|"Sanguine about Providing High Value Services of International Standards”|
Managing Director, Fluor Daniel India Pvt Ltd
|Celebrating 100 years of being a trusted global leader in providing Engineering, Procurement and Construction (EPC) services, Fluor Corporation has really come a long way in delivering world-class solutions to its clients worldwide, optimising their assets, improving their competitive position and increasing their long-term business success. Arun Jain, Managing Director, Fluor Daniel India Pvt Ltd, talks about Flour’s success in India along with its strategies and future plans.|
Fluor has executed projects in some
of the most challenging locations and
environmental conditions successfully
on schedule. What has kept the
organisation going on so successfully
for so many years?
Fluor has been successfully executing a host of projects around the globe with challenging climes, terrain, technologies and ownership structures. These successes can be attributed to our continually improving work processes, robust yet adaptable systems, evolving tools and above all, a motivated and well-trained workforce. We have been able to engage our esteemed clients through our commitment to safety, predictability of outcomes and our ability to draw upon our worldwide resources at short notice as needed.
Since how many years is Fluor India operational and what role has the Indian arm been playing in global growth strategy of the group?
FluorÊs India operations began in 1995. These 17 years have been marked by successful global distributed execution engineering for more than 150 projects in diverse industries like steel, power, LNG, refining, gas processing, petrochemicals, chemicals, food and beverages, manufacturing, oil sands, copper, iron ore and diamond mining, gasification, polysilicon and others. The clientele served by Fluor India include both Fortune 500 companies in these sectors as well as individual refiners and home-grown Indian conglomerates.
The engineering talent in the India office is a healthy mix of experience and youth. FluorÊs professionals are eager, motivated, willing to learn and mobile. Thus, Fluor India employees have not only executed projects from the home office in Gurgaon, but have also worked at project and office locations in the United States, Canada, Siberia, Saudi Arabia, Kuwait, Singapore, South Korea, Australia, South Africa and Europe. Fluor India personnel are also increasingly performing subject-matter-expert roles across various disciplines globally. We continue to invest heavily in tools, training and creating challenging opportunities for our employees to make Fluor an employer of choice for top-notch professionals in our engineering and other disciplines. Their desire to excel globally, flexibility to learn new skills and to work hard has helped FluorÊs India operations to be a significant contributor towards the fulfillment of client needs.
Despite having a very strong global presence and extensive experience, Fluor has fairly lesser number of projects in India. What has kept Fluor off from executing projects in India though the group has carried out many projects in the South East Asian market?
FluorÊs advent into India was in the wake of economic liberalisation brought about by the Indian government. This positive sentiment propelled many of our international clients to start looking at India as one of their potential destinations. As engineers and constructors, we follow our global clients where they want to go and this happened in India also. Initially, however, the Indian economy, being very price sensitive, drove Fluor to use its proven distributed execution model for projects around the world.
With the gradual strengthening of the Indian economy over the past few years, publicly and privately-owned Indian clients have embarked upon ambitious, large growth programmes that they believe will be better served by experienced professionals, proven work-processes, tools and systems. These Indian clients are now willing to engage contractors based on their capabilities and expertise rather than simply who has the lowest low hourly rate. Local clients realise that they would save on their long-term, facility life cycle costs with a project completed on time and within budget. We are now, therefore, very active in the Indian market.
How do you compare the Middle East market vis-à-vis Asian region including Russia, Korea, China, Indonesia and India in terms of scope of projects?
Projects in the various countries in Asia and the Middle East call for discrete execution approaches.
Project Execution: There are many elements such as geography, political structures, strength of local supplier/contractor base, ownership structure; specific client needs that make project execution methodology unique even though they may be located in the same region. One such example is for Asian markets.
Procurement: China, Russia and Korea provide a significant amount of local sourcing and fabrication opportunities on projects. Korean products also enjoy global credibility. India is an emerging force and making significant strides in this arena.
Construction: Construction technologies adopted in the Middle East, Korea and China have to be adjusted to local labour skill sets, safety practices and ease of availability of construction equipment. With every passing year, the differences are narrowing though. In some markets, there are many competent general construction contractors, while in a large construction market like India, there are relatively few.
Availability of Infrastructure: In countries like Korea, Indonesia, Russia and the Middle East region, the infrastructure availability for project execution is not much of a problem.
