Todd Akers, Managing Director, Exterran Singapore
Todd Akers, Managing Director of Exterran Singapore, speaks about the merger which formed Exterran, what was happening in the market at that moment, and the present strengths of Exterran’s global operations.
Exterran is a global market leader in the full-service natural gas compression business focused in the wider oil and gas industry. Can you provide our readers with an overview of the company’s history in Singapore and the scope of its operations?
Exterran formed following a 2007 merger of two major natural gas compression companies; Hanover and Universal Compression. About 2006, Universal Compression was looking to position itself into Asia and therefore began a search for a fabrication location. This lead to the acquisition of BT Engineering and its fabrication site which is where we are currently operating.
This acquisition took place just before the formation of Exterran in 2007. BT Engineering was integrated into Exterran. Initially, the core element of work conducted here was topside modules for FPSOs. We have subsequently expanded into the engineering and design of gas compression packages. Since 2007, Exterran has continually grown in fabrication of both FPSO topsides and natural gas compression equipment. Our FPSO modules are dispatched all around the world, while the gas compression units we fabricate here are mostly deployed across Asia.
Exterran also produces gas compression equipment in Houston. From a topside standpoint, Singapore is the main engineering and fabrication location; however we have capabilities in UAE as well. More integration occurs in Singapore shipyards than anywhere else, which makes this location ideal for us.
Having arrived in 2010 as managing director, what objectives did you have in taking Exterran in Singapore forward?
The top priority, as with any business, was to grow the company. I was also seeking to better integrate the facility into Exterran’s global operations, ensuring that we implemented standardized processes and procedures across our business. I was seeking to grow both the gas compression and FPSO product lines. I also sought to satisfy several secondary objectives such as building a culture of continuous improvement in the company and ensuring that long term sustainability became a priority for the business.
Given the cultural and commercial business between Asia and the US, what has Exterran’s HQ in Houston learned from the way business is done here? And what does Exterran’s international experience represent in terms of improving business practices in Singapore?
The US market is more standardized in terms of off the shelf products which are available and desired. In Asia, there are far fewer products which are bought “off the shelf” as they were. Product procurement in the Asia Pacific is mostly a customer-driven specification product. How a business wants and chooses to position itself to react to these differing markets is something that can be shared from a best practice standpoint. The lessons that can be useful are more product-specific, and less about how one conducts its business.
While most companies chose to place their manufacturing facilities in low cost hubs like China, why has Exterran opted to maintain its fabrication facilities in Singapore; a destination with generally higher production costs?
Singapore is reliable in delivering the right product at the right time at the best full channel cost, and it does have key advantages that we thought rendered it a prime manufacturing base.
Singapore is an undisputed leader in the conversion and integration of FPSO vessels with its three major shipyards and commands a leading global market share. Considering that topside units for FPSOs tend to be installed on converted tankers in the shipyard, it is therefore only natural that we fabricate our FPSO equipment close to where they can be quickly and reliably put into place on the vessel. In addition to this, our proximity to the yards allows us to provide services and support to the integration of topside units onto a FPSO under construction in the yard.
How would you describe the split in your business between FPSO products, traditionally the company’s original activity in Singapore, and the relatively newer gas compression business line?
We have been very pleased with the growth of the gas compression element of our business portfolio which has expanded each of the past three years. The primary driver of this growth is a result of the increasing importance of gas as an energy source in Asia. In addition to this, with more than 50 years of experience around the world, the Exterran brand is globally renowned and our technical expertise is incomparable. We have earned a solid reputation for providing quality and reliable FPSO modules, compression equipment and services.
As to topside modules, there are a number of projects which we are undertaking. In contrast to gas compression projects which tend to be executed with shorter cycle time, FPSO projects often are in the works long before the work reaches fabrication, hence a much longer cycle time of the overall project.
Most in the engineering sector in Singapore have highlighted the difficulties in maintaining adequate talents in light of the tightening of local regulations on foreign workers. Is this a situation you are also dealing with? How is it affecting the attractiveness of Singapore as a base of operations?
It is an issue which we as a company must also understand and address and an issue the entire industry is facing. Labor costs are likely to continue to increase as foreign labor becomes increasingly expensive and work permits become more difficult to obtain. You do see government policy promoting the hiring of locally based workers as well, but Singapore might not have sufficient population to supply all the labor requirements of the industry demands.
Nevertheless, we have not been severely affected by these developments, primarily because our model of hiring follows the government’s current policies. In addition to this, as a global company, we do seek to use our global labor pool as an advantage, one which can counterbalance any potential issues we face with regards to labor. We implement continuous improvement in our talent pool as a means of reducing costs associated with hiring new staff. After all, a company must continuously improve, or risk falling behind.
In the US, Exterran has experienced tremendous growth as a result of the development of unconventional resources. What is your outlook on these developments in Asia?
Prospects from unconventional gas resources will continue to present Exterran with growth opportunities. Access to, and demand for, these resources are increasing in countries such as Indonesia and Malaysia, and there continues to be activity in India and Australia. This is a trend that I do not expect to slow.
Considering that Exterran is in the business of handling pressure, how does Exterran plan to deal with competitive forces in the future?
Exterran enjoys an excellent name and reputation for its product which has been steadily asserted over years. We always welcome feed-back from our customers and we seek to maintain our course of continuous improvement. Our engineering expertise and quality is second to none. Our commitment to service is evident by our dedication to delivering our products on time, every time. If this is what customers seek, then Exterran is the right partner for them. In addition, we have a tremendous number of field operators within Exterran too. This permits us not only to sell equipment, but undertake repair, maintenance and after-sales customer service as well. We can be present to support clients for the entire life-cycle of a product, and that really sets us apart from our competitors.
Lastly, we have a legacy of experience with decades of proven performance. In sum, our leadership is perhaps best demonstrated by the fact that our customers work with us on a repeat basis which is always the hallmark of great product and service quality.
Following your last three years with Exterran in Singapore, what are the next steps for the company and what goals would you like to achieve?
The first priority is to grow the business. Ensuring the business is continuously growing more efficient and effective, year over year. It is my goal to ensure that the FPSO topsides product line expands and becomes an integral part of the company’s global operations. Exterran is built up of equipment solutions for petroleum production, gas compression, gas processing and produced water treatment. In turn, FPSOs topsides are effectively an integration of all these functions in the offshore segment. This market is growing as is the number of ships required and I intend for Exterran to be there to support our clients with best in class solutions.