Star entrepreneur says North Sea firms can flourish if they forget the ‘silly stuff’

As Saltire does much of its business in the North Sea, one would think Mr Loggie has plenty to be worried about.

Activity levels have plunged off Scotland following the fall in the crude price from $115 per barrel in June 2014 to around $50. The pain has spread across the supply chain, some firms have gone bust and thousands of jobs have been lost.

But noting that Saltire is as busy as ever Mr Loggie says those who believe the North Sea industry say may never recover from the setbacks endured in recent years are wide of the mark.

““There’s a great future for the North Sea. It’s diminished but they’re still bringing on new fields like Kraken,” says Mr Loggie, referring to the giant development off Shetland that Enquest and Cairn Energy expect to bring onstream next year.

He notes technology is making it possible to develop some finds that would have been considered unviable in the past. Kraken, a heavy oil field discovered in 1985, is a case in point.

Mr Loggie has seen the industry bounce back from past slumps in the 30 years he has spent running Saltire.

But he believes those who long for a return to the boom days seen before oil prices plunged as growth in production ran well ahead of muted demand will be disappointed.

The 72-year-old reckons OPEC nations led by Saudi Arabia will ensure that the price of oil is capped at around $60 for some time to keep American shale producers under pressure.

Mr Loggie has no sympathy with those pining for the past though.

“Oil at $50 is the right price and the basis of a great future. It’s competitive with every source of energy and demand will grow.”

The cost cutting seen in recent years has been painful. But Mr Loggie reckons at least some of it was only required because industry players let costs spiral during the boom.

He speaks scathingly about the “silly stuff” that went on, including private jets, excessive salaries and over manning.

“If the oil industry had been producing sweets we would have been out of business.”

Saltire has made cuts but has not had to be as vicious as some firms have been.

“I’ve cut costs but we were always lean, we never had ten guys doing two men’s jobs.”

The industry must take the opportunity it now has to get the cost base right for the long term.

“If we do that there’s a great future for everybody; we need oil.”

But Mr Loggie is worried that the oil and gas industry has let costs return to unsustainable levels once past recessions were over.

He has always seen recessions as an opportunity.

In the one triggered by the financial crisis of 2008 Saltire made a big push overseas to reduce its dependence on North Sea. Saltire is currently very busy in areas like the Middle East and Africa.

Sales fell 14 per cent, to £31.2m, in the year to June 2015 but the company still managed to achieve a net profit margin of around 50 per cent. It made £15.3m profit.

“In each recession I’ve expanded, I’ve kept buying equipment, I’ve pushed and pushed,” says Mr Loggie.

“I never ever turn people down: ever.

“If I ever find one of our staff saying they won’t give someone a quote they won’t be there tomorrow.”

This sounds like the approach of an entrepreneur. But despite being judged Entrepreneur of the Year by Entrepreneurial Scotland last year Mr Loggie says he isn’t one.

He prefers the label “businessman” and says his success reflects a willingness to take risks and to learn from his mistakes.

“I’ve fallen down lots of holes, every hole you could ever fall into. But you dig yourself out, you just don’t give up.”

It is vital to stick to criteria one believes in.

Mr Loggie is very big on service, the importance of which he learned in the pubs and hotels trade.

“Hotels have been fairly good to me. The customers are there in front of you so you’ve no excuses you just have to do it right.”

All people in business must behave as if their customers were standing in front of them.

Mr Loggie made his first million in 1984 by selling a hotels business he built up after making a move into business by acquiring The Plough pub in Keith in 1976.

He left school at 16 with not much in the way of qualifications but a very clear idea that he wanted the control over his destiny that having his own business would bring.

After spells working in a Jute mill in Aberdeen and serving in the RAF overseas, the young hopeful managed to build up the £4,000 savings he used to start in business by working as a rough neck on rigs in Middle East.

“People did not last out there, conditions were horrendous.”

He went on to own businesses in areas ranging from property to graphic design before starting Saltire Energy to capitalise on the 1980s boom in activity in the North Sea.

“I was ripping into everything there was.”

Though well past retirement age, Mr Loggie has no plans to give up running Saltire. He has spurned plenty of offers for the business.

Mr Loggie shows equal relish for the philanthropic activities which have allowed him to have an impact on societies around the world.

The Saltire in the Community programme he started in 2008 supports organisations ranging from a school for Burmese immigrant children in Thailand to Befriend a Child in Aberdeen.

It is a source of obvious concern to Mr Loggie that there are many children suffering deprivation in a city as rich as Aberdeen.

“I could tell you stories that would make your hair curl about those kids. Children in Aberdeen who’ve never seen the beach, or a cow.”

Mr Loggie has created his own opportunities. But he believes many people living in poverty simply don’t get the chance to improve their lives and wants to do something about that.

“If you give them a bit of an opportunity they’re off and running.”

The winner of this year’s Entrepreneur of the Year award will be announced at Entrepreneurial Scotland’s annual dinner on Wednesday 30th November 2016 at the Doubletree Hilton, Glasgow.

For more details of the event go to: https://esawards2016.com/