Regis Holdings

REGIS HOLDINGS

REGIS HOLDINGS

Regis Targets Heavy

Growth in Africa PRODUCTION: David Napier

Regis Holdings is a leading supplier and contractor in the oil, gas, mining and construction industries around Africa. Starting life in South Africa in 1994, the company has grown to become an international player, and is now on the hunt for more opportunities on the continent. COO Olivier Bernard talks to Enterprise Africa about plans for expansion. www.enterprise-africa.net / 3

INDUSTRY FOCUS: INFRASTRUCTURE

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When Dave O’Connor started Regis in South Africa in 1994, the future was looking extremely exciting. The country was in a good place, revelling in newlyfound freedom and emerging from the harsh recession of 1989; the global economic climate was improving, and output in developing countries was driving positivity. Global oil prices were reasonably stable, and technology and innovations were connecting the world like never before. O’Connor, a seasoned trader in sub-Saharan Africa, demonstrated true entrepreneurial spirit, seeing opportunities in commodities and supplies for the nongovernmental agencies.

After 12 months in business, he took part in a South African trade mission to Angola. In 1995, Angola like South Africa - was emerging as an exciting African nation for investment and development. Major oil discoveries had prompted large companies from around the world to pump cash into the country. Chevron alone announced that it would invest $600 million

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between 1994 and 1998. Oil became the engine of the economy, and O’Connor saw the potential, quickly involving Regis in activity. From there, the company grew quickly, gaining a reputation for service excellence. was supplying capital equipment, engineering services, procurement management, personnel services and much more.

Because of the company’s focus on quality service delivery, Regis quickly became an in-demand provider, growing across the key energy markets of southern Africa while also diversifying into new industry sectors.

Today, the business is serving oil, gas, mining and heavy industry in Africa and beyond.

Olivier Bernard, COO at Regis, tells Enterprise Africa that the company is now looking for new opportunities across Africa following a highly-successful decade. Headquartered in Mauritius; with offices in Johannesburg, Luanda, Pemba, Kampala, and Toowoomba; Regis is an international player with increasingly global aspirations.

GEOGRAPHIC GROWTH “The main drive behind Regis’ geographical expansion has been to look for diversification to achieve a lower exposure to a single country or a single sector,” he says. “Naturally, the countries closer to our existing locations are more attractive as it is easier to connect them on a regional basis. Other decisive factors will be the number of new projects relevant for our sector of activity, and of course the conditions offered to foreign investors.”

Areas of interest for the company include north Africa, Uganda, South Africa and Mozambique. Regis already holds a strong presence in these markets but Bernard explains that there is still much opportunity to be realised.

“With Regis’ presence in sub-Saharan Africa, it makes sense expanding into the northern part of the continent. The Mediterranean region has several areas of exploration and production, including but not limited to the Zohr project, the largest gas discovery ever made in Egypt.

Regis is looking at several options to become present in the region.”

REGIS HOLDINGS

// AS OFTEN AS POSSIBLE, WE HAVE BEEN TRYING TO OPERATE IN EMERGING MARKETS WHERE THERE IS A LACK OF OFFER FOR OUR SERVICES // In Uganda, the government is hoping that new oil discoveries could propel the country forward similar to other East African nations. The first major find was announced in 2006 and since then the date for first oil has been constantly shifting. Ugandan Energy Minister Irene Muloni announced at the end of 2018 that first oil is now expected in 2022.

“Regis’ entry in the Ugandan market was directly linked with the recent oil discoveries made in the country, and with the projects associated with the start of the production, being the refinery and the export pipeline.

Unfortunately, the FID by Total is still expected as we speak and as a consequence, Regis Uganda is mostly serving the construction sector in the country, and eagerly waiting for the beginning of operations within the oil industry,” says Bernard.

At the end of 2018, Regis was awarded a contract by leading construction firm Mota Engil to assist with the building of roads and bridges around Kampala. Heavy lift equipment, including a 120t crane, has been used to move precast concrete materials into place.

