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IT companies
have seen a general cut-back in purchases of non-essential hardware, as well as delays to scheduled
upgrades of IT systems. While software packages to support ongoing production have been in high demand,
support and maintenance contracts have come under increasing price pressure, reducing profitability.
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Logistics companies
engaged with the transport of goods to and from platforms have experienced relatively
stable activity as production on the UKCS continues to increase. Like a number of other parts of the supply chain,
margin pressure and contractual models now linked to performance and, specifically, efficiency are increasingly
common, as is a desire for more collaborative options such as sharing deck space with other operators.
6.4 Case Studies
While the general commercial pressures being felt across the supply chain are clear, there are companies who have
been successful in adapting their businesses to meet the changing needs of their clients. Strategies to succeed
through the downturn include the expansion of product ranges, diversification into adjacent sectors, building
stronger business capabilities overseas, or differentiating to create value in the UKCS. The following examples
illustrate how UK-based supply chain companies have applied these techniques to grow their businesses over the
last two years.
The company
BEL Valves manufactures valves, controls and actuators for
application in the oil, gas and petrochemical industries.
How has the company shown resilience in this difficult climate?
BEL Valves provides an example of a company that has extended
its product range to great effect. It quickly identified that its clients
would be seeking more cost-effective solutions to develop smaller
pools and brownfields with faster payback. To that effect, it is
developing a new product, a motorised pneumatic actuator, as an
alternative to the more common solution of hydraulic actuation
for heavy duty valves, removing the extra associated costs such as
the need for additional infrastructure to accommodate hydraulic
power units.
BEL Valves also expanded its international supply chain by opening a site in Milan, Italy. This enables the company
to source materials and expertise in a more cost-effective way and act as a single source of provision for their
customers. Large development projects are now satisfied through a single valve provider with the introduction of
surface ball valves to complete the company’s portfolio.
What are the results?
The motorised pneumatic actuator has been proven to provide clients with savings in the order of
30 per cent for a single well tie-back, unlocking developments that would have previously not gone ahead. The
expansion into Milan has allowed BEL Valves to access more opportunities overseas while the domestic UK market
is struggling. The investment in Milan, coupled with the expansion of the company’s UK presence, has resulted
in a 20 per cent growth in export share over the last five years. Forecasts suggest that exports will make up over
85 per cent of turnover in 2017, from an average of 66 per cent over the last five years.