By Haig Armaghanian, Founder and CEO, Haig Barrett Partners – November 2020
Haig Barrett Partners has had the incredible honour of working with Euro Mechanical to pursue their growth journey in the Abu Dhabi oil and gas market. Their recent acquisition of SAMCO was a remarkable success. Additionally, I continue to be fascinated by both Euro Mechanical and the region’s business philosophy, designed to drive long-term success amid so much struggle in so many areas worldwide.
Amid Abu Dhabi’s sparkling waterfront, architectural wonders, rich oil reserves, and rapid modernisation, forty-year-old Euro Mechanical is taking big steps to expand its service offerings and grow the company. Many regions and companies around the world are taking significant steps backwards because of COVID-19 pandemic disruptions and resulting economic downturns. Euro Mechanical, in contrast, is moving forward by making a key acquisition, remaining firmly dedicated to its business culture, and being fortunate to operate within a region that is effectively managing the pandemic.
Euro Mechanical Acquires SAMCO, Facilitating Upstream Capabilities
Until now, Euro Mechanical’s construction, fabrication, and technology sourcing capabilities served the downstream areas of the oil and gas industry. However, its acquisition of SAMCO delivers capabilities to serve the upstream needs of the United Arab Emirates.
In 2019, Euro Mechanical’s Chairman, Mr. Ahmed Al Hurr Al Suwaidi; CEO, Jon Rawding; the Executive Team; and Division heads worked together to formulate a three-to-five-year strategic plan. Although they explored several growth trajectory options, the team ultimately decided to expand the company’s capabilities in the upstream area of the oil and gas market.
With the strategic direction in place, Ahmed Jasser was named Euro Mechanical’s Chief Business Officer in January 2020 to help execute the established direction. Although the company did not envisage finding and completing a suitable acquisition to achieve its upstream objectives until 2022 or 2023, Ahmed brought the SAMCO opportunity to the table in February 2020.
“It’s an exciting time for Euro Mechanical. Adding SAMCO to the Euro Mechanical family will allow us to achieve the goal of serving the upstream demands of the oil and gas market, and most importantly, we will be able to even more thoroughly support the Abu Dhabi National Oil Company (ADNOC),” shared Mr. Ahmed Al Hurr Al Suwaidi, Chairman of Euro Mechanical. “Advancing ADNOC and their growth goals has been extremely important to us for the sake of our growth and to help extend the importance of the United Arab Emirates within the global oil and gas market.”
SAMCO’s Legacy Contributes Capabilities and Cultural Richness
Rolv Flaaten co-founded SAMCO. He formerly owned a company that provided downhole tools and worked with companies across the Middle East. In 2012, Rolv’s company was acquired by a large Norwegian oil and gas service company.
“While we had a lot of success working in the region, we also ran into all sorts of difficulties,” shared Rolv Flaaten CEO, SAMCO. “Western companies tend to think that they can conquer the world and do things their way, but it does not work that way when you come to the Middle East. You must adapt to the culture and the challenges here to serve the market.”
After the sale, Rolv and his business partner Mr. Saeed Al-Mazroui sought to do something truly special to serve the market. Using their expertise in the upstream oil and gas market, they launched SAMCO to be a bridge between Western and Middle Eastern cultures. Ultimately, they helped Western companies be successful in Abu Dhabi while allowing Abu Dhabi to accelerate its prosperity by tapping into global technologies and expertise.
SAMCO will slowly be integrated into Euro Mechanical’s operations. “The last thing we want to do is destroy the culture that’s delivered SAMCO’s success,” commented Jon Rawding, CEO, Euro Mechanical. “We want to supercharge what they’re doing and offer the operational and financial security of a larger company. They’re experts in the upstream area, and they’re a good four or five years ahead of us. We are not going to tell them what to do, rather integrate their expertise to accelerate the success of both organisations, and, over time, we will meld into a more unified organisation.”
Ahmed Jasser, Chief Business Officer, Euro Mechanical, reinforced this sentiment by stating, “We want the SAMCO team to transition into Euro Mechanical with the least amount of disruption. The best way to do this is for them to continue business as usual with the additional support Euro Mechanical brings to them.”
