Innovative oil service company FlexTech Engineering has predicted strong growth of its business in the years ahead, despite a continuing tough market environment.
The flexible pipe specialist’s extremely cost-competitive offering is proving increasingly attractive in both home and foreign markets, with the young firm managing to triple its client list in the last 18 months.
FlexTech is now aiming to achieve total annual turnover of £25 million and a workforce of 100 within the next five years.
Craig Keyworth, the founder and engineering director, explained what would drive this rapid growth:
“Put simply, our business model is disrupting the established order in our areas of the oil service sector.
“We have a strong focus on keeping costs for clients down to a bare minimum, while still providing sector-leading engineering expertise and quality of delivery.
“More doors at the major operators are opening for us all the time. The fall in the oil price has led to the big players becoming much more interested in engaging with smaller more agile and dynamic companies like us who can innovate and undertake projects on a leaner, more efficient basis.”
FlexTech offers “life of field” engineering in both subsea flexibles and pipelines, and also marine offloading systems.
It is forecasting a 50% jump in subsea turnover to £1.5 million in the financial year to March 2018, then doubling this figure to £3 million in the following 12 months and doubling it again to £6 million the year after.
Meanwhile, the firm is anticipating turnover at its product and marine offerings to double to £2.5 million in the year to March 2018, and then hit £5 million the following year and £10 million the year after.
Mr Keyworth said this predicted level of growth may initially appear ambitious, but was achievable through bringing fresh investment into the business, concurrent with the roll-out of its developed and developing products and technologies. In addition, he expects more uptake in the longer term and larger project services such as integrity management, life extension and decommissioning for which the company has gained a successful and innovative track record.
FlexTech has already begun putting the building blocks in place for its major expansion. A key step was the recruitment last summer of industry veteran John Marsden as general manager.
Mr Keyworth said: “He is a former colleague of mine and has a strong industry background. He will play an important role as we grow.
“FlexTech has a hard-working team of experienced and focused engineers, an ethos that is as important at all levels. The business also believes that developing young engineers is as critical a requirement to its long-term goals as is developing technologies and equipment.
“To this end, we have invested heavily in both R&D and in our apprentice programme, both of which are an impressive undertaking for a young business, but also statement of intent for our future.”
FlexTech’s current workforce of 12 is spread between its head office in Aberdeen and its research & development base currently located in Grimsby.
Another four recruits will join the business in the immediate future as the workload increases following a great start to 2017 and recent contract awards.
Mr Keyworth admitted the company’s subsea services are in a significantly competitive market, but were still managing to consistently make a profit from contracts, unlike a number of its bigger rivals.
He added: “Many of these oil service firms, who have been around for decades, find it difficult or even impossible to compete with us on cost terms in today’s market when bidding for contracts, as their business models are quite simply inefficient.
“There is a frustrating trend of thought in some quarters that large or complex work scopes need huge manpower and a big office, but history shows that small, agile teams can achieve great things.
“All our key technical staff are still at the sharp end with our engineering teams. There are no passengers at FlexTech.”
Mr Marsden said many of FlexTech’s competitors have a business model where their usual target is achieving net profit of around 3%.
He added: “Historically this has been seen as acceptable to the operators, but this is no longer the case. For them to be price competitive in the current market, they are clearly selling at a loss.
“Customers have realised that our rivals, in order to achieve their targets, are then either adding manhours, or extending workscopes. This is not what the customer wants, nor what the industry needs.”
FlexTech has been officially recognised for its achievements by industry body Subsea UK, which has named it on the final shortlist for the organisation’s annual awards.
The oil service venture is a finalist in the best small company award, with winners to be announced on Thursday, February 2, at Aberdeen Exhibition and Conference Centre.
Mr Keyworth, 39, a mechanical engineer from Grimsby, had worked within a variety of subsea and marine organisations, including multiple flexible pipe manufacturers, before starting his own business in 2013, which was the realisation of a long-term, focused goal.
In its fourth year of trading, FlexTech has progressed a long way from its inception in an office above Mr Keyworth’s garage in Lincolnshire. Success has been achieved during the most sustained downturn in the oil industry, a situation which he sees as much an opportunity for his firm as it is a difficulty.