By Daniel Hunter
Earlier this week, we caught up with Yoav Ben-eli, General Manager of ESI Group, a supplier of tailor-made corporate accommodation services multi-national companies operating in Africa with a particular focus on the Oil & Gas industries.
What are the founding principles of the ESI
Yoav: The leading principle was a desire to stand out from the crowd, by providing an excellent service in difficult conditions. The idea was always to achieve excellence within our field, and to serve the oil and gas industry in its needs. It is about working in Africa, but to international standards for international firms. When you are working in harsh conditions being excellent is much more than being excellent, and we wanted to be the absolute best.
When you first started out, before you built a track record, how did you win the trust of your initial clients to say 'we can deliver what we promise'?
Yoav: We gave them the liberty to take part in the design and the development of the properties, but without taking any financial risk whatsoever. That was the model because we didn't have a choice, it was the only way to convince them in the beginning. It was a zero risk model and we were saying; 'join us and take part in every aspect of this project'.
The first properties that we developed we did so without specific clients. We were pure real estate developers in the beginning and it took us a while to understand and develop our model. I didn't start with the best structured business model to begin with, but we evolved and learnt along the way. We started approaching the decision makers in the clients' management team to understand what their future needs were so we could be pro-active. The way to convince them to engage with us was by offering a trouble free agreement, one where we would provide the solution and only when they moved in, upon a satisfactory hand over, only then did they pay.
So that was a very low risk decision for them, and they could follow us up during the construction period to ensure a satisfactory delivery. They could have a say in the engineering side, define the quality, define the sizes, define any of the specifications that they wanted to. They could even check to see that we were working to the correct environmental and safety policies.
What has been your growth strategy and how have you implemented it?
Yoav: The strategy was to approach as many clients as possible from the industry, to understand their growing needs and to adapt our business model to their requirements. We wanted to have a tailor-made solution for each of our clients. Further to that we wanted to have a diverse client portfolio, and to diversify geographically, which is what we are currently doing as we follow our clients' developments to neighbouring countries in Africa.
That approach has changed now, as you've developed as a company and acquired an impressive portfolio of clients, hasn't it?
Yoav: The policy today reflects the fact we have a fifteen year track record and the clients within the oil and gas industry know us well. Now we engage in a contract prior to anything else whereby we sign a contract for providing a set amount of office space or accommodation, and then we look for the solution. The market in Angola, and Nigeria for that matter, is very different and usually you pay two to three years in advance on rent. So it's not like London where you pay only a small down payment of rent, where we operate people need to pay a large upfront sum because of all of the infrastructure involved.
What are your USPs?
Yoav: We provide a full turn-key solution to our clients that is very user-friendly and above all totally reliable. We know the particularities of the market, we are always on time and always ready to attend to the clients' needs 24/7.
How do you intend to remain the leading provider in this sector?
Yoav: I think that the main thing is our availability, our willingness and our motivation to continue to serve our clients. Not only that but the willingness to migrate with them to their new geographies, and provide them with a specialised solution wherever they go.
Can you talk us through the process of what you do, from meeting a new client, to delivering their solution please?
Yoav: The first thing when meeting a new client is that we tell them about ourselves, we describe the scope of services that we provide, we give an overview of our business model and we talk about the fill process of working with us. In the initial stages it is about us understanding the clients' needs, the scope of work that is required and the type of tenants they intend to lodge. This is important for us because every tenant has different particularities, and we want to ensure all of the small details are covered. It's about getting as much information as possible so we can start to paint an accurate picture.
Once we have that information it moves on to us providing a tailor-made response for a new client that is not only competitive at market prices, but better than market prices. Once all of the criteria are met from both sides, we provide a firm proposal, and once the client confirms this we start the design phases. If it is an existing property, we present the property to the client and talk to them about how it can be matched to their needs. If it is a new property, we design it together with the client, working to meet all of their specifications.
Then it moves onto the development stage, where the client follows up on the development of the project as we carry it out. When a client takes a commitment with us they are keen to know that the property will be finished on the proposed time frame because they need it for their operation. As such we always work on the carrot and stick system; if we finish on time, or even earlier, we get the carrot, if we finish late we get punished. This is part of our engagement with the client, to show them how we intend to finish on time and to the highest quality. Finally, after the client accepts the property and moves in, we move onto the next stage, which is property management.
How are you able to offer a solution at a lower rate than the market price?
