Duro Felguera (DF) is one of the Spanish companies in the energy, industry and Oil & Gas sector that has had to extend its sights beyond our borders led by economic crisis. While in 2008, 50% of its sales were located in Spain in 2015 this represented only around 10%. EnergyNews talks with Luis Deza, Ccorporate Director Business Strategy and Development.
1. DF is an Asturian company. When did the first internationalization of DF occur and what were the first services offered?
Duro Felguera started its operations in foreign markets in 1970 and, ever since the company has evolved its business to enter and focus mainly in the field of industrial and energy projects, its main activity today. The company tries to adapt to the demands of a constantly changing market and started executing and specializing in “turnkey” projects seeking partnerships with leading technologists in the world. This is how the company plunged into the construction of gas power plants (combined cycle), industrial plants and fuel storage facilities a segment of activity that now accounts for about 75% of the Group´s turnover (data of September 2015) and has significant potential for development in the near future.
The internationalization of activities (currently the income generated abroad represents close to 90% of total turnover), together with staff training and recruitment of the best talent, are two factors on which the company has insisted on in recent years as essential and differential elements to ensure the company´s consolidation and growth.
2. What are the sectors within Energy where DF currently has more activity?
DF´s activity in energy is focused on two sectors: electricity generation and gas. In power generation, DF has six combined cycle power plants under execution Vuelta de Obligado CC of 800 MW, Argentina; Chilca Plus CC of 110 MW, Perú; India Urquía CC of 1.080 MW, Venezuela; Empalme II CC of 800 MW, Mexico; Carrington CC of 880 MW, UK; and Djelfa CC of 1.200 MW, Argelia) and two cogeneration plants: Aconcagua (70 MW + 125 ton/h, Chile) and San Juan de Río (18 MW + 50 ton/h, Mexico).
In addition, DF is very active in the gas sector. In this area, the most important project that we are undertaking is the extension of the LNG terminal for Fluxys in Zeebrugge (Belgium)
3. Taking into account the large gas reserves found in the United States. Do you think that the gas will be decisive in generating energy for the coming years?
All analysts agree that gas consumption will grow substantially in the coming years while accompanying the development of renewable energies. One should not forget that renewable generation being non-modular, electric systems require thermal generation to allow power supply go hand in hand and meet the demand needs that are variable in time.
4. What is the role of DF in renewable energies?
Renewables already play a key role in electricity generation and its weight will continue to increase in coming years as developed and developing countries are clear about the importance of promoting the so-called clean energies, which have become a firm commitment across the entire society.
Under this premise, DF wants to grow and commits on renewable energies since we are convinced that the future should go in that direction. As the development of renewable alternatives becomes more complex and larger, it appears that a more natural fit with our capabilities occurs. In this sense, DF is at the forefront in the development of large turnkey projects in the energy sector.
5. DF´s international business represents 88% of the total portfolio. To what extent has this increased since 2008?
Since the 2008 crisis, the demand for large projects comes from international markets and not from Spanish.
Currently the pipeline of bids submitted and in preparation, is the most diversified in the history of the company. DF hopes to get contracts worth more than 23,000 million euros and almost 90% of its business outside Spain.
In 2009 we took a major leap towards internationalization with the award of a combined cycle project in Venezuela worth 1,500 million euro. Since then we have continued to grow in other Latin American countries and the rest of the world.
6. How did the international and more specifically the Spanish crisis impact DF?
In a profound way. We jumped from having more than 50% of our sales in Spain in 2008 to nearly 10% in 2015. Although DF was an internationalized company for already many years, the economic problems experienced in the domestic market pushed us further if possible, to become a global company that today has most of its new projects beyond our borders. In this context, and operating under these assumptions, we have had to learn to sell and manage projects outside Spain.
Our next challenge is to expand into new geographical areas where we are not present or where our presence is testimonial, such as North America. Another goal is to promote new business lines / areas that allow us to diversify our revenue sources to protect our results from the swings and shocks facing the world economy.
7. What are DF´s expectations in Spain for the next five years?
DF is a company focused on the export and internationalization of its activities. To maintain and increase its presence outside Spain it is necessary that companies can count on the full support of the Government. In particular, at DF we consider it essential to have:
1. Aid for R & D that allows us to improve our commercial offer. 2. A diplomatic network more oriented to the active support and development of the foreign business. 3. Increase the scope and availability of financing to export to developing countries. 4. Improve the brand Spain and have a political stability that gives confidence to investors and foreign companies.