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Interview

with Patrick Collins, Managing Director, Aubin

12.11.2008 / Energyboardroom

You were the Managing Director of Ythan Environmental Services before heading Aubin after the two companies merged. What was the vision behind the merger of the two companies?

On the one hand, I created Ythan Environmental Services (YES) in 2002, with activities centered around subsea technologies. On the other hand, Aubin had been in business for about 20 years, traditionally operating in the sector of Cement and Stimulation Chemicals. I knew Aubin’s then-Managing Director well, and we identified the opportunity of merging the businesses together. So we merged the two together, reorganized the shares arrangement, and I came on board as Aubin’s Managing Director. This explains why the company is today positioned and moving forward in the two key sectors of Cement and Stimulation chemicals and subsea technologies.

Aubin has an unusual business model. Could you give us an overview of the exact niche in which the company operates, and explain the peculiarity?

Aubin’s unusual feature is that although the company is based in the North East of Scotland, about 75% of our business is elsewhere, predominantly in the Middle East. We supply specialist cement stimulation chemicals to local service companies in the Middle East rather than the big three major companies. It might seem strange that, being Aberdeen based, we sell most of our products there, but Aubin has been successful in developing that market. Our customers are satisfied, and we are happy to serve that market for which we have acquired a degree of skill and expertise. Today, the other sector which will be growing rather more rapidly is subsea, as there is a lot of activity in the UKCS with commissioning and decommissioning. Aubin has developed technologies in pipeline gels and pigging, using chemical pigs and gels to treat and clean pipelines where ordinary pigs won’t work, and we are further developing a range of niche specialties and services for the subsea market.

Coming from Aberdeen, what was it in Aubin’s evolution that made the Middle East an attractive market for such a large portion of the revenue?

It’s a historical fact; Austin worked for many years in the Middle East and knew a lot of people there. When he set up his company to do cement and stimulation chemicals in the North Sea, he discovered that the main potential customers here, such as Schlumberger, Halliburton, and BG Group, already had their suppliers of chemicals. Therefore, he got on a plane, met his friends in the Middle East who were setting up their local businesses, and started selling there. In the last couple of years, Aubin chose to further develop and focus on that market.

What is Aubin’s exact growth trajectory in terms of revenue and headcount?

Although we started from a low base, Aubin grew sales by 300% in the last 3 years. The company is moving up at a much faster pace than before, but for the coming years we plan an annual growth rate of 40% to 60%.

What fuelled the rapid growth of the last few years?

In the cement stimulation area, Aubin is positioned well with local independent companies. Recently, in order to support the local economy, there has been a drive in the Middle East from NOCs to use local independent service companies more, especially as they are becoming more professional and skilled. Aubin intends to support them, working in partnership with our clients. Aubin focuses a lot on technology, developing products that our customers need that allow them to break into new markets and build market size. If their business grows, so does ours.

Given this focus on supporting local interests, what is the attraction behind working with an Aberdeen-based company?

Potential partners see that as a positive area. Presenting chemicals coming from Europe and developed in the North Sea gives them validity and provides a level of comfort for our customers’ customers. Indeed, the North Sea is perceived as a technical area of expertise, therefore tools developed and proved in the North Sea have a distinct advantage when marketed in other parts of the world.

What is it about the subsea area that made it a focus segment for Aubin?

The subsea area is growing very rapidly in the UKCS. As a chemistry-driven company, Aubin has some interesting products and patented deep gel technology. We provide alternative solutions to tackle issues that the operators and installation contractors are having, with applications in insulation, sealing, or buoyancy. Furthermore, the UKCS is a center of excellence for subsea technologies. Aubin has been a member of Subsea UK for a number of years, and works closely with major installation contractors, which have very large facilities here in Aberdeen, making it a big center for offshore installations. In that respect our location helps us to enter our market, especially as there are not many other companies with chemistry skills operating in that sector. Aubin has been knocking on doors of course, but subsea companies are also coming to us looking for solutions that need a chemistry input.

What makes Aubin the partner of choice in the North Sea subsea market?

Aubin puts in quite a lot of time and effort, investing to develop a stream of IP that is expected to come to fruition in the mid-term. Aubin works with partners to develop new technologies for subsea applications; they are responsible for the engineering side of the project, and we for the chemistry side. Gradually, Aubin will acquire a greater understanding of the engineering aspect, allowing us to provide more input, look at things differently, and complete jobs more quickly and safely. This broader knowledge will also add value to Aubin’s employee skillset.

Many companies lament the perennial lack of talented people in the industry. What is your strategy to attract and retain the necessary human capital to grow the business?

It has not been too difficult to hire chemists, and of those hired, Aubin has focused on developing bright young individuals rather than experienced professionals. This younger cohort has fresh ideas and can be more easily directed to look at new ways of doing things. They are not familiar with the “we tried it before and it doesn’t work” concept because they don’t know what doesn’t work, and this mindset helps with innovation. Indeed, Aubin’s approach is to understand our clients’ issues; they need a chemical with certain properties, and our job is to develop a new product for this specific application.

Aubin has undergone a 400% increase in revenue, is developing a new IP stream, and the nature of the business itself is evolving. What are the biggest changes from a manager’s point of view in terms of organizing a larger company?

Aubin has become an increasingly large organization therefore more difficult to manage, with everything now at a faster pace. Therefore, to help manage the growth of the system, we brought in integrated management systems to help us get ISO:9000, 18000 and 14000 all at once. This represented a lot of work but we expect Aubin will have full accreditation in the spheres of safety, quality and environment by the middle of next year, it is going to be a very powerful asset to bring us to the next level in the next few years.

What are your biggest items at the top of the agenda in terms bringing the company to the next level?

My first priority is to focus on developing the cement stimulation business in the Middle East, and as our customers in the Middle East extend to other markets, following them and bringing that model to West Africa, South America, and the Far East. The second priority is to transfer more business to the North Sea by realizing the potential in the subsea market in the UKCS and turning our clever ideas in real solid money. Indeed, it is ridiculous being based in the North Sea not to develop our activities here and make an effort to sell more. So far, curiously enough, the opportunities were bigger and easier to get elsewhere.

You mentioned expanding to markets such as West Africa, South America, and the Far East. What about North America?

For the cement stimulation sector, there are already many very good companies based there capable of doing the same thing, so the question is whether we can provide something extra. Therefore, Aubin should probably better focus on markets that are less well-developed than North America. However, for the subsea sector, there is definitely scope in North America, as the issues in the Gulf of Mexico are the same as the North Sea. Aubin is actually looking to find partners operating in the US, who would pull us into that market rather than pushing our work there. However, finding a good local partner is a big challenge for a small company like Aubin, and management is sufficiently busy with existing markets and clients that investigating vast markets like the US is a bit challenging.

What is your vision for Aubin over the next five to 10 year time horizon?

I would expect a company four to five times bigger, with a similar growth rate, a better known name in the industry, and operations in new markets. Although the Middle East is a very important market and we value the opportunities there, we see huge potential and lots of development capabilities elsewhere. Aubin will develop new technologies and be more active in the North Sea, West Africa, Russia, South East Asia, South America, and in most subsea markets as well.

What is your final message to our readers about Aubin’s growth trajectory and ambitions for the future?

Aubin is growing by solving its customers’ problems and by developing technologies that its customers need. Our approach is to find out what people want to buy and produce it. If they have chemistry-related issues that will enable them to grow their business, we can help them. Aubin will continue to grow by adding value to our customers, through a personal approach and by building long-term business relations.

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