Presberg – Chairman & CEO, Vinci Technologies – France
The CEO of Vinci Technologies, a provider of laboratory and field instruments for the oil and gas industry, discusses the critical role of research and development in the production of innovative solutions and gives insight into the company’s prospects for international expansion.
How did a very specialized company founded in the 1960s and part of the IFP manage to become a successful international player?
In the late 60s, the Institut Français du Pétrole (now known as IFPEN) decided to create a new company named Géomécanique. It worked in three main fields: one was to create laboratory instruments for geologists regarding exploration and production; another line was pilot plants for refinery and petrochemicals; the third business unit created specific electronic sensors to be put into wells. At one time, Vinci Technologies was even part of Technip. Overall the creation of this company stems from the IFP. The original purpose of Vinci Technologies was to constitute a workshop for the IFP. Then the idea emerged that if the IFP needed these lab instruments and processes, other customers could be equally interested. When I joined this company in 1997 my first mission was to set up a new strategy and our new team has managed to produce 18 years of consistent growth.
Why were you appointed to cope with this difficult environment?
The company was confident in their product but needed someone with a project management and sales experience rather than a scientist. My international background acquired in previous positions was also a key factor in their decision. During 10 years, we worked in collaboration with IFP and developed the company. We have been able to start this spin-off, and actually had an MBO. The type of instruments we were developing at the time were considered advanced in the 70s, but were no longer in the 2000s.
Has Vinci Technologies’ growth consisted in a combination of organic growth and acquisitions?
Most of our growth is internal and based on R&D. We acquire declining companies to open new markets and create new products. It was the case for Meca 2000 for instance. The acquisition of the American company Xytel, one our fiercest competitors in 2006, marked an important milestone in our development. It granted us access to the US market for pilot plants. When we took over Xytel, we also acquired 49 percent of Xytel India, one of their successful affiliates, which explains our presence in India.
How do you nurture your international network?
Our network of distributors is our main asset coupled with the sophistication of our products. We need local support to sell our products because we can’t monitor every aspect of our activity from France. Even in a more liberalized market like the US, we have very strong partners to run the business. Our global presence in regions including China, Russia and South America enables us to foster strategic and lasting partnerships.
Would you say oil & gas is your core business?
Indeed, the oil and gas sector represents 95 percent of our business. Instruments for reservoir engineers and geologists fuel our growth, and have made us champions in our field. Our customers are oil & gas companies, service companies as well as specialized universities. Our company is renowned in this field. We started with Rock eval used by geochemists all over the world. The objective was to develop a science to help analyzing the source rock. From this scientific outburst by IFPEN scientists, we were able to develop the appropriate instrument used by geologists on the field. It has become a trademark for the analysis of rock source all over the world. With the revolution of shale gas, this product has even become more required then before. We also developed another instrument called Coreflood to analyze how fluids can go through rocks and how you can insert gas or polymers. We sell this system to numerous chemical companies. We have also developed all kinds of instruments for routine analysis. Our relatively small company develops very famous products and recognized brands for our customers.
How do you integrate environmental concerns within your business?
Our instruments can be used for that purpose. Everything has an application for the environment and so does rock analysis. All the people using our instruments share the concern of not damaging the environment. But none of our products are specifically dedicated to protect the environment per se.
You are also developing specific instruments around fracking and mapping. What is your assessment of the ongoing debate on shale oil and gas?
I am in favor of an exploration process. I believe that we possess the adequate technologies to develop unconventional energies without damaging the environment. The situation deadlocked for political reasons. Environmentalists don’t have the same power in France, the US or China. Everyone talks about this issue but the solution will come from Technology, not from political debates. Our contribution to this debate is to provide tools to help geologists deal with these issues. We are for example just completing the development of an innovative tool; from our experience in sensors for seismic acquisition, we have been able to set up a specific downhole tool for fracture monitoring, which gives an appreciable information to make fracking efficient and prevent negative effects.
Can you tell us about your EPC projects and the way you match your customers’ needs?
Our major mission is to sell instruments to geologists or catalyst developers. In order to cope with the ups and downs of the market, we develop as many products as possible and reach the largest basis of customers.
What are Vinci technologies’ future projects ?
After being able to develop all the routine instruments and products, the next big step is to develop flow insurance, which implies more sophisticated products and enable reservoir engineers to optimize their production. Our target is to provide up to date technologies to sustain us in the long term.