With its eyes on the ocean but its feet firmly grounded, HCS Control Systems was part of a £9 million equity funding deal in June 2013.
The opportunity to acquire HCS arose with the retirement of one of its founding shareholders.
Managing director Brett Lestrange led the HCS management team to the completion of the deal: “We are going in with new investment, and with an invigorated approach to growing the business.We’ve added a depth of capability with our knowledge, experience and financial backing, so we’re looking at fairly aggressively developing the business and taking HCS to the next level.”
The company has established a loyal client base and has gained a great reputation amongst them. With a clear focus on business development Brett said: “We have been producing very high quality subsea equipment and delivering it on time. This is a big deal in the subsea business and is a key part of our growth plan. Firstly we are looking to expand the number of services and products that we offer to our existing clients, providing a whole suite of equipment that is designed, built and tested as a package, and subsequently ready to go offshore. In doing this we are looking to take a greater role in our clients’ projects.
“Secondly, there are additional customers in the sector that HCS Control Systems are talking to in order to expand our client base. Thirdly, we are introducing new products and services, expanding on what we offer.” By developing these three areas the company is looking to take advantage of its geographical position within the oil and gas hub of the North East of Scotland.
The new management team plans to open an Aberdeen base, specialising in sales and service support, whilst retaining its core manufacturing capabilities in Fife. Brett highlighted: “This gives us some distinct advantages over being based solely in Aberdeen. There’s a vast skilled manufacturing pool of labour in Fife and across the central belt of Scotland. I hear daily the challenges of labour supply, but we are easily able to access this band of highly trained and highly skilled technicians that are an ideal fit for our business. Locally we are also supported by a large number of high quality suppliers with whom we have long-term working relationships.
“We are looking at expansion of the testing and assembly facilities in Glenrothes over the next year. In advance of the new business that’s coming in we are hiring additional engineering graduates alongside apprentices. At a time where the consensus in the industry is that there is a lack of resources, skilled personnel and capacity, we are telling our existing and prospective clients that we can handle more. We’re scaling up, we’re very optimistic, and year on year 2013 is already substantially better than 2012.”
Developing innovative solutions to problems faced by the subsea industry and with a patent pending on its design, HCS Control Systems has developed in-house a new Zone 1 rated high capacity electric umbilical reeler. Client engagement was sought from the early days of its conception. “They really helped to crystallise that development because we knew that there was an end application there,” explained Brett. The zone one electric reeler is primarily for deepwater applications requiring large diameter, long umbilical lengths beyond two or three kilometres, for deployment and retrieval of subsea production trees. “These units can weigh in excess of 50 tonnes,” he continued. “With the electric drive system we are able to accurately and precisely control the deployment and retrieval of the umbilical. Utilising its PLC control allows us in real-time to accurately log any loads and tension seen by the umbilical. With this data we can manage the integrity of that umbilical, so are able to give much greater assurance to the operator that there’s no inherent defects or areas of weakness from prior deployments that could result in operational problems,” he said.
For its clients, the main benefit of the application is its use in deep water, but another advantage of the technology is the suitability in cold, and arctic conditions where pneumatic systems can suffer from freezing and hydraulic systems can be problematic. Brett expanded: “It’s a good example of the innovation drive through HCS and really opens up a dialogue with customers. They are recognising that we are able to take on a greater scope in their project, giving them a fully tested suite of equipment, but also being able to innovate and develop products that are key to their business. It’s a method that is going well in terms of the new business plan and we are pleased with the positive response we’ve received.”
The management team has a background working for and with the international service companies, so has a good understanding of the challenges they face on these big demanding products. It is driven to get beyond the initial transactional level of business and is making time to engage with them and understand their business needs.
Delving into the activity this year Brett acknowledged: “Around 80 per cent of HCS’ production is destined for export. Our clients, based primarily in the UK, Norway and the US are purchasing systems often destined for projects in West Africa, Asia and beyond. They recognise our capabilities and the support we can offer and that, to us, translates into purchase orders of substantial contract values.
“We see great scope to increase our core market share and we’re making some significant roads into developing in new areas. We recognise Brazil is a fantastic market. We have equipment that clients have utilised out there, but the continual question over geographical expansion needs to be considered carefully. It is important not to spread our efforts and focus too thinly, so geographical expansion at the moment is lower down our priority list, behind fully developing our core businesses in the markets we are in.”
Recognised for its commitment to health and safety and dedicated to continuous improvement the company earned, for the second year running, the RoSPA Gold Award. Reflecting, Brett said: “It’s extremely helpful in terms of new clients understanding who we are and what our priorities are. We are extremely proud of it.”
Summarising the strategic view for the next five years Brett reported: “We want to be recognised as one of the leading subsea design, manufacturing and project support companies in the global market. Maintaining our excellent health and safety record, delivering high standards of quality and repeatedly delivering our scope on time is how we see our business growing.”
