In an excerpt from his exclusive interview with Mexico Oil & Gas Review 2016, Octopus CEO José Pablo Mendoza reveals details of current and future projects, discusses potential joint ventures for the company, and explains why Octopus offers a superior value proposition.
Q: In terms of integrated services, when working with companies such as Cameron, ATCO, and Sulzer, what will Octopus contribute, and what do you expect these companies to bring to the table in order to achieve a superior value proposition?
A: We have a strong, qualified, disciplined workforce, and we fabricate quality products in a timely manner, provided that the funds are also supplied quickly. That is another element that we will have to examine when embarking on joint ventures with these companies. In this case, both Octopus and its partner company would jointly supply the components, and we would deliver those components as an integrated package to the customer. At the moment, we have a large contract to provide spools for ATCO, and we are not buying the materials, which is a much more attractive option for us. In terms of this maquila manufacturing process, there is an absence of expenses and of risk, and our partners are extremely happy with the service. We do not depend on national content requirements, but rather on quality work and manufacturing at a reasonable price, which is attracting the foreign companies to work in collaboration with Octopus.
Q: Over the past two years, the company has had to shrink to focus on its core business. What will be the main difference between the Octopus of two years ago and the Octopus of the future?
A: In developed countries, the turnaround time is a lot faster since in countries like Mexico, reaching the same standard is much more labor intensive. Our quality is second to none, but as a result the timescales may be a little more prolonged. All the cutting is carried out by hand, as we do not have a pantograph, which would bring doubled or tripled productivity. That has not yet become a priority since we must invest in the knowledge that there will be a return on this investment. One of our assets is transparency, and as a medium-sized company, we depend on projects for cash flow. We are also acutely aware that companies our size are being acquired by larger conglomerates and are being integrated into much larger structures, meaning that the large companies like ATCO are not only aware of our achievements, but also our weaknesses. For us, a merger or a partnership with another major organization would be a positive step in that it could complement weaknesses with strengths, provide a deeper understanding of the Mexican market, and bring our experience in turnkey solutions. This said, we do not feel a time pressure to create these strategic ventures, but I feel the first step will come from the side of the larger companies with whom we can potentially work.
Q: In terms of potential partnerships, with foreign companies entering the market, do you expect to experience any cultural clashes, or do you see this as advantageous?
A: In terms of cultures, it makes sense to make alliances with those companies with similar cultural values, like Canadian and European corporations. However, difficulties lie in allying with companies whose cultures are so different from our own that it may cause conflict, such as Chinese enterprises. However, we would not rule out any alliances provided it proves beneficial for the company.
Exclusive interview with José Pablo Mendoza, CEO of Octopus.
This is an exclusive preview of the 2016 edition of Mexico Oil & Gas Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy of Mexico Oil & Gas Review 2016.