Karl Leidenfrost: Seeking new opportunities to expand the business and an investment plan of EUR 5 million

For PPS Pipeline Systems, part of Austrian Habau Group, 2000 marks the beginning of its activity in Romania. How everything started on the domestic market, what are the main objectives and proposed future plans of the company – revealed Mr. Karl Leidenfrost, General Manager of Habau PPS Pipeline Systems, in our interview.

Mr. Leidenfrost, how did PPS Pipeline Systems began works in Romania? In which business areas the company is currently involved and in what other areas affected?

PPS Pipeline Systems entered on Romanian market in year 2000 starting with several World Bank financed water and gas distribution projects. At that time, in the respective projects, PPS was executing only the project management services through internal employees, all other services and works being subcontracted to Romanian local companies. Habau PPS kept over the years a very good business relation with this Romanian partner. Habau started the activity in Romania in 2007 having international partners for the logistic park projects in which it was involved. In 2008 the company developed very fast by setting up its own civil department. In 2009 the two companies merged and became Habau PPS Pipeline Systems. Nowadays the company is executing civil construction projects, pipeline construction projects and even EPCC projects being focused on oil and gas industry.


What PPS Pipeline Systems means in figures and data (turnover, investment budget, no. of employees, etc.)?

In the last years Habau PPS has achieved a turnover of around EUR 15 Mio. The company grew from around 20 employees in 2009 to 160 employees at the moment. In peak season Habau PPS use additional personnel to cover projects requirements. In 2014 Habau PPS has invested around EUR 1.1 Mio in new equipment and staff development. For the next two years Habau Austria has approved an investment plan of EUR 5.0 Mio. That will be done in line with the developments on the Romanian market.


For how long have you been working within the company? Why did you choose this job and what is your previous work experience?

I work for Habau since 2008. After finishing my technical education I started in year 2000 to work for a construction company taking the responsibility in highway and street construction projects and, as well, in water and heating system projects. In 2001 this company was bought by Habau. Once I graduated the Law University I moved in 2008 to Habau Austria. Here I took the responsibility for merger and acquisition projects in South and East Europe – this also brought me to Romania. Habau Austria is a private owned company with 1.1 Billion Euro turnover and around 4000 employees with a history of more than 100 years. The owners and the board members of HABAU Austria had confidence in my abilities and gave me the chance to become GM of Habau Romania despite my young age of 29. They are mostly supporting me and my ideas and they are real sustainers of my career development. A safe employer who gives young persons the chance to lead and develop determined me to make the decision of accepting my actual job position.


What are the current projects of PPS Pipeline Systems and which of them are devoted to oil and gas industry?

Currently Habau PPS is involved only in projects in the oil and gas industry. We have an ongoing frame contract for construction works with the largest oil and gas company in Southeastern Europe, which over the years became also one of our main partners, OMV Petrom, so we are executing projects under this agreement. During last years Habau PPS also worked with Transgaz, NAMR (National Agency for Mineral Resources) and has developed a major project in the Republic of Moldavia. Presently we are waiting for the results of our applications for an important project and hoping the result will be positive in order to work with a new customer in 2016.

Who are the main partners of your company, in the country and abroad?

As clients, our main partners are the private and state owned Oil and Gas Companies. We have worked and delivered successful projects for all of them: OMV Petrom, Transgaz, Romgaz, Conpet, E.ON, NAMR or the Government of the Republic of Moldavia.
Being part of the Habau group, Habau PPS has access to the large portfolio of international partners from oil and gas industry of Habau Group. We already delivered projects for international customers in the Netherlands or in Germany, for example. Also there were cases in which we brought foreign partners to Romania for special operations in our previous projects.
Habau PPS has good business partnerships also with local competitors and with big Romanian contractors even if lately, due to the oil price crisis, it is a fierce battle between companies in terms of prices in order to win contracts.
Habau PPS is permanently looking for new clients and partners – Let’s hope we will manage to expand our client network also in 2016.


How did 2015 conclude in financial terms (against previous years) and what are your main medium and long-term objectives?

Habau PPS managed to close the year 2015 also with a positive result. For the moment I hope to maintain such a turnover and result also for the next year considering that we don’t know if big projects will come up already in 2016.
As a long term perspective I would like to further develop Habau PPS and my clear target is to achieve an annual turnover of around Euro 50.0 Mio. But this growth will be done carefully and with focus on profitability. Many companies grow too fast and lose the profitability in this process.
We also do monitor the Romanian Market – maybe we can purchase a Romanian competitor who wants a partnership with an international strong Group.


What future plans has PPS Pipeline Systems in Romania and the region?

As already mentioned we will develop our activities in Romania. There are big projects in discussion and beside the new clients that we will gain we definitely want to remain a reliable partner for all our already existing clients. Also we are applying our offers for important projects tendered in Bulgaria and Moldavia.
Relying on the experience and the power of Habau Group we will start to look in the near future for new opportunities and to develop also in other domains like Infrastructure Projects or Development Projects.
With the support of our strong mother company I am sure we will be able to deliver construction projects in all domains. Here I would like to mention that one of the leading companies for construction of tunnels in Europe belongs to Habau Group.
I am optimistic and strongly believe that especially in the infrastructure area there are big interesting projects that will come.

How did the fall in oil prices influence your company’s operations and what changes in the optimizing strategy did you operate consequently?

The drop down of the crude oil price seriously affected the complete industry. All over the world companies are struggling to maintain their positions on the market, the employees are losing their jobs and the projects are suspended or even stopped. Of course also our clients suffer because of oil price crisis, this causing a major decrease of the number of investment projects. Therefore as strategic measures we permanently try to diversify the clients and the areas of industry of which they belong. We do continuously educate our staff in modern technologies in order to increase the performance and reduce costs for our clients. We permanently try to be a real partner for the clients and to find together always the most cost efficient solutions in order to win and execute projects.


In your opinion the most important capabilities of a Business Process Manager to perform at the highest level are… ?

I strongly believe that a good business process manager must understand processes, shall have an analytic thinking and the power to motivate the employees and to determine them to accept any changes that may occur, even such a change may seem hard for them at the beginning. Besides this he should also be an optimist.


Do you have a company slogan or philosophy that defines your own actions?

TODAY, we are building for tomorrow! We have the responsibility to make good decisions, to manage the company successfully and to build our future projects. Like this we can guarantee to our employees that they are working for a safe employer, to our clients that we deliver safe projects and we can protect the environment for the future of all of us.

Lavinia Iancu

Lavinia has an experience of over 20 years in business management and has attended in-depth management courses. She is licensed in the field of Industrial Engineering, Welding Technology and Equipment specialization, and in Psychology. She is currently Co-Founder and CEO of Industry Media Vector and coordinates the newsroom team of Energy Industry Review publication, having a rich experience as energy business analyst. She has been involved in the organization of events dedicated to the energy industry for over 14 years.

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