Q&A Daniel Moczydlower - CEO of Chemtech
With over 1000 employees and 2000 projects developed worldwide over the past three years, Chemtech is Brazil's leading provider of optimisation solutions to the process industry. The company has for more than 20 years provided engineering, control and automation, and software development services for the oil & gas industry with a genuine commitment to the growth of Brazil's engineering capability and the country's sustainable development. With a BSc degree in Chemical Engineering from the Federal University of Rio de Janeiro and a Masters degree from COPPE, Daniel Moczydlower started working at Chemtech as an intern and assumed his position as CEO in 2010.
The Report Company: You recently visited London. What was your impression? Do you feel that there is an understanding in London about Rio de Janeiro as a centre for energy?
Daniel Moczydlower: I can certainly give positive feedback but I still think there’s more to communicate in terms of Rio really becoming a capital of energy like Houston. Sooner rather than later the regulation will be finalised so that many more foreign and even Brazilian companies will be making their own investment plans in the next bid rounds to come in May, so the potential is really amazing.
TRC: There remain some doubts about Brazil’s ability to deliver on its potential, given several bottlenecks for development, including skills shortages and lack of agreement on oil royalties. How are these being addressed?
DM: There are real issues which need to be properly addressed but I have no doubt at all that they will be, because there is a strong demand in the market. Even if we take into account the economic crisis there’s no changing the basic fact that a huge part of the global population is increasing its standard of living, which means that more energy is going to be required.
Despite all its issues, Brazil is still much safer and more predictable than other oil and gas regions of the world. We don’t have natural disasters, harsh conditions or environmental issues like the Arctic, for example.
We’ve experienced a huge improvement in all of our institutions and in the level of cooperation between the different areas of government and private entities. Some issues are even seen as opportunities by investors. For example, the infrastructure requires investment and improvement but on the other hand it’s creating opportunities for new companies to come in and for new jobs to be created. All of the items that Brazil has to work on are creating more opportunities for more businesses to establish themselves.
TRC: What makes Rio de Janeiro a capital of energy?
DM: Rio is the entrance point into Brazil, and Brazil is the world’s fifth largest economy. It has a huge domestic market and – as one of the BRIC countries - it’s one of the heavyweights in the world economy. The impact that Brazil has is already significant, and has the potential to become even more so in the coming years.
In addition, there are many different sources of energy that we are capable of developing and producing in Brazil; it’s not just oil and gas. Brazil has the cleanest matrix in terms of power generation worldwide with a huge contribution from hydropower. There is also biomass, then the ethanol program, which is the most successful biofuels program ever conducted worldwide. We also have potential in wind and solar power.
Having hosted Rio 92 then Rio+20, sustainability is high on the agenda in Brazil. When we talk about the role we see Brazil playing in the future, a lot of energy will come from oil and gas but there is a big effort to create the new green economy here.
TRC: How would you define Brazilian entrepreneurship?
DM: Until very recently Brazil was not the most efficient place in the world to start up a company, so you would think that entrepreneurship would not be as significant as it actually is. There has been a positive shift and the government has now become a helper instead of a problem to be addressed.
It’s in the DNA of Brazilians to search for innovation and create new ways of addressing issues. We have so many interesting examples of disruptive thinking. People are not used to being bound by a certain condition, they’re very open and if you look at the track record of Brazilian articles and scientific journals, this is already beginning to show. What we are still lacking is the patents, the final connection between academia and industry. The technological park, located in Ilha do Fundão, is a major step to bridge this gap. We are very excited about taking part in this initiative with a new Chemtech/Siemens building.
TRC: How would you define innovation at Chemtech?
DM: In 2009, Chemtech was named the most innovative company in Brazil. One of the reasons behind this award was our innovative approach to people, how we recruit our talents, how we train them and how we speed up their learning curves. What we have been doing in this company ever since its foundation 23 years ago is to focus on the potential of young, talented people.
The industrial sector of the economy is a very conservative one. There is a huge technical responsibility involved in what we do and this makes our market very conservative when it comes to people, which creates a barrier for young talent to be attracted to the industry. Chemtech is very proud to be challenging young talent, and a major source of our recruitment is people immediately graduating from university.
TRC: How do you convince young people to work in your sector?
DM: It’s a challenge, but at Chemtech we hold the key. We were twice named the best company to work for in Brazil and this is very unique for an engineering design company. We have a commitment to our employees in the long term and this has created a great reputation for us in the marketplace.
The unemployment rate for young people between 19-24 years old is still very high because there are only a few companies that are willing to take the challenge, to train people. It’s a risk because you’re believing in the potential of someone who has never executed that job before, so you have to invest. It’s really tough to develop an organisational culture that speeds up the learning curve. The majority of organisations are actually designed to block this kind of rapid growth. Instead, we have created a very open environment where people are willing to share their know-how and are willing to cooperate. We create value for the country and the society we are in, developing a new generation of engineers for the market.
TRC: What are your international ambitions? What percentage of your revenue comes from outside of Brazil, and what percentage comes from outside of the oil and gas sector?
DM: In 2004 we had a peak of 15% of our revenue coming from international customers like Exxon Mobil, Saudi Aramco and Chevron. In 2005, the Brazilian economy really started to take off. Since then, Brazilian activities are up to 95% of everything we do. That said, we are making some moves in the Middle East. We have a branch office in Abu Dhabi and we are beginning to execute our first projects in the region. We are also starting up an operation in Lima that we intend to create as a basis to serve other Spanish-speaking Latin American countries.
As a percentage of our business, oil and gas today is around 85% but we’ve been steadily increasing our activities in mining as well. Our sweet spot is mega projects; whenever we’re talking about a big facility that will require the combination of all sorts of different engineering expertise, not only process design, but automation, mechanical, electrical, civil design, there are very few companies worldwide that are capable of delivering a combination of all of these skills and Chemtech, I’m proud to say, is one of these companies.
TRC: What are Chemtech’s competitive advantages?
DM: We are the number one in Brazil serving the oil and gas industry. Chemtech is focussed on engineering design only so all of our investment, all of our R&D, all of our innovative capacity is focused on how to be more efficient and how to achieve better quality with a very high level of commitment. The first step towards addressing local content needs without creating budget overruns or delays is engineering that fits the industrial capacity of Brazil. To do that you need to be local; you need to have local engineers. Our day to day business is interfacing with Brazilian manufacturers and suppliers, so we know what they can and cannot do in-country. We can help our customers address local content in the most competitive way.
TRC: Where do you see Chemtech in the next 5 years?
DM: Chemtech will continue to be one of the world’s leading engineering design companies. Because the demand in Brazil is so significant on a global basis, companies that have a strong position in Brazil will certainly evolve to a more important role worldwide. Developing young talent will remain as a major driver for us because that’s something we see as a strong point of our company. I see Brazil evolving a lot over the next 5 years and Chemtech will certainly be part of this story.
TRC: Chemtech runs an annual “engineering marathon”. Can you tell us more about this?
DM: This competition we created gives us the chance to engage students and professors and show them how challenging our industry is and how many interesting problems we have to solve. For four months we train people remotely in some of the technologies we use. The top achievers are brought to Rio for the finals and around 90% of them come to work at Chemtech afterwards. We are identifying talent. I started as an intern, and I’m very proud today to see Chemtech creating opportunities similar to the ones that I myself benefitted from. It’s part of my mission here to keep creating these opportunities – the marathon is something I would have loved to have taken part in as a student, so the fact that Chemtech can create this opportunity and reach students from everywhere in Brazil is really something that makes me passionate about the work we do.