Neuman & Esser Group In Africa For The Long Haul- Dr. Jiří Rus

By Ajong Mbapndah L

Barely two years into its African foray, the Neuman & Esser Group seems to have found a new home where its expertise is highly needed, and its services cherished. In time of great changes in the energy sector, the circa 200-year-old German owned family business is slowly but steadily making a difference with its premium quality equipment, and top-notch services.

“We do not believe on doing the business in Africa from remote places like Germany, Italy or even Middle East. We have developed our Local Content Concept and the very first rule is to be present on the market and to be close to our customers and partners,” says Dr. Jiří Rus, Sales Director for Africa at the Neuman & Esser Group.

Discussing progress and perspectives on its continental wide strategy, Dr. Jiří Rus says the Neuman & Esser Group is in Africa for the long haul. The Esser & Neuman Group wants to partner and support the development of Africa and help governments, customers, and its people for a better future, says Dr. Jiří Rus in an interview with PAV.

We know already from our last discussion about NEUMAN&ESSER GROUP a bit. However, for those who may not know or did not read our last interview, could you give a very short summary of your company and its services, and products?

Dr. Jiří Rus: Well, it is not easy to introduce a company that was established nearly 200 years ago (1830) in a few words. Let me maybe focus on our DNA and characteristics going beyond only our products and services.

I would emphasize, that we are a family-owned business (in hands of family Peters from 1891) with headquarters in Germany and around 14 subsidiaries around the World. As a child of the first industrial revolution, we went through several business changes and Energy Transitions in our history.  Our clear values and vision and mission – to develop and produce high quality equipment with German engineering, quality and reliability helps us to swiftly adapt to changing market and customer requirements. We provide to the market all kinds of reciprocating and diaphragm compressor systems; we do produce electrolyzers and we also have great solutions with our milling and classifying technology. We produce our core equipment in one of our four production facilities in Germany, but the final system design, integration and packaging we do in our Sales Business Units around the World.

With our compression solutions we are traditionally very strong and active in the Oil & Gas sector, especially in the downstream segment. However, we are, I would say enthusiastic and great believers in the renewable energy sector as well. Our long expertise in hydrogen compression brings a lot of benefits to this segment and we broadened our contribution to the H2-value chain towards the hydrogen production itself by producing PEM electrolyzers and actively working on green solutions with many studies and concept developments.

We are also very strong on our after-market knowledge and expertise for a great benefit of our customers, that are also valuing this very much. We do love old compressors, which we can revamp to meet all state-of-the-art expectations. And this we don´t do only on our brands, but in general on any reciprocating compressors.

Regardless of our age, we are very modern and agile company. We do love to develop new solutions and work with our customers on different studies and consultations within our know-how range.

How do the products and services of NEUMAN & ESSER GROUP align with the development needs of Africa today

Dr. Jiří Rus: I do believe there is a great fit across many industry segments.

We do see these days very strong development of oil and gas production. Most of the gas projects are related to overseas export via LNG and there our equipment plays very strong role in Boil-off Gas application. You can find our equipment also on all floating applications like FLNG, FPSO, FSRU etc.

 Due to our history, we are very strong with our compression solutions in all the downstream applications. This means refineries, petrochemicals, but also fertilizers and chemical plants. With the growing population in Africa and also its steadily increasing standard of living, there has to come a demand also for the extension and construction of new plants like that. Moreover, there are many such plants already, which are in some cases very aged. We can help with our revamping and modernization program with any brand of reciprocating compressor. This is very often more effective (CAPEX and time) way instead of just replacing old equipment by new.

Last but not least, Africa is also using its chance to be an early bird in Energy Transition.  There are several locations, which are really blessed for renewable energy, be it wind and / or solar power and biomass.  Here we combine our century long H2-compression expertise with our H2-generation knowhow, bringing integrated solutions of e.g., electrolyzers and compression and H2 storage systems into the market.  We already participate in several projects in this area, and we also support this development with studies and consultancies.

Can you shed some light on the operations or networks you currently have in different parts of Africa?

Dr. Jiří Rus: I have to say first of all, that we do not believe on doing the business in Africa from remote places like Germany, Italy or even Middle East. We have developed our Local Content Concept and the very first rule is to be present on the market and to be close to our customers and partners.

Historically, we have had for already many years our branch office in Cairo. However, that was it. During the last 2,5 years, when we started the implementation of our Africa strategy and journey, we achieved a lot. We have our branch office as a JV in Libya. Moreover, we cover already additional 9 countries in Africa via our authorized business partners (Representatives) like for example South Africa, Angola, Nigeria, Mauritania, Uganda and others.

We also established with our partner in South Africa – Rotamech (Pty) Ltd - a service workshop and they are able to repair basic components locally. The same we are establishing in Nigeria with our partner MILAT Nigeria Ltd.

And, we are further continuing with this development. Our key objective is to generate value chains and jobs inside the respective countries of installation.

What is the ideal profile of projects or countries that the NEUMAN & ESSER GROUP is looking to expand to in Africa?

Dr. Jiří Rus: Very simply saying – any project or country, that is demanding the application of reciprocating compressor or electrolyzer systems.

But to be more precise, we are of course having our criteria for prioritizing our future development. We are following and developing countries, that already understand they need to

• increase their fuel production by increasing their current capacities or constructing new capacities - refineries are our traditional segment.
• increase of the food independence by having domestic production of urea and fertilizers.
• establish and increase the LNG-export.
• take part on the newly developing segment of energy transition by producing green hydrogen, ammonia or methanol.

Those are the main criterions for us to go. Very often each country is focusing on some of those segments and thus it is all the time for me and my team balancing between our development resources and project maturity and each country’s governmental priority.

