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Interview

with Rick Shannon, Managing Director, C & C Technologies (Asia Pacific) Pte Ltd

26.08.2010 / Energyboardroom

Seen the fact that you have been a long time resident of Singapore and having set up the branch for C&C Technologies here, what would you say are some of the key advantages and disadvantages to operate a surveying company and serve the Asia Pacific region from Singapore?

To start off, it needs to be said that there is obviously no surveying work in Singapore itself. C&C Technologies initially established itself here because of the central location and the good electronic, sea and air communication we find in Singapore. While these features initially attracted the company here, conditions have changed slightly. It has become increasingly tempting to operate from alternative locations in the region.

With many neighboring countries stepping up their game, Singapore will be challenged to retain certain business such as offshore supply bases that may start looking at lower-cost alternatives in Singapore’s vicinity. The significant overhead costs to operate from Singapore makes it more challenging for established surveying companies to compete with players based in places like Indonesia and Malaysia.

While space has also become increasingly important, it has surprised me that some facilities are not present yet in Singapore. In Hong Kong, they have high-rise warehousing where you can easily drive in a 40 ft. container, lift it and slide it into its space in the warehouse many floors high.

While C&C Technologies (Asia Pacific) still has its offshore base here in Singapore, it is important to consider the fact that more than 50% percent of our projects are mobilized and demobilized outside of Singapore.

Having an offshore supply base in Singapore is not that ideal anymore, when many customers have moved to Batam and it takes up to three days to send equipment to an Indonesian island which is in fact only a 45 minute ferry ride away, you start to wonder if we are in the right place.

With more and more companies trying to bring their operating costs down, some of them will increasingly look into alternative strategies to manage their overhead costs. The potential to develop offshore supply bases in locations such as neighboring Malaysia and Indonesia will start to be worth considering.

While it is important to keep costs down to remain competitive, what would you say is C&C Technologies’ competitive edge in the region today?

C&C Technologies positions itself as a local international company. The company does not aim to profile itself as a large multinational to the region, while it maintains the ability to rely on the technology and practices backed by international experience. Worldwide, the group has the capabilities to share and move around personnel from one location to the other. Rather than being related to reasons of cost efficiency and the price of human capital, this shifting of personnel is done for the purpose of training, to nurture the cross-fertilization of knowledge. The company will continue to expand on this network to grow and expand its branch in the Asia Pacific, a region with an enormous amount of potential!

If we put this potential in perspective and compare to the group worldwide, we know from previous interviews with José Aguilar in Mexico in 2007 and Donizeti Carneiro in Brazil that Mexico’s operations had grown 35% in one year while Brazil saw a doubling of employees and revenues year after year before 2009. How has the company grown in the Asia Pacific region since 2002?

This branch grew by 50-100 percent annually for the first 8 years, a growth rate I have been trying to limit to ensure a stable expansion and prevent the local operations from becoming too hectic and losing control. Conditions in 2010 have obviously been worse: some competitors have been wiped out of the market while an increasing number of competitors from Malaysia have been entering the market almost every quarter. What is more important is the future which is still looking quite bright.

While the industry is becoming far more nationalistic in the region, there are some business lines and projects that are not so suitable for local operators. In the AUV industry for example, C&C Technologies recently completed projects in Indonesia together with our Indonesian partner. It simply does not make sense for these local players to make such capital investments and enter such risky projects by themselves. The daily bread and butter projects may be moving towards the local companies, but this example shows that there are still opportunities for C&C throughout the region.

In the US, the focus of C&C Technologies lies on seafloor mapping, surface positioning and acoustic positioning while in Brazil for example, the scope of services was enlarged to oceanography and environmental monitoring. What are the cash cow products and services in the Asia Pacific region?

Survey positioning and offshore construction support make up a major part of our business. While a minor part lies in geophysical services, another major part is the AUV industry. Even though the AUV equipment is being brought in from other parts of the world, there is good potential here in the Asia Pacific.

… and you entered the region with C-NAV.

C&C Technologies was very successful in entering these markets with C-NAV. At that time, this product presented a technology jump in the industry. Traditionally, the technology in use gave an accuracy of three to five meters and constantly required field engineers that drove up the operating costs. C&C Technologies came to the market with a product that could be integrated on customer’s vessels globally and allow them to sail anywhere in the world without touching the equipment reducing the need for support. It took four years for the competitors to come anywhere near C&C Technologies with a substitute technology. As a result, the Asia Pacific branch was able to pick up a substantial market share in a relatively short time.

On top of that, the C-NAV technology was developed based on a business model that was far more cost efficient than any of the competitors could match. The advantageous combination of a state-of-the-art technology and cost-saving potential meant an enormous leap for C&C Technologies worldwide, including the Asia Pacific region.

Today, C&C Technologies keeps training its people to work with the newest equipment and make sure that the customer experience is pleasant, simple and easy, from the day the customers call in, until the day they receive the final report. Our people are trained to comfortably make decisions offshore. The cultural perspectives in the various Asian countries are considerably different than those in Europe and the US. The Asia Pacific branch spends a lot of effort to blend these perspectives together to create a comfort zone in which the right decisions can be made. Our people are empowered to make sure they can make decisions on their own and it would seem that our customers see this value.

C&C Technologies (Asia Pacific) aims to contract to the major companies and is able to do so because of a growing track record in the region. With the very first job we did for a major player in the region our customers were impressed with the rapid response from the invitation to tender through the field operations to the final report.

Operating in culturally-specific Asian nations requires establishing and maintaining a strong network in the region. What initiatives did you put in place that have allowed you to build and expand your network?

Obviously attracting the right talent is a tough challenge, in particular for the offshore business. Finding skilled people that are willing to go offshore is hard in Singapore, thus many of our staff are from neighboring countries such as Malaysia and Indonesia, where there are many very skilled professionals who still enjoy the offshore work environment.

As far as networking is concerned, C&C Technologies (Asia Pacific) firstly puts a lot of emphasis on social networking within the company. C&C Technologies organizes family events and sets up programs that serve the diversified nature of its staff. So far, this has lead to an enormous amount of respect between our people. The company’s open communication policy takes the cultural perspectives well into account to make sure that people within the company can feel at home and feel highly valued. As a result, the company has only lost one employee since its inception in Singapore.

Externally, it needs to be said that a lot of the big customers C&C Technologies works with in Asia are international players. It is generally the big international companies that approach us while the local companies tend to work more closely with local suppliers. In the Asia region there exists a good deal of protectionism that exist through formal legislation as well as the informal level of long-term relationships. In our industry as others we are witnessing the coming of age of the region technically as well as commercially, this presents many interesting challenges to an international company but there is still room to develop the business but one needs to get out of the stereotypical attitudes of the past.

In view of this, what is left for you to achieve in the coming years and what are your future ambitions with the company?

My personal ambition is to continue building the company in the region because there is plenty of room, provided that you find the right strategy. Now is the time for C&C Technologies to find its way to develop a sustainable business in the Asia Pacific region, and this is an exciting challenge.

Do you have a final message you would like to send to our international readers as well as to the industry here in Singapore and the region?

The bottom line and most important part of doing business in Asia is the quality of service you are able to provide, from the first meeting up to project closeout. This quality is measured by a number of metrics of key importance such as including technology, price and cultural appropriateness. This will continue to be the challenge for international companies aiming to operate in this region.

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