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Interview

with Oyvind Bjorkhaug, Chairman, Malaysia – Norway Business Council

19.02.2010 / Energyboardroom

Could you explain to our readers the vision and ambitions behind the creation of MNBC, its original aim and how it has evolved across the years?

It started in 1990 when the first Norwegian companies started to settle down here. Singapore used to be the place to be for Norwegian companies, and it was a hub for the entire Asia Pacific region. However over the years costs of logistics increased, Malaysia became more and more competitive, and last but not least Malaysia had the resource (Oil & Gas) contrary to Singapore. As a result it became only natural for majors and Norwegians companies to operate a move towards settling down activities in Malaysia. After a few years came the idea to establish a committee for Norwegian companies that should benefit to all of them through networking, provide them with crucial information as well as be a platform for social events. Shipping and Oil & Gas was a common ground for most companies. From then on we started organizing joint activities where speakers from Norway would come to Malaysia, and where representatives of PETRONAS and other major players would also be present. We organize event to share our culture, introducing Malaysians to our food for example. The all idea was to market Norway as a nation, through all the companies that were present here, and get Malaysia familiar with Norway. After a while Oil & Gas became the domineering factors because of the North Sea development programs as well as the technology being developed in Norway that could be applicable to Malaysia. A lot of the high technology products that are here today have been developed at that time in Norway.

There are lots of associations to promote Norway in Malaysia, what is the specificity of MNBC?

MNBC is an association to brand Norway in Malaysia, and develop networking platforms for Norwegian companies to develop their business here and find Malaysian business partners. But you are right in a sense that there a lots of Norwegian associations in Malaysia but they are more intended to help Norwegian companies export and internationalize their activities, whereas MNBC is meant to integrate Norwegians in Malaysia and get both sides together.

Tuan Hai Ewe was mentioning that Norwegians were not accustomed to the way Malaysians do business, and had a choc when they had to participate in more social activities with their future partners. What would you say is the biggest challenge for Norwegian companies when they try to start their activities in Malaysia?

There is obviously a cultural gap between the East and the West. The APAC area has been colonized, so there is a trust relationship to rebuild. When westerners bring new technology in, they had to prove it really works and that they are not trying to bring in something obsolete. One needs to prove that products they want to introduce, and that was developed in Norway, can do the job and deliver its promises. There are some examples where Norwegian companies came to Malaysia with a new technology, but failed to deliver. It then takes many years to create trust in that same technology and these companies lose a lot of credibility. There is a general skepticism on whether what you are telling is true or not, and getting in the Malaysian market can be extremely challenging. That is why companies need references to succeed in Malaysia, not only from the North Sea, but preferably from here or Asia Pacific. There is also a need for personal trust and a personal relationship to build with one’s business partners. Asians like to go out, but Norwegians are not that outgoing which is a cultural gap. But Norwegians who come to this country understand pretty soon that they need to adapt and meet with the industry through different platforms. I do not see this as being a problem. The problem is more, as I mentioned before, to prove that what your company is promising will really happen. The positive side of it is that if you really deliver what you promised, customers will remain loyal. Moreover the decision making process is collective, and the hierarchy, in PETRONAS for example, is extremely strong, which wouldn’t happen in the west. In this context everyone has a distinct position and no one wants to stick the head out by using new technology as it represents taking a risk. But if this technology performs in line with what was promised, then you are becoming a winner, and build little by little a strong base of loyal clients who also become references. And at the same time you have developed a personal relationship of trust, which is more important than the product in itself in the first place, because if Malaysians trust you and believe in you it will become easier for the buyer to take the risk. If anybody is going to invest here, not only in Malaysia but generally in Asia, they need to understand that commitment to the country is important, and they need to have a long term view on their investment.

How do you manage to juggle between the interests of all your members since they are from so many different sectors of activity?

Everybody is welcome to be a member, and not only members but anyone is invited to the networking sessions that we have. In the telecommunication area for example, Telenor/Digi are big players in Malaysia and are members of MNBC. They have to bring in the people they believe are relevant to their business at the different networking sessions that we have. But the domineering sectors are Oil & Gas and shipping. MNBC tries to provide information on a broad spectrum that anyone can use as their own property.

How do you attract your Malaysian members, and how do you explain to them that Norway should be their partner of choice and that they should look into the complementarities between the two countries to develop their business?