Availability of Skilled Labour: This is dependent both on the extant pool and the number of projects being implemented simultaneously in a country or region within a large country. Generally, for large projects, craft skill development centres such as welding, scaffolding, metal working, etc need to be set up to facilitate timely and quality execution. Safety training is also a vital component of project success in both the Middle East and Asia.
What are your views on the scope for EPCM players in the Indian market over the next five years? Which areas in your opinion would show the fastest growth in terms of execution of projects and which are the key areas of focus for Fluor in India?
Swings in major currency exchange rates, rising interest rates, inflation, policy instability and clients leveraging the intense competition amongst contractors to compress costs and transfer risks have all contributed to the increased challenges in EPC / EPCM execution. This scenario opens the door for players such as Fluor who have well-entrenched work processes, forecasting mechanisms and experienced personnel. Project management, programme management, project controls and procurement management would need to show the fastest growth in terms of execution of projects.
Key areas of focus for Fluor in India in the coming decade would be to increase its share in niche technology areas (gasification, polysilicon, LNG, and others); programme management of large projects or investment programmes; long term alliances with key clients for project execution in the region; engineering, procurement and construction projects; diverse industry base of oil and gas, power, metals, mining, manufacturing; and increased share of distributed execution of worldwide projects.
Fluor is first in the world to be working on technology to process coal seam gas to LNG, was first to use disc stack centrifuges to separate water and sand from crude oil for offshore project in China. May we have your comment on these and various other new technologies that Fluor is working on globally; and which technologies is the company looking at specifically to offer in the Indian market?
Fluor is a technology-neutral company that brings the best and most effective technology to meet individual client needs. While we are familiar with a vast array of cutting-edge technologies and employ these routinely on projects, again, each application depends upon the specific needs of our clients for their projects. This applies to India-based projects as well as to projects around the globe.
Please tell us about the agreements with chemical giants BASF & Dow Chemicals. Tell us about the oil & gas and chemicals & petrochemicals projects being executed by the company and the ones in the pipeline.
Fluor has entered into a long-term agreement with BASF in Asia to improve the competitiveness of their capital investment projects in the Asian markets. The agreement will also help in continuously improving the performance of engineering, procurement and construction with respect to time, capital cost, life-cycle cost, efficiency, productivity, safety and quality.
We are currently executing projects for multiple BASF business units in India and the Asia Pacific region, but we are not at liberty to disclose the specific projects.
This Dow agreement includes potential new projects for specialty chemical, advanced materials, agro-sciences and plastics businesses in high-growth sectors such as electronics, water, energy, coatings and agriculture. Fluor is currently providing front-end loading services for a coatings and water treatment project in Jubail, Saudi Arabia and is also involved in expanding an existing Dow facility in Freeport, Texas.
As the world economies are witnessing the slowdown, what would be your growth strategy to ensure continuous growth of the company and which of the segments amongst chemicals & petrochemicals, onshore & offshore hydrocarbon services, power and infrastructure will drive the growth of the company?
We have actually begun to see an uptick from a potential capital expenditure standpoint with several proposal opportunities in the pipeline from clients in the oil and gas, petrochemical, chemicals and power segments. There are regions especially in the developing economies where we are very optimistic. One example is India, which is responding to growing internal demand. Business-friendly policies will enable some of these projects to go forward and we are optimistic we can support them. There are segments like LNG, metals and mining in Asia, Australia and other parts of the world that are attracting strong investments.
What are the future plans of Fluor India over the next five years?
We will seek to address the robust EPC market. We also see a growth in the engineering, procurement, construction management and maintenance (EPCM) services markets and have a very positive outlook about the future of Fluor in India. This is also in line with corporate strategic initiatives to address markets such as Asia, China and the Middle East.
We intend to expand our capability to serve diversified industry segments such as the upstream, downstream, petrochemicals, chemicals, power, manufacturing and metals, and mining markets. Over the past 18 months, we have sought to reach out to various clients in India, Thailand, Malaysia, Indonesia, Australia and other countries in the region.
We continue to expand our office as we implement an ambitious recruitment programme. With the ascending knowledge base for successfully delivering projects through shared execution across the world with multiple clients, we are sanguine about providing competitive, value added services of international standards to our clients, particularly emphasising the local interface while accessing out global expertise.