Euro Mechanical’s Unique Business Culture Is a Competitive Advantage
Emirati companies operate on a much longer-term basis than most Western companies. “We’re a family company, and we’ll always be a family company,” Rawding reflected. “The relationships we’re building today are relationships not just for this but for the next generation and the generations after that.”
Mr. Ahmed and his Executive Team view themselves merely as custodians of today’s company and responsible for the success of future generations. However, some Western principals work with different business models and shorter time frames. They have the experience from both Western and Middle Eastern perspective within their leadership team which helps build the understanding required to meet both parties’ expectations.
Euro Mechanical is also operating with a significant advantage in that Mr. Ahmed and the Board are deeply engaged in the inner workings of the company. The company has the ongoing benefit of the Board’s experience and expertise. Additionally, the entire organisation is confident that decisions made by the Executive Team have been made in cooperation with the Board members.
In addition, customers in the region trust that decisions are being made with input from the Board. This construct builds confidence and trust within the Euro Mechanical organisation and with its customers, principals, and other businesses in the United Arab Emirates. These factors combine to create an advantage as Euro Mechanical seeks to attract the top talent and leading global principals.
Why Euro Mechanical Is In a Position to Thrive Post-COVID
To understand why Euro Mechanical is in a position to thrive post-COVID, one must consider the broader picture. “To attract partners and world-class principals to Euro Mechanical, there are three different tiers. Partners must be attracted to the United Arab Emirates, understand the ADNOC vision, and then we must get them excited about working with Euro Mechanical,” shared Rawding.
The United Arab Emirates does a great job of marketing the country, and ADNOC has created a leading brand in the Middle East. Partners want to work with Euro Mechanical because of the company’s reputation for high levels of skill, expertise, reliability, and trustworthiness that builds relationships that last for generations.
Ultimately, Euro Mechanical is positioning itself to thrive post-COVID because it operates in an outstanding fashion, supporting and serving both ADNOC and the whole of the United Arab Emirates.
Effects of the Coronavirus Pandemic
While the coronavirus pandemic has suppressed global demand for oil and gas and up-ended many Western companies, ADNOC is playing the long game. This mentality permeates the region’s business culture. In a recent interview with Energy Intelligence, His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Group CEO of ADNOC, shared, “When it comes to managing the economic impact of COVID, it comes down to the fact that we realise the benefits of the transformation we started four years ago. Over this period, we have focused on improving our performance and strengthening our agility while always reinforcing efficiency throughout our business. Most importantly, we have focused on what we can control, and that is our costs.”
Commenting on how ADNOC and Abu Dhabi have continued to attract investment in 2020 following ADNOC’s multi-billion dollar deals, H.E. Dr. Al Jaber said the deals were as a result of the fact that the UAE has created a safe, reliable, and stable business environment, underpinned by a unique partnership model. He noted this business environment is very attractive to the global investment community who view the UAE as a highly trusted, go-to investment destination. In terms of managing the pandemic itself, the UAE adopted an aggressive detection and containment strategy that has, to a large extent, allowed business to continue as normal. To date, the UAE has conducted more than 13.5 million tests on its 9.6 million population. The established strategy is working as established by low levels of both infections and deaths.
In keeping with its long-term thinking, Abu Dhabi is committed to protecting its people while allowing business and life to continue as uninterrupted as possible. “COVID testing is readily accessible,” shared Rawding, “I do a COVID test before I come back across the border to Abu Dhabi, and I do another COVID test after four days and again after eight days to confirm the negative result.”
The long-term strategic thinking of the United Arab Emirates, ADNOC, and Euro Mechanical is delivering an astounding level of success, and all signs are that this success will continue. Mr. Ahmed’s closing words captured this thought perfectly: “Euro Mechanical has been here for forty years, and it’s going to stay for a long time. We have an elite team, and Jon, his Executive Team, and the Division heads are doing such a marvellous job. They know Euro Mechanical, ADNOC, and the market very well. I am so excited to see what we can build for today and for the many generations that will follow.”