Yoav: First of all through access to affordable financing. But also because we have experience and sophistication in this field, we are not a new player, we understand the market and are highly efficient in everything that we do. Our business model, which provides a user-friendly solution to our clients, is unique in that it saves both us and the client a lot of time and money. Again, it has been a case of trial and error but after fifteen years we have a very smooth operation that requires very little management from the client side, allowing them to focus on what they are here to do. The client doesn't need to worry about anything, we take care of it all for them, and for one set yearly price.
We are very unique in the sense we work on a very specific niche and have relatively low levels of competition.
What operating systems and guarantees do you have in place to ensure this process works seamlessly in what can be unpredictable environments?
Yoav: First and foremost we are very good at what we do. We have a project management team in place and we have weekly operational meetings with reports of “planned versus executed” activity. This enables us to understand, on a weekly basis, exactly where we stand from every aspect of the business, be it financially, technically or work completed. We never have surprises, the unpredicted for us is something that is normal. If you plan a project in Zurich, with a Swiss company executing it, they will plan with a 3-5% contingency, in Angola the contingency sometimes has to be 20%, and we plan that in to start with. In all of our experience we have never had what we would call critical delays to projects, we pride ourselves on running on time.
What is your vision for the future?
Yoav: We would like to be a pan-African service provider to the oil and gas industry in those territories that are producing oil and gas. We want to specialise in Africa, and then maybe further down the line we can look further afield. We have already had offers to look outside Africa, but at this stage we are focusing our attentions on Africa.
How do you plan on achieving that vision?
Yoav: The first stage is that we are re-organising from an internal point of view so we can become more corporately compatible. We are looking to understand better what the big corporates are looking for in global partners. We are discussing with our own clients where else we can serve them, because it's best to leverage our relationships from Angola to other localities. Why invent the wheel again? All of our clients are present in neighbouring countries and we are moving towards our clients to understand their needs in other geographies, and to see where we can improve or develop new properties for them.
What KPIs have you in place to track your progress towards becoming a pan-African company?
Yoav: We are following the industry very closely, through specific publications and our current clients. We talk with them on a regular basis so we know where the new discoveries are. We visit the countries to look for the right local partners, and we already have representation officers in several countries. We have our finger firmly on the pulse of the industry and are now approaching clients on the corporate level, letting them know of our expansion, and to present ourselves as potential suppliers in other territories.
What part do the representation officers play in this process?
Yoav: They gather information for us in areas that we visit, but have no direct employees at present. They feed back the intelligence we need; market conditions, costs and in-depth market analysis so that when we come in we are already ahead of the game and equipped with the local knowledge. This enables us to be proactive, we are not waiting for the clients to invite us. Once they say 'we need something in Libreville or Gabon', we already know the area, we have the right contacts there. We know the city and can act quickly.
What other territories do you see as potential growth markets?
Yoav: Mozambique, Gabon, Congo Brazzaville, Ghana, Nigeria and all of of the sub-Saharan territories where there is oil and gas exploration.
What are you plans for Mozambique?
Yoav: Mozambique is a known place for us, we are present in the market and are already established there. We are familiar with the potential needs in the northern part of the country and in Maputo the capital. There are two major players in the Mozambique oil and gas industry today, ENI and Anadarko, and they have both made very big gas discoveries in the north of Mozambique, in very remote locations. They have already signed their agreements with the Mozambican government and national oil and gas companies. Further to that they have signalled their intentions by instructing the construction, and operation, of a $50 billion dollar LNG plant in the northern part of the country. During the construction period, and the later stage operation, of the LNG plant they will be a great need for accommodation, offices and logistics bases to serve not only the construction but the industry in general. This is a unique opportunity where the client, ENI, is already an existing client of ours for many years and we have a track record with the client.
With ENI being an existing client does that mean you automatically get the contract for Mozambique?
Yoav: Any business around the world will tell you that if you have a supplier you know already it is easier as you have the track record, you know the people, you know the standards and what is required. But it doesn't mean we get the contract automatically. There’s still work to do.
What is your approach towards CSR?
Yoav: It's a developing aspect of what we do. Over the years we have been supporting orphanages but it isn't something we have had a structured approach to, it has been a little sporadic. We understand that the time is now to turn it into something tangible and part of our day-by-day operations. We want to balance CSR throughout the business. Ethical business practices, specific CSR campaigns in areas of need and most importantly sustainable long term projects that deliver permanent and meaningful benefits. CSR isn’t an after-thought, it’s hard-wired in our business practices