ussaudiforum - panel 10 - chuck montgomery - opportunities in the oil and gas sectors
DESCRIPTION
The 3rd US-Saudi Business Opportunities Forum was held Sep 16-18, 2013, bringing together officials, business people, educators and specialists highlighting the U.S.-Saudi trade relationship and how U.S. companies can participate in Saudi Arabia's expansion. Saudi Arabia is undergoing an extraordinary economic boom. Massive public investment, rapid private-sector growth and new sector initiatives are driving an expansion projected to offer more than $1 trillion in trade and investment opportunities over the next decade. This panel of distinguished experts highlighted business opportunities in the oil and gas sectors.TRANSCRIPT
FLOWSERVE | TECHNOLOGY TRANSFER – SAUDI ARABIA
SEPTEMBER 18 , 2013
Brief Introduction to Flowserve
Europe, Middle East & Africa
MFG QRC
28 53
N America
MFG QRC
19 58
Latin America
MFG QRC
6 23
Asia Pacific
MFG QRC
12 41
•$4.76B in revenues in 2012
• 65 manufacturing and 175 QRC sites globally
•Five business platforms‒ Engineered Pumps‒ Industrial Pumps‒ Seals‒ Valves‒ Aftermarket Services
• Customers and products span diverse markets
• Flowserve has a long history in Saudi Arabia with significant installed base of pumps, valves and seals
• $110M+ investment in three plants in Dammam in the last five years
• 186 employees with 47% Saudi employment
• Initial focus is on customers in Saudi Arabia, but future expansion plans include supplying to the GCC
Presence in Saudi Arabia
Localization
• The Flowserve investment in recent years has been the result of Saudi Aramco programs‒ The Corporate Procurement Agreement (CPA) was signed in November of 2008 and provides the
framework for: Localization of Flowserve products and aftermarket services Technical collaboration
‒ The first Local Manufacturing Development Program was signed in April of 2012 Provides a commitment by Saudi Aramco for annual purchases that justifies and promotes the
investment in local manufacturing facilities and supply chain to achieve 75% local content
Lead Plant
Product Configuration
& Proliferation Product
Localization
Low Cost Country Sourcing
Product Lifecycle
Management
Training & Technical Support
After Sales/Service
Support
Technology Sharing
Product cost Reduction
Product Certifications• Localization of manufacturing
‒ The major challenge for localization is to meet the expectations of the local customer without sacrificing quality or technical competence
‒ Programs should exist to transfer manufacturing and product technology in a controlled manner
‒ Development of the local supply chain is important from a lead time and quality perspective
Localization
• Localization of Aftermarket Services‒ There is a significant demand from Saudi Aramco and the other
Saudi end users to provide local aftermarket service Start-up and commissioning assistance Technical programs and assistance with improving
productivity, reliability, and driving life cycle cost reductions
‒ Speed of response is a key requirement in Saudi Arabia that includes:
On-site technical support with qualified technicians Short deliveries of parts or replacement product
‒ Engineering resources are crucial Problem solving Upgrades
‒ Training programs for employees and customers are in demand
• Saudi Aramco have resources and programs to assist manufacturers who want to localize operations and services
• The investment must be made on the front end, and the plant approved before orders can be received
‒ “Store Fronts” will not be approved• Local consulting firms are advised to understand procedures and regulations
concerning licensing, taxes, visas, etc.• Develop a solid support plan (commercial and technical) for the local plant
‒ Be prepared to send support resources from outside Saudi• A robust Saudization plan is necessary to insure:
‒ The early involvement of expats for expertise and training‒ The eventual transition of jobs to qualified Saudi employees
• The market for Saudi employees, especially engineers, is very competitive‒ Higher end compensation packages and career plans for key employees are a
must‒ Partnerships with local technical universities is helpful
Conclusions
Thank You