John R. Hewitt, President and Chief Executive Officer, Matrix Service Company (MTRX)
Matrix Service [NASDAQ:MTRX] is a master class in building a billion dollar business in the United States.
“Over the last 40 years, Matrix expanded its services beyond maintenance and construction of atmospheric flat bottom storage tanks for crude oil and other refined products into refinery maintenance, turnarounds and capital projects that included specialty vessels — non-atmospheric storage tanks — as well as electrical infrastructure work in the Northeast and transmission distribution substation work.
Our move in the early 2000s into specialty vessels expanded our storage brand and leveraged acquired expertise in cryogenics — which is where product is stored in liquid form at extremely low temperatures or under pressure that keeps it a liquid, for example liquefied natural gas — LNG — and various natural gas liquids — NGLs — like ethane and ethylene, propane, butane, ammonia and hydrogen.
Around 2011, we began providing not only the storage components, but all the infrastructure around that storage — the surrounding plant infrastructure.
…When the company went public in the early 1990s, it was only bringing in about $40 million or $50 million in annual revenue and just before the COVID pandemic, we were, on average doing $1.2 billion to $1.4 billion in revenue.”
CEO John R. Hewitt describes how his strategy to focus on the storage and maintenance for the US oil and gas sector has led to high returns for his shareholders.
“We’re sitting on a record backlog right now and a large part of that is some form of LNG storage — either for peak shaving, which is the process of storing LNG at power plants for use during periods of low usage to boost power output during peak demand, or for fuel bunkering as an alternative fuel in high horsepower applications.
We are still seeing a tremendous number of opportunities in our pipeline for LNG-related projects.”
Matrix Service is seeing a burst of activity from the new hydrogen fuel supply chain.
“On top of that, there is a lot of activity with NGLs, principally for export ammonia.
There’s a high demand for ammonia because of its ability to be a hydrogen carrier.
We’re also pretty busy from an upfront engineering standpoint on hydrogen-related projects…
I think hydrogen is going to be part of the energy mix globally in the future.
We’re in the very early stages in the use of hydrogen and the role it’s going to play in our energy mix.
My sense is that its use is going to be primarily around transportation — at least initially — and mixed with natural gas or renewable natural gas for power generation.
That will probably be the initial demand for hydrogen.
It could be shipped as ammonia, it could be used as fuel in heavy highway trucks, trains, fuel cells, maybe for cars.
I think those are the areas hydrogen will play a role initially.
My sense is that, at least probably not in my lifetime, it won’t replace natural gas completely.”
The role of Matrix Service in developing clean energy alternatives is articulated by the CEO John R. Hewitt:
“The vision starts with our purpose.
We happen to be an engineering and construction company, but our purpose is to add value.
We add value by the things that we do and we add value to people around the world that use the energy that we’re able to store and help energy companies transport.
We provide value to our employees, giving them opportunities to take care of their families, to be more educated, to grow with the business.
We provide value to our business partners, to other fabricators, and other contractors.
We provide value to our clients in this whole energy cycle, and certainly to our communities where we work.
And we’re a public company with shareholders, and we have to provide value to them.
To do that, we have to deliver on our services, engineering, construction and maintenance work, with very high quality.
We’ve got to deliver very strong safety performance.
We have to deliver those services on time and on budget, and meet our clients’ expectations.
We have to do that with strong relationships.
That’s the foundation of our organization’s vision.
Long term, we need to continue to grow our business, either organically or through M&A activity, and we’re positioned to do that.
We’ve touched on some of the megatrends that are affecting our markets globally, but certainly supply assurance, both domestically in LNG peak shaving, and energy supply security.
Then, when you think about, for instance, what’s going on between Russia and Ukraine, and in the Middle East, and the ability for the U.S. to be a secure country to provide energy globally, that’s an important place for our clients to be.
We’re able to provide the services to help our clients do that.
The low-carbon energy transition is certainly a megatrend for us and is driving some of the things that we’re doing.
We talked about population growth demand.
We need more energy to improve the quality of life everywhere.
Geopolitical instability brings us back to secure energy supply from the U.S. as well as the global demand for low-cost feedstocks.
The key additives for chemicals that go into everything that we touch, whether it’s clothing, medicines, homes, or computers, those are carbon-based feedstocks.
They have to be processed, stored, and transported.
Our organization plays a role in almost all those areas, so we’re in a great spot.
We’ve got a strong brand, great people, and the right skill sets at the right time.
Our vision is to continue to play a major role in those parts of the global economy.”
John R. Hewitt has been President and Chief Executive Officer at Matrix Service Company since May 2011.
Prior to joining Matrix Service, Mr. Hewitt served as Senior Vice President of Aker Solutions where he was responsible for providing executive oversight on major capital projects in Power and LNG.
He previously served as President, United States Operations, at Aker Solutions E&C US, Inc. from 2007 to 2009 where he was responsible for managing all construction services in North America.
Previous to that, he served as President of Aker Construction Inc. where he had full profit and loss responsibility for a multi-disciplined direct hire industrial construction business operating throughout North America.
Mr. Hewitt has spent his entire career in the engineering, procurement, and construction (EPC) industry.
Mr. Hewitt earned a Bachelor of Business Administration degree in Finance from Stetson University in 1980 and a Bachelor of Science degree in Civil Engineering from Florida Institute of Technology in 1983.
Mr. Hewitt is a member of the Construction Industry Institute; he has served on various committees including the Implementation Strategy Sub-Committee and Optimizing Project Organizations research committee.
The full interview with John R. Hewitt, CEO of Matrix Service Company, is available exclusively at the Wall Street Transcript.
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