Rakesh Kumar, Country Chief Executive, Bureau Veritas, Singapore
Rakesh Kumar, Country Chief Executive of Industry & Facilities at Bureau Veritas Singapore, discusses the considerable evolution of the company’s services in Singapore, and gives his perspective on how the company can continue to build its presence in a bustling offshore region through the renewed strategic plan BV2015.
Initially, Bureau Veritas (BV) was essentially a marine inspection and classification organization in Singapore. With regards to the Industry & Facilities (I&F) division, everything was initially part of the Marine department however, it was then separated and run independently some five years ago while the Marine division was verticalized. Following a number of acquisitions some five years ago, our range of services was expanded and today includes five divisions: Marine, I&F, Consumer Products, Government Services & International Trade, as well as Commodities.
As the country representative of the I&F division, I look after the upstream and downstream oil and gas business, besides various other activities related to audit and inspections. The services we provide include industrial inspections, certification and quality management systems, audits as well as in-service verification (IVS) and non-destructive testing. Of the 400 people in BV Singapore, I&F is composed of about 140 people, with an additional 100 plus in the Marine department.
Last year, BV realized a 16 percent growth in global revenues, or EUR 3.9 billion, and a 25 percent increase in operating cash flow (EUR 505 million). What was the I&F departments contribution to the Singaporean offices’ performance?
Singapore as a whole contributes approximately USD 60 million to BV’s global revenues. Given the country’s size, this is of course a sizable amount. Within that, the I&F divisions contribution to the global revenues is fairly small while it contributes over 25 percent of revenues generated from Singapore.
Considering the offshore industry, is there much synergy between the Marine and I&F departments?
A large portion of our efforts are directed towards the upstream side of the oil and gas industry, such as fixed structures. Marine, on the other hand, focuses on the floaters. Nevertheless, we do share a good deal of synergies. There are areas where our colleagues from Marine excel in, especially with sea transportation and marine warranty surveys, which is where they lend a hand when we deal with the fixed structures. Also, when they have certain requirements and lack the capabilities, especially with regards to shop inspections, non-destructive testing (NDT), noise and vibration studies, vendor audits and HSE studies, we in turn also help them.
2012 marked the first year of BV’s renewed strategic plan BV2015. How would you summarize the key objectives of this strategy and how does Singapore fit within that picture?
Within the I&F division, our global activities cater to a wide range of industrial sectors. Of course, this includes the oil and gas industry, but also the construction market, for instance. As you can see, infrastructure development in Singapore alone can surpass that of many small countries. It is simply that intense here. Considering that we do not have a strong presence there yet, we would certainly like to develop those capabilities for the Construction sector, among others. For the same reasons, this is partly why we ventured into NDT through the 2011 acquisition of Atomic Technologies and now NDT is a global focus for BV. We will be looking to cross-pollinate those NDT services.
One of the major Global Oil refiners is, for instance, one of our biggest clients here, though we will undoubtedly be looking to broaden that list of clients here. We will also be targeting equipment manufacturers and other refineries, all of which have a strong presence in Singapore. For instance, many OEM suppliers have manufacturing activities and regional souring centers here. This really demonstrates Singapore’s positioning as an oil and gas product and services hub, despite its lack of natural resources. Having said that, we will certainly continue to work hard towards expanding our footprint across the board in this direction.
How do you intend to realize these goals?
One way will be through achieving our 2015 targets in terms of capability development. This will be either internally generated and/or achieved through external acquisitions. Essentially, we are trying to fill in those gaps where we are not present in some of the sectors, perhaps in construction or in oil field services.
As mentioned, we have already made a foray into NDT and will be looking to diversify our client portfolio there. This is currently a major focus area for BV; to broaden our target markets from the downstream oil and gas industry, into other areas.
Over the years, BV has classified in excess of 10,100 ships making it the No.3 worldwide in number of ships. However, considering that the shipping industry continues to experience stagnant growth, what impact has this had on your offshore operations?
Globally, the offshore sector has for a long time been a strong area of interest for BV. Needless to say however, this focus has only been compounded and accelerated following the slump in the global shipping industry over the past few years. More specifically, we are increasingly targeting the LNG vessels, FPSO’s, FSO’s as well as a range of other fixed and moving structures. This is a global initiative for BV and to that end, we are developing a range of internal capabilities. In doing so, we are always leveraging the expertise of our technical centers across the world in Malaysia, Singapore, India and the UAE.
Similarly, Singapore has made clear its intentions to strengthen its position as a regional marine and offshore Oil & Gas services hub. Given your expertise, what will it take for Singapore to achieve these ambitions? What are key drivers for success here?
Looking at Singapore’s product portfolio, the country produces a range of advanced products that manufacturing centers or low cost countries still do not. There is a striking difference between what the rest of the world/Asia produces in the marine industry and what Singapore offers. In this regard, I believe Singapore is well positioned to maintain its competitive leadership in terms of technological competitiveness and innovation in the marine sector. Perhaps even more importantly, Singapore has certainly established a leading track record in the efficient and timely manufacturing and delivery of various marine and offshore structures. This is demonstrated for instance with clients from the North Sea and Gulf of Mexico coming in to place repeat orders. Many of them are even delivered ahead of schedule. Deservingly, they take great pride in that and this will always stand in good stead against most competitors in the region.
In addition to this, the QHSE records of Singaporean maritime manufacturers tend to stand above and beyond those of many other countries. I cannot speak for all countries in the world, but I feel that Singapore, Japan and South Korea are certainly among the leaders in this particular field, in this geography.
The high caliber of manufacturing and quality systems employed in Singapore is reflected in the fact that a large number of the offshore structures in the North Sea, that are subject to the industry’s strictest standards and requirements, are in fact manufactured here. This demonstrates the trust the industry places in Singaporean manufacturers.
Generally speaking, the Asian region has been known to lag behind their western counterparts in terms of implementing and enforcing the highest HSE standards. How do you think this has changed over the recent past? And how does Singapore compare to its regional neighbors in this regard?
I believe that a majority of Singapore’s regional neighbors have for a long time drawn inspiration from the country’s broader regulatory environment and HSE regimes, from labor manufacturing processes and standards. Singapore sets the regional benchmark.
At the same time, international oil and gas companies have played a role in advancing the industry’s safety and environmental concerns. Not only do they ensure that they comply with the set principles and rules, but also that their suppliers and service providers follow their requirements. This percolates down the value chain and helps to raise the standards of those in other countries who wish to be active in the industry. In this regard, I feel that the oil and gas industry has played an important role in bringing about an HSE revolution in the Asian region.
Not only are the company’s training services a business activity, but also an obligation because we are seeing local content laws coming into the tendering process. What are some of the training services that you provide in Singapore?
In the systems certification services, we offer courses across quality management systems, environment management systems and occupational health and safety management systems to a range of customers. One of the great things about Singapore is that everyone is required to participate in safety induction courses on a variety of topics as prescribed by WSH. Obtaining certification in these topics is an absolute prerequisite to obtaining a work permit.
As the country chief executive of BV’s I&F division, what goals and ambitions have you set for the affiliate as you near BV’s 2015 strategic plan?
Our top priority is without doubt to achieve our 2015 targets. In line with this goal, we expect to double our local workforce by 2015 to be able to facilitate our growth ambitions. Within that, I would also like to see our team continue to venture into advanced technologies in NDT, which our upstream and downstream clients are looking for. This will help them achieve enhanced efficiencies and innovations in their day-to-day operations. I am confident we can realize these goals.
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