Many Scottish companies are cautious about investing in growth in this uncertain financial environment.
Not so Aberdeen specialist oil and gas logistics business Asco Group.
It has just opened for business in the Middle East. Only yesterday it launched its latest international venture, Asco Middle East, at the British ambassador’s residence in Muscat in Oman.
This follows news that it is to open an Arctic base in Norway later this year in a joint venture. There is also a new joint venture in India.
Meanwhile, in recent months, Asco has won contracts totalling about £75million from oil and gas operators BP, Talisman Energy, TAQA and Marathon.
The company has come a long way since its modest beginnings in a small warehouse in Aberdeen in 1967.
Asco has suffered mixed fortunes over the years, but has been on the up since being bought by private-equity firm Phoenix Equity Partners in 2006.
One of the Asco bosses responsible for this is Derek Smith, the chief executive for Europe, Middle East and Africa.
The 44-year-old father of three, who has been with Asco since Phoenix took control, has worked his way up from the shop floor in the business world.
He started as an apprentice electrician with a small Hamilton firm in 1982 and his career path before Asco took him to being a Glasgow-based divisional managing director with construction and support-service firm Alfred McAlpine.
Mr Smith’s duties at Asco involve regular travelling around the globe; a far cry from his youth. He said: “When I was young, going to the Far East meant a trip to Edinburgh. These days, I am finding myself in the real Far East.
“These are exciting times at Asco, where we are growing an international business.”
Asco says it now works with more oil and gas operators in more locations worldwide than any other oil and gas logistics company.
It also has a leading position in the UK North Sea oil and gas supply-chain service market and, through operating arm Enviroco, is a significant player in the hazardous-waste market.
The Granite City company has operations in nine countries with just over 1,500 employees worldwide.
Turnover in 2009 reached £391.8million while earnings before interest, taxes, depreciation and amortisation (ebitda) were £27.2million.
Mr Smith is aiming for turnover to hit £475million this year, while ebitda has a target of around £29million.
He said: “Considering the tough year it was for everyone, our 2009 figures displayed a solid performance by the company.
“A lot of our success is about understanding our customer’s needs and offering solutions to fit these requirements.
“Our Arctic base gives us an unrivalled opportunity to create a logistics hub for the Russian market. Similarly, our base in Oman will provide a hub for our Middle East operations, supporting Iraq, UAE, Saudi, Kuwait and Qatar.
“Our Indian joint venture will allow us to take advantage of growing oil and gas opportunities in the Indian marketplace.”
This year has also been marred for everyone in the oil industry by tragedy in the Gulf of Mexico.
The Deepwater Horizon rig was under lease to BP when it blew up and sank on April 20, killing 11 workers and leading to a huge release of oil.
Asco was among hundreds of companies from the US and abroad who were called in by the offshore giant to provide specialist skills.
The Aberdeen firm was selected by BP to be the lead contractor for logistics response.
Eight staff from Asco’s freight-management operation in America were working full-time with BP to make sure people and equipment were in place to help with the cleanup.
Five were based at BP’s crisis centre in Houston and were involved in high-level planning meetings.
The company’s freight-management units in Aberdeen and Singapore also helped to move equipment from various parts of the world to the US oil capital.
Mr Smith said: “I think for me that was a clear signal of the trust a customer placed in us. There was incredible teamwork during that terrible event. It was a 24/7 operation.”
Asco wants to be recognised as the clear global leader in oil and gas logistics.
Mr Smith said: “I understand the challenges that surround our ambition, but I’m also clear how we achieve it – through our people, innovation, our unrivalled commitment to outstanding customer service, the use of technology and continuing our excellent record on HSEQ (health, safety, environment and quality) performance.
“It was interesting that, as we moved through tougher times in 2009, many other companies’ graduate and apprentice intake schemes were slowed down or ceased altogether.
“Led by our group chief executive, Billy Allan, we agreed at the outset we would continue to invest in these key areas. Investing during the tough times will also show dividends when things start to get better and the danger is, if you don’t continue to invest, you quickly lose ground.
“We always say that people are our most important asset. That’s true, however, we’ve had to carefully manage costs like everyone else in tougher times but a balance has to be struck in order to maintain the overall growth of the company.”
Mr Smith is confident about the future. He said: “As 2010 has progressed, we’ve seen gradual increases in activity. I’m optimistic that will continue.
“We’ve also had positive signals from some of the majors working in the North Sea about continued commitment and additional investment.
“Our investment in Scrabster Port Services last year will help support the industry’s continued commitment to the west of Shetland.
“Utilising Scrabster helps reduce sailing times and customers are always looking for logistics partners to think of new ways to add value to their operations.
“New opportunities are also emerging from markets such as decommissioning and renewable energy.
“Bear in mind we have the logistics infrastructure to service these new markets.
“Our facilities and our people can handle big pieces of equipment already coming across the quayside. At our base in Peterhead, we are already handling the delivery and onward transportation of giant wind turbines.”
As regards Phoenix’s future intentions for Asco, Mr Smith said the private-equity firm had no plans for now for any exit.
Such a move could usually lead to a stock market flotation or a change of ownership.
Mr Smith said: “We have come very strongly through a very difficult time through 2008-09, maintaining our profitability. Phoenix has been, and continues to be, very supportive of us.”
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