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January 29, 2013 5:21 pm
Alan Ryder has faced many challenges in his career but he never thought he would have to ship sand to the desert. Three container loads from the beaches of Britain left for Iraq just before Christmas because it was cheaper to truck it to Iraq than buy it there. “You need the sand to be of a very specific size,” says Mr Ryder. “We looked at buying our sand locally, but it was so expensive”
The sand is for filters around new oil wells to prevent sediment entering: if the sand is too fine it passes through the filter into the well.
This is the kind of service that has made RSK a leading environmental consultancy in the oil and gas sector. Although it remains a midsized business, its expertise is deployed in dozens of countries, from Azerbaijan to the US. It has also made it the kind of British success story outside the financial services sector sought by British policy makers.
Founded by Mr Ryder and Bernard Kenworthy, his PhD supervisor at Aberdeen University in 1989, RSK has ridden the rise in environmental legislation around the world and the challenges of building infrastructure in ever more hostile environments. This includes monitoring the health of oil and gas wells, cleaning up after them and helping to get infrastructure built. In the latter case, part of the job is to explain environmental impacts to local people. It is “natural human instinct” to object to everything from waste incinerators to railway lines, he says: his job is to placate the objectors – often called Nimbys (not in my back yard) – with information events, impact assessments and projects to put right damage to the land.
RSK competes in environmental consultancy with much bigger names such as Atkins, Mott MacDonald or Amec. “We have built RSK over 20 years by winning work away from our larger competitors,” he says.
With offices around the world, £60m turnover and 836 staff, RSK has come a long way since the two founders started out working and sleeping over a village cake shop in rural northwest England. Its base is now a converted farm opposite that cakeshop in Helsby. Sitting in the boardroom, there remains a touch of the academic about the softly spoken 51-year-old Mr Ryder. Yet he happily rubs shoulders with the international oil and gas tycoons whose projects he is working on. “I don’t wear cowboy boots though,” he says.
“I am no good at sport. I was not a great success at school – I did OK. Making a go at things in business is what drives me on.”
Mr Ryder is a paper multimillionaire but he makes the tea himself – popping into the kitchen along with Garry Charnock, a fellow director – and he drives an eight-year-old Mercedes E-class. “Everything has gone back into the business. There has been no significant amount of cash come out and, in fact, people have put significant amounts of cash in. I set up the business with nothing and still have nothing,” he says. Even his first car was traded in for start-up share capital.
“Nothing” is in fact ownership of more than a third of the business as well as managerial control.
RSK has focused on developing its workforce:
● Employee innovation: Pipelines or power lines are usually surveyed by helicopter. However, after a survey helicopter accident in the North Sea, one RSK employee asked to research a hunch that fixed-wing aircraft could be used instead. He was right and now has his own venture within RSK. “If somebody comes and says ‘I want to do something’, we help them,” says Alan Ryder.
● Growth overseas: The opportunity to work for a private business with global reach has attracted recruits with overseas experience, says director Garry Craddock. “As you’re following the trail of work, which is going east, you need a wave of young people to go to India and China and do all the work that down the line we’ll be doing.”
● Women in a male-dominated industry: Mr Ryder is proud that RSK hires as many women as men. He cites the head of the ecology division whose husband is a soldier serving in Afghanistan, and has four small children and a long commute.
He became an authority on the environmental impact of pipelines at Aberdeen, and when new EU legislation emerged in the 1980s he was asked by the UK government to write a guide for businesses. That made him hot property for any company building pipelines for North Sea oil. Shell asked him to work on its pipeline from Grangemouth in Scotland to the Stanlow refinery in the northwest.
Yet he does not pretend to know every detail now that RSK has reached the size it has – he relies to some extent on the expertise of colleagues such as Carolyn Young, who heads RSK’s international environmental impact business and has lived for long stints in the Middle East, or John Jones, whose roles include schemes to employ graduates – 40 in the past year – and a dozen or so apprentices.
All the equity is owned by 110 people who are directors and past or present employees. Certain that one secret of RSK’s success is its independence, Mr Ryder is seeking a £10m investment – but from a long-term partner, such as a family office rather than a private equity firm, which would want a quicker return.
The group has several contracts in Iraq and Mr Ryder has made three visits so far to see conditions at first hand. He conducts local interviews himself and hired eight people on his last trip: “We must have interviewed the entire graduating year on the geology course at Basra University.”
But he wanted to benefit directly and financially and so co-founded RSK: “I have always wanted to make money, since being a child.” Having seen his father work hard for little reward as a driving instructor, he wanted to enjoy the full fruits of his labour. “Money was very tight when I was a kid – going to jumble sales was part of a normal Saturday.”
The Shell contract led to others and in 1994 RSK won its first overseas business, with BP in Azerbaijan.
Two big deals with US businesses led to rapid expansion. In 1995 RSK gave Radian, a consultancy, a 25 per cent stake in return for a UK subsidiary that worked in contaminated land and air-quality studies. “We broadened our service offering and broadened our client base,” says Mr Ryder. When Dow Chemical bought Radian, RSK bought the shares back with some software Dow wanted.
In 2001 history repeated itself, with ENSR of the US taking 25 per cent of RSK while RSK bought its UK operations, a laboratory and a contaminated land business. It had a staff of 100 that tripled by 2006 as the world pumped oil and gas, built wind farms, regenerated land and decommissioned nuclear power stations. ENSR was taken over and, eager to win back full control, RSK borrowed £13.5m to buy its stake back. It borrowed another £12m as it bought 11 companies in two years. A third of revenue was generated overseas.
By March 2008, debt was £25m but turnover had hit £63m. Then recession hit. Turnover contracted to £55m by 2011 and the group lost more than £10m. Staff numbers shrank from 850 to 730 and everyone took a 5 per cent pay cut. Despite that, employees invested more than £2.8m in shares to provide working capital: “I’m lucky to have a very loyal team of people.”
Mr Ryder sometimes refers to RSK as a “family business” – by which he means it is owned by the founders and staff – and is not expecting control to pass to his own children: “That’s not part of the plan. I think you’ve got to stand on your own two feet and make it happen.” Moreover, he says: “I’ve got no intentions of retirement. My dad worked until he was 80.”
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