Nicolas de Coignac: "An extremely rapid and bold growth underpin the strategic prospects of John Cockerill Hydrogen"

Leaders League: Could you introduce us to John Cockerill Hydrogen?

Nicolas de Coignac: John Cockerill is a 200 year old family-owned group. Its DNA is rooted in engineering and services dedicated to heavy industries. The group entered the hydrogen business a few years ago and has since become the world leader in alkaline electrolyzers. This business has seen impressive growth in the last two years driven by a demand for green hydrogen that has become a key vector of decarbonization for the transportation industry, for the chemical industry, and for other hard-to-abate industries.

Tell us a bit about your career path.

Nicolas de Coignac: I am an industrial engineer by training and have spent half of my career abroad, in countries on four continents. I spent about 30 years with Vallourec, the leader in seamless steel tubes. A large part of those 30 years were dedicated to the oil & gas industry. This industry is a major consumer of tubes: drill-pipes, OCTG, line-pipes, process pipes… I left Vallourec and joined the John Cockerill Group, about nine months ago, to lead all of our North and South America businesses. This includes John Cockerill’s legacy activities, and, more critically, the start-up of the hydrogen business, which is not present on the continent. This is taking a big proportion of my time now, and represents the group’s main growth vector in the Americas, US and Canada in particular.

What have you learned from your time in the O&G industry that you apply to the renewable sector?

Nicolas de Coignac: That’s a great question... First, and very simply, there is good share of my O&G network that is very relevant and very handy for the development of our hydrogen business in the Americas. This is because many O&G companies are now seriously considering developments in the hydrogen sector and are potential customers or partners for John Cockerill. Second, we are in similar industries that deal with energy and with the treatment and transport of gas and fluids. Technical and business issues are similar: we design, manufacture and sell heavy equipment, and we sell and deliver a range of installation and maintenance services in support of that equipment. Finally, in the US, comparisons have been drawn with the rush for the shale business of the last decade. To some extent, this is reminiscent of the current push toward green hydrogen with new players entering a business they do not know that well with the ambition and the means to grow quickly and boldly. In this situation markets are far from being mature and lack visibility and predictability. They involve a large number of new players with different backgrounds, operating models and therefore fairly different needs and wants.

How, specifically, can the hydrogen sector can benefit from oil & gas sector know how?

Nicolas de Coignac: Any company with ambitions to grow quickly in a market that is somewhat immature and lacking established structures, has to define where they want to go and how to get there; there is no predefined path. Hence, when we meet with potential customers, we need to be able to have a range of discussions on the best way to go forward, and to have the flexibility to accommodate very different organizations with different technical capabilities and decision-making processes. This gives the opportunity to develop relationships that go beyond the strategic and well-established procurement processes, of requests for information, and for quotes and proposals. To develop a deep understanding of the specific problems faced by our clients, and to solve those problems, we have to engage with them at an earlier stage. This also gives us more opportunities to create value.

This is something I have experienced during the so-called shale revolution and that clearly applies to the green hydrogen revolution.

Conversely, where does the hydrogen domain offer cultural and skills challenges for people from O&G?

Nicolas de Coignac: As mentioned earlier, some of the players come from the O&G field, yet, many others come from very different fields. For instance, renewable energy developers more often come from the electrical/power industry.  They have a totally different mindset, and culture.

One of the big differences that struck me, is that electrical companies deploy a fairly large number of assets and want to ensure they will run and deliver their expected performances for many years without any problem. This is their dominant concern. They are much less concerned by the installation project itself, which is normally low-risk. This leads to quite different discussions from the O&G field where installation is critical and often defines everything else.

For instance, in the Oil Country Tubular Goods (OCTG) field where I operated, discussions around the performance of the product and its reliability were, of course, very important. But the installation project was discussed in much more extensive details: how to put it in, how to remove it, how to run it… in short, how to guarantee the integrity of the well and all associated installations. That was the heart of the discussion, because the major threats to the success of the entire project were in that phase.

In the field of electrolyzers, implementation is much less of a problem. There is little or no talk about it.  On the flip side, we talk much more about the durability of the product over time, its performance, its efficiency, its reliability, its availability, and its maintainability. A performance or reliability gap can seriously damage business worthiness. Hence, the discussion is more about what is guaranteed, what is not, as well as the maintenance services that ensure the operational availability and productivity of the system.

Finally, on a personal level, electrolysis systems are generally more complex than the tubular products and associated services I used to sell and deliver. Between the upstream power systems, the electrolyser system itself, and the various downstream gas treatment or compression systems, which is the scope the OEM does, or is required to do, as well as the sub-systems it must be integrated with, makes the overall project quite complex. That said, going beyond my personal experience, the O&G industry as a whole, is very advanced when it comes to the development and integration of complex systems.

How challenging is it for John Cockerill Hydrogen to recruit?

Nicolas de Coignac: I will talk specifically about North America, and about the development effort John Cockerill is undertaking. As it happens, recruitment is less challenging than one could expect. In fact, I have seldom experienced such a favorable situation: with green hydrogen and renewable energy being in the limelight and making so many headlines, even if we are a little-known company in North America, our business is attracting talented individuals. Despite our limited notoriety, our modest size, and our European origins, we are meeting very good candidates who are clearly looking for a job that is more in line with their ethical principles in term of sustainability, and environmental stewardship; obviously, joining a business that is likely to enjoy high growth for the foreseeable future is also very exciting. These professionals may currently be working for large, well established, and renowned companies, yet are attracted by this adventure around hydrogen and renewables, and for what it means to them. Of course, we are far from having finalized all of our recruitments, but our first contact with the talent market is favorable: we are meeting super interesting people for all of our open positions.

Are there particular types of skills that you have more difficulty finding?

Nicolas de Coignac: Not really. This is perhaps because we have not yet hired that many people, and we may get more headwinds as we increase our intake. That said, we are also not looking for people who necessarily have huge experience in hydrogen. We are not only searching within the hydrogen sector. We can use the skills and experience of people from various industries, for instance petrochemicals,, oil & gas, metallurgy… So far, the position we have had the more difficult time finding good candidates for was proposal managers. This is quite a difficult position and there might be more competition for candidates with both the required technical skills and the commercial acumen. In addition, given the pace of growth and the lack of maturity of many players, such positions are subject to a lot of stress and that may put off some candidates.

What are the strategic perspectives for John Cockerill Hydrogen?

Nicolas de Coignac: An extremely rapid and bold growth underpin the strategic prospects and ambitions of John Cockerill’s hydrogen business. We are in a sector that presents huge opportunities and for which we have unique technologies and skills. We aim for a five-to-tenfold increase in growth of our business globally. This is a major strategic undertaking.

It is truly exceptional for a group that has been in business for 200 years, where legacy capabilities have often combined with a radical change in market dynamics ─ in this case the energy transition anddecarbonization ─  to enable the breakthrough of a new business that has the potential to vastly alter the scale of the group at the global level.

Speed is a critical factor in our strategic equation. Capturing such a huge growth opportunity requires fundamental changes in order to reinforce our technological leadership, adapt our structures to a different scale, our governance, our recruitment engine, to engage with partners much bigger and powerful than us… It also requires starting in a very short timeframe a multitude of industrial sites around the world. Yet we know how to do all of this. We’ve already done it in our history. The group has grown in size fivefold in the last 20 years, thanks to a series of strategic acquisitions and investments in new technology, and thanks to the very nice commercial and technical successes of several large projects. John Cockerill knows how to grow and change its scale. The difference this time, and our strategic imperative, is to do this faster. We have the opportunity to multiply our size by five, in just five to ten years, and do it four times faster than we were able to do in the past.