Jan Wolter Ooosterhuis, Area Manager, Southeast Asia, Dockwise, Singapore
“We have positioned ourselves through strategic partnerships and relationships. It is important to forge local relationships, based on trust and commitment. This process takes time, but it is essential, particularly in Southeast Asia,” states Jan Wolter Ooosterhuis, Area Manager, Southeast Asia, Dockwise.
What do you believe are the principal growth engines that have made Dockwise into the global company it is today?
Dockwise was able to steer through the financial crisis, because we have evolved into an entity which is much more than just a shipping company; rather, we are a fully-fledged offshore contractor. Today, we have ascended the value chain, as our portfolio is able to offer clients a diverse range of services.
Dockwise is constantly striving to push the boundaries of the industry, and that philosophy has most recently been illustrated by the development of the Vanguard: the largest semi-submersible heavy lift ship in the world. There has been a clear shift in the industry towards bigger, taller platforms and through the Vanguard we have designed a ship that meets the industry’s demand. The Vanguard is an industry game changer. Projects would not have been initiated in Korea and China, had it not been for the construction of Vanguard. Furthermore, such innovation manifests new markets; indeed we have a contract to transport the Costa Concordia from Italy to an appropriate scrap yard. Such forward thinking has contributed to Dockwise’s success over the years.
An IEA World Energy Outlook report, published in 2013, stated Southeast Asia’s energy demand is to increase by more than 80 percent in the period to 2035. Since you arrived in Singapore in 2009, how has Dockwise evolved in this region?
Rising populations, urbanization and industrialization are all contributing to South East Asia’s phenomenal energy demand growth. Simultaneously, the oil and gas production rates of a number of the region’s energy supply hubs is decreasing. In particular, the Philippines, Indonesia and Malaysia are working tirelessly to re-invigorate their declining production rates, and bring new fields online. As a result of these trends, there are colossal growth opportunities in the region, and Dockwise is well positioned to capitalize on the considerable potential of the region.
We have positioned ourselves through strategic partnerships and relationships. It is important to forge local relationships, based on trust and commitment. This process takes time, but it is essential, particularly in this region and it is a platform we have worked hard to build.
Can Asia maintain this unprecedented energy growth?
The center of gravity, in terms of energy demand is moving to this part of the world. This growth will not stop suddenly. At a certain time, when these countries reach a certain standard of living, the escalating energy demand may begin to flatten out; nevertheless, I do not see this occurring for some time. This region will be growing for the long term, and Dockwise has been careful to cultivate a long-term business strategy.
Considering the rise in the number of Asian competitors, what specifically is it about Dockwise’s business model that makes you the partner of choice?
We are facing competition in the traditional heavy lift market from Asian, particularly Chinese and Korean, state backed entities. I do not know whether the success of these companies, in this specific market, is sustainable. They are actively trying to cement a stake in this market through offering low cost services, which naturally puts pressure on our pricing, but I do not think that is a long-term, viable strategy. Nevertheless, partly because of the competitive arena that we operate in, we are not going to receive the significant margins we had 15 years ago when we were the only player in town.
How have Dockwise’s activities in the Asia Pacific region changed since you arrived in Singapore in 2009?
On launching an office in Singapore, I projected that Dockwise could attain a certain amount of revenue from this region within five years, and discussed rather ambitious figures with the management of Dockwise. Fortunately, my forecast has been relatively accurate as we achieved the revenue goal after four and a half years.
On arrival, I was effectively a traveling salesman, operating from a small, shared office. Initially, I furrowed hard to forge relationships with major players and build up our network in Singapore. As we signed more contracts, momentum naturally picked up and the Malaysian market opened up to us. We negotiated some large projects with MMHE, the fabrication subsidiary of Petronas, and that acted as a catalyst towards reaching the next level of development.
What attracted Dockwise to establish an office in Singapore?
Clearly, Singapore has no oil and gas resources, yet all our major clients have a presence here, either through a marketing or operational office, or both. Across the chain, from the platform construction companies like Sembcore and Keppel, to the drilling entities like Transocean, to the ship brokers and offshore contractors, Singapore acts as an industry magnet, facilitating business and market intelligence for the region. Moreover, Singapore is an operational hub for us, as our vessels come in and out of Singapore often. Ultimately, Singapore brings us closer to our clients, which is paramount. It is business friendly, strategically located in the fulcrum of the region and for international companies, which hold many expats, it operates as a good base to bring one’s family.
Arguably, Singapore is facing challenges that are confronting its reputation as a business utopia. A recent article in an international financial paper cited issues such as: rising inequality, tightening foreign labor laws, escalating living costs and productivity issues. Given these challenges, can Singapore continue to entice the world’s leading offshore service companies?
These headwinds are something that Singapore definitely needs to be aware of. Dockwise operates in Singapore, primarily as a small commercial center, with a small operational arsenal. Yet, we would never start an engineering base here. Kuala Lumpur is a more attractive proposition: the cost of living is less, the overheads are less and there is more access to labor in Malaysia. Whereas the cost of living here is rocketing; as a result, I do know of smaller companies that are withdrawing from Singapore because of these excessive living costs.
Though Singapore is extremely business-friendly and efficient, the country needs to be wary of not pricing itself off the market.
What markets in the region have you earmarked as areas that Dockwise could establish a tangible presence?
Malaysia is certainly one of the most interesting markets as there is a vast amount of project activity. In addition, Indonesia and Thailand are attractive. Vietnam is on our radar, but it is less developed than the other markets mentioned and there are notorious bureaucratic headaches that companies face when operating in that environment.
Dockwise was acquired by Boskalis in early 2013. What specific synergies have you seen the acquistion bring to Dockwise in Asia Pacific?
On the ground, at a corporate level in the Netherlands, the transition has been relatively smooth. Boskalis has over a thousand people in their office, and Dockwise has a few hundred employees that need to be integrated. In Singapore, we are the second biggest hub for Boskalis and I think we are further ahead than any other area in the world in terms of integration.
Boskalis supply three core services: marine services, offshore services and traditional dredging. In Asia Pacific, Dockwise is a significant part of Boskalis’ offshore division as we have an already established footprint within this area. We are rapidly working on integrating the two entities into one offshore team, which will allow us to leverage robust synergies. The transition into a combined team will provide us with a vast scope of opportunities in this region.
There are many similarities between Holland & Singapore. Both countries are geographically small, and have traditionally been surrounded by larger powers that have influenced the countries into being more outward looking. In terms of business mentality, what similarities do you see between the two countries?
I do see some similarities between the two countries—historically both countries have had to be forward thinking and both countries are regional, trading hubs for their regions. Yet, there are acute differences in the cultural and business mentalities. The Dutch have a tradition of voicing their opinion, which dilutes a system of corporate hierarchy. Whereas, Singaporeans tend to be more inclined to follow leadership, and support the directives of the leader, which drives efficiency. Neither mentality is necessarily better; both have their unique merits and flaws.
If we were to return to you in three years’ time, what would you have liked to have achieved by then?
In three years’ time, Dockwise Singapore is likely to have moved into the Boskalis office. I envisage a fruitful unification with Boskalis, establishing a fully integrated offshore business line, offering our clients a diverse range of services. Moreover, we want to continue the development of strong partnerships throughout the region. Yet, ultimately South East Asia is not one monolithic block; every country in the region has unique traits, dynamics and cultural ways, so a tailored strategy must be adopted to each country. If we can achieve that, our activity and growth in the region will continue to augment.