers?

The need for energy will continue to increase as various countries develop, and I expect this business will see my life through in addition to future generations’ lives. The oil and gas industry has a much longer lifetime than many people estimate, simply because of the new technologies and phenomenal advances made in recent years in terms of recovery rates, not only for the UKCS but also for the industry on an increasingly global basis.
For companies like Vector Supplies Limited, who are more than willing to go the extra mile required to keep our clients constantly supplied, satisfied with our service, and most importantly operational at all times, I personally think the future is incredibly exiting.



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