An interview with Nadeem Bajwa, CEO Descon Engineering '30 per cent of our growth should come from international JVs and technology partnerships'

Nadeem Bajwa has over 24 years of leadership experience, across diverse geographies and functions in the oilfield technology. Currently he is the Chief Executive Officer at Descon Engineering Limited; one of largest engineering, construction, manufacturing and maintenance conglomerates in the region.

Nadeem has spent two decades in key leadership roles with Schlumberger Limited, undertaking assignments in the Middle East, North America, Latin America, Europe, and Africa. Most recently, he served as Managing Director South and Central Asia region. He also served as Senior Manager for business management to drive corporate strategy for Schlumberger Limited.

He began his career as a field engineer. His expertise is strategic leadership, general management, oil & gas asset management, negotiating and managing strategic alliances.

BR research recently met Mr. Nadeem Bajwa at the Descon head office in Lahore. Following are the edited excerpts of the conversation:

BR Research: Let’s start with a bit about Descon Engineering.

Nadeem Bajwa: In Descon, the purpose of our existence is “We build prosperity by partnering in progress”. There is no one similar to ourselves in Pakistan; we are very unique in what we do with a great diversified portfolio. We are and we will keep on attracting talent across our areas of operation, with the desire to have strongest talent coming into our organization.

We are a world class project management company operating in different geographies. Descon is very well known to honor its commitments by providing the most reliable solutions in project management and its implementation. We are by far recognized as the leading manufacturer of high-quality equipment in the industry. We offer plant services, and most importantly, our automation business segment is a real step change in process and production industry.

We are living a vision and striving with ‘service delivery’ to become a world class and most trusted partner of our customers in Engineering, Manufacturing and Construction domains operating internationally.

BRR: What segments does Descon Engineering cater to?

NB: We are the largest Engineering, Procurement and Construction company in Pakistan. We do carry a history of 42 years in successful execution of the largest and most complex projects in Pakistan. Descon has been and is being a part of some very strategically important infrastructure projects, which are of national importance.  We cater to all kinds of industrial projects that include, but not limited to, the likes of building the largest fertilizer plants, the largest refineries, the largest power plants, the largest cement plants. We are the preferred choice of contractor in all major projects in Pakistan. We build sub-stations, manufacture world class industrial process equipment with our process automation portfolio. We are in a process of upgrading the current industrial infrastructure by digitalization and automation. Descon was the first Pakistani and is still the only company, which has the capacity and competency in alternate and renewable energy projects i.e. wind, solar and biogas. Here, I would like to add; where we build and put the project together, Descon Power Solution provides a complete aftersales solution, services of maintenance and operations.

BRR: What is Descon’s long-term vision?

NB: Our vision is that we must be the preferred choice for our customers for all the engineering and contracting services we provide. And we want to be the partner in the progress of this nation. We are proud to be the largest project management enterprise operating inside Pakistan and carrying out projects of national importance.

BRR: What percentage of the revenues comes from Descon Engineering?

NB: The revenue mix can be different as we have different entities. But in terms of volume, execution and presence, 75 percent of the business comes from Descon Engineering.

BRR: What refineries have you built and set up in the country?

NB: The biggest refinery in Pakistan is PARCO that we built in the 1990s. Today, it is one of the state-of-the-art refineries in the country. We are continuing to provide the maintenance services to the refinery, it’s important to mention here that we were the major maintenance contractor for all the refineries in Pakistan.

BRR: Tell us about Descon’s global presence.

NB: We are operating in eight countries today in Middle East and Africa. At this point we are preparing to enter into more geographies in Africa through joint venture collaborations. The prospects, we anticipate, in Southern and East Africa are appreciative.

We are almost in every country in the Middle East. We have also executed projects in Iraq and now focusing on supplying equipment there, but we are not active in the country in terms of on ground presence due to the ongoing political situation there.

The geographical coverage and the diversified portfolio we offer makes Descon a market leader.

BRR: What does a basic engineering project for Descon entail and what are its elements?

NB: The CONCEPTUAL ENGINEERING project phase serves to identify the technical and economic feasibility of the project. Our long experience in the industry and consolidated knowledge allows us to conduct conceptual engineering and front-end engineering design (FEED). This includes the engineering documents that define the global and conceptual scope of the project, including the type of technology and equipment specifications to be used.

The elements of an engineering package are the Basic Engineering and Detailed Engineering; we at Descon can do all these. BASIC ENGINEERING design phase is generally associated with an economic and financial feasibility study; this process serves to provide a project cost estimate closer to reality.

DETAILED ENGINEERING project is the set of documents generated from the Basic Engineering. These include all the construction details by discipline (Civil, Mechanical, Process, Electric, Telecommunications, Instrumentation and Control, Computer Systems) which must be approved for construction.

