A bright future for equipment rental

Abu Dhabi

Pat Fallon, group deputy CEO of Byrne Group, talks to The Energy Year about how the company is emerging from the Covid-19 crisis, details of its ongoing expansion and its strategic approach to selecting new products. Byrne Group provides equipment rental in the areas of oil and gas, industry, construction and events.

What have the last couple of years been like for Byrne Group?
The earlier part of the past couple of years was focused on diversifying our products and services. We added climate control to align with our existing power generation fleet. We added powered access to join our existing hoist and mast climber fleet and we bought some unique new structures for the rental market for various elements of industry – oil and gas in particular.
The latter part of the two-year period has been more about managing our way through what has emerged as a Covid period. By implementing best practices across all geographies where we operate, we ensured our health and safety teams worked round the clock with our staff of 1,500-plus people, both in the field and across the depot network, to quickly educate them on the Covid-19 protocols and ensure that we had appropriate PPE in place to ensure their safety.
We didn’t lay off any staff, which was huge, especially compared to what a lot of our peers did. In fact, in most operations we adapted very quickly. We took people who were typically operating in the events and oil and gas sectors, and we quickly deployed them to support governments and health services across the region to rapidly set up quarantine centres to fight the pandemic. We did this most notably in the UAE and Saudi Arabia and to a lesser extent in Oman. To successfully shift from oil and gas and events to meet a demand driven by a pandemic we feel is a testament to the agility of the company, its capabilities and its people.

What are the main challenges you have faced?
The main challenges we have faced have been offsetting the negative effects of the pandemic – for example, the slowdown or the postponement of planned shutdowns that would typically happen in the oil and gas sector, which represent a huge market for us. In addition, companies made changes to their production capacities and activities, again key areas where we would be a supplier of products and services. An additional challenge was sustaining our events division. The events industry was decimated by Covid-19.
We have been a leading supplier in that space for many years. 2020 had promised to be a huge year, not just here in the UAE, the typical epicentre, but also in Saudi Arabia for example, where mega-projects were coming up. There was so much set to happen over the course of 2020. A certain resilience has been maintained, but obviously the events side of things has had to take a backseat because it just has not been possible to hold events and that’s unlikely to change until we have large-scale vaccination.
We also faced a scenario where in a pandemic situation people get into the process of tightening spending and preserving cash. This preservation of cash means that we end up trying to manage credit arrangements with our clients. Thankfully, we have maintained very open communication with clients and partners and I think we’ve come through that. There is, however, a residue of uncertainty because of what has gone on.

How do you plan to emerge from the pandemic?
First of all, it’s important to say that we are planning our way through 2021 and beyond. I believe that 2021 will be a year which will allow us to emerge from Covid-19 and be able to return to some sort of normal. The market remains strong, albeit competitive. We have been through downturns before, probably never on a scale like this, but I also believe that with every downturn there’s an upturn. We are going to emerge stronger. As times like this tend to push you towards reviewing your processes, operational efficiency comes into play. Also, it sharpens your focus on the most likely areas of new business.
Oil and gas has always been a stable market for the rental industry and from our perspective the focus on the development of gas exploration is presenting many new opportunities, while we also have seen improvements in our traditional oil and gas markets as well.
Here in the Middle East, the rental industry is by international standards quite immature. It is getting stronger and becoming more in demand all the time, with more players coming into the market. There’s a bright future for it, no doubt. However, there is work to do in terms of bringing into being a model that can penetrate more widely into different industries.

Will you consolidate this model in the energy industry?
We will continue to promote ourselves as the largest single source of plant and equipment rental in the region. We’ll push on with the focus on being a regional brand with a local focus through our existing and new depots. That may of course not happen at the same pace as it has been for us in the last 10 years, but we won’t close our minds to opportunities.
Saudi Arabia has probably been the place where we have seen the greatest development of our business over the past five to six years. On a country-by-country basis, it’s an area where there is still opportunity to open more depots.

What does your existing depot network look like?
We have 16 depots and offices across the region, and many new opportunities are arising at the moment. However, we will be very selective and we will be very measured in our approach to the opportunity existing in those areas. Overall, we are well positioned to be a regional brand offering new items of plant and equipment to existing and new markets.

How do you decide what new products to make available in the rental market?
Our approach to adding new products has always been driven by our customers and the needs our customers come up with. That is not to suggest that it is done more by accident than by design and good judgement, but it does mean that as markets change and new standards are implemented, that then drives us to take action.
For example, only a few short years ago the requirement for blast-resistant buildings in the oil and gas industry was non-existent in this part of the world. Over the last seven or eight years, it has become mandatory as larger oil and gas players have started to adopt world-class specifications and standards for the safety of their people and their product. That’s an area that we have gone into rather heavily and for which we have a significant fleet at this stage, predominantly in Saudi Arabia and Abu Dhabi.

As big oil and gas EPC projects such as the Hail and Ghasha development and the expansion of Ruwais resume activity, is the demand for your products increasing?
We already see an accelerated demand based around the projects you have just mentioned, and specifically in the Abu Dhabi oil and gas arena. I think we are very fortunate here to operate in a region where governments have reacted quickly and effectively to this pandemic. While we are not out of the woods yet, the arrival of vaccines and the better treatment of the disease suggests that we have reason to hope for brighter days ahead.

As the green energy market is gaining momentum, what is Byrne’s approach to new products serving this industry?
We have explored opportunities in the hybrid energy sector and that is very much a work in progress. We’re not at the stage where we’re ready to go to market with anything yet. The technology is actually evolving in most markets, regardless of what anyone says. There are certain parts of the domestic sector back in Europe where hybrid power will likely be a solution.
In the larger scheme of things for the energy sector we have to think much bigger than that. The whole idea of gas-powered generation rather than diesel fuel-powered generation is something that we are very keen to explore. It is something for which the expertise of our partners can help us.
There are obviously other elements that we can look at as well in terms of electric-driven equipment like forklifts and various different items that would historically have been mechanical plant and there is great technology coming on stream to give us electric options to explore. Again, this part of the world has been slow to take it up but as we get through to new markets and demand for “green” options, hopefully we’ll be able to introduce these in the future.

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