You often find in the energy business those destined to leave their mark in the industry share two important components: an entrepreneurial spirt and vision. Line pipe producer Ahmet Erciyas is one of them. He could foresee that with its strategic geographic location that literally connects Asia and Europe, his homeland of Turkey would also be one of the global epicenters for energy development and transmisson.
Move forward to 2014 and his company, Erciyas Steel Pipe Company, finds itself a key player in that increasingly vital energy corridor while also growing its business and reputation worldwide. It is a company with a background and tradition to respect as well as one to emulate as it moves forward.
Ahmet Erciyas was born in 1948 in Istanbul into a tailoring family, so assembling materials is second nature to the founder and chairman of Erciyas. In 1989, he founded Erciyas Industry (which is mother of all other Erciyas Holding companies). In 1990 he founded Erciyas Steel Pipe and Erciyas Pipe Foreign Trade. The steel pipe business started with a single coating machine, an engineer and three workers in a small workshop. Soon the company added spiral pipe made with a second-hand pipe manufacturing machine. In 1994, Erciyas opened its Istanbul office and began exporting its product. That year annual production was 5,000 tons, not even the weekly production of today’s company.
In 1997, Erciyas laid the foundation of its modern Düzce factory with two pipe manufacturing lines and was awarded major water pipe contracts. By 1999, with API 5L and ISO 9001 certificates in hand, Erciyas, added oil and gas pipes to its range of products and improved its quality system. By 2009 Ericyas, not only became the 25th-largest exporter of Turkey and the leading exporter among all pipe producers.
Erciyas is still Chairman of the Board of Directors of Erciyas Holding which has investments in three major groups, energy, industry and contracting. He also continues to serve as Chairman of the Board of Directors of Bima? Bicyles Motocycles, Erciyas Energy, Briza Wind and several other companies. He is president of ÇEB?D (Turkish Steel Pipe Manufacturers’ Association) and is actively involved in many other Turkish associatons.
In this interview with P&GJ, Erciyas, who is married and the father of two, discusses his career, his company and the industry itself.
P&GJ: What is your background and what interested you enough to make a career in the pipeline industry?
Erciyas: I graduated from Istanbul Technical University with a degree in Msc Metallurgical Engineering in 1971. Then I went to work at Mannesmann-Sumerbank Pipe as chief of quality control and Product Manager between 1972-1977.
The invaluable experience obtained and the observations I made of the sector led me to conclude that there are three main fluids vital for human health and prosperity: water, natural gas and oil, and that they can only be provided continually and efficiently by steel pipes.
P&GJ: Can you give us a brief history of Erciyas Steel Pipe and what prompted you to start the company? Is this a private, family owned company?
Erciyas: With my experiences in this sector starting from 1989, I realized that as humanity continues to develop, there would be an ongoing need for steel pipes. Given that Turkey was a developing country, it was inevitable that the manufacture of pipes will come under the control of national capital and entrepreneurs. Thus, I decided to manage my own company and built Erciyas Steel Pipe Co. in 1990.
I founded the company with my beloved wife who retired after serving many years. I plan to retire within this year and leave the chair to my son, who’s been working in the company and is now vice chairman.
P&GJ: What prompted you to add oil and gas pipe in 1999? How much of your business today involves oil and gas pipe?
Erciyas: After gaining some experience and capital we started to produce oil and gas line pipes to carry the full scale of life to people. Today, our production facility is capable of producing large-diameter line pipes according to all international production standards while keeping our employees and nature safe and clean. Upon continuing investment expenditures, Erciyas became the lead manufacturer of spiral welded steel pipes with the annual capacity of 450.000 Mtons under a single roof in Europe and MENA.
Since 2009 when we became the export leader of the sector, 60% of our products are oil and gas pipes.
P&GJ: How competitive is the steel pipe business and what do you think gives Erciyas an edge over the others?
Erciyas: Erciyas’ competitive advantage in this sector comes from being the leading manufacturer of unrealized projects worldwide with high-steel grade and heavy wall thickness, meaning the projects that involve such tough pipes that haven’t been produced by any producer before. For example 20” o.d. – 1” w.t. with x-60 Steel grade, X-80 Grade 21.6mm and, X-70 grade with the 25.5mm projects. Our clients know that when they need pipe Erciyas can always find a solution for them.
P&GJ: What is your business strategy and how has changed through the years?
Erciyas: We believe that technical capabilities of production are open to everyone that has capital in the world. Thus, we differ from our competitiors by giving values to quality assurance, HSE and social responsibilities.
I also started my career with a profit-oriented mentality but then realized, most probably with age and growing responsibilities, the importance of the quality of life of my fellow family members and employees and the value of clean and green nature for our kids as well as, the education of our future generations. Therefore, for every margin we generate from our pipes we invest a major ratio of in our quality, HSE expenditures while building new education opportunities for our community and next generations as well as investing in green renewable energy production power plants.
P&GJ: Turkey seems to have become a key EurAsia center for pipe production. Why is Turkey a good place to do business in the pipe industry and what are some challenges that companies face doing business there?
Erciyas: Due to its strategic location, advanced technology and capacity for the steel, Turkey stands among the center of the trade between Europe, Middle East and Africa. Turkey has very easy access to technology and has a very friendly and easy business environment.
