Steffen Tunge, Managing Director, OSM Ship Management, Singapore
“A conspicuous challenge that is threatening to derail Singapore’s offshore and marine status is the sheer annual cost of hiring people. There is an acute talent issue here and this has been compounded by recent changes in labor laws. The Ministry of Manpower has toughened up its approach on work permits for foreign labor, which is antithetical to the pro-business ecosystem that it has worked tirelessly to make,” explains Steffen Tunge, Managing Director of OSM Ship Management, Singapore.
Having joined OSM in January 2014, what has been your initial impression of the company’s business model and corporate philosophy?
In terms of structure and strategy, OSM is going through an exciting transition phase. Through the changes, I believe we are positioning ourselves for sustainable and long-term growth. For example, OSM has traditionally been a prominent player in crew management. Coordinating crews and having access to officers and seafarers is a pivotal element of our business model. Indeed, we have around 10,000 people on our roster and have grown remarkably in this segment. Our other premier service lines—Ship Management & Offshore Management—are relatively smaller than crew management but the company is actively addressing this issue and looking to bolster and grow these two service lines.
In my short time at OSM, the most striking and noticeable characteristic of the company has been how people-focused it is. At OSM, its people are the highest priority. We place great emphasis on teamwork and on creating an environment in which our seagoing and shore-based staff feel valued and a part of the company. We also strive to reflect our values and vision throughout the organization in order to provide the best possible service for our clients. As a result, it is essential that we bring in the right people for the right jobs. In Singapore, there is a shortage of qualified people and the cost is perennially rising, which makes it a challenging place to hire from. Consequently, the company is trying to leverage office synergies and harmonize operations between different global branches.
What was the initial mandate that you were tasked with?
The core objective was to ratchet up new growth and business for our Singapore office. This has involved strengthening the team and implementing a few nuanced strategies. In particular, the offshore market is exciting and we have earmarked a number of growth opportunities in this sector. I have a lot of autonomy in Singapore and that is enabling me to craft a sustainable vision for this office’s next phase of growth. In addition, I am ensuring that we work with the holistic ambitions of OSM so that we build one, cohesive international company.
Backed by high oil prices and a scramble for indigenous hydrocarbon resources, Southeast Asia’s offshore industry is forecasted to experience unprecedented investment over the next few years. How important is this region to driving the company’s future growth?
Southeast Asia’s has a behemoth energy market. The region is blessed with an abundance of energy resource riches, deep offshore potential and with a variety of markets to choose from, oil and gas companies are eager to occupy a square on the offshore energy chessboard. As a result, it is important that we position ourselves right at the epicentre of this offshore hotbed and that is what we are doing from our offices in Kristiansand and Singapore. At the moment, it is rather basic offshore work that we are doing but over time, we hope to target the high-end of the offshore market.
As a Norwegian company, does the OSM leverage the Norwegian stamp of quality?
Being associated as a Norwegian company in this region is a double-edged sword. On the one hand we can metaphorically wave the Norwegian flag which is synonymous with the highest standards of quality, technology and safety and that manifests a certain element of kudos for the company. On the other hand, being Norwegian can unnerve and scare companies because of the association of high costs and regulatory procedures. In this very cost-conscious region, we have to be competitive. Although the company’s roots can be traced back to Norway, OSM is a truly international organization.
The oil and gas industry is contested between NOCs & IOCs. In terms of customer demands, expectations and standards of operations, how do these entities differ in the region?
I think there is a difference in expectations and procedures in the regions too. For instance, in the North Sea and Australia, there is a stringent, perhaps over the top regulatory standard, which compounds the costs of operations in those regions, whereas the oil companies in this region are not willing to pay excessive costs. Nonetheless, we only want to work with serious companies that focus on the highest health, safety and environmental requirements.
Does that mean companies operating in Asia Pacific are compromising on Health Safety Quality Environmental (HQSE) standards?
No, the attitudes today are profoundly better, compared to those of a couple of decades ago. Indeed, in recent times the industry has not witnessed a spectacular disaster in this part of the world. With the swathe of international players operating in the region, step-by-step, local players have upped their game and safety pre-cautions. Nonetheless, despite being on the right path, the change in attitude and procedure has been incremental. There is still a lot of work to be done and the industry should not shy away from that. OSM is a company that certainly champions the highest of HSQE standards and it is an area where we can energetically support major oil companies.
An important factor that has clearly elevated industry HSQE standards is Singapore’s influence and prowess in rig building and FPSO conversions. They work with major international players and therefore the government has worked assiduously to ensure that the shipyards operate in a safe and efficient manner. The city-state has harnessed a world-class reputation in this segment, based on building quality, reliable and safe assets. These are traits that bolster Singapore’s competitive advantage. They have helped set the benchmark in not only the region, but the world as well. In a myriad of ways Singapore acts as a regional model and their success is a source of inspiration.
With increasing overheads and high energy costs, can Singapore maintain its position as a regional maritime and offshore powerhouse?
A conspicuous challenge that is threatening to derail Singapore’s offshore and marine status is the sheer annual cost of hiring people. There is an acute talent issue here and this has been compounded by recent changes in labor laws. The Ministry of Manpower has toughened up its approach on work permits for foreign labor, which is antithetical to the pro-business ecosystem that it has worked tirelessly to make.
Despite clear challenges, Singapore is a special nation that in essence operates like a successful business: they are always looking to hone and enhance their competitive advantages. When the Singaporean’s put their mind to something, they do it very well and craft it very carefully. The Singaporean government has a deeply ingrained desire to succeed and will supply the necessary resources to ensure they do.
The country is only 750 sqkm and has seemingly defied these natural barriers with some incredible achievements and milestone. Today, Singapore remains an immense petrochemical hub, it has been forward thinking in the construction of an LNG terminal and with Sembcorp’s aim to integrate Singapore yards at a new ‘mega’ shipyard: the country is striving in all segments of the oil and gas industry to remain competitive. Singapore has been able to extract synergies from the offshore and shipbuilding activity that takes place in Batam & Bintan. These islands are a very convenient place for land-intensive sectors such as the offshore industry, and continue to support Singapore’s yards and visa-versa.
OSM is intent on attracting a “new generation” of seafarers. In a very diverse region, encompassing employees from different backgrounds, how does the company instill a standard level of quality and management in its employees?
OSM sources crews from across the world, many of which are in frontier markets: Myanmar, Mexico and Africa. In particular, we use the Philippines as a breeding ground for offshore and marine talent. There are lots of maritime academies in the Philippines and many of them do not reach the required standards that OSM demands. As we have operated in the Philippines for a decent period of time, we have covered the market meticulous and forged relationships with trusted partners. We have a training centre there, cutting edge technology, simulators and DP equipment.
With a global footprint, covering over 25 offices around the world, how important is Asia Pacific and Singapore to the company’s future revenue growth?
Asia Pacific will unequivocally be a key driver in the company’s quest for the next phase of growth. The burgeoning activity, investment and economic growth of this region automatically put this region on a pedestal.
Ultimately, OSM is committed to Singapore for the long term and it is from her that we will conduct the regional orchestra. There is a cluster of companies like us in Singapore. When it comes to technical ship management and negotiating regional projects, the regional market is oriented in Singapore and therefore we want to be close to the customers.
I hope that over the next three years we would have doubled the number of assets managed from this office. OSM has an excellent culture; the owners are very supportive and are focused on sustainable long-term growth. We are very bullish about growth in this region and have all the ingredients to engender great success.