AfricaLive: Please tell readers a bit about the DNA of Harlequin Group, and how your philosophies will shape the future of the company.
Daniel Hesse Tetteh: Our first foray into the oil and gas services sector as individuals was about seven years ago . After completing a masters degree in Supply Chain and Logistics Management at the University of Warwick, U.K. I returned to Ghana to spearhead the development of HT Marine Offshore Logistics Limited; A company focused on the provision of offshore vessel support services to the upstream oil and gas industry.
In August 2018 we divested equity in our family real estate development business CADS Contracts and Services Limited (“CADS”). CADS was founded by our father Chris Hesse-Tetteh 25 years ago in 1995. The reason for divesting equity in CADS was to develop a diversified portfolio of businesses that we believed would aid the development of local capacity building and participation in Sub-Saharan Africa, particularly in the extractives industry. That being said, when introduced by a good friend of the family, to the prospect of acquiring a well established fabrication and engineering services provider, whose founder was looking to exit the country, we immediately jumped at the opportunity.
This opportunity we felt was in line with our diversification goals, and in effect we chose to expand our service offerings in the extractives industry, through the acquisition of a 20 year old company , the Harlequin Group. Harlequin is a fabrication, general engineering and hydraulic business that over the past 20 years has seen tremendous growth in the mining industry and more recently in the oil gas industry. Despite Harlequin’s success it has always had the limitations of not being a fully indigenous business. However, through our acquisition Harlequin is now a fully indigenous business.
Today we have combined our lessons learnt from running efficient family businesses, with the world class structures of a successful 20 year old engineering services company that has extensively served both the mining, and oil and gas industries. Our aim with Harlequin as new indigenous owners is to set the benchmark for engineering in West Africa. Already, our investment in such a world class facility has enabled us to take advantage of a lot of opportunities in Ghana.
In order to set the benchmark for engineering in West Africa, we are seeking partnerships and alliances that are beneficial, to enable us take advantage of opportunities not just in Ghana but in other African countries as well. As African industry players, we plan to offer our expertise in countries that may have the resources but lack the expertise, and track record to exploit them. We shall build the necessary infrastructure and introduce technologies that assist businesses exploit their resources economically. We invest heavily in training at Harlequin and ensure that young professionals are endowed with skills beneficial to our sector. Eventually, we want to help our country and other neighbouring countries gain self-sufficiency through local capacity building.
Frederick Hesse Tetteh: Our company performs services both in the oil and gas industry and the mining sector. For the mining sector we manufacture and repair precision mechanical components, and repair, assemble and test hydraulic cylinders, pumps and motors. For the oil and gas sector our services include turnkey welding and fabrication of both topside and subsea equipment including suction piles, manifolds, steel bend restrictors, holdback anchors, mud mats etc. In addition to our welding and fabrication services to the upstream oil and gas industry, we provide offshore labour, hydraulic and pneumatic support services for high-pressure hydraulic/air systems, components such as cylinders, valves and pumps, heat plate exchanger and riser maintenance services amongst many others.
Our potential for growth is reliant on the growth of the oil and gas and mining industry in Sub-Saharan Africa and we are confident we shall grow from strength to strength over the next decade. We believe that there are still huge untapped opportunities in both the oil and gas and mining industry in Sub-Saharan Africa. In 2018 we visited Senegal with the aim of setting up an engineering facility in Dakar in the near future. Senegal and other West African nations are very much a part of our growth strategy going forward. We do not intend to set up shop in these countries to compete with local businesses but rather to partner locals by offering services that complement what’s already present in-country. We are strong advocates of inclusive growth in Africa.
AfricaLive: What is your approach to fostering innovation?
Frederick Hesse Tetteh: In regards to innovation and trends within Ghana, I can say that Harlequin has always been a market leader in that respect. We work closely with our clients to understand their engineering needs; we brainstorm innovative ways to work faster and better to deliver a superior service and cost savings to our clients.
AfricaLive: Within Ghana and West Africa, what do you consider to be the primary opportunities and threats facing your sector?
Frederick Hesse Tetteh: The pandemic hit the oil and gas sector hard and oil prices spiralled down rapidly. The downturn is causing anxiety and is deterring projects from being pursued as planned. The pandemic has caused major players in Ghana such as Aker Energy to re-strategise due to new supply chain complexities as well as current oil prices. At the beginning of the year, we had amazing projections of what was going to happen in our industry within the next two to three years. Companies like Aker Energy, ENI, Tullow Oil, and Exxon Mobil were making big moves. All of their laid out plans are up in the air at the moment, but things may change for the better as we progress into a more stable situation.
The silver lining is that the challenges experienced this year are stimulating a global shift to renewable energy. Companies and investors are looking at alternative sources of energy, and that will lead to new opportunities for companies such as ourselves. In regards to local content, the Petroleum Commission has done well to ensure international companies have local joint venture partners and transfer knowledge and skills to these local partners. By building local capacity tangible benefits shall trickle down to local communities in many ways.
Daniel Hesse Tetteh: The pandemic has been disastrous but some local benefits have come with it. Since the pandemic, foreign and local companies operating in Ghana cannot solely rely on foreign engineering firms as they did before. These companies now have to engage local firms such as Harlequin to avoid downtimes and delays in their operations. We just signed a framework agreement with an international gold mining company for a myriad of scopes, and an agreement like this would have been harder to seal before the pandemic because of intense foreign competition.
AfricaLive: How can the need to attract foreign investment to Ghana be balanced with local content policies and the development of indigenous Ghanian companies?
Frederick Hesse Tetteh: In summary we have to build in-country capacity whilst offering value for money. Local content in the oil and gas industry tends to drive up project costs hence reducing the return on investment for foreign investors. As a nation, the last thing we want to do is to force foreign firms to risk quality, health and safety on projects by contracting local players that are below par. As a nation, we must make it easier for multinationals to onboard local businesses, and this can be done through the development of existing local businesses; by providing businesses with cheaper access to finance as well as skills and leadership development programs, local companies can quickly compete with their foreign competitors.
A strong local environment must add value to international players instead of taking away from their potential profits. Notwithstanding, it is also important that Ghana attracts foreign firms who are committed to spending significant time and resources in assisting local businesses grow and flourish. In order to achieve this, the Government of Ghana must put in place short term, medium and long term incentives for foreign investors who are keen on stimulating job creation, technology and skills transfer through the industrial development of Ghana.
AfricaLive: If you were to bring together Ghana’s leaders from government, higher education, and business to a roundtable meeting held at your HQ – what main issue would you urge them to get behind for the good of the economy & country?
Daniel Hesse Tetteh: I would bring up the need for a strong local content policy that supports all industries, not just oil and gas and mining. This local content policy should include regulations that will enable banks to support local companies with funding for growth at competitive lending rates.
Frederick Hesse Tetteh: Both education of our youth and industry specific local content requirements as both Kofi and Daniel stated. It is important that we have policies that encourage patronage of Ghanaian goods and services, as well as the necessary education to ensure that the Ghanaian youth have the relevant skills and knowledge to meet our own local content requirements.
AfricaLive: What is your outlook for the company and your country a decade from now?
Daniel Hesse Tetteh: We will have done a lot of work and gone from strength to strength in all our areas of expertise.
Frederick Hesse Tetteh: We hope to be the West African oil and gas and mining service company of choice offering an array of services that others won’t be offering under one brand.