HYDRASUN will soon be moving to its brand new, purpose-designed and built headquarters facilities in Europe’s Energy Capital.
The relocation to the £12million complex at Aberdeen Gateway, Altens, is an important step in the Aberdeen company’s strategy to be the leading UK and international provider of a wide range of fluid transfer, power and control solutions to the energy industry.
Eight years ago, 90-95% of Hydrasun’s business was UK Continental Shelf; today the balance is around 70% North Sea versus 30% international, including UK exports to over 50 countries. However, while the proportion of overseas business is increasing, the North Sea market is also growing in real terms.
Growth is robust. Hydrasun’s turnover eight years ago was just over £25million. Expectation for the current financial year is in the range £65-70million – clear indication of considerable progress. While almost all of the growth achieved to date has been organic, Hydrasun is now considering a couple of very strategic acquisitions.
“When we took over just over eight years ago, Hydrasun already had a very good reputation, particularly on the hose and fittings side and also the instrumentation products business,” said CEO, Bob Drummond.
“Back then, the firm was fundamentally about distribution, with the main value-add being through the range of hose assemblies that it made, including manufacture of many of the specialised fittings used in hose assemblies.”
The strategy is simple: nurture and continue to build Hydrasun’s market-leading position as a supplier of specialist hose and fittings, instrumentation and related products, then add value by offering a comprehensive service back-up, developing an engineering capability, and in turn developing an integrated solutions offer.
Committing to the development of an engineering capability is not only about front-end systems and product development, it is highly relevant throughout the operations value chain. Another important aspect of the engineering back-up is assuring the operational and technical integrity of products and systems provided by Hydrasun.
Integrity management has grown over the past eight years from virtually a zero base start-up to now employing more than 50 people in that area, 32 of whom are offshore inspectors. This service, both in terms of hoses and small-bore high-pressure tubing, has already been a considerable success and is regarded as a key area for further growth and development.
A further important element of Hydrasun’s diversification strategy has been the development of a specifically targeted umbilicals capability.
Drummond: “Some of the big players in the segment appeared to be conveying to customers a message of being somewhat disinterested in smaller, less complex umbilicals; quoting very long lead times and high prices. In contrast, customers were telling us we were quoting much better lead times and more competitive prices.
“So we decided there was a real niche opportunity to build up our umbilicals manufacturing business within this specifically targeted segment, initially in hydraulic flying leads, which remains a core market for us.
“We’ve continued to further develop and broaden that area of our activities; our ambition is to be the best at the smaller bespoke applications end of the umbilicals market.”
Indeed, the biggest contract that Hydrasun has secured is umbilicals-related. It covers various phases of the West Delta Deep project offshore Egypt, which is operated by Burullus – a joint venture between BG Group, EGPC and Edison International.
There is a saying that success breeds success and so it is with Hydrasun, as the company has been asked to complete further scope on the West Delta project, including the design, manufacture and provision of further umbilicals, specialist connectors and stab plates.
This has been made possible in large part by the fact that, over the past few years, the company has further developed its ability to design and manufacture the required end connector technology, applications and associated infrastructure.
As for the hugely important subsea market, the ambition is to be involved from the last interface on the tree to the first interface topsides, whether a fixed/floating production installation or a mobile offshore drilling unit. The objective is to get to a position where the company can offer an integrated subsea-to-surface-to-topsides solution – not just umbilical pipework, but terminations too.
Hydrasun has, in essence, evolved from simply being a supplier of the products in which it had traditionally specialised for many years, to being a developer, manufacturer and servicer of business solutions, very much in line with the evolution of the petroleum industry itself, where clients increasingly demand a packaged approach for their supply chain.
It has been said that walking through the main door of Hydrasun’s long-time home on the city’s King Street is a bit like stepping into Dr Who’s Tardis, as so much lies behind the unassuming façade.
Aberdeen Gateway is different – the new HQ is a clear statement of forward-looking corporate intent.
“There are two aspects to this,” said Drummond.
“First is the needs of the business, making sure we’re able to deliver the service and products offered to customers to the highest standards.”
