In May 2018, the Board of Directors of the INCLAM Group appointed Alfonso Andrés Urrutia Director General. The nomination entails assuming the leadership of an engineering group to continue the legacy of one of the most important Spanish engineers in the past decades in the field of hydraulics, his father.
Alfonso Andrés takes over the reins of a group that has been constantly growing since it was created, that has been able to face the economic crisis better than many, diversifying the markets where it does business, daring to step into new geographical areas, and with a commitment to technology which is not common among Spanish engineering firms.
After more than one year as Director General, Andrés looks at the future proudly, to continue working towards consolidating the INCLAM Group as an international leader in the field of engineering and consulting. We talked with him in the Madrid office of the Botín Foundation.
Question: Mr Andrés, your professional career has been linked to the INCLAM Group from the very beginning. Can you tell us about the company's evolution since you joined it until you became Director General?
Answer: Indeed, my career has always been linked to the INCLAM Group, and that has allowed me to try different positions, a very rewarding experience: from technician in project production, to director in a production division, to market lead. Before I joined the Group, it was already doing business nationally and internationally, although most of the work was done nationally at the time. In these more than 12 years, the word that would best describe the Group is 'growth', because from a company with a turnover under 10 million euros and a couple of international markets, we have become a company with a turnover of 77 million euros, with a stable and continuous presence in more than 13 countries in four continents.
During these years, not only did the Group's turnover increase, we also grew in terms of diversification of markets and products, deciding to foster Spanish engineering and technology in all our areas of activity, even developing software systems based on artificial intelligence and implementing them in a country like Germany, which is very demanding concerning technology.
We have become a company with a turnover of 77 million euros, with a stable and continuous presence in more than 13 countries in four continents
Throughout my career path in the Group, in different positions, I can identify certain milestones in the company's trajectory, which anyone involved with the Group who has followed its evolution would know about. For instance, the implementation of Decision Support Systems to deal with floods in the Ebro basin, and the development of methodologies and projects in the field of flood prevention studies, even developing a bi-dimensional simulation model to calculate high flows.
Other milestones are becoming part of the Spanish Alternative Equity Market (Mercado Alternativo Bursátil, MAB) in 2015, the construction, installation and maintenance projects for water supply systems in indigenous communities of the Peruvian Amazon region, and the awarding of large consulting projects in the Philippines, as well as constant innovation and research on software systems for water management using state-of-the-art technologies.
Q: What are your objectives as the Group's Director General?
A: When you have the honour of representing a Group such as INCLAM and you consider the objectives you want to achieve as Director General, two main lines of objectives come up, to be addressed and balanced: business objectives and personal objectives. The personal objectives do not involve me as an individual, but everyone that makes the INCLAM Group possible, from clients and company staff, to those that benefit from projects, directly and indirectly.
Within those personal objectives, and taking into account the Group's trajectory, it is more of a challenge: I would like to at least provide the same personal service and attention that we have been providing for more than 30 years to our clients and our team.
We are aware that we have to attain a well-balanced portfolio in all markets and all production divisions
In terms of business objectives, I focus on the Group's growth and the consolidation of the business and markets where we work. In this regard, we are aware that we have to attain a well-balanced portfolio in all markets and all production divisions, so that our great diversification becomes a strength. This involves applying the mechanisms that have worked well in the Group, and that allowed us to overcome with positive growth the period of economic crisis that Spain and the sector experienced about a decade ago.
The growth in terms of business lines involves enhancing and exporting the activities we do in one market to the rest of markets where those activities are not present, as well as creating new lines of business. Lines the Group has been investing in over the past few years and which should become more important in the income statement for the years 2020-2025, such as those related to technological products, or the development of public-private partnership projects in the water sector.
Q: In 2016, the company became part of the Spanish Alternative Equity Market (MAB), and a few months later it was nominated by the European Commission as the best Spanish listed SME. What has been your experience so far?
A: The experience with the MAB has been overall very positive, not only because of the nomination, which recognises our effort and our work, but also because of the process in itself, from our listing until today. The road travelled has been and continues to be rewarding.
From the moment that the INCLAM Group considered the possibility of searching for a financing alternative to enable it to realise its growth plans, the MAB was a good option to fulfil the objectives that we had set in 2015.
Our listing in the MAB entailed preparing and presenting a huge amount of information about the Group. This transparency exercise involved many people and served to organise things and improve processes and mechanisms, leading to enhanced management and professionalisation. Without a doubt, the work is worthwhile and it enables you to grow in a more orderly fashion, as we were able to do.
At the INCLAM Group we know well the potential of the MAB, which in Spain will reach 100% whenever we can compare ourselves to the small cap markets such as those of England and France, so that the growth of SMEs is fostered, since these companies are the main drivers of growth in global economies.
Q: What is the position of the INCLAM Group in the water sector consulting and engineering market?
A: I think the INCLAM Group is in a privileged position in the water sector, since for more than 30 years we have tried to be the most financially sound in the sector. We have tried to have make our vision — being the group of choice when it comes to solving a water management problem — a reality at all times, and I think we have achieved it in many instances and with a large number of clients.
