KATONI ENGINEERING: Thriving Katoni Eyes Further Double-Digit Growth

Aberdeen stands at a crossroads as the energy transition sparks economic growth and development in new energy solutions alongside the expected volume of exploration and production in the UK Continental Shelf.

For the UK and Aberdeen to maximise their role in this transition it seems obvious that the skills developed in oil and gas will form part of the energy mix for the next generation. Aberdeen is laden with talented people, the city is a strategic hub for delivery, innovation and development, and the legacy of oil and gas means there is capacity currently in place to facilitate a healthy future. However, that successful future is not guaranteed.

Aberdeen and the UK will compete globally to lead on electrification, new energy solutions, and optimisation of low emissions power. The city and its businesses are in a fight for talent with places like Houston, Amsterdam, Singapore and Dubai.

Success will need clever economic thinking, a supportive government and a city that retains people based on things to do and places to go. One thing is clear: Aberdeen’s engineering skill base remains one of the world’s most recognised, and one which is agile and adaptable.

Katoni Engineering is the perfect example of a company able to operate in ‘traditional’ offshore energy spaces while applying creative thinking to adapt and grow.

First incorporated in 2010, the company began its life as an EPC player in 2016. Now it sits in the heart of Aberdeen’s West End as an award-winning engineering consultancy that specialises in energy sector projects.

Recent successes are as diverse as consulting for the North Sea Transition Authority on the future of the UKCS and electrification, to safety related work in the water industry. In between sits a core EPC offering with scopes covering all aspects of multi-discipline engineering for global companies. The company now has subsidiaries in the Netherlands and Mexico, with active plans for further expansion. A simple ethos to delivery excellent customer service something Katoni feels is perhaps a forgotten aspect of EPC companies in the energy sector. However, it is how Katoni acts internally which is what sets it apart from others.

The team at Katoni are asked to act as an extension of customers. There is no transactional approach, it’s not a buy and sell operation. CEO James Bream tells Energy Focus that ‘the Katoni Way’ – a documented set of values and cultural principles – guides every interaction with customers, and this leads to long standing partnerships and sustainable operations that will endure all the way through the energy transition.

“It defines separately what we expect of team members but, importantly, what they can demand from the business, its owners, and management team. It is this definition that makes Katoni’s culture a little different; it is not a set of words on a wall, it is a set of tangible things, actions, requirements and it is actually measurable.

“Katoni is a family-owned business. We are independent and that allows us to drive our own agenda and focus on long-term and sustainable growth.

“Everything centres around the Katoni Way and how we deliver our customer service. What we do and how we do it are the pillars on which we stand,” he says.

GROWING BUSINESS, FUN CHALLENGE

Bream and the Katoni team are not fazed by the changing nature of the Aberdeen landscape. In fact, the Katoni Way dictates that the company’s culture and mentality embraces the change. As long as customer service levels remain extraordinarily high, Bream is confident that this multidisciplinary engineering firm can flourish.

“Being a family business allows us to do things our own way,” he says. “The oil and gas industry is known for having very high attrition in the workforce but we have focussed on looking after our people and we spend a lot of time socialising together, creating great packages, and supporting local charities and community activities, all with the view of making Katoni a really enjoyable place to work. The reason we do that is because we care about people and we know that if we can keep good people then we will have a consistent level of customer service.”

Katoni breaks customer service into three parts. “How do we deliver high quality internal customer service; that is the very basis of what we do, looking after each other in terms of the work we do for each other, and that is very important with multidisciplinary work,” explains Bream. “Then we have to deliver exceptional external customer service. And the final nirvana is getting to know our customers as people. We document those things in the ‘Katoni Way’, and this sets out what we are as an employer, what we expect from people, our operating philosophy, and how we deliver customer service. That is our part of our culture, doing this consistently helps us grow but we do it because we care about the outcome.”

Through this cultural grounding, the company has created an atmosphere of excellence and this resonates with customers who return to the business again and again, even choosing Katoni over larger international firms because of the human nature that underpins relationships that are fostered.

“Starting and growing a business is hard,” admits Bream. “We compete against global companies who are sometimes 100 times larger than us. Our aim is to be more responsive, more consistent than them in terms of customer service. The team have the freedom to make customer centric decisions and manage short and long-term commercial success with that in mind.”

Responding to the market, the company has moved beyond its traditional focus on oil and gas and is now taking on projects across various industries as part of a diversification strategy. But Katoni has an advantage; it can take projects from concept all the way to execution – unusual for most engineering houses that either choose concept or execution but not both. “Our engineering service is a full multi discipline offering and we have all the types of engineers you need – structural, piping, instrument, controls and automation, process, safety etc. We have a wide group of skills within the team as engineers but it’s also important that we have a breadth of both logical and creative thinkers.”

These skills helped the company excel in the modification and optimising of topsides in the UK oil and gas sector. From here, the company onboarded safety, power optimisation, and power supply and demand understanding, which has been critical as it moves into new sectors and geographies.

“We will continue to secure new clients in our core market, which is topside engineering, that is happening simply because our reputation is strong. However, we are also looking to move outside of the oil industry, using some of our services like power studies and safety work, to secure new work. It might sound surprising, but this is partly being driven by our younger team members who are hungry to learn, experience different sectors and work types. It is important to me we offer that latitude, and it helps dispel the myth that young people don’t want to work in oil and gas, they just need variety and to have a safe future path.

