Dr. M. A. Karim Abdullah – Group CEO, Serba Dinamik Malaysia
Dato’ Dr. M. A. Karim Abdullah, Group CEO and Founder of Serba Dinamik, shares with EnergyBoardroom Serba Dinamik’s evolution to become a leading Malaysian one-stop service provider in the EPCC, plant operation & maintenance, systems integration, IT and training spheres. Among other topics discussed, he details the company’s international expansion and its upcoming acquisition of a UK-based technology provider.
Dr. Karim, as the Founder and executive of Serba Dinmik, can you please introduce the company and its twenty year history to our international readers?
I started the company in 1993 in Bintulu, a small fishing village in Sarawak, as a rotating equipment service provider. Serba Dinamik thus provided equipment overhaul, repair and maintenance and acted as a contractor for plant turnarounds. From our inception, PETRONAS’s support has been invaluable. We became a PETRONAS licensed company in 1993, and, in 1997, we were appointed as a PETRONAS Vendor Development Program (VDP) company. This VDP program allows Malaysian SMEs to gain the experience, track record, and financial strength to enter the global market. Serba Dinamik graduated from the VDP program in approximately eight years and has since used the learnings, track record, and financial strength fostered by the program to grow as a global entity. We first expanded to states throughout Malaysia before taking on our first international project in Qatar.
From an initial staff of only three, Serba Dinamik now employs 1,500 personnel monthly and offers a wide variety of integrated engineering and contracting industrial solutions, in addition to our historic strength as a rotating equipment solutions provider. HSE is central to our operations, and we are certified in compliance with the three different standards (ISO 9001 for quality, OHSAS 18001 for safety systems and ISO14001 for environmental management systems). Excellence in performance is the key indicator for all of our operations, and Serba Dinamik fosters an integrity culture to build sustainable alliances with partners around the globe.
The downstream sector in Malaysia was very quiet between 2000-2010 but now it’s suddenly become exciting with the RAPID project. How do you position yourself in order to benefit from this boom in Malaysia’s downstream sector?
All actors in the Malaysian oil and gas scene are closely eying the RAPID project, as it offers a plethora of opportunities for players to tap into a new level of project opportunities locally. Even given the recent drop in oil price, the Malaysian government has made a very bold statement that RAPID is going ahead. Furthermore, the project serves as a major building block of the nation’s ambition to position itself as a prominent hub for the region.
Serba Dinamik is making a very offensive move to grab as many opportunities as possible arising from the RAPID project. We are currently aiming to become part of the procurement, construction and commissioning (PCC) component of the project. Although the engineering component of the project will be undertaken by foreign companies holding technology licenses, we are keen to complete PCC work and have put in offers to all the major EPCCs awarded contracts last August. We have even established a fabrication facility in Pasir Gudang to be prepared to service the RAPID project and are now looking at making further investments in this facility to better support the EPCC contractors working in Johor. Further ahead, we will target maintenance work for the project.
In 2003, Serba Dinamik attempted unsuccessfully to list on the Bursa Malaysia’s Mesdaq Market (then known as the ACE Market). Have you reconsidered listing under current market conditions?
In 2003, we attempted to list on a small market of the Bursa Malaysia and raise approximately nine million RM (approximately $2.5 million). These efforts were not successful, and we thus had to go back to the bank and seek the support of friends and family who trusted in our vision and mission. We were able to fulfill the financial needs of the projects undertaken at this time, and history has proven that we have crossed successfully this time of difficulty.
However, Serba Dinamik has now reached the point where dependence on our current financial backing will not be sufficient to push the company to the next level of growth. As such, a listing on the main market of the Bursa is one of the options that we are currently examining in the short term, as tapping into funds from public investments remains one of our best options to grow.
What could you tell us about your internationalization strategy today and what opportunities are you pursuing?
Currently our business split is 40% international projects and 60% domestic projects. However, in the next two years the split will become 50/50, and, within five years, the split will likely be 60% international work and 40% domestic work.