Currently the water sector is a sector many companies would like to be part of, since given the projections by climate change models, everybody thinks that water will be one of the sectors with most demand in the near future. A company cannot start working in the water sector and within a year have the capacity to provide quality engineering and consulting services; rather, you need to have a good trajectory in the sector in order to undertake this type of work with confidence.
Thanks to our Group's years of experience, to the skill of the professionals that work for us, and of course, to our clients, we have been able to accumulate extensive experience, having been involved in numerous engineering and consulting projects in the five continents. Therefore, nowadays there are not many things that surprise us in the water sector, although sometimes we run again into surprises.
Q: INCLAM has supported different public authorities in the fulfilment of several European directives. Starting with the most important one, the Water Framework Directive (WFD), what is your view of this directive's usefulness and its implementation process?
A: The WFD was born to ensure the protection of water resources and promote their sustainable use, in order to ensure long-term resource availability, incorporating as well active public participation in the planning process. Water use pressures mean that in Spain there is an important gap between meeting the demands and complying with environmental objectives. Nevertheless, the benefits of the WFD in terms of water resources protection are undeniable. For example, in the Ebro river basin district, where currently more than 70% of water bodies are in good status, despite the arid conditions.
On the other hand, we cannot forget than this ambitious protection objective may have offered the hope of recovering a balance in some water courses where it will be very difficult for environmental objectives and socio-economic objectives to be aligned. Therefore, the environmental objectives in certain water bodies had to be revised. For example, in stretches heavily modified by human activity.
Eighteen years after the directive entered into force, with its setbacks and achievements, we can affirm that its implementation in Spain gave rise to the 25 river basin management plans that encompass the entire country. Concepts such as water bodies, environmental objectives, pressures, programme of measures, exemptions, etc. are already part of planning's daily language. In addition, the cultural change that the WFD incorporated into water management patterns is fully aligned with the 2030 Agenda for Sustainable Development (United Nations, 2015).
The WFD has undergone a fitness check, completed in December of 2019. Some of the issues considered were the 2027 deadline to meet environmental objectives, the role of river basin management plans as management tools, as well as the length of the management cycle (6 years). Likewise, its two daughter directives, the Groundwater Directive and the Environmental Quality Standards Directive, as well as the Floods Directive, have been assessed. Also, in parallel, the Urban Waste Water Treatment Directive, Directive 91/271, has been evaluated.
I think it is also interesting to highlight the impact of the European Floods Directive and Spanish Royal Decree 903/2010. We have been working since 1988 on flood risk management with river basin authorities, civil defence and land use planning organisations. With the Water Directorate General since 2006, and uninterruptedly working on the floods directive. We see that thanks to the new legislation and the ensuing regulations we have built a risk management system that contemplates all aspects, and there has been a lot of progress in terms of coordination among public authorities and prevention measures.
We have been working since 1988 on flood risk management with river basin authorities, civil defence and land use planning organisations
Q: The big issue in the news is climate change and its effects on water resource management, one of the big lines of activity of the INCLAM Group. Have we moved forward in Europe in terms of prevention and control of extreme weather events such as floods?
A: Yes. Just the fact that we now have the information in flood hazard and risk maps has been a big step forward, achieved thanks to the Flood Risk Management Plans. In the case of INCLAM in particular, it is very rewarding for us to see that whenever there is an emergency it is our information that is being used. Being useful is very rewarding.
A lot of progress is being made to reduce vulnerability, although we need to improve the communication with citizens. In this regard, the amendments to the Spanish regulation on public waters (Reglamento del Dominio Público Hidráulico, RDPH) and its involvement in land use management is essential.
In terms of early warning systems, INCLAM has been working as a key developer of the Decision Support System of the Automated Hydrological Information System in the Ebro basin for almost two decades, to minimise the effects of high-water flows and improve the information. In this area a lot remains to be done.
Lastly, it is important to highlight the role of emergency services in Spain: Civil Defence, Military Emergencies Unit, health services, etc. Of course, there is room for improvement. We always need more knowledge and more resources, but the European Commission acknowledges our efforts in this area; the cut-off low pressure systems (COLs) have left us with some hard images to watch, but we can be thankful to the work of the teams involved in these weather emergencies.
Q: Technology has a key role in this progress. What does the INCLAM Group offer in this regard?
A: Technology has always been at the core of the INCLAM Group. From the very start, INCLAM's first work already involved computing and the use of simulation models to address problems in the water sector. Something unthinkable now, in 1986 was not common in Spain, and maybe it was the secret to the Group's success, during its first steps. In this regard, and to fight floods, INCLAM developed a system for the Ebro basin that enabled knowing what would be the effects of floods in the basin, and how those damages could be reduced. The system was implemented in 2001, it started to be used during a flood event, and from then on, it became one of the main systems in the Ebro river basin district. Of course, the INCLAM Group has always been interested in maintaining it up to date and valid.