NEUMAN & ESSER GROUP has been in the continent now for a few years, what has the experience been like for you, and any recommendations to governments to facilitate more business cooperation with companies like yours?

Dr. Jiří Rus: I am very happy to see that governments are steadily developing their own strategies – Gas strategy; Oil strategy; Green Hydrogen strategy etc. I hope that this time the materialization and implementation of these strategies will really take place. It is very important for the continent and people here. I see a great job of for example Africa Energy Chamber (AEW) under the lead of my brother NJ Ayuk, who is working very hard on the clear naming of the strong energy needs in Africa. Their slogan “Making Energy Poverty history by 2030” is very ambitious, but it is doable. We just need to understand, and we need to lobby for it and explain that (natural) gas plays an important role in that task.

What I would also recommend to all governments or project owners to properly evaluate the alternatives and balance between CAPEX/OPEX and not neglect reliability and safety aspects in case of equipment selections. We have a discussion in ARDA (African Refineries & Distributors Association), led by my friend Anibor Kragha about the long-term reliability and efficiency of equipment. The low CAPEX very often does not mean to buy quality and earn in long term.

What is really a business trouble in Africa are very strict monetary policies, very complicated customs procedures and in general the business environment should be more open. I also do believe that intra-African business should be more developed. Very often the interaction between neighboring countries is still very limited. I think this can be a key future growth driver in the continent.

In the face of competition out there, why should African countries prioritize or consider doing business with your company, what makes NEUMAN & ESSER GROUP stand out from other companies?

Dr. Jiří Rus: I believe there are three main aspects and many small others, which should be a strong argument to go with our products and solutions.

First of all, we are a very stable company with nearly 200 years of history. This shows the stability of our set up, but also ability to be able to react for the market demand changes that happened during that long period of course many times. We stay here for a high quality and superiority of our products and have many years of experiences. In other words, we know, what we are talking about, both in the traditional Oil & Gas business as well as in the Green Hydrogen market.

Secondly, we are German family-owned company. This means that we think twice or three times before doing a strategic decision. However, once we decide, we go for it, and our decision chain is very short. This is exactly about our mission in Africa. We decided to go here, and we started first to work on our Local Content Concept. We do not want only to sell our equipment and leave. We want to stay on the markets with local partners, help them to develop local people and capabilities. You can call it as a kind of know-how transfer if you wish. We strongly believe that we should also take our responsibility to develop local markets. We have done this in a comparable way e.g., in our location in Thailand, where we started with a service point during the installation of a big chemical park and developed the location to a full-blown sales business unit serving the entire APAC region with around 100 employees in primary and aftermarket.

Thirdly, we do stay in the market for a strong local aftermarket support. This is very often forgotten during the greenfield projects. We want to provide strong and high-quality support following the local demands and this also means high availability, flexibility, swift responses, and local pricing strategy.

Finally, we are here not to only provide our compressor systems or electrolyzers. We are supporting and cooperating on various studies and projects consultancies. This is very important especially in the newly developing Renewable energy sector.

For 2024, what are some of the major projects that NEUMAN & ESSER GROUP will be working on?

Dr. Jiří Rus: We do have actually 4 main pillars of 2024 objectives.

We want to further explore new markets and will continue with our fact-finding trips which form the basis for the later local strategies preparation. I just recently came back from Algeria, where I received a lot of interesting inputs and got a basic understanding of this market. In February my Managing Director will also pay a visit to Algeria with the German Vice Chancellor and Minister of Economy and Climate Protection, Dr. Robert Habeck.  We will definitely come back and further develop our activity there. Next month I will be for the same reason in Mozambique and other countries will come later.

We also want to continue on our activities across the market presenting our capabilities and showing to end-users, partners, people, what we know and what we can do. We will take a part on several conferences and exhibitions, where we all the time try to give a presentation sharing our experiences and know-how. We also want to present there our partners like for example we did last year at MSGBC in Noaukchott, Mauritania with our partner Sea Engineering or we will do at Nigeria Oil & Gas with our partner MILAT Nigeria Ltd. Additionally we will show our flag in common events with the VDMA in different parts of Africa. We will continue on our active cooperation with our colleagues in ARDA; AEC and newly we want also to work with Africa Hydrogen Platform (AHP). So, I hope to meet many of readers of PAV in some of those events.

We are about to organize an official opening ceremony of the authorized service center in South Africa with our partner Rotamech (Pty) Ltd. We will finalize the service center in Nigeria with MILAT Nigeria Ltd and are investigating the next possible locations.

And of course, last but not least, we want to work on our ongoing projects in both primary business as well as aftermarket. We are working for example right now on revamping, rehabilitation of several compressors in different refineries in Africa. This gives end-users the possibility to continue to use very old compressors from their installed base with the full reliability and efficiency. One of these projects is currently ongoing on compressors that were not originally produced by us. But our expertise allows us to also enhance the capabilities and characteristics of other brand compressors.

How do you envisage the future of business ties between Africa and NEUMAN & ESSER GROUP?

Dr. Jiří Rus: I am very positive about this. I know we work very hard and intense on our homework. I know that we offer a strong knowhow portfolio to Africa; great products and we are ready to develop our relationship with customers and partners by also sharing our expertise. Just last year we organized our Training on the Road events in South Africa and Egypt. This is the event, where we invite all our customers and partners and dedicate one day training focused on specific topics. We will continue that, and we discuss also for example to organize such sessions with ARDA in their training center for theoretical and hands-on technical training open for all refineries of Africa.

I believe that we all share the same dream and goals. We want to support development of Africa and help governments, customers, people for a better future. I personally am a big “Africa believer” and it is a great honor for me to be a part of this story of NEUMAN & ESSER GROUP in Africa which started just 2.5 years ago in such an intensity.

*Culled from February Issue of PAV Magazine