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Interview

with Mark Tapson, General Manager Southern & Sub Sahara Africa, Emerson Process Management – South Africa (Regional HQ)

02.05.2012 / Energyboardroom

The world’s perception of Africa has changed over the past decade. Whereas leading publications such as The Economist named Africa ‘The Hopeless Continent’ in 2000, it changed this name to ‘The hopeful Continent: Africa Rising’ late 2011. Did Emerson Process Management also start looking differently at Africa in the past decade, from the moment you joined in 2001?
Before 2001, I was already working for Alpret Control Specialists, Emerson’s local business partner and one of its most significant value-adding partners in the country. Emerson today is investing heavily in Africa, from North to South. We are currently putting a number of strategies in place to increase headcount across the continent. From the past few years, most of the growth has been driven by the Southern region and South Africa in particular. We have been looking after and supporting local business partners in different countries ranging from South Africa to Ghana. The region North of Ghana, i.e. French speaking Africa, has traditionally been run from our Parisian offices.
We have always treated Africa as a single entity but now, in order to sharpen our focus, we are looking at two halves of the continent and adding headcount and capability in each. From an investment point of view, Africa probably represents the next frontier for Emerson Process Management. The continent has gained a lot of focus from our senior management in the USA and with that comes new investment. It certainly is a focal point for the Group.

The regional office in Johannesburg was only launched in 2008 for logistical reasons, while the regional headquarters in Dubai would continue to support the local business partners. Can you elaborate how this changed the supply chain and the way you service your customers in this part of the world?
Initially, we were part of the Middle East & Africa region that was being managed from Dubai. Logistically, however, it did not make sense to support Africa from the Middle East. We regionalized our operations, both in the Middle East with new offices in Abu Dhabi and Saudi Arabia for example, as well as in Africa with an office in Johannesburg. The vision behind this move was to get closer to – and give better support to – our customers.

How did the customers, in turn, react to this change?
We have traditionally approached the African markets via local business partners, but the customers are always keen to see the principal too. While our partners are of considerable size and add a lot of value, our customers still need our support on a different level. The Johannesburg office, in turn, serves as an interface with the Dubai headquarters.
The Dubai operations have also grown immensely in the last couple of years. Between 2001, when I first moved to Dubai, and now, their headcount has gone up from fewer than 50 to more than 700 people. In addition, significant investments have been made in that region too.

Last year, another USD 3 million investment has indeed been made into a Calibration & Service center in Abu Dhabi. How does this also help you in servicing your customers?
We can use any of the service facilities in Emerson’s global network, and this is no different. When it makes sense to our customers to take advantage of what this centre can offer we do so. Additionally, we are also developing our own service capabilities in South Africa and are adding a so-called QSR: A Quick Ship & Repair Center. This allows us to turn around equipment, repaired or new, within a 24 hour period. Our local business partner also has a flow lab, similar to the one in Abu Dhabi. They also have other facilities including a certified valve service center and a QSR for field devices; all of these are Emerson-certified.
As we further develop and move up into East Africa, our local partners become smaller and the infrastructure more limited. This is because the markets are not so big, making it harder to obtain such a large return on investment. The standard Maintenance & Repair Opportunities (MRO) are limited. Business in Zambia, for example, kicked off hugely because of mining projects in the Copperbelt, yet remains cyclical. The opportunities in Mozambique are also still largely project-driven. In general, finding people with an appetite to fund projects in Africa is still a challenge.

While this may create an incentive to wait, it may also result in a loss of first-mover advantage. Is it a tricky balance?
It is a chicken and egg situation. If you do not put infrastructure in place to deal with these projects, you end up behind the pack. It is therefore necessary to make investments up front. Generally speaking, the real challenge exists in estimating the gestation periods of projects in Africa which are far longer than anywhere else in the world.

What advice can you give to an Emerson manager from another region on the key success factors to mitigate some of this risk in Africa?
Localization is a key part of the strategy. For many of the projects, for example in Mozambique, supplies cannot just be obtained down the road. It can be an entire logistical nightmare. The closer you can be to the end-user or project site, the lower the risk. Wherever we can drive localization, we therefore should definitely do so. The local people – as well as the host country as a whole – need to be involved.