Although being the gateway of energy supply and demand of energy, Turkey surely has some challenges for producers as well. For example, agreements between countries for the customs operations; Turkish producers face tax issues with certain countries, which is frustrating and preventing business opportunities.
P&GJ: What are some of the major oil and gas pipeline projects that you’ve been involved in, and are you seeking to expand your scope of business internationally?
Erciyas: We have a vast amount of experience, especially being “the first time in the world” for the production of pipes with heavy wall thickness and high steel grade. This is surely due to the high level of knowledge and strong and durable machines which have been designed by our own engineers. I would like to share some of them as follows;
- Ø20″ x 25.4mm API 5L X60 pipes for Wintershall/Germany
- Ø56″ x 21.6mm L555MB (API 5L X80 PSL 2 ) gas pipes for Vattenfall/Germany
- Ø56″ x 25.5mm L485MB (API 5L X70 PSL 2 ) gas pipes for Erdgas Zurich/Switzerland
- Ø48″ x 22.2mm API 5L X70 PSL 2 gas pipes for Alfapipe-Sonatrach/Algeria
- Ø40” x 12,7/15,88/19,05 mm X70 PSL 2 gas pipes for Sonatrach/Algeria
- Ø28″ X70 PSL 2 gas pipes for Sonelgaz/Algeria
- Ø16″ to Ø28″ X70 PSL 2 gas pipes for REN Gasodutos S.A., Portugal
- Ø24″-26” X60 PSL 2 gas pipes for Zubair Oil Field Development Project of ENI (South Oil Company of Iraq)
- Ø28” X60 PSL 2 Natural Gas Pipeline Project for GOGC in Georgia
- Ø36”-40” X65 PSL 2 Natural Gas Pipeline Project in Turkey for Botas (National Gas Company)
- Also, pipes for the biggest water pipeline project named Tamanrasset In Salah covering 1,300 km of Ø28”-56” have been supplied by Erciyas within just 18 months.
In the international playground, Erciyas is becoming a major player. With the recent interest in Latin America and awarded qualifications in companies such as; Pemex, Enegas, Fluor, Shell, CFE, Erciyas is very active in the region. In North Africa, Erciyas also has had a very strong presence since 2008 and remains very active in every tender.
P&GJ: What is your outlook for the near-term pipeline construction activity in your region, and what do you expect your involvement will be?
Erciyas: As we are all aware, the huge projects like TANAP and TAP will feed the production capacity of producers for some time. Future projects may also include northern Iraq gas transmission, Israel gas transmission. Interconnection alternatives of these huge projects will also help the economy of both countries supplying the gas as well as the providers of products and services.
Our main goal is to be the key player in these projects based on our experience, knowledge and capabilities. We believe that technically nothing is impossible to produce, but the important thing is to do it cleanly, safely and without compromising any necessary requirements.
P&GJ: What accomplishments are you most proud of?
Erciyas: Erciyas is very proud of;
• Industry leadership and leader in exports
• Providing quality and performance during especially big projects
• Social responsibility – Hakime Erciyas School of Foreign Language/Düzce University
• Usage rates of recycling materials and consumables
P&GJ: What is the range of products that you manufacture and will you be expanding your facilities in the near future? How many employees do you have?
Erciyas: Erciyas manufactures large-diameter line pipes (HSAW) for oil, gas, drinking water and, pilling pipes ranging between Ø273mm (10″) – Ø4064mm (160″) in diameter, 4mm (0,16″) – 35mm (1.37″) in wall thickness, using steel grades from St 37 up to API 5L X100. In addition, as required, we can apply all kinds of interior and exterior insulations in compliance with all existing international standards.
With approximately 400 top-notch employees, our installation in Düzce/Turkey is a manufacturing center operating at global standards. We will add a new coating facility within the next few years and never stop modernizing the existing manufacturing line.
P&GJ: How do you ensure the quality of your products and that they meet or exceed industry standards?
Erciyas: As Erciyas Steel Pipe Company, we carry out a quality-control procedure for every step which has can affect the quality of the product, even beyond the international standards. Our main goal is to maintain complete customer satisfaction at each step, from incoming of raw materials to delivery of the pipes, with our dedicated and expert quality personnel and using the latest technological equipment for every project. Each and every step of the production is monitored by using a barcode system. With the help of this system the pipes are prevented from entering the next station if they haven’t passed from the previous necessary stations.
All pipes that we produce are delivered after being checked and examined with all required tests and inspections in accordance with the customer specifications and international standards. These tests can be divided into two groups: destructive and non-destructive. In our factory, non-destructive tests consist of ultrasonic inspection, digital radiography, magnetic particle test, visual dimensional controls, etc. All of these procedures are conducted by qualified and well-educated expert operators using the calibrated and latest technological devices.
In addition to non-destructive testing, various mechanical and chemical tests are carried out to investigate the production and process conformity. All laboratory activities including sample preparation are performed in-house with the well-invested equipment that provides reliable and accurate results. Besides NDT and laboratory tests, each produced pipe is hydrostatically tested in accordance with the technical specifications.