Chilean gas company Indura is a family affair says company boss Hernan Briones. What's more, as the company and the country, moves through a period of considerable growth it's likely to remain that way. He explains, $quot;The next generation is still very young but they are starting out and as soon as they get more experience we will take them with us to grow and bring their experience to the group.$quot; This has always been the way for the ambitious Briones family, as our intrepid interviewee explains, $quot;the whole family is involved and it has been an excellent experience since we support each other better than ever and we can take the best of each other to assume new roles in the organization.$quot;
Mr. Briones is himself an excellent example of the family's ethos. He came to the helm in December 2005 following the death of his father Hernan Briones Gorostaiga, the company's founder. Briones Sr. left behind a thriving business with an air gas capacity of 1,200 tpd, a long way from the simple welding consumables operation he founded in 1948. As Briones Jr. explains things soon moved on for the group, $quot;In the 60's, together with Airco, INDURA entered into the air gases market, through the installation of a 3 tpd gaseous oxygen plant, which increased its position in the market. In the 70's, this position was reinforced by establishing the first cryogenic plant, reaching a leading role in the market, that has been maintained until today.$quot;
Looking at the current market, Indura is indeed the main gas and welding company in Chile. The company had a turnover in 2006 of $211m, of which 68 percent was generated within their home country. Of this total sales value, 40 percent corresponds to gases, 40 percent to welding equipment and welding consumables and 15 percent is personal protection equipment. Add to this an employee register of 1,410 and you have a recipe for runaway success.
When you incorporate into the mix the technologies and support of a global gas giant you begin to see how a market leader is made. Mr Briones explains, $quot;In 1995, BOC entered into Indura's operations, providing access to their technology and latest gas application development for different industries, as well as the latest management, operational and commercial systems used in the industry.$quot; The collaboration would last for over a decade until BOC completed their merger with Linde late in 2006, and the family's holding company moved to purchase BOC's 41 percent share in the company to take it's majority stake to 82 percent.
Although the Briones family have since reclaimed their sovereignty over the business, the impact the BOC Group has made is still being felt. Mr Briones tells us, $quot;BOC was an important support during the time that we were in partnership, especially in technology and know-how. This time also permitted us to expand our capacities and develop a great team of people with initiative and knowledge, lessening the impact of the departure of BOC from Indura. From a positive view, we have internalized all the technological knowledge acquired, according to the local requirements of each country, which are sometimes, very different. This is a very good differential advantage for us.$quot;
Briones believes this is not the only thing riding in his company's favour. He says his business can call on not only quality technologies, but also qualified and committed staff and management. He says, $quot;Since its (Indura) beginning in 1948 the shareholders are practically the same. Our relations are based on a strong friendship that has borne many important changes through the years. I have to say that my father formed an excellent group of people in Indura and I am really enthusiastic with this business area which is quite interesting and new for me.$quot;
Prior to his involvement in the industrial gas business, Mr. Briones was involved in the other branches of the family industry. He explains their other interests saying, $quot;Indura is one of the companies that Invesa, the holding company has. Invesa belongs to our family, I am the eldest brother but there is also my sisters Anita, Loreto and my brother Pablo. Invesa also owns Cementos Bio Bio a cement producer company, Cerámica Industriales, the world's sixth largest manufacturer of sanitary ware, H Briones a company that distribute and commercialize a wide range of product and Automotriz Portillo that commercialize important car brands and of course Indura, as you already know.$quot;
Briones is dedicated to taking his company forward, and offers clear ideas on both the path so far and the way onward. When asked to describe his market he says, $quot;Indura is a customer oriented company, focused on satisfying the industrial and medical gas, welding, and related market needs, through a strong commitment on integral customer service.$quot; He also knows his markets saying, $quot;Indura, from its beginnings, seized opportunities generated by the development of key industries in Chile, as a result of strong drive from the private sector and the support from public policies. This was particularly the case in the fabrication, health, food, scientific, agriculture, winery and industrial process sectors.$quot;
