Jagmohans in US$40M venture with int’l partners to start local pipe coating company
The Jagmohan family, which has distinguished itself in the local construction sector, has teamed with a global integrated services group – Wasco and Patagonia Shale Services – to start a new company – Pipe Coating Guyana Inc. (PCG).
As part of the US$40 million joint business venture, the partners will install an industrial production facility here, creating some 450 jobs in the process. Wasco operates out of California, USA while Patagonia Shale Services is based in Argentina.
The establishment of the local facility also has the potential to cut production costs significantly since this type of coating was previously done abroad.
During a launch of the new company on Wednesday night at the Marriott Hotel, Georgetown, Director of PCG, Narain Tulshi explained that the international partners will join the Jagmohan family in Guyana to carry out corrosion coating and deep-water insulation flow assurance services.
More details on the scope of the project were provided by Roberto Gozalves of Patagonia Shale Services. He explained that other services will include custom coatings for curves and special pieces along with double joint preparation and coating.
Meanwhile, the Director said the new company is looking to bring to Guyana a deep water plant within nine months and will be ready to produce by 2023.
The formation of this company comes as more oil discoveries and the development of offshore oil fields have increased the demand for services, such as pipe coating for which the expertise is not available locally.
Chairman of the Private Sector Commission Paul Cheong, Chief Executive Officer of Go-Invest Peter Ramsaroop and Minister within the Ministry of Public Works Deodat Indar all spoke about how this venture adds to the success of the Local Content Act given the direct benefits it is bringing to Guyanese.
With Guyana’s local content law making provisions for local companies to participate, along with high reputation international companies, local companies have been consolidating their resources and partnering with international companies to support the industry.
Indar also pointed out that with the pipes being manufactured in Japan and now Brazil for the local projects, previously, the cost for moving them from these locations after coating was very expensive.
He said it drove up production costs which the government has responsibility for.
“Every one of those stops and the movement drives up cost and those costs are part of the production agreement that we have and it is further passed on… in it, there are costs for transportation, brokerage services, there are a whole host of other services that kicks in when you have that operation and Guyanese never benefited from those because it was not done in country,” Indar said.
The operational network of this latest group spans across 18 international locations.
With this, Guyanese stand to not only benefit from increased capacity in the oil and gas sector but also from skills transfer and technical expertise.
“One way to build capacity it to team up with international companies with expertise,” Cheong said.