S.M.I. taps into lucrative Algerian market
$32-MILLION CONTRACT Firm to build 87 digital communication centres
Entrepreneur Bernard Poulin, founder and CEO of S.M. Group International Inc., a leading Quebec engineering firm, has won a $32-million contract to build 87 digital communications centres for the oil and gas industry in energy-rich Algeria.
The satellite-based communications centres, including voice, data and imaging, will keep drilling sites in constant touch with owner Sonatrach’s headquarters and send back encrypted drill hole data to its processing unit.
After the design stage, S.M.I. will be a “systems integrator” sourcing the hightech components from specialized firms worldwide and then assembling the centres in Montreal.
Each will fill a standard six-metrelong shipping container for the journey across the Atlantic to the Mediterranean for delivery to Sonatrach in Algeria, Poulin said.
The State-owned oil and gas giant operates about 200 drill sites across Algeria’s prospective oil and gas production areas several hundred kilometres inland from the Mediterranean coast, and Poulin hopes to get more orders.
S.M.I. is a diversified full-service design, engineering and construction management group with a payroll of more than 650 and earns annual revenue of $100 million-plus, half from Quebec and half from overseas.
It is one of several Quebec-based engineering firms, including SNC-Lavalin Group Inc.
and Dessau-Soprin Inc., that have big contracts to develop Algeria’s neglected infrastructure.
In June, Algeria’s Agence nationale des barrages et transfers awarded S.M.I. the job of managing construction of an 85-metre earthfill dam, an 88-kilometre aqueduct and a large water-treatment plant, costing about $500 million in all.
The project will supply drinking water to 12 towns in the coastal corridor between Arzew, one of the world’s largest liquefied natural gas export terminals, and Oran to the west. Oran is Algeria’s second-biggest city after Algiers.
S.M.I. will have a team of Quebec engineers on site for two years or more and earn $8 million in fees for its management services.
Telecommunications and information technology have recently become S.M.I.’s fastest-growing business segment.
“Our success has been built on our long experience with satellite-based monitoring systems,” Poulin said. “We’re also installing a state-of-the-art national security network for Morocco’s Gendarmerie.”
While designing buildings, managing construction of roads and bridges, electrical engineering, the environment and quality control will continue to make up the core of the business.
“We’re becoming.more of a scientificapplications company,” Poulin said.
Poulin, 54, from Sherbrooke, founded S.M.I. in 1972. He was an engineering student at Université de Sherbrooke and his initial contract was a geotechnical study for a Drummondville housing project.
He hired his teacher Jean-Paul Morin and friend Gérard Laganière, who is now 56 and vice-president of research and project development.
Poulin owns a majority of S.M.I.’s shares and Laganière owns the rest. The company averages a 10- to 12-percent pre-tax return and rewards staff with annual bonuses.
Poulin joined Hydro-Québec’s James Bay dam-building spree in the mid-’70s and S.M.I. was soon doing materials management and quality control. It built the massive high-voltage substations that control the flow of electric power to the transmission lines running to Montreal.
Acquisitions later took S.M.I. into construction management, transportation, power generation, laboratory services for industry and the satellitebased monitoring systems. It now has seven offices across Quebec and a European unit handling overseas clients.
“We’ve installed instrumentation at older Chinese and Vietnamese earthfill dams to monitor their safety, studied the cooling water discharge from the Gentilly II nuclear station, done water and environmental projects in Egypt, managed Valleyfield’s harbour expansion and built the Highway 30 interchange in Montérégie,” Poulin said.
S.M.I. was part of a consortium that won the structural contract for the Caisse de dépôt et placement’s $400-million headquarters in Montreal. “Only the public sector can invest in such beautiful buildings that later become landmarks,” he added.
The company plans to bid for both Montreal super-hospitals, Highway 25 and other public projects as Quebec City loosens its purse strings. It will manage decontamination of Lac St. Pierre, near Trois Rivières, where unexploded ammunition is creating problems.
Times were tough in the 1991 recession and again in the mid-’90s when Premier Lucien Bouchard hacked the province’s deficit, forcing S.M.I. to shift its focus overseas to offset Quebec’s public spending freeze.
“All Quebec’s engineering firms have had their problems,” he said. “The biggest risk is taking on too many farflung jobs and getting overstretched … leaving you with too many chiefs and not enough work.”
S.M.I. has no plans to sell or go public, but Poulin said the company may later put certain activities such as wind power into income trusts.
“So long as you can get finance, companies like S.M.I. are best privatelyheld,” Poulin said. “I’ve two sons and a daughter in S.M.I. and Laganière a son. We’ve achieved financial stability and now we’re poised for the next growth phase. The world desperately needs security for the environment but also for the individual.”
Bernard Poulin, founder and CEO of S.M. Group International Inc., says there are no plans to take the company public.