In February, French oil major, Total, announced a significant gas-condensate discovery off the coast of South Africa in the Outeniqua basin. “It is gas condensate and light oil [but] mainly gas. There are four other prospects on the license that we have to drill; it could be around one billion bbl of total

resources of gas and condensate,” said Total CEO, Patrick Pouyanne. South African President, Cyril Ramaphosa was also enthusiastic, saying: “This could well be a game-changer for our country and will have significant consequences for our country’s energy security and the development of this industry.”

Bernard - an oil and gas veteran who spent time with Schlumberger before joining Regis in 2011 to head up Angolan operations - says that this is the type pf development that Regis could support.

“Regis’ presence in South Africa is mostly linked with its trading division, as it is ideally placed to source products for the rest of Africa due to the presence of many industries in the country. To date, Regis has not yet entered the logistic services, but this may change in the midterm.”

He is also buoyant about Mozambique. The country has become a

powerhouse in terms of gas production and the sector looks like it will flourish in the future. Large discoveries in the Rovuma basin (supposedly enough to supply the USA for seven years) are helping to develop this former basket case of Africa. Between 2011 and 2014 the supergiant gas fields of Coral, Mamba and Agulha were discovered, boasting estimated 2,407 billion cubic meters of gas in place. But, according to project advisory business Turner & Townsend, Mozambique still faces challenges. Getting equipment, materials and supplies to site is not straightforward; sometimes appropriate infrastructure is not in place; often too much is required from an unskilled workforce; and sometimes the business culture is misunderstood. This is where Regis Holdings is the perfect local partner. With an office in Pemba, the

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INDUSTRY FOCUS: INFRASTRUCTURE

// OVER THE PAST FOUR YEARS, REGIS TRANSFORMED ITSELF FROM BEING INVOLVED IN ONE SECTOR AND A FEW COUNTRIES TO SEVERAL SECTORS AND A GREATER NUMBER OF COUNTRIES // company has boots on the ground.

“Regis entered Mozambique in 2012 and we believe strongly in the potential of this country. After years of little to no activity in the energy sector, it is with genuine excitement that we saw the oil and gas operators coming back to Pemba at the beginning of this year. Contrary to many companies who had mothballed their operations during the few years since the last drilling operations, Regis has remained on site, diversifying into support of the mining industry, and also investing into brand new facilities. With the new installations and the largest fleet of lifting equipment in northern Mozambique, we are confident that we will benefit from the activities linked with the ENI development. As for Anadarko’s project, it is still a bit early to see how this will materialise, in particular with the sale of the project to Occidental/Total,” explains Bernard.

In November 2018, Regis announced that it had added a Liebherr LTM 1250/1 with a maximum lifting capacity of 250t, ensuring it remains the leading capital equipment business in the market. This came after Regis Mozambique was given ISO 9001 quality certification, demonstrating commitment to providing consistent high-quality services to clients.

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LIFTED WITH LISTING In March, Regis made the move to list on the Stock Exchange of Mauritius (SEM). Having moved its head office to the Indian Ocean Island in 2007, Regis has been reaping the benefits ever since. “One of the significant milestones in the group history was to move the headquarters from South Africa to Mauritius, to permit its international expansion into Africa while benefiting from the favourable business environment in Mauritius,” says Bernard.

On 29 March 2019, the first 10,000 of 100,000,000 ordinary shares were offered for trading at $1 per share. This strategy demonstrates the company’s commitment to the region and to business on the African continent.

“Mauritius remains a good platform to operate in Africa, even after the latest changes implemented in 2018 for Global Businesses,” details Bernard.

“The country still offers good economics for office support functions, and the financial system is working well to deliver Treasury functions. Mauritius has signed Double Taxation Agreements with a large number of African countries, and this is also another incentive to base our transactions here,” says Bernard.

The group is attractive for investors because of its strong market position, industry-leading brand reputation, geographic spread, and decades of acquired knowledge and expertise.

