In the pipeline

You are responsible for promoting Volvo Construction Equipment's entry into the oil & gas pipeline segment. With the crisis surrounding BP's disastrous Deepwater Horizon oil spill continuing in the Gulf of Mexico, isn't this a depressed market? 

Lars-Göran Andersson. Far from it - there are currently 275,000 km of oil, gas and water pipelines planned or under construction globally. The market has more than doubled in recent years and there has never been a better time for Volvo CE to enter this lucrative, yet demanding, market.

So are you just going to be promoting your new pipe layer range?

LGA. As important as Volvo's pipe layers are to winning confidence in this market, it is not pipe layer sales alone that make this segment so attractive. Pipeline projects need machines of all types - and lots of them: a typical contract can involve 200 units or more. While there are, of course, specialised machines such as pipe layers, welding tractors, line up clamps etc, the majority of units are general purpose equipment that are needed just for the duration of the project.

How will the pipeline business be managed?

LGA. Central to the Volvo proposition is offering a complete product offering and the flexibility to offer rental, retail, financing, buy backs and customer support agreements - anywhere in the world. We have gathered a team of oil and gas experts who are 100 percent dedicated to promoting Volvo in this segment - and a multi-million rental fleet of pipe layers that we will supply to customers through our regional and dealer network. It is our job to understand the pipeline business, chase the contracts and build global relationships. It is the dealer's job to handle supply and support - dealers are crucial in delivering our promises.

There are established players in this segment. Why should customers opt for Volvo?

LGA. Apart from machine performance, there are two additional factors that help Volvo's ambition of breaking into this sector: safety and environmental. A lot of the equipment now on site is old and inefficient. There is a tremendous need for reinvestment in newer, more environmentally friendly and safer equipment. The major oil and gas clients take corporate social responsibility seriously and are starting to demand their pipelaying contractors to improve their fleets. Volvo's fuel-efficient new pipe layer range meets the highest emission standards, and will soon be supplied with Stage 3i/Tier IV engines for North America and Europe.

Safety is also important, and there have been a number of cases of traditional dozer-based side boom-type pipe layers in roll over accidents due to instability or excess loading. With their own protected encased cab, Volvo's advanced pipe layers are not only more stable than side boom pipe layers, they also have sophisticated load management systems to safely govern loadings regardless of angle or slew position. Convenience is also a factor, as the Volvo pipe layers can disassemble themselves and be quickly converted back into the EC290C and EC460C excavators they are based on. This not only means spare parts are easily available but also gives the machines greater work site flexibility - as well as allowing owners the option of selling the machines into the used market as either pipe layers or excavators at the end of the project.

What is Volvo's biggest challenge breaking into the pipeline sector?

LGA. We need to understand the language of pipe laying contractors. They don't suffer fools gladly, and so we need to reassure them that we know their needs and can be a reliable partner wherever they are working in the world. We have the strategic focus, the expertise, products and services in place - now we just need to convince the marketplace that Volvo is serious about pipelines.

Lars-Göran Andersson was born in Eskilstuna, Sweden. Having completed his degree in finance and his national service in the Swedish military, Andersson joined Volvo on its graduate management programme in July 1974. He has spent the majority of his career working in international markets in a range of positions, including CFO of North American sales. He began his current position as vice president of global key accounts in 2006.