OVER 25-YEAR PARTNERSHIP WITH ROLLS ROYCE

Spain 2020 | ECONOMY | VIP INTERVIEW

TBY talks to Jorge Unda, CEO of SENER Group, on more than half a century of operations, internationalization, and the future of the aerospace industry.

Can you tell us about the evolution of the company?

SENER Group was founded by two brothers in 1956. It started out as a marine design office, as one of the brothers, the late Enrique de Sendagorta, was a naval architect with a PhD in naval engineering. A few years later he asked his younger brother José Manuel, an aerospace engineer with a PhD in aeronautical engineering, if he was interested in pursuing research, and they both worked to develop the company. Opportunities began to arise, one being an international bid for a rocket launch tower north of Sweden in Kiruna in 1967. Later, we expanded into infrastructure, and then energy, naturally became a diversified company. One major milestone was getting a contract in the 1980s from the consortium developing the European fighter aircraft called the Typhoon, for which we helped develop the jet engine. We were awarded the contract to develop 13% of the project. Then, we entered into a partnership with Rolls Royce and developed an industry in Spain for the manufacturing and maintenance of jet engines; a partnership that has lasted for over 25 years. The culture of this company has always been driven by its founders' spirit of innovation and excellence. In fact, one of them, José Manuel de Sendagorta, came from the academic professional development with a focus on research and development. We have always positioned ourselves at the high end of engineering. After starting in engineering services, we moved into products such as mission critical electromechanical systems onboard satellites. To give you an idea, if you look at the Mars Rover, Curiosity, all data that comes to the earth goes through an antenna that was partially developed, manufactured and qualified by SENER: we did the antenna's pointing mechanism. We are proud to remain at the cutting edge of technology.

What is the most prominent line of business or products that you offer?

Being a diversified company, we have been involved in the design and development of civil infrastructure, transport infrastructure, urban transport, metro systems, trams, high speed rail and so forth, where sometimes we team up with construction companies. That is one business area. Another is marine, where, in addition to developing marine engineering projects, since the late 1960s we have developed FORAN System, a commercial CAD/CAM software to design and build ships. In the energy arena, we have been involved in construction first as a designer, and later on also as a designer, engineer and turnkey constructor of energy power plants. Lately, we have been involved in renewables and solar power plants in which we have developed numerous power plants in Spain, Morocco and South Africa among other markets. Finally we are active in the aerospace business in which we have two key products: the onboard telecommunications systems and the aforementioned mission critical electromechanical systems. They are called mission critical because if that antenna's pointing mechanism on Mars fails so does the entire mission. We also have an investment arm through which we invest in cutting edge technologies that we develop as engineers. Therefore, we have a broad range of engineering services: we design, integrate, test and manufacture aerospace equipment, products and systems; in civil infrastructure, we provide a full range of services for complex integral projects, and we are an international renowned technology company in railways and mass transit; we deliver marine engineering services both designing ships and through our FORAN CAD/CAM system; or we deliver turnkey plants in the energy arena. We are well known for our space projects, but also for our leading-edge technology in solar thermal power plants.

When did your internationalization process begin?

It was a conscious move, but expedited by the crisis of 2008 and 2011 when we decided that we had to expand our geographical footprint. The first steps were Portugal, Argentina, and Poland, followed by Mexico and Brazil. Hence, before that crisis I would say that about 30% of our total turnover was international. That shifted dramatically in the crisis years when the process of internationalization sped up. This is not necessarily a good thing because as an engineering company you need the home market where you have established a long-standing relationship with your customers, whom you can rely on to work with you. Today we consider Spain, Portugal, and Mexico our home markets and also trying to develop the same in Brazil.

Are you looking to focus only on these home markets or are there any new international regions or markets to expand into?

Geographically we follow different strategies. Where we have a leading-edge product our market is the world, which is the case for FORAN, our CAD/CAM system for ship design, and also solar thermal power plants. For example, with high-speed rail we participate in a consortium with US companies for high speed rail design services between LA and San Francisco. We are also involved in the HS2 project between London and Birmingham, in which we have teamed up with similar companies. As we have the technology our approach is global. When we team up with construction companies we follow them, and accordingly are present also in Australia, Canada, and the US among a few others.

What is your outlook for the market specifically in Spain, and what is the role of regulation?

One thing that is clear to us is that there is a shift from fossil fuels to renewables driving the energy transition. At the end of the day we will go into more electrified green energy and that will be the future. Out of all the energy consumed, 50% of that is for transportation and that 50% is mainly fossil fuels. The other 50% is electricity generation, and there you have nuclear, hydraulic, wind, photovoltaic and concentrated solar power (CSP). That is going to significantly change because of the drive of the electric vehicle. However, there are still some technological challenges that we have to face, and we have to solve before arriving at the end of the green revolution. How the speed of that will be and how the regulation will help depends on the country and its characteristics. The energy transition has come and it is inevitable, although the speed remains unknown.

What do you identify as some of the opportunities or challenges in the near future of the sector, specifically in aerospace?

The aeronautics business has an underlining trend of growth because of the increase of travel around the world. However, the aerospace business is rather different as it reaches into realms such as Mars exploration that are driven by the R&D budgets of respective countries. Currently, we are in a moment where there are several proposals for New Space. For example, instead of having a large satellite that connects the US with Europe there are several other concepts being developed now, within this framework of New Space, which is about small constellations of satellites orbiting at a higher speed that could provide quick access to the internet.

What is your strategic plan for growth for 2019?

I would say investment in research and development, and we currently invest EUR21.2 million annually. We divested ITP two years ago and have the resources to realize M&A's in different companies. A year ago, we realized the M&A of another Spanish company very much complementary to SENER, and look forward to seeing different opportunities in the M&A market regarding various technologies and geographies. Those are the two areas: R&D and the different opportunities that can arise from technologies in new energy, new constellations and then to expand our domestic markets in Spain, Portugal and then Mexico.