INCLAM's first work already involved computing and the use of simulation models to address problems in the water sector
In the past few years, with the advances in information technology, INCLAM proposed to evolve the system to a new one known as SUAT, thus designing a SaaS (Software as a Service) to determine the levels of flood warning that the population in a certain basin or municipality faces. This system, in addition to including all the meteorological forecast sources available currently, allows implementation flexibility, and makes use of significant economies of scale as well as a quick deployment in new areas thanks to cloud services.
Finally, it is important to note that, without abandoning numerical methods and simulation software, currently INCLAM continues to contribute innovations to the water sector through the use of new technologies such as cloud services, the internet of things and artificial intelligence.
Q: In the specific case of Spain, in the past few months the country experienced floods that, in addition to stressing the importance of political will to address the effects of climate change, challenged all the models and calculations done previously. What has been your experience in this regard?
A: Indeed, over the past few months we have seen floods that caused severe damages. It was probably the second worst year in the past 50 years. In terms of flooding, it is true that, although we need to increase investments, there is political will to face the issue, and there is progress — it could not be otherwise — concerning the commitments made in Europe on this matter.
These floods, aside from being a wake-up call concerning the effects of climate change, allowed us to test the appropriateness of the models and calculations that are part of the studies we have been doing for years. It is important to note that although the models are always calibrated so that the results they produce are trustworthy, the calibration is complicated with the highest flows, because usually we have little information about those events. In fact, thanks to events such as the COL this past fall or the San Wenceslas event in 2012 we have proved that the models and calculations by the INCLAM group for these parts of Spain represented the reality as closely as a model can.
These results that represent reality so well, confirm for the INCLAM Group that the technology used (GUAD 2D), developed by the Group, together with the team that did the work, are flawless, keeping in mind that when we talk about modelling, the most important think in the calculation process of a simulation model is always the technician involved.
An important point is having worked at all scales, from the national to the municipal scale, and from many perspectives: emergency, integrated risk management, land use management, environmental management, or from the point of view of infrastructure. Thanks to this we were able to offer an integrated answer.
Q: Aside from water, another essential vector in climate change is energy. The water sector has increased its commitment to efficiency in response to the challenges of water management in the coming years. Did the development and implementation of the WatEner platform have this objective in mind?
A: Indeed, nowadays energy is the buzz word used by those who talk about climate change, whether as one of the main sectors that generate CO2 emissions, or as one of the sectors that can contribute the most to climate change mitigation processes, given their involvement in emissions. Furthermore, water is one of the resources that is most affected by the effects of climate change, and appropriate water resource management can help in this regard.
Although it is not its only objective, WatEner allows improving energy consumption during the operation of water supply networks, significantly reducing the amount of energy needed to ensure the urban water supply. Interestingly enough, during the first implementation of WatEner in the German city of Karlsruhe, one of the main positive aspects of implementing it was that we could reduce the carbon footprint of the daily operation of a water supply system serving 400,000 people. Nowadays we cannot make decisions based only on economic performance, as it has been demonstrated in Karlsruhe. Nevertheless, if we strive for efficiency, we almost surely can put together both objectives.
Although it is not its only objective, WatEner allows improving energy consumption during the operation of water supply networks
Q: In the past few years we have seen that the digital transformation is changing the way we manage water resources, leading to new business models. Can you tell us about the vision and experience of the INCLAM Group?
A: The digital transformation is changing the way we understand the world, and, of course, the water sector is not immune to this situation. This digital transformation allows us to do a lot more than what we could ever imagine just five years ago. Many of these new business models are specific to the water sector, such as the systems to solve problems that used to be impossible to deal with. However, other business models are new for the water resources sector, but not for other sectors, and the water industry is adopting them quite hastily.
We have always been committed to the modernisation of the water sector and we tried to provide technologies that were either newly created, or it was the first time they were used in the water world. For instance, we created and promoted the first LIDAR used in Spain in the water sector, almost 20 years ago. We used it in a flood study that was ground-breaking at the time. Today nobody doubts the need to use LIDAR mapping for flood studies. The same thing that happened with LIDAR technology will happen with big data, artificial intelligence, blockchain, the use of cybersecurity or the use of new materials or new ways of construction in the water sector.
The digital transformation is changing the way we understand the world, and, of course, the water sector is not immune to this situation
This is our Group's way of thinking; whomever knows about a technology, promotes it or develops it, will have an advantage when it comes to a client choosing one company versus another.
Q: To conclude the interview, and talking about the future, what are the challenges ahead for the INCLAM Group in the next decade? What would you like the position of the Group to be in 2030?
Our vision for 2030 is for INCLAM to continue to be the company of choice when it comes to solving a water management problem
A: We have many challenges ahead, and even more objectives, but to summarise a great challenge for the INCLAM Group, we want our technology to be the main water management technology used worldwide, and, on the other hand, we have as a challenge to develop public-private partnership projects in emerging countries.
In 2030, INCLAM should continue to be a water sector leader in technology, engineering, consulting and construction. As I mentioned earlier, our vision for 2030 is for INCLAM to continue to be the company of choice when it comes to solving a water management problem.
The truth is that if someone had told me 10 years ago, when I was a project manager, that the Group would reach its current position, I would not have believed it, so surely enough the position of the INCLAM Group in 10 years will be a privileged one.