FORECAST 20% GROWTH IN 2019

Colombia 2019 | ENERGY | VIP INTERVIEW

TBY talks to Daniel Lucio, President of Summum Group, on the state of the oil and gas sector, innovation, and transparency in Colombia.

The oil and gas sector is recovering after a difficult period. How was 2018 for SUMMUM? What significant events defined your year?

It was a positive year for the company, where growth percentage was double digit over 2017. Our staff doubled to 1,200 employees, which reflects the new contracts and businesses that we were able to generate in 2018. Additionally, in terms of portfolio and customers, we managed to attract 40% more companies in Colombia, Mexico, and Peru. Furthermore, we forecast for 2019 a growth in sales of 20%. We are very competitive, and our percentage success rate in proposals made against those won has also increased considerably. In Peru, our operation had only one client a year ago, and today has four. We have operated an office with a certain position in Mexico for nine years. We managed to continue generating business, although in that market the start was rather slower, and we hope to create further opportunities in 2019 following the inauguration of the new government.

What was the strategy behind the remarkable growth of your portfolio?

We proactively identify potential customers and commercial opportunities, especially since the market sustained a severe blow from the fall in prices between 2015 and 2016. As of 2017, we decided to strengthen the commercial teams of our two divisions. We understood the investment plans of the clients, and today work with 16 of the 20 largest oil operators in Colombia.

What expectation does SUMMUM from the oil and gas investment environment in Colombia over the coming years?

We have a positive expectation, and in 2018 we knew that some operators had under budgeted due to pricing pressure. Companies have unfortunately become accustomed to working in a pricing environment that generates little financial gain. In 2018, certain Colombian oil operators reported strong high positive numbers, but still put pressure on prices for services companies like us, which led them to remain without suppliers and certain services required for their projects, thus hampering investment plans. Oil operators must understand that service companies also need to generate financial value. In short, they should review the prices they offer to suppliers as our margins remain tight, despite the inherent risks in the field.

How is does SUMMUM's innovative approach help it to face particular challenges of the Colombian market?

In 2018, we started with a strong strategy called Ruta SUMMUN 2018-2021. The job of the organization's management committee was to analyze the company's potential position four years ahead, what it should change to improve, where to innovate, and what lines of business to integrate into its service portfolio. As a business, some years ago we are working at aspects such as artificial intelligence or the internet of things. These issues are going to touch all industries, and we must prepare for what is coming in the future. External consultants supported us by generated the roadmap for the Ruta SUMMUN 2018-2021. Having reviewed our current business lines, we identified certain additional technologies that could be integrated into some of those business lines. We also reviewed our partnerships, and are looking for key players with specific characteristics in order to penetrate new markets. While we are happy to continue performing strongly in the Mexican market, we know that there are further opportunities to tap in America, and our focus lies in North, Central, and South America. We have offices in Mexico City, Colombia, and Peru, which gives us the advantage of familiarity with the idiosyncrasies of Latin American cultures. We know that interesting businesses are in the pipeline. Our evaluations have been translated into concrete projects that will involve the entire company. There are valuable ideas that come from all over the world. In 2019, we have to work hard to cover the schedule we have established. The year of 2018 was one of structuring and defining projects, and 2019 will see the start of some of those projects.

SUMMUM was the first oil and gas company to be part of the anti-corruption business commitment for transparency in Colombia. What is the potential of such initiatives to transform the Colombian corporate world?

We have worked hard for three or four years in our commitment to compliance, and on strict adherence to the law in all jurisdictions in which we operate. We have reinforced our compliance work, and actively participate in related discussions. SUMMUM has clear operational procedures. We wanted to be part of a representative entity to give opinions and listen to other companies as a good internal practice of our own operations. We are proud to be the only oil and gas company to do so, and this year, we have further initiatives along that line. For example, we will become ISO certified against corruption. We will continue participating in forums because there is an essential challenge to the dirty game that blights everyone in Colombia and the region. This effort cannot come from individual governments alone; the private sector must also contribute. SUMMUM will also be part of many more such initiatives going forward.