When asked where he feels his group is leading the industry he coyly tells us about a number of projects of interest to the industry. He says, $quot;We developed some very important projects during 2005/2006. This is the case for the new oxygen plant installed by the end of 2006 in the main steel mill company in Chile, CAP. He also describes the work put into a new oxygen plant at ADELCA in Ecuador, and a new CO2 plant in Chile, requiring an investment of approximately $40m.$quot; This offers some insight into the company's growth projections, though he continues, $quot;We also foresee new opportunities in the region that I would rather not mention until they are established.$quot;
As his comments show Chile is not enough for Indura's growing potential. Indura has direct gas businesses in Chile, Argentina, Ecuador and Peru, establishing in each one in 1948, 1991, 1979 and 1996 respectively. Briones also tells us, $quot;Indura has a direct presence in 5 countries in America, and also through distributors in most American countries as an exporter of high quality and prestigious welding consumables including adding value services offer.$quot; In addition they have made inroads into European distribution as Briones explains, $quot;Indura is present in the Spanish market with a very small share of the welding market, a share that we hope to increase in the future.$quot;
When asked to describe the motivation behind these moves Mr. Briones tells us, $quot;the basis of Indura's growth, has been its early focus on high potential export markets, supported by creativity, private companies and government policies.$quot; This is a foundation he intends to build upon and he says, $quot;Our main effort today is to consolidate our presence in the countries were we have direct operations, where we have an enormous growth potential.$quot;
Our Chilean raconteur also tells us his company is now in a position to significantly develop such operations noting, $quot;Our main development and presence has always been related with the development of the main exporting sectors in Chile, such as mining, agriculture, food and wine. As a result from the export growth, we have had to develop the skills of our staff in how to use different type of gases for each process in each industry. In many cases we have learned from previous experience in other countries, but in others we had to discover them by ourselves.$quot;
Research and development is a key part of Mr. Briones' strategy and he tells us, $quot;Indura counts with state of the art technology in order to access gas related businesses through a competitive approach, investing in R&D and being in constant communication with other companies from more developed countries. From this we obtain what is necessary in order to achieve success in commercial challenges, additionally we invest a lot of time training our people in order for them to increase their efficiency and creativity.$quot;
He believes that this creativity will be necessary for his company to develop in tomorrow's market. Talking about the future he tells us, $quot;The gas industry is heading towards an industry of commodities, and we must focus our business on providing solutions to our customers in each market.$quot; However, his forward thinking should leave them set for this challenge as he explains, $quot;We have an executive mentality that allows us to face challenges as we have been doing until today, which means analyze all existing opportunities that can access in the Latin-American region in every specific niche market.$quot;
However, there is more on Mr. Briones' mind than simply business strategy. As the market in South America develops he is growing increasingly worried about the growing gaps in cross border safety standards and believes a regional industrial gas association could provide a solution. He told us he, $quot;has been actively promoting the creation of a South American Gas Association through the CGA (Compressed Gas Association) in order to establish international norms and safety standards in the Latin-American gas market.$quot;
Furthermore he believes an industry standard would be of benefit for everyone as, $quot;most Latin-American countries have different standards, and distribution barriers between them almost doesn't exist, so it is a very dangerous situation.$quot;
He recognizes the timescale for organizing could be drawn out but believes, $quot;The migration from local to CGA standards, could take place in approximately 10 years, with the purpose of not producing a high cost for the industry due to the changes.$quot;
What else can we expect to see from the group? Mr Briones is hopeful for the future though like any efficient entrepreneur he plays his cards close to his chest. He tells us, $quot;We are analyzing the possibility of listing the company in the stock market or having a strategic alliance with a global player, or both, but we are always thinking to prevail in the market as Indura.$quot;
He finishes his chat with us by saying, $quot;Indura will continue its strategy, as before, open to evaluating new opportunities in other markets, where it can participate directly or through another modality, depending on the competitive advantages in those markets.$quot; As he clarifies his final thoughts you can almost hear a throaty chuckle from the fast-paced family man as he explains, $quot;of course, I cannot say anymore at the moment.$quot;