PacificTech Solutions, Inc. is an engineering and architectural services firm based in Manila, Philippines. Founded in 2006, the firm provides specialized services to corporate clients on a concept that uses diverse staff input to meet the technical and staff competency levels required by the company’s clients while maintaining a cost effective operating structure. Please tell us more about the history and the background of this group the company and what key strategic moves were made to bring the group where it is today?
The company, as you mentioned, started in 2006. We were a few people who came together and after a few exchange of some ideas, it was already 2006 there is a great need for Northern American and Northern European markets to technical resources because the economies were booming and there was a lack of educated people within various technical disciplines. I’ve been in Asia since 1992 and I’ve been working a little to outsourcing from Thailand which was challenging because of language and culture. Having worked at that time for a Japanese consulting firm, I decided, together with a few others to start Pacific Tech Solutions. At that time, our main purpose was providing what you call ESO or Engineering Services Outsourcing to international clients. When we started, we actually have no inclination of doing business and whatsoever in the Philippines becuase in 2006, the Philippine economy was largely dormant and there was not much really going on. There were interest in certain sectors but there were no funding to be found. When we set out originally, it was with a view of working here based in Manila but the, all the work will be done outside of the Philippines. So that was the start of the company.
The company operates in well-defined fields of engineering and architecture providing support services--Tender preparation for engineering companies in-cluding preliminary engineering design, cost estimation, 2D CAD and 3D CAD de-sign; Detailed architectural design; Detailed process, civil / structural, electrical, mechanical and control system engineering design; GIS application and clash de-tection; 2D and 3D CAD design as stand-alone services; Photo realistic 3D visuali-zation; and Staff secondment for project implementation. Can you tell us more in detail about the product & services the company offers and which are the strongest and more profitable parts of the company?
When we look at what we do and I think you mentioned that we have 2 mainstreams of our business. We started with ESO work then came the crisis in 2008. At that time, our Northern American and Norther European markets virtually disappeared overnight. But the, the Asian activity came back very quickly in 2nd quarter of 2009. But the dynamics have changed so we were requested to provide actual consulting engineering services it the region which pertains to Philippines and the rest of Southeast Asia. So we took a jump from being an ESO provider into becoming a multidisciplinary consulting engineering firm. When you look at our 2 mainstreams, we working broadly with ESO but probably at a lower level than engineer work at countries like UK, Denmark or the United States because we cannot sign off. That doesn’t mean we cannot do a lot of the work. A lot of the work we do is by electronic mean so that means CAD design. It’s not just a matter of preparing drawings but being actively involved in the layouts, to formulate the ultimate solutions for clients. From our early stages, we worked out in the notion that we wanted to be 3D capable. When I look back, that is something that we’re a little bit on forefront of things. The software was there but a bit clumsy to work with. But, 3D design is really the thing now and we have been in the environment ever since we started. I would say that if there is a particular strength we have is that we have this early development of skills to provide in 3D engineering and design mainly with infrastructure development projects.
In order to get a clear view of the actual size of the company, could you please give our readers some key figures and indicators, such as number of employees, annual occupation rate, annual turnover and growth rate of the company?
We have grown from a start up. We started out merely running around with just a briefcase. We are about 80 people now. I think when you look at our activity levels we try to operate in the matrix organization so the people working on the ESO job can also work on consultant jobs. We can provide quite a broad range of services. Beside infrastructure, within the last one and a half year, we had an increasing number of projects for buildings which is technically a separate field from infrastructure development. But the true main areas are infrastructure and building. We’re covering all that now. But when you talk about development of the company, we started really from the bottom but we are determined to grow. We started growing since day 1. A bit on the speculative note because initially, it was not so easy to get the jobs. We are up against 2 obstacles. One was that outsourcing was some sort of people talk about but don’t know how to relate to it and how to use it. The other thing was the fact that as a start up, we have all our collective experiences, but as a company we had no references at all. Those 2 things made it hard in the beginning but we had made this decision to take on a staff of 50 people. There were a lot of intern training and things like that. Then, when the work started coming in, once we have cut to a certain level of work, we started growing the organization organically. We have grown the company purely out of organics. I would say we are a growing company but we’re also a company that’s affected by projects running in cycles. You could say that we are on a growth path and you could see that over time. We have grown from being just one to about 80. Where we are now is the way we are developing our business is in such a way where we can overcome when you fluctuations in workload which is typical for engineering companies. Engineers work in project cycle and once the project is finished, then there’s nothing much more to do. So we’re balancing that with our ESO. It’s no being linear. It sort of comes in bursts so when we have major projects, then, we take in more people. On that background where we are now in terms of business development capabilities, we now have the ability also to move on when we reach a certain level. Some companies are dragged down by becoming very busy that they have the jobs but they forget that there’s something else that has to come after the picture. If I should say, how has the growth been, certainly it has not been linear. It has been a bit in jumps but where we are now, I think we are looking for further expansion next year.
