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Kraftanlagen Romania S.R.L. – founded in 2007 as a subsidiary of the German company Kraftanlagen München GmbH – celebrates its 10th anniversary with a review of its most notable achievements. In this interview, the company's CEO, Costel Lungu, reveals highlights of its activities and addresses major challenges and future plans.
In the past ten years, Kraftanlagen Romania has achieved great results. How would you characterise the company's development?
We started in 2007 with the purpose of providing maintenance services for Romanian refineries. In retrospect, the turnaround of the Petrobrazi refinery in the summer of 2012 was an important milestone for the steady growth of Kraftanlagen Romania. Following eight months of preparation and with a staff of more than 1,500, Kraftanlagen Romania carried out conversion and new construction work at the crude oil distillation system and the coker. During the 31-day shutdown of the refinery, the team compiled more than one million accident-free hours on these projects and additional work. We had to assume a lot more responsibility and manage subcontractors from different fields. That was a great experience for us. Afterwards, it was obvious that our future lies in working on complex projects. While there are some risks, they also offer tremendous potential for growth and can secure the future of our company. Bit by bit, we earned additional permits and prequalifications and boosted our performance – both in the office and on the construction site.
In 2014, we received our first general contractor assignment for a revamping project – the modernisation of furnaces in the crude oil distillation system (DAV) of the Petrobrazi refinery. For this turnaround, Petrom presented Kraftanlagen Romania with an award for the best occupational safety. Also in 2014 we successfully expanded our range of services with the foundation of KAROM Professional Services for Industry SRL, a company specialised in maintenance for the upstream sector. If in 2007 we were offering maintenance services only. Today, as an integral part of the Kraftanlagen Group, we provide a wide variety of customized solutions for our partners in the chemical and petrochemical industry. After ten years of dedicated work, we have reached a point where complex requirements in maintenance and new construction in refinery, extraction, production and industrial installations are a welcome challenge for our company.
What are some of the strenghts customers can expect Kraftanlagen Romania to bring to bear in their projects?
Revamps, for example, are one of the strengths of Kraftanlagen Romania. Building a new refinery is easy. There is an empty construction area, new plans and one only has to construct everything. A revamp project involves the problems of a plant that has grown organically. It's possible that plans are showing a pipeline that runs straight ahead. On site, however, it turns out that there is a pillar or a cable that block a crane on Day X. We have experienced people that can solve such situations in time.
Our highly qualified welders are another benefit that Kraftanlagen Romania can offer our customers. To us, welding is one of the most important aspects of our business and therefore we employ excellent welders. That is particularly true for maintenance and revamping projects. Connecting a new pipeline to an existing one is much more demanding than welding during the construction of a new plant. That also applies to a larger scale. In the summer of 2014, we replaced the 22-metre tall upper part the C1-column of the DAV unit in Ploieşti. The old part was cut with high water pressure cutting and removed. The new component weighed 80 t and had a diameter of 5.4 m. Gigantic cranes with a load capacity of up to 750 t lifted it into position. Our team only had 48 hours to place the top of the column and weld it into position. It delivered a masterpiece. Even with such a large diameter, measurements confirmed that the connection only featured a deviation of a couple of millimetres.
What are the major challenges of growing your business and how do you intend to meet them?
Our business is dependent on investment cycles. Conditions like sustained lower oil prices, long intervals between turnarounds and the constant pressure to reduce costs continuously force us to rethink our strategy. We have stood our ground in an aggressive market by steadily becoming more professional and efficient. Each day is important because it allows us to continue developing. I wouldn't be happy if there weren't a new challenge each and every day.
An important step in the growth of our business was the acquisition of the Romanian engineering company IPIP S.A. by Kraftanlagen München in 2016, followed by its integration in the Kraftanlagen Group. In Romania, Kraftanlagen and IPIP form the perfect team for carrying out EPC projects. In this way we are not only better prepared to meet current market requirements, but Kraftanlagen Romania also has a reliable engineering partner to execute major projects. For Kraftanlagen Romania and the Kraftanlagen Group, the purchase of IPIP secured geographical market access for services in Eastern Europe and increased competitiveness.
Another challenge in our business is finding qualified people to ensure high-quality work. Less young people complete their training as a welder or locksmith. We are also looking for certain types of engineers, which are highly needed for the execution of tasks inside the refineries. In this matter Kraftanlagen has a very strong collaboration with the Petroleum and Gas University in Ploiesti and students that are willing to learn are invited to do internships at our company.
In conclusion, for every challenge there is a perfectly adequate solution. The most important thing is to have a reliable team to search and to find the best way to success.
How do you ensure future sustainability?
The Kraftanlagen Group has responded to all challenges with a sustainable business model, which allowed a steady growth since 2007. We have built a solid foundation for a long-term, reliable success and we are planning not only to maintain this position, but also to develop new perspectives. We have surrounded ourselves with capable and dedicated people, because business is about people and without the right people a business cannot grow and mature.
When we think about the future, we must take environmental issues into consideration. Kraftanlagen is constantly trying to reduce waste and to work with environmental friendly products and machinery in every project. This is a priority for us because we strongly believe that future generations should benefit from their environment as much as we do today. We try to participate in this matter as much as possible.
What are your main markets and what new directions does your strategy include?
By far, our most reliable is the oil and gas market in Romania, but we are also doing business in countries like Hungary and Serbia. As a general contractor, we continue to develop in the field of plant construction and monitor the entire life cycle of plants. We are looking for solutions to meet both current and future challenges. It is essential to define a strategic direction and to engage all levels of staff to ensure success. The process starts by pursuing the Kraftanlagen Group's goals and responsibility. Then we take the next step: expanding our portfolio, increasing market penetration within core regions and developing strategic partnerships.
What is your outlook for the year 2018?
We have high expectations for 2018. We will continue to develop our existing projects and will invest our efforts in securing new ones. Kraftanlagen Romania is already under contract for large-scale projects, such as a turnaround in the Petrobrazi Refinery in Ploiesti. IPIP will engage in multidisciplinary engineering projects for Wood Group, UOP and Casale. We have good reason to start the new business year with optimism.