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Anchored in Singapore History : The Story of the Marine Industry


ANCHORED IN SINGAPORE HISTORY

Voice for the Industry
Made in Singapore
Positioning the Keel Blocks
A Remarkable Story of Growth
No. 1 Centre in Shiprepair
Rigbuilding
Shipbuilding
A Future in Industrial Engineering
Lending Support
A Marine Powerhouse
Confronting the Issues

 

ANCHORED IN SINGAPORE HISTORY

A MARINE POWERHOUSE

Actions they say speak louder than words. So to let the actions speak for themselves, Singapore shipyards are sinking another $400 million into the ground. New and expanded facilities are being built as an expression of the marine industry's continuing commitment to its future in Singapore.

Said current ASMI President, Mr M S Tan: "I see Singapore as still being in a very competitive and strong position in the next five to ten years. I'm not too concerned that Singapore can displaced by another shiprepair centre." This optimism is generally shared, as above all else the success of a shiprepair yard depends on its location. Said Keppel Shipyard Managing Director Loh Wing Siew: "Singapore shiprepair will continue unless there is a fundamental change in trading pattern."

An Enviable Position

There are no competitors of equal stature. Shipyards in the Middle East and South Korea may take nibbles at some segments of the repair market but their facilities are not comparable in scale with what Singapore has to offer. The critical mass that Singapore has built and its position in the heart of a dynamic region makes it difficult to displace. The high entry cost and long pay-back will act as a deterrent to most except the stout-hearted or the well-heeled. "You are not setting up an operation, you are setting up an industry," noted Mr Tan, who is also Managing Director of Sembawang Shipyard.

Singapore shipyards are also strengthening their competitiveness by fostering closer ties to pitch for mammoth contracts, thereby overcoming the limitations of size. Jurong Shipyard and Hitachi Zosen Singapore, in 1993 drew on their respective strengths to clinch a $20 million contract to restore the severely burned Maersk Navigator. Jurong Shipyard has the newbuilding capability to restore the accommodation area while Hitachi Zosen has a drydock broad enough to accommodate the 260,000-dwt tanker.

Commented Managing Director of Hitachi Zosen Singapore, Foo Meng Kee: "We see this co-operation as a good start, because joining forces, the Singapore shipyards would not be able to compete with the large foreign yards. Hitachi Zosen has also teamed up with neighbouring Singapore Shipbuilding & Engineering (SSE) and its sister company, Singapore Electronic & Engineering, to bid or US navy contracts.

This newfound co-operation may have been unimaginable before, with the keen spirit of competition. SSE's Managing Director Boon Swan Foo, suggested this could be an unforeseen positive side-effect of Singapore's push to 'Go Regional'. I've talked to a few other chief executive officers, they seem to agree that we should look at it from a Singapore perspective. Perhaps it is the 'Go Regional' drive." In pitching for regional contracts, Singaporean companies will have to bid against from around the world. By co-operating rather than competing against each other, they hope to stand a better chance at winning contracts.

Making Forays Abroad

Attractive though it may be for marine companies to stay at home, with its well-built infrastructure and its organised systems, it is undeniable that there are opportunities abroad which they cannot afford to ignore. Even opportunities to build and repair ships trading regionally.

Keppel Shipyard began to make its move in the mid-80s when the industry was dismissed as a sunset industry, which had no place in modern Singapore with its emphasis on high-technology, high value added production and servicing. "It made us think," said Mr Loh. "We have acquired these skills, other countries might love us." Keppel started with the Philippines where in 1975 it had established a shipyard in Batangas as an expression of Singapore's solidarity with another ASEAN neighbour. The Keppel Group is now a key player in the Philippines, with three shipyards in Cebu and Batangas. It also has key stakes in the United Arab Emirates and Madras, India.

The maritime ventures abroad have all succeeded in producing better returns than Keppel's other non-shipyard diversification. Singapore's position in the world's most dynamic region has thrown up vast possibilities for shipyards, in onshore and offshore engineering. As Asia develops and prospers, road, airports, seaports have to be built, and power generation plants installed. Countries with oil and gas fields will also have to exploit these resources to fuel their economic development.

Singapore's skills and track record in project management, which integrates the engineering, procurement and construction ability, will serve it well in these forays abroad. Procurement, though seldom mentioned, is one of Singapore's strengths. With little import restriction at home, Singapore yards have tapped the world for equipment and supplies enabling them to enjoy cost advantages even in areas where there seem to be none. In shipbuilding for instance.

Equipment accounts for 80 per cent of the cost of a newbuilding, and Singapore with hardly any equipment manufacturer to speak of, has been able to pitch successfully for tankers, seismic vessels, cableships and multi purpose carriers. Even with this ability to source out equipment, it will become increasingly difficult for Singapore yards to remain competitive in tug and barge construction. "That cannot in the long-run be viable, "Mr Tan remarked. With the high cost of land and labour the low-end marine construction could be phased out, freeing up much-needed resources.

With their future assured, the marine industry is now facing up to the problems of manpower and mechanisation, so often ignored in the past by more immediate considerations.

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