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Interview

with Jean-Paul Margotin, Managing Director, Axens India

10.12.2010 / Energyboardroom

Axens has been present in the Indian market for more than three decades, establishing in 2008 a local subsidiary. What was the driving force behind the decision to establish your local offices in 2008 and not before?

Indeed, even though Axens established its office in India in 2008, we have been present in the local market for more than 30 years through representative offices. In this period Axens implemented important projects that have built our name and credibility in the Indian market.

2006 and 2007 were very successful years to Axens in India, with many new projects in the pipeline. As a result, it was only natural to come directly to the Indian market and stay closer to our clients, supporting them through our own resources especially for commissioning activities. Besides, after the creation of Axens in 2001, we have started our process of establishing subsidiaries in our main markets. Axens India is Axens’ second largest subsidiary.

How would you define the role that the Indian market plays for the Axens Group?

India is definitely a very promising country for Axens because we can bring all our successful technologies already applied in the USA and Europe to this fast-growing market. Axens is in a privileged position to use its existing assets to produce products that are subject to specifications like Euro-IV specifications.

India has now adopted these specification standards, and soon there will be new specifications in place such as the Euro-V, where Axens can add tremendous value and expertise to the local industry. India wants to become a refining hub, so more capacity will come at those high standards. The industry will only grow in India, whereas in places like Europe the industry is shutting down refineries. Therefore India is, without a doubt, a region where a considerable part of Axens’ future growth lies.

What’s your strategy to continue increasing Axens’ presence in the Indian market and where do you see further potential for growth?

In order to achieve our Indian clients’ goals of ever rising standards, Axens knows it has to follow up projects very closely, answering to our clients’ needs and specifications. This is why we are based in India, to better support our local clients, for which our constant presence is required.

Today, producing products meeting legal specifications in place is a must for Indian refiners. Every relevant refinery has to have units capable of producing very high quality products including gasoline (“motor spirit”) as well as diesel owing to rising specification standards. Upgrading the current assets was a main driver in the Indian market and will continue to be so in the field of technology Licensing. Another driving-force in the Indian market is the willingness of India to become a “refining hub” resulting in the need for additional capacity with the proper tools to allow new production with already higher standards. Down the road, I expect that the upgrading of residues and petrochemical projects will constitute our main areas of growth.

As a Catalyst and Adsorbent manufacturer, Axens finds in India a large market for catalyst replacement. Loaded catalysts quantities are very important and continue to grow with all the units still to be put onstream in the years to come. Our challenge will be to prove that the catalysts from our portfolio which cover an extensive range of applications focused in the refining and petrochemical industries are among the most efficient of the market.

Since its establishment, Axens India has been very successful, as you signed important contracts with major players such as IOCL and Bharat Petroleum. With such a fierce competition, what assets Axens had to offer to become their partner of choice?

When our clients come to Axens, they know that they are selecting a first-class technology provider. Axens has a foolproof operation in India where we have built an outstanding credibility. This is very important and I have capitalized on this as I know that credibility takes very long to build but very little to destroy.

At the end of the day, we have no choice other than to offer technology that will be efficient and will completely fulfill the expectations of our clients. This is what Axens brings to our Indian partners.

India’s refining industry is aggressively growing in international markets thanks to its great advantage in producing costs. What explains such an advantage?

The two main reasons that make India so cost-competitive are its Capex that is lower in India because India’s refining industry is working mostly with local manufactures that tend to cost much less, and can rely on skilled manpower also cheaper than in most other places. These would be the main reasons why India is more competitive in export-products.

Many in the Western hemisphere believe that part of this cost-competitiveness comes in the expense of quality of products or lack of investments in security and environmentally friendly technologies. Is this really a misperception?

Firstly, a product is a product. When you produce diesel at a given sulfur content there is no debate on the quality of the product. There are a lot of refineries in India that are export-oriented and as such their products will follow worldwide specifications such as Euro-IV or Euro-V.

Today Indian local market is Euro-III and Euro-IV oriented as per the current law. Therefore, local refineries follow these standards. Then you have the refineries that focus on the international markets, which have no problem to export to countries that follow Euro-V standards. India is not a country where people have poor quality products such as gasoline or diesel, the local industry simply adapts to the standards in place.

In the future Euro-V will be applied in the local market; it’s just a matter of regulation. That’s why Axens is here today, because whatever has happened in California 15 years ago will happen in India soon. And in order to replicate these transformations there are no trade-offs in technology. The process books we are delivering are the same in India than the ones delivered in France or in the USA.

The same logic is used for security and environmental standards. All the levels of construction in our process books are the same everywhere. Today, it’s a mistake to think that what Indian refineries build in India is of any lower quality than what it is build anywhere else in the world.

The world has to take very seriously when we say that India will be a “refining hub”. This country and its industry are highly committed to become a competitive international refining hub. Even while the national demand is growing so fast, , India seems likely to become Asia’s largest exporter of refined products by 2012. This is a testimony of India’s commitment and capacity to deliver on its promises.

Do you have any advice for those willing to do as Axens and take advantage of India’s oil and gas booming industry?

You have to come to India prepared and follow up very closely with your local operations in order to be a part of India’s success story. Reasons to invest in the Indian oil and gas industry abound. This country already is a very strong player in the refining market and it will continue its steady growth, playing a major role in the international oil and gas industry in the coming years. Axens is not waiting to see.

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