'Specialised infrastructure and water to be our focus' an interview with Bakhtiar H. Wain, CEO Avanceon Pakistan

Bakhtiar H. Wain is the founder and the CEO of Avanceon. He brings over 30 years of exemplary leadership. He is an engineer with experience in leading global companies such as Exxon Chemical Fauji Fertilizer and ICI Limited.
He founded Avanceon in 1984, and his entrepreneurial drive found its roots in his faith towards the educated and technically qualified human resource of Pakistan. From the onset, he wanted to build a company that could capitalise and promote this conviction globally.
Below are the edited excerpts of a conversation BR Research recently had with Mr. Bakhtiar at the company's analyst briefing.
BR Research: There has been some confusion regarding the structure of the organisation. Could you elaborate a bit on the company structure and the shareholding?
Bakhtiar H. Wain: It is the holding company of the Avanceon Group, with two wholly owned subsidiaries and one associated undertaking with various branches in different regions including Pakistan, UAE, Qatar, KSA and the USA. To simplify this, Avanceon is a public limited company in Pakistan that owns 100 percent of its Dubai's subsidiary. Hence, there is no individual shareholding in Dubai. Our subsidiary in Dubai owned Qatar, Saudi Arabia and a small shareholding in a US company. However, because of the issues going on in the GCC, we had to transfer the ownership of the Qatar Company from Dubai Company directly to Pakistan. Only the shareholding of our Pakistani company flows through every business we do internationally.
BRR: What has Avanceon achieved since the IPO in 2013?
BHW: We have successfully completed our first 5-year business plan called Highway 50. It was the core commitment made to shareholders in 2013, which mapped out several strategic objectives. $50 million market cap by 2017 was the corner stone of our strategic business plan; the plan also involved implementing critical goals that included the creation of cross-functional marketing and business development departments in Pakistan as well as a focus on expanding business in the Middle East region - also adding an office each in Qatar and the Kingdom of Saudi Arabia.
The five key points of Highway 50 were living the brand; increasing and retaining high quality human capital; reducing variability in process execution; building relationship and responsiveness for client success; and after-project sales and services.
All this time, I would say that the biggest asset and catalyst to Avanceon's success has been our human resource; and we will do everything to retain and develop the team we have. Avanceon has achieved what we promised a few years ago. Our objective was to institute a top quality Sales Forecasting System, and today it is the backbone of our projections.
I had explained two to three years ago that our pipeline is as per our business plan; these turned into business orders and now the growth engine is running. Now, we just have to deliver to recognise the revenue. 2017 numbers and 2018 backlog of projects is a testament of our business model. I would say it is all about the sales process, building the pipeline, backlog and delivery. That has been Avanceon's engine.
Now that Highway 50 is all well-achieved, we are in the process of devising our next strategy - The Accelerated Business Plan, where we will totally capitalise on our successes.
BRR: Before coming to what this new plan would look like, could you first tell us what areas and segments are you working in? Are you also working or planning to work in the public sector?
BHW: No, we are not in any contracts with the government as of now. However, last year we did a lot of business development and did many challenging international infrastructure and water treatment projects, and we have also made a division here for similar projects. We are now picking and choosing segments that we would work in with the government.
As far as our key revenue segments are concerned, our gold rush is oil and gas, food and beverages, and specialised infrastructure. And now new projects are coming in water treatment as well. We started off with small projects in water treatment and recently we have signed a $8 billion project in Qatar, which is a privilege for a company from Pakistan.
BRR: Since oil and gas is a big chunk of your business in Pakistan, can you tell what kind of projects are you working on in this sector these days?
BHW: Due to the cyclical nature of a project based company, we have projects in the backlog, which are projects in the pipeline. We are particularly working on the storage enhancement of the oil companies. We started working on the proof of concept and design way before any of the storage expansion plans were announced by the oil companies. Out of the 10 terminals, 8 have been done by us in terms of automation including those of APL and Hascol. And now we are working on the E&P side. Our dream project is where we offer all services from safety, control, automation, data management. But we also offer customised services as per the demands of the customers.
BRR: Pakistan lags behind in quality infrastructure. What areas in infrastructure can Avanceon bring its skill set to?
BHW: There are two areas that are part of our future plans for Pakistan under CPEC: one is tunnel safety system, which is a very expensive system. The other is water treatment; there will be many water projects in Pakistan the coming future, and we have a very strong experience to take them on.
BRR: Since you are venturing into specialised infrastructure and buildings, do you see any prospects on the retail side in Pakistan?
BHW: Definitely not on the software side as there many players already are doing that. However, when it comes to large shopping malls, plazas and retail outlets, yes that is all part of our plan going forward.
BRR: What in your view are the some of the challenges that the industry faces today?
BHW: I believe there are three main industry challenges: One is filling the skill gap amid the challenge to cope up with maintaining the right skill set and upgrading the technology. The second is the gaps in manufacturing and the capability to take informed decisions to achieve production KPIs through reliable process and production reporting. And last but not the least, balancing maintenance with throughput to produce consistent product quality, with reduced maintenance and production cost and zero downtime.
BRR: Can you shed light on the Accelerated Business Plan?
BHW: Accelerated Business Plan kicks off in 2019. It is a 3-year plan that encompasses 100 percent increase in Pakistan core business order generation, and 50 percent increase in international core business order generation by 2021. We plan to establish the international AMS business by 2021 in line with Pakistan success, which essentially means that 50 percent of the fixed cost should be met by recurring revenue. This was one of the core components of Highway 50 plan for Pakistan Our aim is to achieve a market cap equal to the core business for Avanceon Digital + Services (AMS) in these 3 years.