You have different customers and clients all over the world such as in Denmark and other parts of Europe. Could you tell as a bit of relationships you have in those countries where you are currently operating? What kind of relationships are you open to have in the next months or years?
Obviously, we are from Denmark, right? So there’s a natural tendency to look back where you come from. Of course, it’s a small country. It speaks a very special language but when it comes to communication, we communicate well. Two of our oldest clients are actually from Denmark. What we’re looking into engineering markets is to getting to work with people over a long term eventually, in a way, to copy the BPO model where you sell seats which in ESO is a bit difficult because unlike medical transcription or say, legal transcription, or BPO bank office like Accenture doing a lot of accounting also in the Philippines. They work like you need 500 people in here, 600 in there, and then, you plot them in. They work steadily because that’s how those sectors work. In engineering, you’re always running in cycles so therefore, for us, we wanted from the beginning also to set up in ways so we could sell seats. We’re finally getting into that now at the start of 2016 with a medium-sized Danish consulting engineering firm. We will then have seats so they would be what you call a take or pay basis.
How do you take the US market into consideration?
The US market has always been interesting to us. As an example, 2 of the latest jobs we worked on as sub-consultants on ESO nature. We worked with AECOM which is the world’s largest consulting engineering firm based in the United States. I think the difference is that we are also in the architectural services. the US market has always been intriguing to us. My partner Julius, who used to be married to an American. Even though we sort of look like each other, there are some cultural difference between Europeans and Americans. We never really managed to get beyond the voice mail systems and the non-responsiveness to e-mails. But then again, we have reformulated our strategy so now we’re pulling on a network of Americans. We’re rolling out an actual strategy on how to access the US market.
You have 2 mainstream activities. Are you planning to concentrate on just one activity in the near future?
When you look at what we do, you can say that some of the work is what you probably call inbound and some of the work is outbound. The outbound work whether we do it in the US or Europe, it has to be ESO work. In some ways, it’s the lower level work because we cannot actually work already for the end-users who are the ultimate clients. our typical clients in the Northern Europe would be other consulting firms. Some of the big players have already set up their own capture centers maybe here in the Philippines. The big players set up their own outsourcing centers only to service their organization. Our target are medium-sized organizations with about 50 people. We would typically not work for the end-users in the states and Northern Europe. We would work with other service providers to make their services more competitive and also to add resources to their pool that they may not have as readily available.
The firm has quickly established a client base comprised of reputable companies in a variety of industry sectors. What makes your company different from other companies in the sector and what are your main strengths and competitive advantages?
I think one of competitive edge is that we decide the best way of doing things. We give a lot of thought to everything we do because when we were setting up the company, we went into the details through a diligence study. At that point in time, Western companies are already sending out work to India. They would formulate the jobs and get Indian people to do it. Typically, as engineers, they do their cramming and would just integrate that package in the overall work close to the deadline. More often than not, what they actually get from India, once they open the package, they realized they couldn’t use it for anything. And why was that? Well, i think it’s all about meeting expectations. The guys in India were never really told what were the expectations from them in terms of standards and deliverable. I think some Western companies are naive and think that these people in India would instinctively be attuned to what is needed to be delivered in a country like the UK . Initially, the whole thing about engineering services outsourcing has a bit of a bad reputation because there are so many examples of things that didn’t go the way they should. What we decided when we looked at that point in time, is to look at other capture centers which were already thriving in Manila and were successful at that time. All those companies operate with a certain ratio of international to national staff in order to meet expectations. When you come from there, whether you are an American or European, atleast you know what does quality mean in the sense that you know what exactly you have to deliver, and also what does delivery on time mean. Delivery on time has different meanings in different parts of the world. What we decided to do also is to operate on a mix of international and national staff in order to deliver on time and to deliver with quality. Of course, we’re trying to push the ratio but to operate completely without the international input because it’s expensive is just not a logical choice for the company.
