Absolute’s unique expertise allows it to develop new testing methods on the spot – without interrupting production.
Talk to Frédéric Jacques and you can’t help feeling his energy for the niche business he and a partner spun off in the booming oil and gas sector. Since its founding in 2008, the revenues of his company, Absolute NDE – specialists in non-destructive pipeline inspection – reached $11 million (2011).
Based just outside Quebec City, Absolute, which is today fully owned by Jacques, has facilities located in France, Brazil, Norway and Australia and 50 employees and sub-contractors working in 12 countries.
“A pipeline is like a chain – if there is one weak part, it can wreck the whole thing,” says Jacques. Finding the weak link is both the challenge and the opportunity. There are countless new pipelines needing inspection around the world, and many giant competitors in the field. So how does a small firm get launched and get known?
The three A‘s
Advanced, adept and adaptable expertise is Jacques’ answer. “We specialize in R&D and testing of exotic materials, not just the run-of-the-mill carbon steel that most pipelines are made of.
How EDC Helps
Jacques also admits the company was burned early on, in 2008, by a non-paying client in Brazil. “That’s when we started to look for credit insurance and began our relationship with EDC. As we grow, the risks and financing needs get even bigger. So we now use various EDC products to help increase our liquidity and credit margins, based on future payments (to the company).”
“Standard inspection methods don’t exist for new construction materials like stainless steel (and other alloys) and traditional radiography testing won’t perform very well on many of those materials compared to our inspection solutions. So we have developed proprietary automated ultrasonic testing methods (using phased array technology).” These methods don’t harm the pipeline or interrupt production – known as non-destructive testing (NDT).
Before launching Absolute, Jacques had years of training and R&D with a large technology manufacturer in his field. Then he worked five years in Italy, doing inspection method development and qualifications for major oil and gas companies around the world. This gave him the ability to develop solutions on the fly, make international connections and understand global market opportunities.
The big break came when a major international oil and gas company’s regular inspection firm was having difficulty testing some 300 of its 3,000 welds made of different metal alloys. The company turned to Jacques on the recommendation of a mutual contact, giving his firm three weeks to prove itself. “Within a week, we were qualified to inspect the remaining piping welds,” says Jacques.
The client was so impressed that the next time around it gave Absolute the full contract, worth up to $9 million.
“Once a company gets to trust our work on the most difficult pipeline parts, we can often sell them on the easier standard business too,” adds Jacques.
Detecting the next big material
Another key success factor is anticipating future pipeline materials. An offshore pipeline can be underwater for 25 years, says Jacques, who keeps asking himself: “What new corrosion-resistant materials are being developed and how can we make sure there will be no flaws in them?”
Similarly, the company looks to diversify its markets. Brazil has become a key market with its growing offshore oil development. “One of our employees lived in Brazil and helped us adapt to the way they do business,” says Jacques.
For example, taxes and import duties can be very heavy there. “The same imported machine purchased for $250,000 in Canada could cost double that amount to bring into Brazil.”
For Absolute, booming opportunities in emerging markets make them well worth the extra constraints and costs. As the company grows, Jacques is looking for potential foreign acquisitions to take on bigger contracts in more key oil and gas markets.