The key factor here would be technology. The key factor here would be technology. There is very little export from Malaysia to Norway on high technology products within the oil & gas sectors, if any at all, so exchanges go in one direction. However, there is quite some export from Malaysia on other products such as palm oil, certain machinery, electronics etc. That means companies have partners and clients here, and MNBC may be helpful in identifying these partners, get them into the culture and understand the need for trust, and likewise with the clients. We make them trust the Norwegian culture through several events, where we bring the culture from Norway here and by so giving them a feel of what Norway can offer them and that they can trust us. We are honest people, who are here to do long term business and are committed to remain in the country for a long time. Every year we have a business award ceremony when we select 4-5 candidates – Norwegian or Malaysian companies – under several criteria: sustainability, environmental issues, corporate social responsibility i.e. as a company you have proved that you are respecting the environment and put systems in place to protect it, and social responsibility. The latter was demonstrated last week when we handed over a check to a local association for example. We want to prove that Norway wants to establish sustainable business relationships with Malaysia and be responsible. We want to help Malaysia grow, bring in new technology and create work for the local population. In a global context MNBC is an association whose responsibility is to help any Norwegian companies establish their business here but with a strong cultural impact that is not especially related to any specific field of business, and to promote Norway in a broader context.

How has evolved the positioning of Norwegian companies in Malaysia since the creation of MNBC?

Norway has a relatively small community here in Malaysia but the companies have grown over the years. Let’s take f. ex. Aker Solutions, previously Kvaerner. They have built a brand new and modern fabrication facility in Port Klang about an hour from KL that was officially opened a few years ago to manufacture their sub sea products for world wide operations. They have created several hundred jobs in Malaysia thanks to this strategy. Another example is the shipping company Wilh Wilhelmsen, which has head offices for some of its operations in Malaysia; Jotun for whose head of the Asia Pacific region is located in Kuala Lumpur, and that also do manufacturing and R&D activities. All these companies are trying to access to high skilled workforce, with lower costs of production than in Norway. They also want to position their operations in a strategic location where they can access to the neighboring markets, and today they establish integrated facilities and research centers in the country.

When we interviewed Simen Lieungh in Norway, he told us that the new challenge was to export the Norwegian model abroad. What do you think Norway stands for in Malaysia, and what is the Norwegian model?

Deepwater technology, instrumentation, metering, or deepwater and subsea contracting are the key things that people would identify as Norway’s expertise. Being myself involved in the Oil & Gas industry, I put these fields first. But then come fisheries and salmon, extremely well known in Malaysia, as well as shipping in which Norway has significant expertise. When it comes to the Oil & Gas, Norway is known for its ability to work in deepwater and harsh environments. Many companies and among those PETRONAS, have sent representatives from Malaysia to Norway for a longer period of time to learn how we developed the North Sea that is regarded as a success story. We started in the early seventies with no industry at all, brought in the expertise, quickly took it over and developed an industry in an extremely tough environment, developing skills in deepwater and subsea. That is for these reasons that when Malaysia started its Oil & Gas industry, the country quickly looked up to Norway as an example, as well as for the high quality and safety standards that we have in the North Sea in terms of equipment and processes. Norway is a high tech solution provider with high standard in quality because it had to be so to survive in the North Sea, which will be a factor to be successful in Malaysia as well. Moreover, the expertise that Norway has developed will become extremely handy to support the development of the Malaysian industry towards becoming a deepwater hub.

Malaysia can of course learn from Norway’s deepwater and subsea experience, but on the other hand Malaysia is the world’s second largest exporter of LNG, a field that Norway is looking to develop through projects such as Snøhvit. How can Norway profit from the development of the Malaysian Oil & Gas industry?

I am sure Norway can do that, but it is up to Malaysia to market itself accordingly. As I mentioned earlier, there is little if any export from Malaysia to Norway, and they need to be more aggressive in selling their expertise. MNBC can help its Malaysian counterparts to do so but Malaysians have to come to us and explain what they want. There is room for mutual exchange, and there should have been more transfers from Malaysia to Norway.

Malaysia is good at training people but retaining them is harder. How can Norway and Malaysia work together to train high skilled workforce in deepwater and subsea area, and retain them in each of their countries?

