Luis Álvarez
Director of Compression Techniques
Atlas Copco
View from the Top

Industrial Compressors Can Cur Energy Expenditure in Half

Tue, 01/20/2015 - 16:28

Q: Where does Atlas Copco see new business emerging in Mexico?

A: There are no new opportunities at the moment since the market is still expecting the arrival of new investments. However, expectations remain high about these newcomers and the new areas of development this will entail. This means that it is important for Atlas Copco to ensure a presence in different parts of Mexico. Thankfully, that will not be very hard given the range of projects we have been involved in with PEMEX. These mainly involve the maintenance of its current assets, replacement of existing equipment, or providing solutions for new projects that PEMEX is rolling out to increase production. Our rental business is very important for refineries and for pipeline construction. We have a very profitable business area dedicated to just those segments, which is mainly working with PEMEX. Several of our divisions, such as compressor technique, specialty rentals, and construction, count on the oil and gas sector as their main source of revenue. Three of our five divisions have business with the oil and gas sector in Mexico. However, 2015 started at a very slow pace and with bad news, such as PEMEX’s budget cut. We expect this to change over the second half of the year. We remain very optimistic and we will try to capitalize on all opportunities that may arise in the market. We are forecasting 10% growth for Atlas Copco in 2015, largely due to the potential shown by our compressor technique division. We already have many branches in Mexico that cater to the oil and gas industry, and we are now waiting for investments to actually be made before opening new branches.

Q: What distinguishing factors make Atlas Copco’s value proposition stand out in terms of cost effectiveness, safety, and reliability?

A: Our main value proposition is based on safety, reliability, and care for the environment. This is shown in our R&D strategy as one of its main priorities is to make energysaving products. Last year, we launched a new compressor that can save 50% in energy consumption when compared with traditional compressors. We try to collaborate with customers to reach their goals in terms of reducing CO2 emissions and saving energy. At the end, this impacts the environment and the bottom line alike, which is where Atlas Copco makes its main contributions. Furthermore, one of our goals is to help customers save 20% on their energy consumption by 2020 across the line. This will be achieved by producing new and more energy-efficient products that meet our objectives by providing energy savings, helping customers’ bottom lines, and increasing productivity.

Q: How is the low oil price environment impacting your clients’ decisions to buy or rent Atlas Copco’s equipment?

A: We try to reinforce the idea that new products and technologies can save energy. Buying new compressors makes more sense for a company than renting old compressors. It is not only about the investment itself, but about saving a lot of money during long-term operations. We try to boost our efficiency and our products in order for the customer to rely more on buying instead of renting the equipment.

Q: How will the balance between your onshore, offshore, and unconventional activities change?

A: One year ago, we had great expectations for offshore projects, but due to the drop in oil prices, this focus has shifted. Companies are now increasingly looking at profitable fields that are easier to explore and to produce. As a result, Atlas Copco will now see more business onshore and in the refineries, instead of focusing mainly on offshore projects. However, our product portfolio is broad enough to meet a range of objectives. Our R&D departments are always focused on developing innovations, as can be seen by our variety of compressors, including injected, oil-free, and centrifugal compressors. Each sector we cater to has a dedicated R&D team to ensure the variety of products we offer continues to cater to real industry needs.

Q: How will you participate in the large downstream investment projects that have been recently announced?

A: Our relationship with all of PEMEX’s departments and divisions is very important. This is essential for us to be able to advise and participate in its different projects, mostly related to maintenance. We have been very successful in our maintenance of the different compressors that are already installed in PEMEX’s locations. PEMEX’s budget cut could impact our operations, but we have a very wide portfolio across different sectors in Mexico. We are not totally dependent on the oil and gas sector.