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Executive Viewpoint

Andrew Garrad on the Garrad Hassan / GL partnership

20 August 2009

Wind Energy Update talks exclusively to Andrew Garrad, president of the new combined renewables businesses of Garrad Hassan and Germanischer Lloyd

Staff Writer

Why merge now? Most companies are focusing on their core business. Could it be the wrong time for rapid expansion?

Garrad: We’ve been thinking for some time about how to respond to the fact that the industry is growing dramatically. If you now look at the players in the industry they are Siemens and GE, EDF, Vattenfall, it’s all big stuff. And so whilst we’ve been extremely successful in the last 25 years, and we are the number one consultancy, we felt we needed to change gear in order to keep up with the industry at large.
There were various ways to do that. One would have been to carry on as we were but growing more aggressively, another would have been to look for a financial partner, and there would have lots of those who would have liked to invest in us, a third would have been to join forces with a big consulting company The fourth option, which is what we’ve done, was to find a partner that we felt very comfortable with and have actually known for a very long time, and are also number one in their particular part of the renewable energy business. Together with GL we’ll be able to offer a more complete service, to have a truly global network. We had roughly 360 people, they had 250 people, so we’re now over 600 people and still growing. It’s two healthy companies joining together making a platform for further growth rather than some sort of cost cutting exercise.

What specific services will each company retain and how do you expect the service to expand? Will you axe any services?

Garrad: We’re not going to cut any services. Although we’re both in the renewable energy business our services are quite surprisingly complimentary, so GL will be continuing on its own to offer its certification services, and that will continue under the GL brand and completely separate in legal structure and in everyday life from the bigger consultancy business. The GL consultancy business will be part of the new combined company as will the renewable energy activities of Noble Denton, the offshore people, and Helimax and Windtest in Germany.
We’re trying to offer a more comprehensive service. I’m sure there will still be a few gaps in what we offer together. But our offering on offshore for example is significantly enhanced through GL’s activities and also through Novel Dentin’s. We’ve previously had about 25 people working full time on offshore wind, we’ll now have more like a 120 on offshore wind, that’s a big change. We presently have about a dozen people working on marine renewables, tidal and waves. GL’s activities over the last 150 years has been in the sea. What we’ll get from joining with them in that new area of renewables is considerable.
We’ll be able to offer a very complete service from site investigation and measurement through to turbine design and certification to operations and maintenance, and later on, decommissioning. So the idea is to be a consultancy of a significant self-sufficient size, and with a comprehensive offering, to provide the needs of the utility type clients.
Being able to combine forces with GL and their global network of offices is a significant benefit, So if we wanted to open an office in Korea, or Venezuela, both of which are interesting for us, to do that in the old days would have been a significant expense and quite a complication, now we can send someone over to Korea and immediately there will be decent infrastructure there, and similarly in Venezuela or Chile.

What can a current client from either firm expect to see

Garrad: Initially in the first few months not much, as it’s going to be quite a big job to align all of our services. The intention is that, within a few months, we will be looking at all our services and putting them together so they’re not the same but better than before. We’ve obviously been in communication with our major clients so we know exactly what’s happening. Within three to six months we’ll be putting together this combined service throughout the complete spectrum of activities and there will be, I think, improvements rather than changes.

What can a new client expect from you?

Garrad: The sort of new customers we will see coming along will be the big players. It’s becoming a utility industry, and there are, for example in North America, new utility companies looking at how to get into wind, so we’ll be offering them a comprehensive service. For example we do a lot of predictive work, we don’t do much measurement work. GL does a lot of measurement work. GL has a network of inspectors around the world who carry out machine inspections, warranty inspections.

Who are your main competitors now?

Garrad: There are various people who are trying to get into this business. There are the people who are rather in the image of GH, who are serious consulting companies. And there are the big boys, the big well-known consulting companies who are also now trying to get into this business. Whereas ten years ago they would have probably laughed at the idea of renewable energy they now see it as a serious form of power generation and so they are now also moving into the business as suppliers to the power industry and the utilities. And of course they are competition. But I don’t think there’s anyone who can match the combined forces of GH and GL, which of course is why we’ve done the merger. I think renewable energy is a bright spark in a rather gloomy economic horizon, so lots of people are trying to get into the renewable energy business now and some of those may become new competition. Those of us who have been here for a long time know that there’s a lot to learn.

Will there be job losses or job opportunities in the new company?

Garrad: No, we’re [GH and GL] both growing very fast. The reason for the merger is to provide a more solid platform for growth. One of the problems for us and I think for the renewable energy industry in general is getting enough people to satisfy the demand. This is a way of growing faster and more effectively. We’ll be looking to increase our presence in all the major markets. I now see the market in three quite distinct groups: the European market, the North American market and the Asian market. The European market is still very important but it’s steadying and the North American market is growing very fast. So we’ll be recruiting people in the right places to deal with that demand. The one thing that we’ll continue to do is to use the people we’ve got in different parts of the world on projects, which need resource. GH has 19 offices in 19 countries, but we’re very flexible in how we work so we’re able to move work from one place to the other. I have no doubt that we’ll continue to do that to make sure everybody is fully employed at all times. The places where there is market growth right now are North America and Asia and we will be setting out to satisfy the demand in those areas.
The growing offshore market is largely centred in Northern Europe, presently in the UK, but shortly also in Germany, and we’ll be very well placed for the German offshore market, an area where we expect to see substantial growth.

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