We have not thought of this yet. MNBC can be a catalyst, a meeting point, an advisor or a communicator, but at the end of the day it is again a matter of seeing those who have these resources promoting it. Malaysians have to become more aggressive with Norway as a country as Norwegians have been doing so far with Malaysia. But so far there hasn’t been any significant action.

How would you rate Malaysia’s attractiveness to Norwegians?

It is getting more and more attractive. Malaysia has been barely brought to the attentions of Norwegians; if you ask a Norwegian what he knows about Malaysia, the answer will be very limited. If you ask about Singapore, Vietnam, Thailand or Indonesia they know a lot more. Malaysia is trapped in between very well known countries: Singapore is known for the place to go for doing business in Asia, Vietnam for the Vietnamese war, Thailand for Pukhet and Indonesia has Bali. Malaysia is a peaceful and stable country, with the same political system for many years, and that does not make the headlines, which would give the country free advertising in a sense. I think that the government has now understood that and they have started promoting their country not only as a business destination but also for tourism, marketing regions such as Sabah and its beautiful resorts. The same is happening for Malaysia as a business destination, and Malaysia sends more and more delegations to promote the country as a business partner. This year, representatives from the Ministers have already planned two visits to Norway to position Malaysia and increase awareness on the country as an investment destination, discuss labor issues etc. Singapore used to be a hub in South East Asia, because Malaysia did not have the infrastructures, which is not true anymore. Today Malaysia has infrastructure, educational programs, it costs half the price and they have energy resources, which is not the case in Singapore. Malaysia is getting more and more aggressive to get investors to recognize the nation, but still has a long way to go. If only considering the Norwegian community, more than 1000 people are present in Singapore and only about 250 in Malaysia. But MNBC and Innovation Norway are trying to help Malaysia attract Norwegians, by for example being involved in organizing the visit of the Crown Prince and Crown Princess of Norway on March 8th to 10Th . The event, that is jointly arranged by the Norwegian Embassy, Innovation Norway and MNBC will be accompanied by a delegation of Norwegian company representatives who have something to offer to this part of the world. The aim is to promote Malaysia as a country where one can settle down with a good business atmosphere, good partners, good communication and transportation systems, with easy access to Singapore, Jakarta, Ho Chi Min, Miri, Beijing etc. Everything is lined up for successful opportunities to start businesses and serve the region.
StatoilHydro has been developing around the world and bringing with the company its service providers, hence serving the development of giants such as Aker Solutions or Roxar. PETRONAS is following the same path, which companies do you see emerging from that in Malaysia?
It is not happening in the same way in Malaysia. PETRONAS is trying to get access in Iran, Iraq, Sudan, Turkmenistan etc, but there is no active assistance to bring in service providers, apart from giving them the right to bid. However PETRONAS tries to help the Malaysian manufacturing industry. In the same way Statoil has assisted a large number of Norwegian companies introducing new products by providing the company test facilities and references in the North Sea, PETRONAS will help Malaysian developed solutions.

How do you see the Malaysian Oil & Gas industry evolve in the near future and what will be MNBC’s role?

The strategy of PETRONAS is to go international and become a major player. Locally the company aims at developing more deepwater activities in Sabah and Sarawak for example, and optimizing the utilization of existing fields in the East Peninsular area of Malaysia. They will also look for more local manufacturing and development. MNBC will not change from its original purpose, but more and more Norwegian companies will settle in Malaysia thanks to these deepwater development, but also because Europe and the USA have limited growth potential while Asia or Latin America are more exciting and promising regions for the Oil & Gas industry today. It is where growth is available and Malaysia as a frontrunner in deepwater for Asia, will become a hub and a centre of expertise in this field. And I am sure they will succeed in this development.

How would you promote Malaysia to Norwegian companies and why would MNBC be their match maker in finding the right partner in Malaysia?

MNBC will be the bridge locally between Norwegian companies, partners, clients and information channels etc.; it will be a networking forum where the expertise can be brought to the table and communicated and as such complimentary to Innovation Norway may be the promoter of Malaysia in Norway. Once companies have chosen Malaysia, we can act as catalysts, and use people who have been in the country for years and be used as resources to provide newcomers with advices, support and contacts. We will tell them how to enter, what steps to take, inform them about the PETRONAS licensing and address them to the right partners.

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