BRR: How do you rate the human capital of the country specifically for the engineering business?

NB: From what I can recall, Pakistan is producing 1000 to 1,100 engineers a year. Some of Pakistan’s engineering schools are rated among the top 500 schools in the world. There is no shortage of talent in Pakistan. Just to add, there are about 9 million Pakistanis working overseas, out of which about 30 percent is technical workforce.

The problem comes in retaining that talent in Pakistan for long, as the opportunities for these young engineers evolve as they work for 3-5 years in an enabling environment like ourselves. We retain quite a few of them, and those that we don’t, we are very proud that we provide that training ground to the young engineers who then go abroad and make Pakistan proud and positively contribute to the national economy.

BRR: Do these engineers get additional training when they join you?

NB: We have a very structured training program for engineers. We put them through different divisions of the business. Some go into engineering department; some go into execution. A few of them move into quality and assurance. Some move into planning and proposals etc.

We also have management training and development programs for development of our management teams

BRR: What role is Descon playing to bring global companies to Pakistan?

NB: Descon is among very few organizations that have the historical joint ventures with the largest companies in the world. Descon had a joint venture with one of the largest Japanese engineering, construction and procurement companies called the JGC. Then we had a JV with Presson, a Canadian technology company, which formed Presson Descon International Pvt. Limited that is an integrated engineering, procurement, construction and commissioning (EPCC) company housed within this facility.

We have distributions for international companies, and we collaborate on consortium basis on a lot of international engineering platforms.

It is our vision that 30 percent of our growth should come from international joint ventures. We want to encourage our workforce to get that international exposure.

BRR: What is your view of the country's changing economic dynamics and the challenges that come with it. How has Descon been affected?

NB: Every economy goes through a certain cycle. The largest economies on the globe have gone through these cycles of growth and depression. I believe we are just going through a cycle of uncertainty. We’ve had political uncertainty close to the elections, and then there were some geopolitical uncertainties, just like any other third world country would during a political transition. But now we are looking at certain stabilization factors.

There are some very large scale projects at conceptual stage, which are of extreme importance for the industrial growth and the nation in general. The economy is at the verge of a major turnaround. We have compacted the trough enough to bounce back strong and high.

BRR: What are some of your ongoing projects in Pakistan and elsewhere?

NB: In Pakistan, we are starting to execute one of the largest dams in Pakistan. We are executing an upgradation project, which will improve the irrigation system of the country. This is of extreme importance, as we are an agriculture centric economy.

We are anticipating major investment in electrification of sub-stations and transmission lines infrastructure of the country. We are aligning our strategy to be part of that growth. We are working on some partnerships with international companies to execute these major projects in the remote areas of our country. These are some of the high-level projects that are expected in the next 18 to 24 months.

There are some infrastructure projects coming up in the northern areas, being planned by provincial governments. We are also actively looking into alternate energy investments that are at the conceptual stage.

BRR: You talked about alternate energy projects, how do you see the new Renewable Energy Policy?

NB: I generally believe that a policy is a framework; it contains guidelines. Government has a vision to go into the renewables, which is the right approach. We have our sunlight to exploit 300 days a year, and high wind corridors to develop renewables.

BRR: From your experience in the upstream oil and gas sector, what in your view are the reasons behind the stagnation and now the decline in crude oil and natural gas production?        

NB: I believe Pakistan has a lot of potential. We are not an oil rich country but probably have enough gas reserves in country, which requires major exploration activity in Pakistan. Unfortunately, in the recent past, we have not been able to attract foreign investors in this sector. It’s a high dollar investment industry that absolutely requires foreign investment by major exploration and production companies.

Overall, I believe that the potential is there. Our two major E&P companies are doing well in order to maintain and retain production. The government is taking some very good actions in order to grow E&P business. The government is offering some new blocks to the international and local companies. So I finally see an element of positivity going into this sector.

Are we moving in the right direction? Yes. Are we moving at the right pace? That’s a question. Did we explore the entire nation? No, we did not.

BRR: Where do you see Descon in the next 5 years?

NB: In the current situation, we want to sustain and maintain our market presence and our market share. We are targeting and putting our structures together for some very strategic upcoming projects in the country as well as overseas. We are focusing on growing our engineering business. We believe we have enough talent and we can provide engineering services to major technology and EPCC organizations for specific projects. We are strategically targeting East Africa, and we want to enter into North American and European markets. So in the next 3-5 years, we want to sustain our growth, maintain market share and grow in strategic locations organically as well as through JVs.

BRR: Any regulatory barrier or any suggestion to the government to make your business operations simpler and easier?

NB: I would like the government to make sure to add local component to have the highest priority in every international tender, be it manufacturing, engineering, or workforce. This is the only way we can develop our ecosystem in Pakistan.