Subsea training firm dives into new opportunities
Oil and gas downturn means tough times but commercial chief is upbeat
ACROSS Scotland and beyond, hundreds of businesses tied to the oil and gas industry are spending 2016 diversifying as best they can to mitigate the impact of the downturn.
Subsea training firm The Underwater Centre is one of them, and despite being dealt a secondary blow when energy sector sanctions against Russia strangled a lucrative new business stream, commercial director Steve Ham is upbeat about the company’s prospects, saying that while “it’s not the most enjoyable of worlds at the moment, it’s exciting and we’re getting to an interesting place”.
While the impact of Brexit may add a layer of complexity to The Underwater Centre’s journey, Mr Ham said the company was content to wait to see how things unfold.
The Fort William business began life in 1975 as a Government-owned training centre for divers. Since its privatisation in 1978, the company has had various owners before coming under the control of the Finlayson family in 2004.
“Since the Finlaysons took over, there has been a steady record of reinvestment to improve the quality of what we do as we answer the needs of the industries we work in,” says Mr Ham.
A big part of its business is driven by oil and gas, which means in the last year the company has not had its challenges to seek.
“It’s not necessarily a bad thing; we’re up for the challenge, it’s all about how you address that challenge,” says Mr Ham. “The ‘bullseye’ of our market is quite weak so we have to work hard to find a different balance in terms of markets and regions that we’re doing business in.”
Finding that balance means investing in diversification and while Mr Ham is quick to rule out a flotation, he says: “At the moment we’re family-owned, but the speed we can invest at is very much dependent on the sector’s willingness to invest in us.”
He said outside investment would help a “great company become remarkable”.
“We’re a family-owned business and so we invest very carefully, it must add value to our customers,” he says. “It’s tough in a year like this to have major investment plans, but we do have plans to continue to invest.”
There are 60 staff at the Fort William base, working in training operations, engineering and even hospitality – the company has on-site accommodation to cater for the clients who come from around the world. There is also a second diving training centre in Tasmania, which was acquired from the Australian government in 1997.
“A lot of standards for diver training were set here and those standards are now enforced and recognised worldwide,” he says. “The training carried out here over the decades has created one of the most respected diving workforces in the world.”
The loss of its Russian clients through economic sanctions has been a major blow for the business. “It’s closed off an important market for us,” says Mr Ham. “Before the sanctions I was on the verge of being invited to speak to several Russian companies that our training is relevant for, there were conversations to be had. Basically, when we have delivered Russian contracts they have been the largest we have done in that year.”
He adds that as soon as he is able to,hewillbebacktalkingto customers in Russia. “It broke new ground for us, but we have to see how global politics develops. It’s not a focus at all for now.”
The firm may have established its global reputation as a diver training facility, but these days that side of the business brings in only half its profits. The other half is equally split between remotely operated vehicle (ROV) training and subsea trials.
Mr Ham says the firm’s ROV training offer is a “remarkable development” that was only achieved with the support of the largest companies in the industry coming together.
“Testing here, before they go offshore, saves a massive amount of money. If something’s going to go wrong, you want it to go wrong in a realistic but controlled environment where you have got access to support, you can get things fixed; where you’re not 100 miles offshore.”
He adds: “It’s a pity those companies are suffering right now, it’s hampered that development,” he says.
Looking long-term, Mr Ham says the ROV and testing would expand – while the company looks further afield, and closer to home, for new business.
A recent contract with the Royal New Zealand Navy saw a team of trainers travel to the Devonport navy base in New Zealand to deliver a nine-day bespoke course that focused on in-water operation training of the Saab Seaeye Falcon ROV, which is regularly used by the Navy for reconnaissance and security missions.
Mr Ham also says the business is bringing the macro and micro opportunities into tandem. “There’s a significant base of businesses locally in the highlands,” he says. “Engineering, agriculture firm, we’re making a bigger effort to do much more closer to home.”
When the oil and gas sector recovers, Mr Ham predicts there will be a “massive” need for its services. “Businesses become more competitive as they come out of a downturn, we’ve seen it before, but this is deeper and longer. It’s becoming more about really understanding their needs and how we can address that.”