What are the main challenges in this sector in the Philippines or you as a company have?
I think if you would look closely at it, our main challenge is acquiring business to avoid so much focus on opportunities in the Philippines because we are set up as an export company so we need to derive a certain part of our revenue from export activities. There are so many opportunities here now. We need to maintain a certain ratio of at least 70% of our revenue has to come from export activities. So we need to be out there. We need to go the United States, to Europe to boost our ESO work while we also do well on consulting jobs. When you look at the inbound, that’s consulting work. For American companies involved in high end production, I think the Philippines is very very good destination because of culture, and language adaptability and capabilities. The other challenge is that you are in a country with a hundred million people. You have production of engineering graduates of more than 60,000 per year yet it’s a huge challenge to find the right people. In summary, the 2 challenges we have is staying in export market and finding good people.
John Stasig Moerk Chairman and Chief Executive Officer (CEO) Mr. Moerk is a chemical / process engineer by training with degree in Chemical Engineering from the Technical University of Denmark. Mr. Moerk has developed his professional and leadership skills through a variety of engineering projects carried out in SE Asia during the past 20 years, of which the last 14 years have been at senior management and / or senior technical level. At the project level, he has demonstrated skills in both acquisition and execution of consulting and turn-key contracting assignments in the environmental and general construction relat-ed industries. At the operations level, he has direct experience in facilities optimi-zation, and implementation and maintenance of quality control systems according to ISO 9000 / 14000. His experience encompasses all aspects of company opera-tion including ultimate responsibility for corporate profit / loss accounts, finan-cial control, marketing and sales, contract negotiations, project control, client liaison, and management of legal issues. His capabilities in mentoring and motivating staff from various backgrounds are based on a deep understanding of how cultural differences influence the profes-sional working environment – generating tangible results in settings and locations where this may not be the norm. Before going to our last question, can you tell us more about your personal and professional background and how you became the Chairman of such a successful company?
: I think you find who are naturally-driven and I’d like to believe that I belong to that category. Personalities are also categorized into two general categories. The first one is the extrovert. I’m the opposite but that doesn’t mean that you cannot be driven. But I started my career as an engineer mainly within the dairy industry to find new applications for dairy processing equipment in Denmark. Then, I got married. My wife is the reason why I came to the Philippines. She was working with Cathay Pacific in Hong Kong in 1992. In Europe, it was not really a good time. I had a job but them she couldn’t get a job there. Hong Kong was booming so we decided to move. Coincidentally, the first job I found in Hong Kong was 500 m away from where I lived as a kid. You were from the other side of the world and you get to work at a place where you come from. Hong Kong was a very good ground for developing a career and as busy as New York City. I think the Hong Kongers can compete with New Yorkers as the most stressed people in the world. I also joined a Canadian Engineering firm then, I moved to Thailand to take up a role as their Director of Engineering. Within a very short while, I took over the operation as the managing director of a subsidiary of this Canadian Consulting Engineering firm. I moved from Hong Kong to Thailand to Malaysian and then to here. I’ve been in the country for about 10 years now.
What is your final message to our readers, regarding to the market and the op-portunities in Manila and in Philippines. What would you say to people who have historically been fed negative and have been misinformed regarding Philippines?
I would say that, despite the stereotypes that have been developed over the years, it’s easy to enter into business in the Philippines as long as you do your diligence study. There are lots of honorable people that you can do decent business with in the Philippines. There’s a lot of opportunities within a variety of sectors. It’s very interesting to look at the Philippines. At the same time, I would say that some of the things in the past is because the government was not really operating coherently well. There is some sense to the madness but when you get in here, I never have a sense that I have to be more alert than anywhere else in the world of being cheated of anything. Here, I think you can actually run a decent business. With the growth in the economy, you have both opportunities to provide something inbound and get some very good returns, at the same time, there is a possibility to work outbound and get services from credible service providers in the Philippines.