People in Energy – Mark Laughlin, Chief Executive Officer, ProCom

Process Components Limited (ProCom) was established in April 1982 by four businessmen in South Trinidad. The company was managed by a dynamic team and had huge potential for growth. However, just one year after its inception, the young company experienced some financial difficulty and they decided that additional capital was needed to grow the business. An invitation was made to Laughlin and De Gannes (LDG) to invest in ProCom, to which LDG agreed. The board of LDG made a decision to purchase 40% interest in the company and in 1984, Tommy Laughlin and Keith D’Abadie, joint Managing Directors at LDG, were welcomed to the Board of Directors at ProCom. The company was located on Royal Road, San Fernando at that time.

ProCom proved to be an excellent investment for LDG as sales increased over 90% in 1985 and a further 33% in 1986. A few years later, the company recorded a profit. ProCom was then subdivided into two divisions, industrial and oilfield services. The industrial division represented Chesterton (pump packing and mechanical seals), Zetex (insulating material), and other general industrial equipment such as pumps, compressors, boilers and electric motors. The oilfield services division supplied API valves and wellhead equipment.

In 1989, ProCom relocated its business to Maharaj Avenue, Marabella, and six years later the company partnered with LDG to lease a parcel of land on the Point Lisas Industrial Estate. Both companies set up a joint holding company and erected a building which was formally opened in October 1996. This was a significant event for ProCom and management decided to upgrade their logo to reflect the move. ProCom fully relocated to Point Lisas by January 2000.

Tommy Laughlin was appointed Chairman of ProCom in 1997 following the resignation of Arnold Mendes. While reviewing the accounts in February 1998, it was realized that for the first time in twelve years, the company suffered a loss in December 1997. In 1998, the third founding director of ProCom had resigned and shares from all three were sold to Insertech Caribbean Ltd. With those shares, Insertech became a 50% shareholder and LDG held the other 50%. Insertech managed ProCom through some difficult times until 2007 when Tommy Laughlin decided the business still had potential and bought Insertech’s shares. With 100% ownership, Tommy appointed his son, Mark Laughlin, CEO of ProCom.

Prior to becoming CEO, Mark had a summer job at ProCom while still at school. It was during this period, Mark realised the full potential of the company. Mark’s first challenge as the new CEO was to “save the company”, and after several months of restructuring and dedicated attention to business processes, ProCom was on its way to recovery.

Mark hired an Operations Manager, Paul de Verteuil, along with a few other qualified and experienced staff members to assist in developing the business, and within a year the company once more realised a profit. ProCom continued on a growth path in the years that followed and the rest as they say, is history.

Opportunities for the business

The business today focuses on generators, production chokes, motors, compressors etc. What is new and exciting for ProCom is that the company is taking on a new brand, Hempel.

It is a line of industrial coatings for both onshore and offshore applications – for the maritime industry, industrial pipes, tanks, and platforms etc. The Hempel brand was officially launched by ProCom at the Trinidad and Tobago Energy Conference 2020.

According to Mark, they’re also looking at other opportunities to bring more consistent business to the organization.

He also added that they are a project-based company and depend on large one-off sales, but what they are trying to do now is find services that smooths out our cashflow. That’s where brands like Hempel come in – it’s something that can sell every day.

In addition, they also do a lot of testing and certification services which have been in consistent demand.

Mark notes that the diversification of the business has been their success story.

ProCom also took some bold decisions to acquire business assets to get into the rigging business. In 2009 ProCom embarked on its first acquisition by purchasing one of the most technologically advanced rigging supply businesses at the time – Superior Rigging. Later on ProCom also acquired the FT Farfan’s rigging division in 2016. The acquisition of the assets serves to bolster ProCom’s position in the local market.

In 2018 the company also took the decision to enter into a joint venture among Guyanese companies, Mines Services Ltd, a member of the Farfan & Mendes group of companies, TOTALTEC which has led to the development of a new energy services company, Jaguar Oilfield Services Guyana Inc. (Jaguar).

The new company provides products and services specific to oil and gas, for example, slinging and rigging. The company provides slings made from wire rope and polyester synthetics, gauges for pressure and temperature measurement, inspection services on lift equipment, as well as non-destructive testing.

Challenges to the business - Access to foreign exchange

The major challenge we experience at this time is our access to foreign exchange.

The lack of access has put us in difficult situations with our suppliers and on a daily basis we have to balance where we allocate our US dollars.

We are trying to leverage what we have, to earn foreign exchange. For example with the Hempel line – we’re actively exploring where the brand is not represented in the region and we will try to service those markets from T&T to earn foreign exchange.

In addition, the Jaguar joint venture in Guyana adds some relief since our dividends will be paid in USD, also we do engage in trade with Jaguar which is also a source of USD.

We are changing our entire business model to look outside of T&T for opportunities especially in the Caribbean and also South America.

Did I want to do that? The answer is no.

Ideally, I would stick to T&T because this is the market we know and this is where our strengths lie.

I think if companies don’t adapt to the rapidly evolving macro environment, there will be some negative repercussions. As a country we need to increase our US dollar revenue base and diversify the economy.

Companies are suffering because of it. The ability to trade has been limited. Suppliers are closing our accounts – not because we don’t have the money to pay outstanding invoices, but because you just can’t get enough US dollars. The allocations from the bank is nowhere close to what is needed at this time.

We have to prioritise the expenditure of USD, allocating it to brands that bring the greatest return while trying to maintain relationships with all of our other suppliers.

For example some of the product lines are higher value but with lower margins, so we cannot give up those lines. We continue to try to maintain a balance with those suppliers, and maintaining our profitability as a business, while trying to pay off other suppliers. It is a tremendous balancing act for us, as I’m sure it is for other companies in the industry with a similar business model.

No one seems to see a way through this other than raising more money through taxes in the energy sector. That happens when you put all your eggs in one basket and become too dependent on energy and there is no diversification in the economy.

If we can’t be competitive and give our customers a cost-effective offer as against what they can get from the US, then the business will go elsewhere. Why would an operator purchase from me if they can get the same product elsewhere at a lower price?

Our advantage is derived from the support of our suppliers. We need to continuously negotiate so that they provide the best prices and ensure sure we’re protected as an established distributor, which will allow us competitive margins.

We try to encourage certain clients to pay in USD, and offer discounts to make it worth their while, because the access to USD is more valuable than a TTD sale.

The foreign exchange situation has changed the way we do purchasing as well. We have to buy stock almost just in time, because keeping large inventories consumes foreign exchange. Consequently, purchases are being placed on order, or smaller orders for faster moving goods.

Challenges due to Covid-19

It is no secret that we are in a very trying time globally, locally and within the walls of our offices. The Covid-19 pandemic has wreaked havoc to our social and economic state and we are all very uncertain of what is next and what further damage will be caused by this uncertainty. All we can do as socially responsible citizens and employees, is follow all of the guidelines which are publicly shared over reputable media. We have a part to play as a company and as individuals to stop the possible transmission of the disease, or “flatten the curve”, as the experts are saying. I have seen a serious attitude to the severity of the disease both internally and with the wider public, and I commend my staff and others throughout the industry for this. We will get through this trying time together, but in the meantime, please stay safe.