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MacGregor never planned it this way: Global group’s growth just took off

MacGregor never planned it this way:  Global group’s growth just took off
Two family stores, two energy services groups, a family recruitment enterprise, a football-club chairmanship and a passion for golf mark Roy MacGregor out as something of an action man.

Two family stores, two energy services groups, a family recruitment enterprise, a football-club chairmanship and a passion for golf mark Roy MacGregor out as something of an action man.

Energy’s editor first encountered this lively Highlander in the early-1990s. With another Cromarty Firth local, Peter Swanson, MacGregor was one of the driving forces push, push, pushing the message that even the north of Scotland could be home to world-class enterprise.

Those were the days of MacGregor Energy Services, which had reached an annual turnover of £50million by the time it was sold to private-equity group 3i in the mid-1990s.

Except for keeping his hand in via recruitment firm Global Highland and other bits and pieces, MacGregor more or less disappeared off the energy stage until the mid-1990s and confessed that it was pressure from his wife regarding underpinning the futures of their sons, notably Donald, that pushed him back into the oil&gas theatre four years ago.

In four short years, MacGregor has grown a group that last year turned over £130million, employs some 2,500 and is forecast to achieve £170million this year plus generate 400 new jobs – and all in the face of the credit crunch and global oil-price slump.

Global Energy Group now has 10 subsidiary companies: Global Resources, Global Energy Services, Global Highland, Global SCS (Supply Chain Solutions), Reel Group, Isleburn, Maris Subsea, Global Pipeline Solutions, Global Project Services and Global Construction.

All additions have been strategic and more are in the pipeline, but it is Isleburn that is perhaps the most outstanding purchase so far as it offers the potential to fuel a major resurgence of large-scale engineering manufacturing and heavy fabrication on the Cromarty Firth – as long as legacy issues associated with ownership of the offshore fabrication yard at Nigg can be settled.

MacGregor has also been spreading the group’s wings internationally, with key offices/facilities and contracts in locations such as Norway, the Middle East, North America, South America, and North and West Africa.

“We’ve been taken there by our customers … a conglomerate of niche businesses that want to be the first choice provider for those clients. We’re very strong in the North Sea and Norway, Mediterranean and down West Africa. And, of course, we’re probably most recognised for being in the rig repair business.”

Global is also into mid and downstream opportunities, aspects that were not a part of MacGregor’s earlier life, or at least not to a significant extent. Outstanding in that regard is the Dragon LNG terminal being built at Waterston, Milford Haven. At peak, Global had 320 people down there.

“We used some of our pipeline technology for both semi-automatic and automatic welding to build LNG using new steels.

“We didn’t have any track record onshore like this, but we had a project management track record. Delivery and project management at Milford Haven had not been up to scratch, so we were asked in and we’re now the only contractor left on site, finishing the plant for Dragon. We’re doing similar stuff in Norway, specifically on five or six petrochemical projects. Last year, for example, we had up to 400 people at the Ormen Lange shore terminal and I was flying two charters a week from Inverness.”

Having been persuaded back into the energy game for family reasons, MacGregor told Energy he had not expected Global to rocket ahead the way it has.

“I would have thought that if I’d got to £20million after four years I’d have been very pleased. And that was in a buoyant, very strong market with high oil prices.

“I didn’t set out to build something as big as this. But our customers have asked for the services and we have built a really loyal clientele in the areas we work.

“We dominate rig repair in the North Sea and we’re now into Norway and Mediterranean and Africa, and it’s a really good part of our business. The drilling industry has been very buoyant, and we have been getting involved with new-builds in the Far East, too.

“We’re also strong in fabrication. We, of course, bought Isleburn, which has 200,000sq ft of fabrication space, and we’re being successful with that even though, in many ways, the (offshore) industry thought that fabrication had died, especially in my part of the world because of the demise of Barmac.

“When we took over Isleburn, it was a second-division player and we had to get it into the premier league.

“We’ve taken two years to do that. It’s now doing double the turnover, and we’re using only one-third of our space.

“We rent the yard at Nigg, we’re the only client there and we’ve got a good relationship with KBR (majority owner). We have the whole site, but use only the fabrication facilities at this time. We’d like to build a longer-term relationship, but there are ownership complexities.