Serba Dinamik’s first international venture was in Qatar, where we acted as a subcontractor to GE Oil & Gas at the LNG Plant at Ras Laffan in Doha. We subsequently moved to other countries in the Middle East (Saudi Arabia, Oman, Bahrain, UAE) where our projects served to boost our brand name and the company’s image of capability and capacity. In the Middle East, we compete with major international players such as GE Oil & Gas, Dresser Rand, and Elliot Ebara, so we differentiate ourselves on our strong after sales service. In Southeast Asia, Serba Dinamik hosts an office in Indonesia, and we have been active in Thailand, Vietnam, and Brunei. Further afield, we are also present in Turkmenistan.
Serba Dinamik is positioning itself as a global entity, and we have decided that establishing a presence in more mature markets is necessary to reach this status. As such, we launched our first legal entity in a tier one country in the UK and are now looking at completing an acquisition in Houston, Texas to be present in the city at the center of technology for the oil and gas industry.
Serba Dinamik is now finalizing the acquisition of a UK based oil and gas company. Can you expand on this strategic decision, and how will this acquisition bring your service offering to the next level?
Serba Dinamik is acquiring a company that has the technology to integrate different engineering components, create new designs and subsequently patent and sell these designs to prospective clients globally. The company has been selling its engineering packages to clients in the North Sea, Singapore, the Middle East, and Southeast Asia. We have decided to undertake this acquisition because our operations are in the areas of engineering and technology and being able to offer the highest quality technologies from tier one markets will ease our entry into new global markets.
Serba Dinamik plan to utilize the intellectual property of the acquired company in Malaysia. To this extent, we have set up a factory in Klang to complete assembling in Malaysia to reduce costs and create a more attractive offering to our global clients. Serba Dinamik has undertaken R&D activities in Malaysia for the past more than ten years, and the acquisition will allow us to unlock synergies between our different global operations. For example, we have our own patented design for a pressure value test bench, which we will also package in the UK to sell across the European market. As another example, our niche RFID tracking system has been implemented by PETRONAS Carigali for the past two years and its track record allows it to be sold globally. Our overall goal is to implement smart packaging of our products across the entire globe.
The oil & gas industry plays a prominent role in the government’s ETP with the stated objective of making Malaysia into an oil and gas service hub. How do you see the role of Malaysian services providers, like Serba Dinamik, in the country’s path to become an O&G hub by 2020 and a symbol of “a new Malaysia” in the oil and gas sector?
Malaysia is working very hard to upgrade its oil and gas image and outlook from a global perspective. The RAPID project will create a hub that is more accessible to a global market that currently recognizes Singapore as a hub. Global players will thus become even more present in Malaysia once it offers a compelling alternative hub. With Malaysia working hard towards global recognition, we are riding on this opportunity.
As one example, alliances between companies like Serba Dinamik and the government create mutual growth opportunities and support the image of Malaysia. Serba Dinamik Group has been working closely with the Malaysian government, especially the Ministry of International Trade & Industry (MITI). With MITI, we have established an anchor vendor company status, meaning that we will create a VDP chain internally to assist other Malaysian oil and gas SMEs to attain to the next level of growth.
What one piece of advice would you give to young engineers in Malaysia looking to become entrepreneurs like yourself?
Knowledge is the fundamental that any entrepreneur must acquire, and an entrepreneur must constantly upgrade this knowledge. Without knowledge, one cannot sustain business activity in the long run. In my case, I started off by acquiring an in-depth understanding of maintenance and repair for rotating equipment, and I have continually enhanced this knowledge to be able to grow Serba Dinamik to its current size.
Secondly, an entrepreneur must bear in mind that success is a journey and not a destination. If success is a destination, the entrepreneur will become complacent and the business will collapse at the end of the day. One must keep in mind that success is a continuous, growing process, where one must always be ready to take on new challenges and to improve on a daily basis.
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