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Interview

with Priya Pillay, Branch Manager South Africa, Hytorc

16.04.2012 / Energyboardroom

Hytorc is recognized as an international player in professional bolting solutions. What can you tell our readers about the significance of the South African and African markets for the Group internationally?
South Africa, Southern Africa and Africa are very important markets for the Group, particularly as the oil and gas and mining sectors -our core industries- are seeing significant exploration activity across the continent.
South Africa used to be run by 2 distributors which have been set up 10 years ago. As of last year, Hytorc terminated these relationships to regain control. As a Group, we have a worldwide customer policy and anyone receiving our products should receive the same level of customer service regardless of their geographic location. With the distributor model, this was not the case.
As of May 2011, the US-based Hytorc head office decided to set up a branch in South Africa which today serves the entire subcontinent. Having terminated these relationships, the subsequent growth path has been painful nontheless. A lot of our end-user database has been lost and we basically had to start over with a zero turnover.
From a growth point of view, however, we do not only look at the mining, refining, on- and offshore industries in South Africa, but focus on the entire region south of the Equator, which includes markets such as Nigeria, Angola, Tanzania and Mozambique. From a business perspective, it is however also critical to recapture the market that we have lost in South Africa. We have grown substantially and have put the right people in place to tackle our different markets, and are looking at long term growth in these different markets. With the support of head office backing us a 100% will continue to grow steadily.

What arguments can you bring to the table when trying to win back these customers?
It is not very hard in the sense that Hytorc’s worldwide customer policy is to ensure that once customers purchase or hire our tools, they will not go anywhere else. HYTORC has the goal of 100% customer satisfaction deeply embedded in every aspect of business. Every customer is entitled to Free Safety training, product operation training and many more unique benefits. Within the first year after purchase we have a worldwide “one year no questions asked warranty’, which includes free labour and parts – another first for our country. If a product requires servicing or repair we will loan the customer free tools so that we ensure continuity in their projects. Our main objective is to make our customers’ jobs as hassle free as possible and they will be equipped with our tools in their production facilities at any point in time.
We also make the lives of our customers easier -by providing training- and are flexible in the way we do business. If a clients faces budget constraints for example, we will arrange a financial package to accommodate their concerns. Hytorc has been manufacturing tools since 1968 and we have a vast range of equipment ranging from entry level to top end. Our torque & tension equipment, for example, are products that we have patented, easy to use and inexpensive in production. We manufacture both hydraulic and pneumatic tools that meet all the standards, which is particularly important in industries such as oil and gas where spark is a very important issue. We also offer a full service and back-up center for our customers.
Furthermore, we also offer full training and technical back-up. Southern Africa is not a mature market such as Europe and the engineering skills base has been thinned out over the years. BEE compliance is a wonderful concept but does require a lot of new upskilling. A lot of the engineers and foremen are therefore not yet familiar with our equipment. Many locals still use the old flogging spanner, which is a very unsafe and unproductive method. We want to do more than selling and hiring tools alone. We want to take it further and educate the customers, provide the training and ensure that the plants are built according to the right specifications. In order to do so, we have a lot of customer engagement. We will engage with the project developers, engineers, and so forth, to ensure that we correctly understand their requirements to makes adequate suggestions about the tools that they will require.

How has this approach been received by the customers?
The customers have received this very well. In the past, the distributors were just selling our equipment, whereby we now speak to the customers directly. Lost production, in the engineering field, costs millions. The shorter the turnaround, the better for the customer. We have a wealth of knowledge from all over the world that we can draw on when doing our presentations to our clients. On big projects, a lot of the overseas engineers have used our equipment before. The history and pedigree of the equipment and the company stands very well in the engineering community. We are therefore very fortunate to be gaining our customers back in this regard.

From a safety point of view, major events such as the Deepwater Horizon blowout has resulted in an increased awareness for higher standards. Have you observed a mindset change in these markets too?
From a South African perspective, I personally feel that there is still a lot to be learned. In certain establishments and companies, there is often still the old mindset of ‘this is how we do things in Africa.’ At the end of the day, we need to get a hold of the right people and educate them to make more conscious decisions.
To quite a few companies, we have introduced our ‘Stretch-to-Load’ technology, which consists of both torque and tension technology. This new technology allows the engineer to apply torque to the application on critical joints while applying tension to the bolt at the same time. Because it is a new technology it has not yet been widely accepted, either because of lacking awareness or end-user resistance to change. We are therefore planning a number of road shows to companies in the Oil & Gas, Steel, Mining industries.

What makes you confident that this adoption rate will change?
In Europe and the USA, it is becoming an approved technology and has proven to be successful. It is simplistic in its form which enables anyone to use the technology. It is just a matter of bringing it to the right people and using case studies as a means of reference. Moreover, we have a lot of status approvals as well, such as CE and TÜV Rheinland.

You describe South Africa as a market that has not yet reached maturity. Looking at your sub-Saharan footprint, does this make the situation even more difficult in less developed countries such as Botswana or Mozambique?
In fact, it is very easy once you are onsite and once you can demonstrate your capabilities to the end-users. The challenge exists in reaching these remote places and to create the opportunity to put in place such demonstrations. Despite the logistical challenges, the growth is definitely there and we need to find out how to tackle it in the right format.

Ideally, when will we see a mature South African market?
In around 10 years we should start reaching a trained and knowledgeable skillset where our method of working becomes the standard in the industry. Moreover, this does not only involve the end-users but also other companies that are involved in supplying those industries. In this sense, we work on a regular basis with companies such as Klinger and Novus Sealing. It is our responsibility to link with the companies out there that have the necessary engineering skills to deliver the required service to the end-users from a shutdown point of view. Then, in turn, we need to speak to the end-users to make sure they can look after their own plant from a maintenance point of view. This is why it is a lengthy process.

If you provide training yourself, you firstly need to have the right people in-house. Is this a challenge?
Looking at the available skills in the marketplace, it is very difficult to find the qualified people in this industry. Finding the right people is always a challenge, which is why we work with some companies that already have a training center in place. Furthermore, Hytorc has worked with accredited institutions OHSA and ASME to create bolting courses that are intended to increase safety on bolting jobs. Hytorc has been recently awarded by OHSA to provide onsite training on product handling and operations at the customers’ facilities. This is the first step in ensuring safety and the correct way of handling the tool for all bolting applications.

What do you see Hytorc in Africa achieving in the 5 years to come?
We hope that majority of the industry will be using Hytorc tools! In 5 years time, we would have certainly gotten our message across to all the players in the oil and gas industry. We will have demonstrated the service that we offer and have showcased that we are available. We certainly hope to have them on board and have them using our products as well as our expertise and technical back-up. When it comes to Africa, because there are so many players in the field and different avenues of supply, it will probably take longer however.

Would you have any final message to send out the international readers as well as the South African stakeholders?
As a company, Hytorc is truly global and can reach out wherever your operations are. Moreover, if we are not situated in a country, we will have someone looking after that space from a regional level. With modern communication and internet, it has become very easy to communicate with customers regardless where they are. With Hytorc, we have managed to perfect such communication to ensure the best service.
On a regional level, there is still a lot of work to be done. Our job is to bring the subcontinent to the standards of the rest of the world. We have the means and capabilities and certainly have the backing from our HQ. We would like to grow with the emerging markets and seize all the opportunities that exist. We have to emphasize our knowledge base too. South Africa, for example, is looking into the wind industry which is a sector wherein we have acquired significant experience at a global level. Regardless of the industry you are in, our skillset allows us to contribute very rapidly in an efficient manner.

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