Murthy Karnam, CEO of Inmarco Middle East, talks about the stringent standards and tough challenges the upstream energy business offers gasket suppliers
Gaskets are the mechanical seals that fill the space between two mating surfaces, such as sections of a pipeline. Often called seals, the function is generally to prevent leakage from or into the joined objects while under compression. Gaskets save money by allowing “less-than-perfect” mating surfaces on machine parts which can use a gasket to fill irregularities.
It is usually desirable that the gasket be made from a material that is to some degree yielding such that it is able to deform and tightly fills the space it is designed for, including any slight irregularities. A few gaskets require an application of sealant directly to the gasket surface to function properly.
What gasket specifications do upstream oil and gas process facilities require?
The basic specifications of choosing a right gasket include the physical and chemical properties of gasket material. The influence of pressure plus temperature and media on the flange / bolts and gasket need are important considerations. The other critical specification is to determine the thickness.
A large collection of dimensional data is usually available with the manufacturer which helps define the dimensions of gasket and the standard specified. The effectiveness of monitoring largely depends on the end user.
Any enforcement which is already in place also needs a periodical update. Aligning the latest innovations with the existing specifications to derive the best results is an important consideration for the operator or facility manager.
The bureaucratic system in the oil and gas sector has to, in my opinion, transform, be more proactive and look for the latest technology and its applications by welcoming innovations.
What has happened to your raw material prices since 2008?
The whole supply chain was in a tricky situation. When the US dollar was fluctuating violently, one of the issues was the value received for dollars. Although volatility of currencies existed, on the whole this was absorbed. This is one of the reasons why our customers express their trust in us. We have maintained the price levels and are predicting that the situation will improve. Our losses were recovered through turnaround and volumes.
How much of your business is related to energy?
Around 60 % of our business is direct to oil and gas or associated energy industries. A large part of this is in upstream oil and gas as our range of products reaches through the industry from the major contractors we supply. By gauging the sort of business they are winning, we have a pretty good picture of where our gaskets find their end-use.
Which markets do you serve in the Middle East?
From our Sharjah Airport International Freezone hub we serve the United Arab Emirates, Oman, Qatar Bahrain and Saudi Arabia. It’s a big catchment area for us and we are optimistic about the future because of the robustness we have seen throughout the recent period.
Did you see orders cancelled when projects started to be put on hold at the end of 2008?
Actually, the orders in our case weren’t cancelled. Many of the projects that clients had bought or ordered for were in advanced stages of development, and as we have seen, a lot, in fact the majority of the energy projects in this region carried on unabated by the financial crisis. That said, I have seen many projects which have refloated tenders. Naturally owners wanted to capitalise on this period and I think that in part is why so much business has been able to continue in this region.
What should customers look for in a gasket supplier?
Several issues create a mix which generate, propels and sustains growth for our operations. Some of these attributes include having the right people backed by a creditable brand, creating values besides just product offering including customisation and reaching out to end users directly with solutions and services which are not otherwise available with the hardware stores that have traditionally catered to the Middle East. I think the most important things for customers to look for are brand reputation, familiarity with hazardous substances, and solid evidence of materials qualifying to specifications.
Do you fear competition from cheaper Chinese suppliers?
Chinese suppliers are not a direct threat to our business. The lack of consistency, quality, delivery, and low innovation over a period of time to match the growing industry are major points which do not pose any threat to this industry by cheaper production costs. Typically markets which are production oriented such as FMCG are more vulnerable to such threats.