Services: Design, manufacture, assembly and test of equipment for the subsea industry.
The RoSPA Occupational Health and Safety Awards are internationally recognised and have fast become the most sought after accolade by organisations from every sector.
This key fixture in the health and safety calendar 2013 offers organisations a prime opportunity to prove their ongoing commitment to raising health and safety standards and to be a part of the longest running and most highly respected occupational safety awards programme.
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Now in its 57th year the RoSPA Safety Awards recognise health and safety success and offer organisations a prime opportunity to prove their ongoing commitment to raising health and safety standards.
In recent years the economic outlook has looked bleak. Yet the health and safety community in Scotland has developed somewhat of a reputation for innovative thinking and strong partnership working – enabling the pioneering of many bold new management ideas.
(left to right): Tom Mullarkey MBE, RoSPA Chief Executive, Gary McCann (HCS Control Systems) and Eric Wiles, RoSPA Chairman.
Below: (left to right): Jim Gilmour and Gary McCann (HCS Control Systems) with the ROSPA safety award.
HCS Control System are pleased to announce the recent award of several significant new contracts, in total worth over £5 million. The orders are for umbilical reeler systems, IWOCS units and subsea distribution units and are destined for Angola, Nigeria, the Far East as well as North America.
The orders for the Subsea Distribution Units are particularly noteworthy as the work involves extensive use of HCS' specialist orbital welding processes, and the product quality requirements for the finished products being the most stringent in the subsea industry.
The new electric-reel system, design, developed and manufactured by HCS Control Systems is rated for Zone 1 hazardous area operations and is a patent-pending system owned by HCS.
Our Pitch! : Reliability analysis of the electric-reel system has show that the simplification of the design will enhance operations and reliability, ... reduced spares ultimately means reduced maintenance requirements and higher uptime!.
From parallel introduction of this drive type to other offshore applications (wireline units in Norway) that these benefits are realized. We have found that the majority of reeler problems in the field are due to the lack of maintenance and/or operator error, both of these areas are improved with the HCS electric-reel design.
Some of the benefits of our electric-reeler over the conventional pneumatic / hydraulic systems are:
Overall, all the e-reeler control enhancements are about protecting the umbilical at all times, using the electronic PLC controllers ability to react instantaneously to control the loads seen by the umbilical to within the safe working tolerances, and automatically logging and storing the run history and loadings seen by the umbilical during its life. Clearly this knowledge can only benefit the integrity of any operation, especially deep water operations where umbilical failure due to overstressing or failure due to previously undocumented excessive loads can lead to substantial operational delays.
Service companies are now routinely providing this operational integrity evidence to operators across many services (such as safety-critical and pressure retaining equipment) the most progressive now able to do so for umbilicals.
HCS Control Systems is seeking qualified individuals to work at its manufacturing facility in Glenrothes.
HCS Control Systems is looking for ambitious, diligent and motivated people with a diverse range of skills, fresh ideas and perspectives, and the desire to succeed. We are currently looking for sales, project and engineering personnel.
HCS Control Systems is interested in providing choice and encouraging opportunities for staff within its business. As a professional forward thinking company HCS seek to attract people who are interested in working in a team based environment and who can commit to our Mission, Vision & Values when working offshore or within one of our office or manufacturing environments.
HCS Control Systems ensure that all candidates who express interest in working for us have the same opportunity to demonstrate how their skills and experiences will assist them in their career.
Please send your CV, click here.
Simmons, Maven and FrontRow Energy Partners are investing £9 million of equity funding in the deal which will see them take a majority stake in the company going forward with the balance in the hands of the management team. Brett Lestrange will lead the HCS management team on completion of the deal, supported by Neil McGuinness as finance director, Tony Kitchener as business development director and Kenny Balfour as chief operating officer. Graeme Coutts will become chairman of the company.
The new management team plans to open an Aberdeen base to be at the heart of the oil and gas supply chain, whilst retaining its manufacturing capabilities in Fife. The firm, which employs 55 people, sells manufactured systems to blue chip subsea tree vendors, subsea service companies and subsea umbilical and project companies. It undertakes the majority of processes in-house including design, engineering, orbital welding and fabrication.
The opportunity to acquire HCS Control Systems arose after one of its founding shareholders decided to exit the business.
Frank Summers, managing director of Simmons Parallel Energy Fund, said: “Within the rapidly growing subsea market, HCS provides specialist manufacturing and engineered solutions which are in high global demand. Drawing upon our collective energy industry experience, we and our co-investors see excellent opportunities ahead to create value within the company through fast-tracking its development. With the senior management team’s extensive industry experience and contacts, we expect HCS to quickly exploit new opportunities both within the North Sea and internationally.”
Jock Gardiner of Maven added: “This is a very attractive transaction for us. HCS Control Systems with its niche position in a fast-growing market and robust management team will undoubtedly deliver results for our investors. We look forward to working with the team to achieve the growth potential.”