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Interview

with Philippe Boy, Managing Director, 3C Metal SA

11.01.2012 / Energyboardroom

Headquartered and founded in Pau, France, 3C Metal has developed into an international group with workshops in Dubai and Cape Town. Can you first of all elaborate why South Africa was chosen as one of the company’s strategic locations?

The choice of Cape Town followed a number of ongoing projects that took place in Southern Africa. In the past, South Africa had been a place where our people have been deployed to assist international clients on a project basis. We are particularly involved in the maintenance and upgrading of offshore rigs.

Cape Town lies on the route between key locations such as South Korea and Singapore, and growing markets such as the West Coast of Africa and Brazil. A lot of the newbuilds that come from the Asian shipyards pass through Cape Town on the way to Brazil.

What do you see as some of the other key advantages of being located in Cape Town?

All the different services are available in Cape Town. It is very easy to bring in people and project managers. They, in turn, like coming here because of the ease of doing business and the fact that all the key players are present.

Several of our interviewees in South Africa have argued that the nation’s potential is still underutilized for such activity, due to lacking infrastructure. Would you agree?

Most probably, we need to spend more efforts on marketing Cape Town as a refurbishment or maintenance hub for the oil and gas industry. At the moment, there are quite some developments taking place in Africa, with projects in Ghana, Namibia, Gabon and so on. We really need to reinforce the commercial potential of Cape Town with our clients.

There are indeed some challenges to Cape Town, as we do not have real shipyards while the water depth is also not optimal. Many of our clients are pushing to find new solutions close to Cape Town in emerging locations such as Saldanha Bay. There, we are currently already engaged with a full management project for one of our Brazilian clients. We have initially started this project in Abu Dhabi with our Dubai-based team. When the rig arrived in South Africa early December, we had a full team of 160 people involved. While the location of South Africa is good, the infrastructure can definitely be improved.
The Saldanha Bay project, where we take care of the full management, is rather new to us. We do not try to market ourselves as a shipyard, but aim to offer our services in our core business of high pressure piping.

Are these full management solutions the new way to go?

We are offering full management solutions for small to medium sized projects. The Saldanha Bay project was our first of this type in South Africa. This is definitely a change in our business model. Increasingly, we are trying to becoming engaged in projects by fulfilling engineering tasks at an earlier stage. We now get in touch with the clients while the rigs are still under construction in the shipyards in South Korea. We are also starting to do some modifications and upgrades while the rigs are in transit from South Korea to the drilling locations such as West Africa or Brazil.

The Saldanha Bay project was awarded to 3C Metal due to our engineering capabilities in Dubai. In some projects, our workshop receives assistance from the ones in France and Dubai. The target for us now is to create more 3C companies worldwide. We started in 1995 in France, followed by Dubai in 2001 and Cape Town in 2007. We hope to start with 3C Metal in Brazil this year, while we also hope to set up a subsidiary in Singapore. We try to develop a network where the headquarters remains in France. At the headquarters itself however, we are not too much involved with offshore operations. Instead, we mainly work on chemical plants and other projects for Total.

Can you elaborate on the capacity of the workshop you have here in Cape Town?

At this workshop, we permanently employ 50 people which serve as a strong support for all of our projects. One of our strengths is also to use experienced project supervisors from overseas. Now, we have a task force in South Africa that can stand by itself without any international reinforcement. The project in Saldanha Bay is for example 100% South African.

We put a lot of effort into training our people. At first, we used to bring in specialized skills for projects. However, we need to do so less and less as we progress with the company. Our people are now also part of internationally deployed teams. In Gabon, for example, South Africans do not need visas which makes it easy for us to send our people there. In general, we are trying to build multinational teams.

Yet it has been argued in the industry that South Africa lacks practical talent in a number of engineering fields, such as welding. Would you agree?

It is true, but then again it is not better in France where the company is headquartered. This problem exists in many other countries too. In our business of fitting, welding, and so on, you will find similar shortages everywhere. For our workshop in Dubai, the situation is slight better whereas we can source talent from the Philippines and India. We also use Romanian talent for example and have an office in Constanta on the Black Sea. It is another place where we have managed to find skilled people with strong work ethics. Overall, our clients have been very pleased with the work we have done. In Saldanha Bay for example, we have completed the job in 4 weeks which is half of the initial timeframe.

You have also partnered with the South African company Belmet. Is this an important partnership for 3C Metal SA?

This is a very important partnership for us, whereas Belmet’s general manager holds a 20% share of 3C Metal South Africa. Back in 2006/7, Subsea 7 acted as the EPC company for PetroSA for a particular project in Mosselbay where both Belmet and 3C Metal SA worked in partnership. Belmet was in charge of all the structural fabrication while 3C Metal was in charge of all the piping and pressure testing. This has been quite an interesting project for us.

Considering the size of our company, it is very important for us to have these types of links with other companies. There are many specialized service providers in South Africa so the opportunity to cooperate definitely exists.

Considering that this has been a successful partnership already and taking into account the industry’s trend towards cooperation, will we see more such partnership for 3C Metal in the future? If so, what type of partners would you target?

We are very open towards new partnerships and maintain a very pragmatic approach. The easiest for us is to work with a joint-venture model on project basis. I think that we need to offer global services in Cape Town and Saldanha Bay, while approaching our clients together with our partners.

Clearly, in the future we will see new locations for 3C Metal worldwide. In a few years from now, what role will the South African operations continue to play?

We are quite optimistic about our future in South Africa. We will continue to develop our projects and year-on-year turnover, as well as our teams. It is extremely important to have the right people to do the job. Cape Town will continue to be a very good place for a young company such as 3C Metal SA to develop, and will provide good exposure to 3C Metal worldwide. This location will remain important to service our clients offshore in Angola, Nigeria, Congo, Gabon, Ghana and so on. At the same time, we also want to start developing more activities along the Sub Saharan East Coast. We definitely see this market further developing.

Do you have a final message that you would like to add?

3C Metal has done well in the last decade, and we are definitely pushing strongly to become a key player in the future. Generally speaking, I think that companies should not be afraid to develop their activities in South Africa. It is a safe place to do business with a good location and a lot of activity.

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