“We have some really good business and, hopefully, we’ll win some Ministry of Defence work on the UK’s new aircraft carriers; we’re looking for nuclear work and we have an order book that supports 450 people at Nigg itself.

“But we have the capability and space to run with 2,000 people, and we’ve set up training facilities to do not only apprenticeships, but to retrain, too. We’ve been doing that extensively over the last year and will continue.”

MacGregor sees winning the aircraft-carrier modules work as important, but apparently not critical. More important seems to be convincing offshore industry leaders that, in Nigg, Britain still has a credible medium-to-heavy fabrication facility.

Moreover, he sees a very strong case for upcoming new offshore platforms such as Clair phase 2, Mariner and Bressay to be built in Britain. But can he see Nigg returning to big platform fabrication?

“Certainly topsides, and we’re marketing for that at the moment in doing modules … 800-1,000-1,500 tonnes. There’s no reason why we can’t do complete decks, too. Sadly, the industry in this country thought fabrication had died – and it did. But there is opportunity now, especially given its infrastructure, of creating that capability again, perhaps in a reduced form but which could give continuity of work to a sizeable workforce. Indeed, it would enable us to create a new workforce – the ’70s/’80s generation is now 50-plus.”

Fortunately, Global does have the confidence of the subsea sector, as evidenced by major projects with Technip (a new pipeline plant) and Subsea 7 (Brazil-related), and a joint venture in subsea pipelines with CRC Evans.

“We have the capability … certainly at the high end with subsea structures and inconel piping, that sort of thing. But much more needs to be done to create in the UK a really international capability.”

Isleburn has been in the news lately for renewables reasons, too, having been involved in the Beatrice wind demonstrator, plus it has built four wave machines and one tidal device.

“Most of that is prototype at the moment, but we’re sitting on a very good place that, if there is a production need, we’re ready and able,” said MacGregor.

He agrees that there is an urgent need to create in the UK a large, integrated maritime renewables manufacturing complex similar to Germany’s ground-breaking Luneort facility in Bremerhaven, and that Nigg is the best place for it.

“We have a very strong case. But, for whatever reason, we don’t have the political clout to make that decision. I’m very hopeful with the current Government that they see, especially in the renewables and utilities markets, opportunities.”

But, as indicated in the lead story on Page 1, the ownership of Nigg needs resolving, though that is not for the want of trying, not least by Highlands & Island Enterprise.

While MacGregor sees renewables as a prime lever to get movement, he is worried that Scotland will screw up on large-scale wind-related manufacturing.

“We obviously know what the Germans are doing, and I do feel that, in Scotland, we’re in danger of missing that market.

“We probably took our eye off the ball in this country and failed to see the real business opportunity on and offshore.

“We must not do the same with wave and tidal. That is a market we must not, and cannot, miss. We have all the ingredients around our shores to make it happen.

“And at Isleburn, where we’ve already doubled the size of the business, I believe we could triple it. that would mean more training.”

Talking about creating new jobs with the emphasis on harvesting experienced people from other sectors and young people starting out is one thing, but can MacGregor actually train them?

He reckons so and points to a series of programmes supported by HIE. Moreover, with the agency’s support, MacGregor has taken the classroom to Nigg itself rather than sending students on day release to Inverness College, for example.

“HIE’s budget is limited and is being reduced. At the moment, the Government’s commitment to apprenticeships and training is not high enough and, in the current climate and going forward, that needs to be addressed.

“The SNP is talking about another 7,000 people in Scotland being trained. If we want to be serious players in fabrication and engineering, we need to do this in a big way.

“Engineering needs to become sexy again so, for young people, we need to create a feeling of value and belonging.”

As for the Nigg programme, last year, Global ran a 21-week course with an SVQ/Modern Apprenticeship at the end.

“We asked for people aged 19-50 and we were really looking for those who were in the wrong slot in life … like stacking shelves at Tesco and looking for a career.

“We expected a low turnout, but got 300 applicants for 25 places.

“And we did something different. This time, we took the training school to Nigg … right into the workshops.

“It is kind of back to where fabrication started in our area back in 1970 when Brown & Root and Wimpey arrived. I was involved at that stage and we took in joiners, brickies, shopkeepers, all sorts, and trained them in the skills needed for heavy offshore fabrication.

“There’s no reason why this can’t be done again.”

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