Manu Domen outlines how the firm plans to beat the recession
Brush Transformers Gulf general manager Manu Domen outlines how the firm plans to beat the recession by implementing new policies.
How is Brush coping with the downturn?
Our initial plan was to produce 33kV and 132kV transformers up to a range of 90 MVA. Recently we have upgraded our facility to produce 220 kV transformers upto 150 MVA, for which there also is a big demand within the region.
As owners of the Hawker Siddeley transformer technology, this was the logical next step for Brush. Any local competitor would have to partner up with another company to acquire this technology.
In addition, in a recent board meeting, it was decided that we would move to 400kV in a few years time, with 315 MVA transformers, and there’s no-one else in the Middle East that can match this.
We’ve also been focusing on the service industry. We offer our customers anything from oil sampling, oil testing, site testing, lifetime assessment, refurbishment and complete renewal of transformers.
What makes Brush a good proposition for local firms?
In the past, all the bigger transformers in the Middle East had originated from abroad. Since we are a local company, we can produce cheaper products and transport is also quick, safe and cheap, particularly true for the refurbishment of transformers.
As we’re local, we can put the transformer on a truck, ship it to our factory here in a day, and then repair and have it back to our customers in a very short space of time. We also refurbish transformers; since no-one else can carry out this work locally, it’s our way of proving the quality of our product.
Many clients may still have the perception that transformers have to come from overseas, and local products sometimes cause hesitancy, but we’re here to prove that that’s not the case.
How is business currently?
It’s been fairly flat recently but we are seeing some signs of change, which might be due to the fact that it’s the year-end and some budgets have been dedicated to certain projects that will be taken on shortly.
There are also a number of huge projects in the oil and gas field which are in the process of being awarded. We are expecting a good outcome for 2010 and at the end of the second and the beginning of the third quarter, I see things picking up.
What challenges are you seeing in the current market?
Decisions are being delayed because of the uncertain market situation but also because of possible financial gain. The fluctuations in the copper price have a lot to do with that.
When the price of one tonne of copper goes down from above US$8,000 to below US$3,000 in the span of six months, it is very tempting to delay your projects and renegotiate the price. This is what happened earlier this year.
Unfortunately we have seen the price go right back up to US$7,000 since then and because there is no copper variation clause in most utility contracts, that leaves us as a manufacturer in a very vulnerable position.
Another challenge we see, especially for bigger transformers, is the perception that good quality cannot be produced locally but has to come from Europe or Japan. We are working hard to change this mindset by supplying European quality, produced right here in Abu Dhabi at local prices.
Can you give an example of a recent contract where you overcame challenges to satisfy one of your clients?
We pride ourselves that we go the extra mile to satisfy our customers. One local company asked us to check the lifetime of their transformer – the insulation material gets brittle as the polymer material breaks down.
In the old days, you would have to examine the insulation paper, but now we have more advanced methods. In this case, our examination showed that there was a need to replace the windings. In the end, the client asked for a new transformer instead, on the condition we would remove and dispose of the old one.
What’s the future for the transformer industry in the Middle East region?
For me, it’s still bright – there’s still huge demand in the market. The electricity sector in the region is growing, and the oil and gas sector is still looking very positive. we have this beautiful facility in Musaffah which is being underused – and it will be a huge cost benefit for the utilities and industries in the GCC area.