By strategically targeting developing markets in Africa, Regis has managed to carve out a niche for itself by getting into regions where competition from international players is little to none.

“Regis is a diversified group, and as such we have different competitors

depending on the services we offer,” says Bernard. “As often as possible, we have been trying to operate in emerging markets where there is a lack of offer for our services, and we can provide a unique access to a level of service much above the competition, whether in terms of standards or in terms of capacity.

“In the markets where Regis is operating, there are very few international groups. For example, most of the large integrated logistic providers won’t invest in facilities and fleet where Regis is present, and rather use our company to provide their services on the ground.”

Like any industry, the challenges that come with being an industry leader in a regional market include finding, employing and keeping the best people. Regis is a people business and follows three founding principles: trust, reliability and performance. Without high-quality human capital, these values could never be truly adhered to.

Regis believes that to deliver the quality expected by its clients, investment into its people is non-negotiable.

“Our philosophy is to exceed our clients’ expectations without compromising safety and service quality. To ensure that we live up to this, we pursue a programme of continuous investment in the ongoing development of our skilled personnel and management systems,” explains Bernard.

“Staff retention can be an issue,” he adds, “in particular when we are increasing staff competency by investing in their training to have them certified. New players in our sector of activity will naturally

// AFTER YEARS OF LITTLE TO NO ACTIVITY IN THE ENERGY SECTOR, IT IS WITH GENUINE EXCITEMENT THAT WE SAW THE OIL AND GAS OPERATORS COMING BACK TO PEMBA AT THE BEGINNING OF THIS YEAR //

REGIS HOLDINGS

// OUR PHILOSOPHY IS TO EXCEED OUR CLIENTS’ EXPECTATIONS WITHOUT COMPROMISING SAFETY AND SERVICE QUALITY // attempt to poach our most qualified employees, and there are few legal protections against this, other than trying to build loyalty over the long term by providing market competitive benefits and career opportunities.”

The other threat that comes with being active across such a range of locations and industries is economic slowdown. While diversification does shield from the effects of an isolated slump, when the oil price drops like it did in 2014, there is no hiding. From June 2014 to February 2016, the oil price fell from $115 per barrel to under $35 per barrel. This was critical for the industry as it made much activity unsustainable.

“As far as Regis is concerned, the downturn started further back

than 2017, as first signs of decline in revenues were felt in 2015. 2017 was probably the worst year in terms of activity. However, we are now seeing signs of improvement, which is very encouraging,” says Bernard.

The US Energy Information Administration’s monthly short-term Energy Outlook expects Brent crude oil to average $62 per barrel in 2020 and the World Bank Crude Oil Price Projection is predicting a rise to around $70 per barrel by 2030.

If this expected stability can play out, the future looks bright for Regis Holdings.

“Over the past four years, Regis transformed itself from being involved in one sector and a few countries to several sectors and a greater number of countries, so we are confident that we will manage to benefit from the growth,” says Bernard.

In November, the company sent delegates to Cape Town International Convention Centre to take part in Africa Oil Week, the continent’s largest oil and gas event dedicated to the upstream industry. Many new contacts were made and a number of exciting new leads were grasped from markets around the continent. The level of interest in the event, and the number of companies present buoyed Bernard.

“Today there is a big discrepancy

between Africa’s population and Africa’s share of the world’s economy.

There is no doubt in my mind that the growth of Africa’s middle class, mostly composed of young people, will have a tremendous effect on the economies of the continent and will contribute to higher growth in this part of the world, particularly when comparing it with an ageing Europe,” he says.

For companies like Regis, with a spread of activity across a spread of regions, with a reputation for quality service delivery, and now a listed entity, growth should not be difficult to come by. While many African economies remain uncertain at the best of times, investment in natural resources continues, and operating in that space is at the heart of Regis Holdings. Now is an extremely exciting time for this global business with local presence. As more and more major discoveries prepare to be brought online, the company is perfectly positioned to thrive serving oil, gas, mining and construction in Africa – where Regis is King.

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