“Second, in moving to a new, self-contained, fully purpose-built facility, we also plan to be able to improve our efficiency and our overall capabilities as well as capacity.”
Key data on the new Hydrasun HQ includes:
The warehouse and workshop area measure just over 80,000sq ft
Offices extend to some 22,000sq ft
Site as currently developed is just under five acres
A further 1.5 acres that can be utilised as open storage, or for future development
Besides providing ample elbow room for growth in the future, more than anything else, the new HQ will enable the company to offer an integrated, thoroughly-modern face to its client base. Hydrasun has changed a great deal over the past eight years and the new complex spread over five acres clearly signals that.
Aberdeen Gateway has enabled the company to reorganise itself internally in a manner that takes full account of the major changes that have taken place, but which have, until now, perhaps been less visible to clients than was desirable.
It has enabled further reinforcement of engineering, training, leadership and management development and other specialised functions. It has also provided an opportunity for systematic capital investment in new equipment and systems, particularly on the umbilicals and associated equipment activities, as this is now one of the highest growth areas at Hydrasun, but also in a number of other key operational areas.
But does Aberdeen Gateway mark a coming of age for Hydrasun? Rather than that, it marks the beginning of the next chapter in a decades-long journey that started in 1976, when it first opened for business.
In fact, the company came of age long ago when it became recognised as a specialist provider of hoses and connectors with an inventory and levels of customer service that its client base could rely on. This is the very reason why this Aberdeen firm has long held what is thought to be the largest inventory of its kind in the North Sea and, along with its commitment to customer service, has always been a key selling point.
“What we’ve tried to do over the past eight years especially is continue to consolidate and develop the firm’s offerings – a more extensive range of products – plus, perhaps more importantly, engineered solutions and services that match the full and continuously-evolving requirements of our customers,” said Drummond.
“We believe the new facility provides us with a real platform from which we can develop to a new level. We see it as the beginning of a new chapter in the continuous growth of Hydrasun. We have achieved quite a lot in the past decade, but believe we can achieve even more in the new one we have just begun.”
Hydrasun’s brand is well known throughout the North Sea and business continues to grow, reinforced by the broadening out and evolution of the company towards being a solutions provider, not merely a purveyor of hoses and connectors.
Hydrasun has a long-established, wholly-owned subsidiary company based in Rotterdam, covering not only the Netherlands, but also other parts of the European market. However, the company has also grasped the broader internationalisation nettle and this is becoming increasingly important with the pace further increasing. The Caspian, Africa and the Americas – especially deepwater Brazil – are of particular importance.
The firm has had a presence in Azerbaijan for about five years, principally through a long-term contract with BP. An operation was also established in Kazakhstan about 18 months ago; primarily for the offshore side of the Kazakh market – providing a suite of products, systems and services for the ongoing Kashagan shallow-water development and other major projects in Kazakhstan.
Both through its core Hydrasun operations and the acquisition made two years ago of Integrated Fluid Power, which specialises in ultra high-pressure control hydraulics for subsea trees, a valuable niche is being carved out in West Africa. This involves working mainly with the major wellhead systems and subsea equipment manufacturers, such as FMC, Cooper Cameron and GE Oil & Gas, as well as the main operators such as BP and Total.
The likelihood is that an operating base will be established in the region during 2011. Until now, West Africa has been supported directly out of Aberdeen. This includes bringing Angolan oilfield personnel into the UK for training, including with Integrated Fluid Power at its premises in Rosyth.
Turning to Brazil, an acquisition is currently being considered and, according to Drummond, is a clear signal of how strategically important this deepwater market is becoming.
But this isn’t all. The firm has just picked up a contract for the provision of Hose Integrity Management Services with BP-TNK covering 17 asset groups in Russia. It is also developing business with Joint Venture partners in Trinidad, Norway and the Gulf of Mexico.
Such markets demand that companies offer their client base business solutions and not just off-the-shelf products. They want a company like Hydrasun that can work with them, developing, defining and delivering the specific solutions that they need.
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