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Interview

with Leigh Elves, Managing Director, AllWeld

07.12.2011 / Energyboardroom

As a company, Allweld has quite a history, with an existence of over 50 years now. In recent years however, we have seen tremendous increases in oil and gas activity along Africa’s West and East Coasts. Has this affected the company in any sense?
These developments have affected the company and its growth potential. However, more can still be done in terms of the upgrading of our ports. The infrastructure in the ports needs to improve to offer better services to our international clients. Nonetheless, the potential to grow more has definitely improved in recent years.

In the meantime you have built up quite a track record with reputable customers that do full turn-key rig repair projects.
Indeed, we have an excellent track record with these large companies, for whom we do specialized work for. At the same time, we are also moving into a direction where we work directly for some of the up- and downstream companies such as Caltex Refinery. We have also increased our offering to our clients and have set up a training school around 5 years ago. This, in turn, has grown into a situation where we are training quite a number of foreign nationals. Currently we are for example training a group of Nigerians for the Niger Delta Amnesty Program. In addition to that, we also have access to a facility in Angola where we can do projects from.
South Africa still has got a good database of artisans and can still offer a good service. In general, South Africans have the reputation to be hard working people. They are generally well perceived on projects abroad. From a training point of view, we thus definitely have the right people to mentor.

Focusing on the welding in particular, why has there been an initial shortage of labor supply for this niche?
As a nation, South Africa has went through quite a few changes. Back in 1995-1996, we won the Apprenticeship of the Year award for the top fitters and welders. The government apprenticeship program that followed failed, which created a big gap in the market. This made us look at what we have available and what we need, and eventually resulted in the setting up of a training school. This school now operates completely independent to Allweld Marine & Industrial, and has also built up a very good reputation for training. In our auditorium, I have had 51 technical schools and have offered to help them increase their curriculum where they move away from cosmetic welding to welding of a structural nature that the industry needs more. I would prefer to see an apprentice coming in with basic structural skills, in order to him or her to a more specialized stage.

How has the training school taken off so far?
It is the second year that we are now profitable and it is only getting better. In fact, we are busy drawing up a new section for the school. We will thus be significantly increasing our capacity. Apart from welders, we will also be training boiler makers and a lot of other different skills related to metal work. In addition to that, we will also be engaged in much more safety training. We have got a permanent safety office around onsite, and have done a lot of work on increasing the emphasis on safety training within our curriculums. We also find that many of the lower skilled laborers are not qualified to work with electrical equipment. From this point of view, we see many opportunities for training too.

The oil and gas sector is not the only sector that Allweld services. Last year, for example, you were involved in the construction of the Greenpoint World Cup Stadium. Was this a milestone project?
It certainly was. Handling such a project gave us a lot of confidence. We handled everything, from the logistics of the materials to the installation, the fittings and so on. It was a very successful turnkey project, which gave my team a boost in confidence. It made us realize that we can handle bigger projects to world class standards. We have received letters from overseas companies complementing us on the quality of our services.
We found in our industry that it is important to be able to offer a broad spectrum of services to the clients, as long as it is all first class. It has to be perfect. Perfection in a broader range of services is what we want to achieve in the future.

Can you elaborate on how you see this portfolio of services exactly evolving in the coming years?
We are working on a number of projects. We are already the biggest company for heat treatment projects in the Western Cape. We are starting to do special parts or pieces of equipment too, such as valves. We bought out a valve shop in 2003, which has now been incorporated into our fitting shop. We now also specialize in petrochemical valves. When the FPSO “the Dalia” came into Cape Town, we were the only ones that could handle the pressure and the types of safety valves needed. We recently increased our ability to pressure test up to 3000 Bar.

Compare to the other sectors you service, how important is the oil and gas sector for Allweld today?
To put it bluntly, the oil and gas sector is currently the cream of the crop. The oil and gas sector definitely has the highest potential for fast growth. However, I would not neglect our work in mining and with other industrial companies such as Saldanha Steel.

Earlier, you mentioned that South Africa still needs to improve on infrastructure. What needs to change?
The government in South Africa talks about job creation all the time. The oil and gas sector is probably the best sector to achieve these ambitions. First of all, the right people need to be trained. Secondly, the infrastructure needs to be created in order to do the projects that are required in the oil and gas sector. Saldanha Bay would be the perfect place to build a drydock that could accommodate an oil rig. Once the infrastructure is up to scale there, we can attract tremendous amounts of rig work from along the Western Coast of Africa. It would raise the local economy as a whole, but I do not think that the government has fully realized the potential of what such infrastructure can bring to South Africa.
We now have a large piece of property in Saldanha Bay and are waiting for the opportunities to build something there. We already have offices and container workshops at the Saldanha Steel premises. As from next year, we will be putting permanent people on site there.

South African companies have the potential to play a key role in partnering up with international players that want to expand in Africa. Is this a scenario that lies in the cards of Allweld?
We have already identified a number of countries where we want to get involved, i.e. by having offices or a presence. We already have people in training at our facilities here, that are being made ready to run these offices. I have a permanent resident from Ghana working here, and we have been to Ghana a number of times. We also want to set up a base in the East in order to be a gateway to Africa for the European companies. We have been approached by quite a few companies. However, they are still awaiting further growth and for a few things to be sorted out before committing to significant investments. Moreover, these companies are not only active in the oil and gas sector, but also have a strong presence in the mining sector. For Allweld, the opportunities are therefore definitely there.

Having this broad portfolio of services directed towards different sectors surely must be an advantage when servicing your clients. What other strengths do you see for Allweld?
I have been to quite a few African countries, such as Namibia, Cameroon, Benin, Ghana, Nigeria, Angola etc. We have done our research and know where we want to go in this continent. In general, we have the ability to understand the African ways. Our training ability also gives us the opportunity to not only go there with expats, but also to train the locals and eventually hand over the operations to them. In Angola for example, we have managed to build up strong relationships with some of the locals, which are eager to take on new projects.

Going forward, it is clear that South Africa is too small for Allweld. As your slogan says, you want to be “the best in the weld”. How far exactly are you on this journey?
Today, we have quite a good marketing strategy to create Allweld Africa, in order to be seen as an African player. Africa is big enough for us, it is who we are and how we want to be seen. We do not aim to be a global player. I really enjoy Aberdeen and perhaps may set up a sales office there, but not more than that, unless if our clients want us to.

As a final question, what are now your strategic priorities for the company in the near future?
For the next 5 years, we are looking at acquiring quite a few other companies that can add value to what we want to offer our clients. We now have a strong focus on acquisitions and partnerships. These have to be companies that offer something that we do not, but still in our line of work. Their service portfolio needs to be complementary, just like what we have managed to do with the acquisition of the valve workshop.

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