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Aker Solutions braces for flat revenue growth

By Zheng Lifei (China Daily)
Updated: 2009-04-07 07:56

Aker Solutions, one of the biggest offshore drilling rig service providers in the world, expects its China revenue growth to be flat this year after recording its best business performance in the country last year, a top company executive said.

Aker Solutions Chief Executive Officer Simen Lieungh

The Norwegian engineering, construction and technology company posted a 30 percent growth in its China business last year, its best performance since entering the country in 1978, said Chief Executive Officer Simen Lieungh.

Currently, the Oslo-listed engineering firm has approximately $1 billion worth of projects under its management in China, according to John McClellan, the head of Aker Solutions' China operations.

The company is expecting its growth to be relatively flat this year in China as the global economic downturn has forced many companies to scale back investments or postpone projects, Lieungh said.

"But our backlog projects will keep our hands full this year and we hope we will be able to grow strongly again in the country once we ride out the global financial crisis," Lieungh said.

China's stimulus package for the petrochemical industry, he said, will have a positive spin on the sector and will also present some opportunities for companies like Aker Solutions.

"China is a country that holds great potential for us," Lieungh said.

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The long-term goal for the company, the CEO said, is to build China into one of its top three markets.

"Our business in China is good right now, but is not as big as we would like considering the size of the market," the CEO said.

The global oil and gas industry service provider will also consider acquisition opportunities in China to drive its business, the CEO told China Daily in a recent interview.

The Norwegian company will consider acquiring local firms that match its business portfolio, Lieungh said.

The company, in particular, will prefer to acquire engineering firms in the oil and gas sector to strengthen its local capacity in the country, Lieungh said, declining to elaborate further.

Last week, the company made a series of acquisitions in its home market to strengthen its position in the offshore and energy sectors.

Aker Solutions, which has a joint venture in China making oil drilling and production equipment, will consider shifting more of its manufacturing activity to China to cut costs, the CEO said, adding the company had no definite timetable for the time being.

The company, which has a global sourcing hub in China, also plans to increase its purchases in the country through this group to reduce costs and improve profitability, Lieungh said.

The company is also planning to deepen relations with and provide more services for China's three big oil majors, PetroChina, Sinopec and CNOOC by increasing local capacity and leveraging its global expertise, the CEO said.

The three oil giants, Lieungh said, are all Aker Solutions' clients "we look forward to increasing the level of business and cooperation with each of them".