“We now have clients in the whisky and water industries and have been active in onshore industrial plants.

“Anything that needs lots of power or has fluid moving through it is something we will understand and that is why we can thrive when new and challenging engineering problems face us not only in the oil and gas industry.”

Work in oil and gas will not stop, and the company is busy in West Africa and across Europe with energy businesses pushing Katoni to help drive efficiency and improvement. A significant recent development comes in the Netherlands where Katoni is opening a new office to help grow the brand on the continent.

“We have restructured the business with one team focussed on growth and one focussed on delivery,” Bream details. “The growth team is aiming to maintain customer satisfaction and aftersales care, bringing in skills from other industries. The whole team will remain focussed on delivery, and that should allow us to make those incremental steps into other industries. Within our core market, we are seeing growth as deadlines on emissions reductions come quickly, driven by governments. Those can be directly reducing emissions or optimisation plant – producing the same amount but for the same or less emissions.”

With industries changing quickly, the need for diverse engineering knowledge is vital and this is why big-name organisations partner with companies like Katoni. “Emissions reducing projects have become more important to us because they are more important to our clients,” says Bream. “We have worked for the UK Oil and Gas Regulator and we are retained by them to work on these types of projects, companies also trust our expertise and creativity, but also know we get that commercial outcomes are rounded in finance, economic, safety and environmental outcomes.”

30% GROWTH THIS YEAR

Thanks to its agile and nimble nature, and the ability to make decisions quickly, Katoni has flourished since its establishment. Today, the company is a lead sponsor of Aberdeen Women’s Football Club, always looking to use the brand for positivity in the city. But it hasn’t been easy to get to where it is now.

“It was difficult to achieve profitability and get our foot in the door in the early days,” admits Bream. “In the oil industry, word of mouth works very well because Aberdeen is a small place. We have managed to achieve more than 20% growth every year since 2019. We are forecasting 30% growth this year.”

Obviously, the period through 2020 and the Covid pandemic was a challenge. But, the Katoni Way encouraged learning and development above despair. The business retained all staff – including apprentices who continued to learn while the whole team shared a financial burden to allow that because the team felt it was the right thing to do. Bream is proud of the way the company bounced back.

“It was difficult and we had to take some tough decisions. It wasn’t just the cash and business implications. We learned a lot about people and how they feel. Accepting that everyone has a different view was hugely important,” he says. “We tried to stick to the standards we had set and what was reassuring was that after the first lockdown, business came back very quickly. It showed me that our foundations were very strong. Since then, the story has been one of growth with clients coming to us for small jobs and getting bigger and bigger.”

This is where the team of more than 100 people come into their own. They deliver the Katoni Way and interact with clients as partners. Whether technicians offshore in the North Sea, or engineers in the Aberdeen office, all have been given a structure to do the very best work at all times.

“I am not an engineer,” smiles Bream, “albeit I have worked on major capital projects in other sectors. I think it was entertaining for a few of our competitors when they saw an economist running an engineering firm. Ultimately, there are few things in running the business that are critical for me. Firstly, allowing our managers the freedom to take cognisance of the fact that we all have families and personal lives. We have a whole set of principles around health including flexible working and mental health wellbeing, and we really stretch those things to the max. We want people to be productive, and we measure that, but we value real customer service. We think that you stand or fall not on your profit but on your ability to retain and grow your customer base. Those are my key focus areas. Succeeding with our customers will delivery profitability as an outcome, that’s the end it is the outcome of trusting our process. ”

While nurturing the customer base, Katoni is also developing a supply chain that is the best in the business. Choosing Aberdeen-based partners where possible, quality is the only measure on which Katoni decides on where to deploy spend. To ensure ongoing relationships, the company regularly interacts and integrates other companies – again, part of the Katoni Way.

“We have a wide supply chain because we deliver all sorts of projects and we need brilliant support from others. Everything from technology and automation, controls and instrumentation, fabricated goods, to highly complex packages – very large and very expensive pieces of equipment. Sometimes we cannot procure what we need locally. We regularly visit our suppliers and catch up with them about projects. We spend time together to understand how we can growth together. We initiated a supplier day each year where we give awards and recognise performance.  This sits alongside our staff awards to embody our ‘One Team’ mentality, we are together in the changing room. We also encourage our supply chain to participate in our charitable activity and community engagement, and that is really successful,” stresses Bream, saying that ultimately customers judge Katoni on the performance of its supply chain.

Clearly, Aberdeen is not down and out. It is certainly not going anywhere in terms of its importance to the local and national economy, and the skills nurtured here remain in demand – in oil and gas and across the wider energy and industrial space. Importantly, Bream will harness the Katoni way to continue driving growth and innovation.

“This year, we have introduced growth team. It’s time to be more visible and bold now we have our foundations strongly set. Ours is not your typical growth story of acquisition. I would say it has been a story of sanity over vanity and that is very sustainable, keeping the core of who we are.”

Safer, greener, and more efficient is the goal, and this Aberdeen business will continue to deliver, all the way through the transition.