You compete with rather big players in your niche, including global leaders such as Honeywell and Rockwell Automation. What is the positioning you are taking compared to these other players?
Instead of worrying about other players, we focus on what we can deliver to our customers. We want to ensure that our customers have a good experience with respect to Emerson and our company’s products. Whichever added value we put in place is to ensure better customer satisfaction, rather than a response to competition.

A significant Enterprise Framework Agreement was signed at a global level with Shell recently. Is this also benefitting you in the African continent?
To a certain degree it does benefit us but we are limited because of the fact that some of the Shell investments are joint-venture set-ups.

You are quite the technology leader in the field as well…
Emerson Process Management is by far the technology leader in the market. A great deal of the innovation that comes into the market has been driven by Emerson. Electronic Marshalling technology is just one example of a new way of implementing projects that is very different from what we have had in the past; it is paradigm-changing and is of huge value to projects. As soon as customers adopt and implement these technologies, there are immense savings to be made. Wireless technology is another obvious development in which we have been ahead of the pack. The majority of the technology adoption in this area is being driven by us.

Is wireless technology going to radicalize the industry?
It is a game-changing technology that opens up many new avenues. In some ways that is also its greatest barrier – customers need to embrace a new way of getting the data from their smart devices, and change can be difficult.

Are most of the customers in Africa also ready to adopt these technologies?
It depends on the skillsets they have available. Some people do see it as a challenge to adopt new technologies, if they do not have the right skillsets. Most of the new technologies, however, take away much of the complexity and can be driven by people that do not necessarily require advanced skillsets.

Beyond a business perspective, Emerson Process Management has also invested in social initiatives. In Ghana, you have delivered a USD 500,000 PlantWeb Cruiser whereas an MOU has also been signed to provide further technical support. How was this initiative received and why was Ghana chosen as its location?
At that stage, we looked at Ghana as a new oil frontier following new discoveries. With the development of that oil industry, we realized that the Ghanaians had only just started to introduce petroleum training in their tertiary education system. From a support point of view, Emerson is well positioned to help them.
We therefore put a so-called PlantWeb Cruiser onsite, which is a very technical piece of equipment consisting of an entire plant with different valves, flow devices, measurement devices and so forth. Every time we go to Ghana, we also provide training sessions at the university.
Hopefully, by the time the petroleum engineer leaves the university, he has a fair idea of how the different (generic) products work. In the long term, our payback is that these engineers have worked and feel comfortable with our equipment. This is an ongoing program with the University of Mining And Technology (UMAT) in Ghana.
Now, we have also started looking at tertiary institutions in Mozambique. Such initiatives help significantly in countries where you need specific skillsets. As we continue expanding, we will continue to look for additional headcount in these areas.

You have been the GM for 5 years now. What targets are you setting for the African operations for the next 5 years?
We need to be closer to our customers whereas we focus on taking Emerson Process Management to a different level in Africa. Right now, we have 2 major centers: one in Johannesburg and one in Algiers. We will be more focused and even closer to our customer base. Such localization will be a challenge in itself too, in finding the right skillsets for example.
Several surveys have shown that the overriding feedback from our customers is that they want things to be done locally. They want local training, local back-up and support, local stock, and so forth. The average Mozambican cannot send someone on training to Dubai or Spain and if they can afford it, they will perhaps send 1 person. If we can localize, however, we are able to train 10 to 15 people at the same time.

Do you have a final message on behalf of Emerson Process Management sub-Saharan Africa?
Africa is definitely the next frontier, and presents huge new, largely untapped, opportunities. We need people to understand this, so that they can invest here to drive their businesses. As countries reap the benefits of these investments, internal development will follow and a snowball effect will result in rapid further growth. It can be frustrating in Africa sometimes, especially when you feel that some projects could be developed faster. Africa is the next frontier, but it will take dedication and investment.

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