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Proconics
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Proconics is a South African-based multidisciplinary engineering company, and a vital cog keeping the country’s oil and gas industries running. From complex brownfield site renewal projects to community job creation and skill development, Proconics has worked across South Africa and as far afield as Qatar and Australia, partnering with the energy giant Sasol.
M
elvin Jones’s introduction to Proconics was very similar to that of many other employees of the company. He worked for Proconics’ major client Sasol for around a decade on multiple projects, before being approached by the shareholders to take over as head. In the 7 years since he’s subsequently overseen the transition of the business from a founder-run, family business to a professionally managed company with a more corporate outlook.
– the relationship has provided an unparalleled training ground for the most technically demanding projects and programmes.
“A lot of the manner in which we function is very typical of an organisation of our size, but by necessity the internal business functions and structures are a lot more formal and developed today than they were seven years ago.”
Jones describes the bond as “parent-child, if you will. They taught us, raised us and then set us loose. We are proud of this relationship – as well as the value we can offer other operators.”
Although it has expanded its offering and market share significantly beyond servicing just Sasol, the important relationship between them still often defines Proconics. This is no disadvantage
“Although it has expanded its offering and market share significantly beyond servicing just Sasol, the important relationship often defines Proconics.
Proconics itself was born out of outsourcing technical execution from within the Sasol business. This created separate execution entities, of which Proconics was one. The technical skill base on which the company depends grew and developed under
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that initial incubation environment, but over the twentytwo years since the company has grown into a fully-fledged engineering powerhouse.
Essential support
Jones explains that Sasol “still represents about 70% of the company’s business – they are one of our major accounts – and the existence of the company is dependent upon doing a good job for them.” Sasol is South Africa’s largest petrochemical producer, and has a specific set of technical requirements which need to be met in order to function. Proconics’ focus is meeting those needs and standards, to deliver quality technical support, a goal
“Proconics’ focus is meeting those needs and standards, to deliver quality technical support, a goal which can only be met thanks to its uniquely qualified staff.
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which can only be met thanks to its uniquely qualified staff. “A lot of the professionals I have working for me have direct experience of doing projects within this complex and demanding environment. Most often they have had operational experience in heavy, hazardous industries before they join us. “The space in which we specialise is renewal and life-extension of complex facilities. So we do a lot of what huge operating companies, like Sasol or Eskom, consider to be small to medium projects. Small for a multinational is not small though and can often be tens or hundreds of millions of Rand. But I believe that while we are big enough to matter,
we remain small enough to care – and that differentiates us from other engineering companies that can deal with the complexity and scope we do.” Proconics also specialises in component recycling and replacement. When operators have a piece of equipment or technology which has reached the end of its life, and is either no longer supported by the technology provider or has just reached its natural obsolescence point, Proconics will have a solution. Jones tells us that “without exaggerating, in last year Proconics has executed an enormous number of renewal projects – 300 in the last 12 months.”
A stable niche
Proconics doesn’t just work for Sasol or within the petrochemical industry, however. The company also works with other commodity and commercial clients, with a wide variety of projects including safety and compliance audits, construction and installation of specialist machinery like medium voltage switchgear or emergency shutdown systems. Because of the unique supplyside nature of the South African petrochemicals market, which utilises coal and gas rather than oil as its feedstock, the business dynamics are different and somewhat decoupled from the international oil markets. Proconics has used this
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decoupling to its advantage, and by focusing on its unique value proposition and specialties the company successfully secured new clients and defended existing ones to weather a very lean period. Enabling growth through major shocks to the oil markets has required the company to be agile and innovative. “We did feel the impact of the transition of oil from north of 100 dollars a barrel to south of 50. That was hard. And because that required the operating companies to rejig their business models, we needed to find ways to support our partners, and find ways to extend the life of their facilities in more cost effective, efficient and innovative ways. “That had a major impact on the psyche of the company. This crazy has become the new normal – although there is a relative stability that has returned to the
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market as we have all adapted to life below $50. Helping companies extend the life of capital intensive operations is a bit insular or niche. These projects cannot wait indefinitely which helps us with stability.” One new area using the company’s services is renewable energy, where demand is high for engineers and engineering companies are expected to come up with innovative solutions. “If one looks at sustainability, in terms of the environment and the long term future of that, there’s the question of renewables. Proconics is involved in doing projects in the renewable space, and particularly around PV and how we can bring our current design experience to bear on what gets installed in that space.” Another big focus for Proconics is in supporting its operating
partners in meeting their everexpanding legislative obligations. Legislation like the Air Quality Act or safety standards for thermal processing units in South Africa have far-reaching repercussions for many operators, especially those using coal and gas. It involves technology migration and life extensions for existing equipment. Often it requires that facilities be retrofitted with new burner and emission monitoring technologies.
“Enabling growth through major shocks to the oil markets has required the company to be agile and innovative.
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the moment it’s pre-planning, legislative approval – and there’s not a lot of opportunity for us there at the moment.” The company has also identified other growth areas, particularly in non-traditional energy generation as well as expansion of its existing services. Jones concludes by telling us: “We have a big push into primary power and the production of power with the state entities. Strategically that’s likely to be our most significant opportunity for growth in the next twelve months.
This is all to do with being at the forefront of shifting attitudes in South African business, as Jones explains: “I think in terms of the South African landscape a lot about sustainability is about how we are supporting various agendas. Renewables: Yes. Emission standards and compliance: Yes. Transformation: Yes. “For us to remain sustainable for the next 20 years there’s societal redress which needs happen, and as a company we are fully committed to that. Technically, commercially and socially we are innovating and demonstrating value to our partners. We are remaining relevant.”
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Future projects
South Africa has high demand for natural gas, and some providers are looking into exploration of shale gas reserves. Proconics also sees an opportunity here, although Jones says that there are several hurdles to jump prior to this resource being properly exploited. “It’s a long way out I think – there’s the core capability of Proconics which is working with operators of critical infrastructure in terms of keeping them in business. Obviously in shale, once there is substantial infrastructure being put down and invested in there’s a lot of opportunity for our company to get involved. But at
“We continue to expand our service offering to our existing customers – specifically in offering brilliance and value in the disciplines adjacent to our traditional offering, like mechanical and piping. So we see ourselves growing off the back of our primary client too and assisting them with an ever increasing portion of their renewal roadmaps. Those are the two exciting growth opportunities for the next year.”
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Proconics (Pty) Ltd 9 Wedge Road Westville Durban, 3630 T: +27 (0)31 266 1718/2388 E: mail@proconics.co.za
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