Stam – Managing Director, Amec Foster Wheeler Netherlands
The managing director of Amec Foster Wheeler in the Netherlands discusses the recent merger with Foster Wheeler, what it means for the new company in the Netherlands, and the importance of oil and gas in the future of Amec Foster Wheeler.
Amec’s merger with Foster Wheeler was completed in November 2014 –how is the transition, and how is the move impacting the business in the Netherlands today?
Foster Wheeler is a huge asset in the new company, first of all in terms of branding here in the Netherlands: while the Foster Wheeler brand is well known here, the Amec brand is only know in certain sectors such as upstream oil & gas with the three offices serving Shell / NAM OneGas project. We arrived in Europe with our Environment and Infrastructure (E&I) practice in association with one of our biggest clients in this area, the US army. A few years ago we decided to expand our European presence into the industrial commercial sector, but up until this point, building a name for ourselves in an established environment has proven difficult. The Foster Wheeler brand should help us to further crack the market. Our unique skills in this market are water-related – we are using this as our unique selling point, and expanding our offering to make sure that we can address all of our clients’ possible needs in this area. Our merger with Foster Wheeler also allows us better access to the downstream, as well as upstream, oil and gas sector, an industry that Amec Foster Wheeler will be making a priority in the Netherlands, and an area where Foster Wheeler has been very strong in the past, with a focus on energy conversion technologies.
How has the integration of the two companies gone in the Netherlands?
Foster Wheeler had a small team based in Belgium: after the completion of the merger, we made contact, and are now drafting a joint business plan for combining our efforts in the market, with oil and gas as a major focus. We will look at the best ways to can combine Foster Wheeler’s current activity in Benelux with Amec’s E&I and upstream expertise. Currently, we expect this will be in compliance-based services such as waste management and contaminated land.
Last week I was in Milan, at Foster Wheeler’s European technical headquarters. We met the environmental team, which has engineering capacity and also has a focus on waste-water treatment, like Amec. We are now in the process of combining this expertise with our UK headquarters.
There are good complementarities between the two legacy entities: whilst the E&I groups were more focused on public and governmental services, legacy Foster Wheeler’s environmental services has focused on industry. Combined expertise in FEED, permitting and project planning and management, is an excellent setup, and should result in good commercial prospects.
What opportunities do you see in the Dutch oil and gas sector for your business today?
First off all, Amec Foster Wheeler will continue to deliver quality through projects to existing clients as ONEgas and Koch. I see a huge possibility for us to expand into the downstream oil and gas sector with services such as asset management. For example, the Netherlands has many thousands of oil storage tanks scattered right across the country, varying in size from tine to 100,000m3. Today, many of these tanks are reaching the end of their natural lifecycles, and need to be inspected, refurbished and upgraded. Almost every company that owns oil storage tanks in the Netherlands is now embarking upon this process. Amec Foster Wheeler is today in a position to provide these companies with the services they need in this area, and systematically evaluate all the tanks they have in their portfolio.
The only thing standing in our way of embarking on this work to date has been the language barrier: we didn’t have a large enough Dutch-speaking staff to interact on the ground and back at the workshops. This has now been addressed by combining teams from the legacy entities working in the Dutch-speaking Benelux area.
What is Amec Foster Wheeler’s current project capacity?
From an environmental point of view, it’s often a challenge to build new business in the oil and gas sector, because traditionally, the industry has always worked through framework agreements in this area, which mean that you have to invest in your capacity, wait for tendering to open, and then hope to win. However, we have the ability today to shift our capacity up and down according to the projects we have ongoing, and if we need, we can expand our local presence here quickly. We’ve also see a slow down in capex in oil and gas so having a more diversified business, and being able to tap into the downstream sector is a real benefit of the merger. My role is to act as a pivot for the wider Amec Foster Wheeler, and look for new business.
What’s your growth plan for this new business area?
We are confident our focus on the oil and gas sector, right across the life cycle, and both upstream and downstream, will pay off. We have a good story to tell, and services to sell, and nowadays, the industry is very focused on cost reduction, which we can provide. We offer vast and excellent experience in project management and asset management in the oil and gas sector, as well as other energy-related sectors, where we were able to reduce the cost of site operations dramatically, while keeping and meeting all the objective criteria that were laid out in the framework contract.
What have been the biggest challenges for you in looking at this new market and getting the company to the right position?
One big issue was waiting for the completion of the Foster Wheeler merger, which essentially took almost a year, thanks to US M&A regulations, which meant that we couldn’t communicate with the company during this time. Not being able to communicate with Foster Wheeler meant that we had to do quite a lot of guesswork in putting together the initial development plan – this meant that the plan we put together was quite conservative, focusing on the strengths of legacy Amec: water and environment-related services, risk assessments and compliance management. We have started on this: the seeds have been sown and some are growing to set fruit as we speak.
Today, Amec Foster Wheeler has plans to expand the business significantly, not only the oil and gas business but also the commercial industrial sector – not just providing the classic environmental services but also bringing in a wide and broad range of expertise from, for instance, the UK and US. When it comes to environmental services, Holland was one of the first countries in the world to advance in this sector, so today most low hanging fruit is cropped. In a small and dense populated country like the Netherlands, the challenge lies with the remaining issues. For this, we have a lot of experience internationally that can be brought to the table here that will change the game.