Apollo – Constantino Galanis, CEO – Mexico
The inspirational Greek CEO of one of Mexico’s largest domestic chemical manufacturers outlines his strategies for transforming the company from a seller of chemicals into a ‘great integrator’ of oil and gas expertise and technologies. He recounts how the Mexican energy market has evolved during his close to three decades at Apollo and gives his predictions for future growth spots across the value chain.
We understand that Quimica Apollo, one of the largest domestic chemical manufacturers, was originally part of the US corporation, Apollo Technologies, but by 1990 had become a fully Mexican firm. Could you please tell us a little bit about the company’s origins and the most significant milestones and achievements to date?
In the early 1980s an American corporation, Apollo Technologies as it was then known, which specialized in the fabrication and commercialization of chemical additives for combustion, made an investment in the country aimed at reducing the air pollution emanating from CFE owned plants in places such as the Valle de México. Apollo was able to successfully reduce those emissions by approximately 90 percent, and by 1988, we had established a formidable foothold in the local market whereby we were treating half the boilers in the country with specialist chemicals to increase the efficiency of the burning by radically reducing the volumes of unburnt carbon. At this point we transitioned into a fully-fledged Mexican company and embarked on a series of transformative diversifications that would render the company what it is today.
The first step was to enter the refining segment and start providing integral treatments utilizing specialty chemicals to optimize petroleum processes. This was, at the time, highly innovative and completely new to the Mexican market. We then started covering the production and exploration segment which constitutes the largest and most lucrative accounts. By adding value across the entire value chain we were able to generate growth opportunities of over 100 percent from one year to the next with the greatest growth levels occurring within the last five years.
As you have just stated, Quimica Apollo delivers efficient solutions across the whole oil and gas spectrum. Which segments then constitute the core drivers in terms of revenue stream and workload?
Our services to Pemex in upstream production and exploration generate the most revenues. Our projects in the refining segment rank second in terms of economic importance, and our activities for the CFE rank third. Irrespective of the segment, virtually everything we do is based on the same concept of enabling our customers to optimize their operations and obtain cost savings. In all cases, the cost of the service we provide represents only a small fraction of the benefits derived by handling and utilizing fuel more efficiently and this is how we make our money. Around 85 percent of our business is directly with state or para-statal entities such as Pemex and the CFE, while 15 percent of our work is for private enterprise in heavy industry such as mining and steel which have their own unique characteristics. Our task is always to delve into our clients’ processes and identify and execute ways to make those processes more efficient in terms of energy load and deployment.
Obviously with the forthcoming reform we are going to witness an increased number of private companies participating in the market and Apollo is positioning itself to cater to these incoming demands as well. We have already concluded a blanket purchase agreement with DS Energy Solutions to cover the production processes of their entire portfolio of Mexican fields. We are preparing ourselves in terms of our engineering and technological capabilities to serve these sorts of clients by ensuring that every last drop of oil can be extracted from the sorts of mature and marginal fields that independent private sector entrants are going to be most interested in.
Many heavyweight international firms with considerable experience in mature and marginal North Sea fields are contemplating market entry. Do you fear this sort of competition with Mexico’s opening up of the industry?
There will certainly be much more competition, but this is entirely healthy. The most intelligent entry strategy for such firms will be to associate with a Mexican company that knows how to handle the local market. We are actively looking to partner with high-technology companies that can assist us, Pemex and private E&P players in extracting the oil at the lowest possible cost per barrel. Many decent competitors will come from outside but I feel it will take them at least a few years to learn the ins and outs of the local market and to get to a stage at which they will be on a par with Apollo with regard to both the services and the expertise we have developed here. In other words, we are very confident about our abilities to compete with any incoming multinational aspiring to offer the same services as us.
Can you please give us an insight into some of your flagship projects?
One of our headline successes has been our work for Pemex in the desemulsification of the Maya crude. Before we were awarded the contract, Mexico was shipping overseas crude off-spec at ever lower prices. Since our involvement no such shipments have left Mexico and the price has been recuperated. We have also been working with artificial lift systems on the Burgos field with a view to increasing the production of gas and handling the condensate by-product which can be blended and deployed in the refineries. Recently we won a large Pemex contract to handle the processes of five of the six refineries and thus, for the first time in Mexican history, refinery operational processes will be monitored, automated and communicated in real-time as part of our integrated service solution package which harnesses a comprehensive systems approach.
It is important to understand that we are no longer merely a seller of chemicals. We are a problem solver and seller of results and this is the stance and orientation of our personnel when assisting the client at the field level. At Apollo, we identify spaces for collaboration and facilitate the improvement of production processes both in terms of enhanced productivity and sustainability through a mix of continued innovation, contextual adaptation and sound critical assessment of the needs and performance of a project.
Mr Galanis, your own story is quite remarkable. Originally an emigrant from Greece, you joined Apollo at a junior level back in the 80s. Close to three decades later, you have worked your way up to become CEO, a position you have held for 12 years. What have been your experiences along the way?
I have worked for Apollo all my life and it has been immensely satisfying to witness how the company has evolved and flourished in the Mexico. The experiences have been endless and what I have learned these past three decades has been invaluable. We have grown together. When Apollo Technologies first posted me to Mexico there were only three of us and today, not only has full ownership been ceded, but we now possess no less than 1,850 employees most of whom are spread out across the field working directly with the clients on the platforms and in the power stations. For me the enjoyment is not so much in reaching the final destination, but rather in the journey and the experience along the way that shapes you and your colleagues into the people that you are.
What are your personal priorities and aspirations for Quimica Apollo going forwards and how do you foresee the growth trajectory in the short to medium term?
Our aim is to become the ‘great integrator’ that brings together different experts to create comprehensive solutions that last for many years. In my native Greek culture, we have a proverb that states that ‘a bean at a time best fills the cradle’. This is very much the approach that I am looking to adopt. In other words, we will take one step at a time and will prioritize any new areas that we seek to enter. Our technique will remain consistent with what has gone before and this is basically to identify thebest chemistries and technology that exist worldwide that will make economic sense to our clients and improve their production.
We foresee a boom across all construction activities related to the oil and gas sector and we will want to participate in that by optimizing the processes for water treatment plants to give just one example. We also expect the shale revolution of the US also taking off in Mexico which has been blessed with very similar resources. We will therefore look to associate with a reputable North American company with considerable expertise in hydraulic fracturing and drilling this type of specialty well. Rather than reinventing the wheel, the idea will be to blend their proven expertise with our local know-how to achieve tangible results for our clients.
Do you have a final message for our international readers?
Mexico is at last ready to do business and Quimica Apollo is equally ready to associate with incoming entities in order to bring cutting-edge technologies and ideas to bear fruit in the Mexican energy sector which will ultimately be to the benefit of the entire country.