New boss is engineering a future for Whessoe

That is how the new boss of a famed North-East engineering firm describes a cavernous storage tank that offers salvation to an icon of Teesside’s chemical industry.

The vastly experienced team at Whessoe Engineering in Darlington has designed the St Paul’s-sized facility that will house ethane to fuel Sabic’s cracker plant on the Wilton site, near Redcar.

The ethane will come from the United States, where it has been freed from the earth as part of the controversial fracking process, and used to help revive the American chemicals industry.

The US now has a massive ethane surplus, which offers areas with a process industry close to the coast the opportunity to take supplies of a feedstock that is much cheaper than traditional sources, such as naptha. Ethane will be shipped across the Atlantic, liquified and stored on Teesside after the Whessoe tank comes on stream at the end of August 2016.

It is the latest example of how industrial chameleon Whessoe has been able to turn its hand to myriad applications over two centuries.

The survival of Whessoe Engineering – which still has offices in Darlington despite all of the odds stacked against it– is in part down to its ability to adapt to the prevailing conditions.

Once one of the behemoths of North-East engineering, the company which played a pivotal role in nearly every major industrial milestone - from the railway revolution to the nuclear age, was on the verge of collapse two year ago.

It is fair to say that without Samsung C&T's investment the Whessoe story, which began in William Kitching's Darlington ironmonger's shop in 1790, would probably have joined the list of North-East industrial casualties.

The Al Rushaid Group, the largest oil and gas service company in the Middle East, bought Whessoe in 2004, but it appeared to lose interest in the Darlington firm which is a world-leader in the design of tanks for liquefied natural gas (LNG).

At its peak last century Whessoe employed thousands of workers across the region, but by the time a division of technology multinational Samsung completed a buy-out in March 2013, the firm had only 57 people working at its Yarm Road offices.

It now employs 117 and expects to recruit a small number of staff this year. There are aspirations to start graduate training and apprenticeship programmes.

Since the takeover company turnover has more than doubled as the historic Whessoe name and the financial muscle of Samsung has proved to be a winning combination.

Samsung’s first year of ownership saw a succession of contracts come on board, but like many firm across the region Whessoe has been buffeted by a gale blowing off the North Sea. Falling oil prices and the knock on impact on gas prices has hit the industry which Whessoe relies upon for the lions’ share of its contracts.

Middlesbrough-born and bred Len Taylor, Whessoe's new chief executive, has taken over from Seoul-born Steve Kim, who has returned to his home country to take a senior role within the group which generates about 20 per cent of South Korea’s entire GDP.

Mr Taylor, a former steel industry apprentice, brings a wealth of experience to Whessoe. His firm might be in the business of building cathedrals of industry, but Mr Taylor's gaze is firmly fixed on temporal matters.

“The market out there is very tough,” says the Teessider, who started as an apprentice draughtsman at Ashmore, Benson, Pease & Co in 1974.

“The fall in oil prices to $60 a barrel and the knock on impact on gas prices have hit the sector hard. It's turned things upside down. Will it recover? Yes, but the big question is how long will that take?,” asks Mr Taylor, who adds: “The key things are we secured a significant amount of work in 2014 which has kept us busy into this year. Once we realised we were going to be hit by the gas price, we had to bid quite extensively all over the world and broaden the things we can do here at Whessoe.

“We are branching out beyond LNG in other gases, such as ethane, and also broadening in line with areas where Samsung operate.”

The power industry is the firm’s next target, as it will use its expertise in areas such as Combined Cycle Gas Turbines (CCGTs) an efficient energy technology that combines a gas-fired turbine with a steam turbine.

“In all of our work it’s a case of us doing the engineering and design work and when it comes to procurement and project management that is where Samsung comes in. We are in effect a technical division supporting Samsung,” explains Mr Taylor.

Whessoe is also given the freedom to sell itself to other companies if it is involved in a project that Samsung isn’t interested in taking forward. The design of an LNG tank on the tiny Greek island Revithoussa, is one such example. The Greece deal will expand a facility which Whessoe originally worked on about 15 years ago.

Less than 10 per cent of the work Wheesoe does is for the UK. Most of its efforts are in the Far East, and India. It is also looking to do some work in the Middle East and is about to bid to design an LNG tank in Canada.

Whessoe’s previous owners seldom visited the Darlington site, but Mr Taylor speaks highly of the support he gets from the Korean parent company.

Samsung has invested heavily in 3D plant design systems to ensure the North-East business can compete in the global arena. The Morton Palms offices recently hosted a visit from Mr Chi Hun Choi, chief executive of Samsung C&T.

Mr Taylor adds: “We presented to him how we saw Whessoe progressing and the growth potential. He was so impressed that when he went back to head office he called in all of his engineering team and said ‘I want you to come up with a plant for how we are going to better use Whessoe.’

“That is about as good an endorsement about the Whessoe business and that Samsung want to continue with us and grow our capability. They don’t see this as a short term investment. It is part of their long term investment strategy.”

Since the visit Mr Taylor’s has been busy fielding calls from South Korea. Darlington may consist a tiny dot on the map of the mighty Samsung empire, but it is not being ignored.

“We bring something to the Samsung C&T brand that they don’t have. That is the key. We are focussing efforts on continued growth into 2016. This needs to be sustainable,” says Mr Taylor, whose CV takes in almost every aspect of Tees Valley industry.

After his start in iron and steel he moved into petrochemicals at ICI, where he worked in design before moving into manufacturing at BASF Seal Sands.

That was followed by a spell at the Wilton site, which gave him experience of plant management. He was at Mowlem engineering at Bilingham before it was sold off to Carillion. An 11-year spell at Amec included time as business unit director after which he transferred to London to work in offshore wind at Dong Energy.

Mr Taylor joined Whessoe as engineering director at last summer. He has been interim CEO since Mr Kim left at the end of the year, a role that was made permanent at the start of this month.

He concludes: "It is an honour to be in charge here. This firm has an amazing history and we have staff with more than 40 years experience with Whessoe.

“I am relatively new to the LNG world. Someone asked me the other day how specialised this industry is. I told them to imagine designing a tank big enough to hold two jumbo jets, on a beach in a seismically active area, with gas liquefied at minus 165 degrees, and it must not leak. That is how specialised it is.”