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Accounting for 10 percent of its global business, Aggreko Brasil is enjoying more success than the country’s 2014 World Cup team; while the Seleção was defeated, Aggreko, the official temporary power supplier at the event, emerged a winner. General Manager of Brazil Pablo Varela spoke with Michael Sommers about how the company has earned such a powerful market position.
In the summer of 2014, millions around the world watched the FIFA World Cup soccer games played in 12 cities throughout Brazil. Few, however, were probably aware that the elation and dismay they experienced depended, in part, upon Aggreko. The world’s largest temporary power generation company, Aggreko’s Brazilian operation was responsible for supplying power, via diesel generators, for the global transmission of all the games as well as providing additional energy to the areas surrounding the stadiums of various host cities.
This high-profile mega event was only one of many important coups the multinational company has scored since it first set down roots in Latin America’s largest – and debatably most football-philic – nation. Founded in 1962, in the Netherlands, and headquartered in Scotland since 1973, Aggreko began expanding internationally in the 1980s with the 1986 acquisition of U.S.-based Electric Rental Systems.
It wasn’t until 2002, however, that the company made its first foray into South America, with the opening of an office in Uruguay. The following year it opened its first Brazilian affiliate in Macaé, Rio de Janeiro, home to the country’s largest – and largely untapped – offshore petroleum reserves. In fact, Aggreko’s first contract was an important one; providing generators for offshore oil platforms operated by Brazilian oil and gas giant, Petrobrás.
The company’s growth in Brazil, and Latin America as a whole, really took off in 2006, spurred on by Aggreko’s purchase of General Electric (GE) Rentals, which increased its global fleet of generators by 30 percent. Aside from opening new bases in Chile and Mexico, Aggreko added a new office in Campinas, São Paulo, to its headquarters in Rio. Over the next few years, it increased its presence throughout the country – and the continent – while racking up clients from a wide diversity of economic segments.
A watershed moment occurred in 2012 when Aggreko made a major acquisition by purchasing its largest Brazilian rival: Poit Energia. “Poit was our biggest, and most direct, competitor in Latin America, 90 percent of whose business was in Brazil,” explains Pablo Varela, general manager of Aggreko Brasil. “Overnight, we doubled the size of our company and significantly expanded our portfolio of products and services.”
A Big Country with Big Projects
Indeed, today, Aggreko is the largest supplier of temporary energy in Brazil. Although it possesses generators that range from 15kVA to 2,000 kVA, most of its business stems from providing large generators of between 1,000 kVA and 1,500 kVA for big projects.
“Brazil is a big country with a lot of big projects that require large applications,” points out Varela. “And so we supply big machines, mostly diesel generators, for big infrastructure projects.” Along with the oil and gas industry, the other main sectors that comprise Aggreko’s main client roster are mining, manufacturing, hydroelectric, and producers of major events, such as the World Cup.
While power generators constitute the company’s bread and butter, an important secondary product line consists of chillers, cooling towers and air-conditioners, also available for rent. In a country where much of the climate is torridly tropical, Aggreko finds itself supplying air conditioning equipment for shopping malls, airports, and large event venues. The principal clients of its industrial chillers and coolers are petrochemical, pulp and paper, and food and beverage companies.
Aggreko also supplies load banks for the construction of pre-salt offshore platforms as well as for wind farms. And, according to Varela, opportunities for generation thermal power fueled by gas are also beginning to appear. “With all the large infrastructure projects being undertaken in Brazil, the demand for electrical energy is going to increase enormously. At our Manaus location, we have lots of available gas that we can use to generate electricity for the network. Demand is going to continue to grow.”
Aggreko Brazil has been growing as well. Following the acquisition of Poit in 2012, the company has enjoyed yearly growth rates of between 8 and 10 percent, well above Brazil’s GDP. “Our growth has very much accompanied the growth of infrastructure in Brazil,” confesses Varela. “And Brazil still has lots of growing to do, particularly with respect to the industries to which we cater, such as mining and oil and gas. Not only are these segments getting bigger, they’re also becoming better, more efficient. And that’s where we come in.”
Power to the People
Aggreko’s trump card is that it’s the only multinational player in a competitive field. “What sets us apart is that we have a great deal of knowledge about the marketplace, both locally and globally,” says Varela. “We also have the support of Aggreko worldwide, which boasts the biggest fleet of generator on the planet. As a result, we have a great deal of flexibility with which to meet our clients’ needs.”
These days such needs depends less upon inventing new products than improving the efficiency of already existing equipment and reducing emissions so that the same systems yields more energy while consuming less fuel. “The marketplace is becoming much more professional,” says Varela. “In fact, last year we launched our ultra efficient G3+ engines, which can produce 14 per cent more power at 12 per cent lower cost per MW than a standard G3 engine.”
Apart from energy, generating customer satisfaction is Aggreko’s overriding focus. “We want to maintain our clients long-term, so whenever a client needs us we’re there, 24/7,” avows Varela. “This is a fundamental tenet of the way we do business, which extends across all areas: sales, operations, logistics, finances, etc.” Its efforts have certainly paid off; on average, the company receives a laudable 60 to 70 percent with respect to its Net Promoter Score, an international standard that measures customer satisfaction. Indeed, adhering to such a strategy seems to ensure that Aggreko will continue to supply ever more power to the people.