Ting Teck Jin, Executive Chairman and CEO, EMS Energy, Singapore
Ting Teck Jin, Executive Chairman and CEO of EMS Energy, describes how the company navigated through difficult financial times to become one of Singapore‘s premier local oilfield service providers stating that, “despite most of our competition in Singapore having track records that trace back over 30 years, we are not deterred. We are on the right path and continue to build and innovate new products.”
Having assumed the role of CEO in 2007, on the eve of the global financial crisis, what have been the core factors behind the company’s continued growth surge since then?
When I assumed the position of CEO in 2007, EMS Energy faced two principle headwinds. Firstly, in 2007, we were entering into the market at the tail end of the economic growth wave, just prior to the global financial crisis. As a result we missed the exponential growth that took place in the boom years of 2004, 2005 and 2006. Consequently, as the global economy lagged, demand for our products and services were low for a few years. Nevertheless, from this financial chaos came the opportunity to restart and build the company’s foundation.
Although EMS Energy can trace its roots back to 1977, it is only since 2007 that we have really started to manufacture our own products independently. Since 2007 we have also completed a number of successful projects. Such steps forward have supplemented the development of our track record, which is a crucial element and competitive advantage in the drilling sector. Despite most of our competition in Singapore having track records that trace back over 30 years, we are not deterred. We are on the right path and continue to build and innovate new products.
At the company’s conception we tried to play a role across the entire supply chain and therefore we produced a range of products. Last year, we initiated a company review and decided to focus on products in which the company has a competitive edge, setting up a few select business units to support these market segments. Ultimately, we seek to deliver integrated products and provide bespoke services to our clients to help them deliver energy for the future.
Two years ago, we applied to the government agency Jurong Town Council (JTC) for land to develop our Waterfront Facility. On the basis of our business model and strategy, SPRING Singapore recommended to the JTC our Waterfront Facility proposal, which ultimately ended up being accepted. The development of the Waterfront Facility, due to come online in 2015, is a game changer for EMS Energy. The total size is five times bigger than our current facility and includes a 106-meter waterfront boundary. It will allow us to market our products to shipyards in not only Singapore, but in the wider Asia Pacific region as well, which we see as a market of great potential. It marks another chapter in the company’s history and strengthens our platform for further growth.
What areas of the business has the company streamlined and how did you achieve cost cutting measures without impinging on company performance?
When a company starts to build products for the first time, there are always unnecessary costs involved. As we have developed our product capabilities and learnt from experience, we have been able to improve efficiency and harness cost-saving mechanisms. Ultimately, enhancing a product is always a learning curve. The more one does it, the more proficient the process becomes. Furthermore, we never initially owned intellectual property of some products, but as we have grown as a company, we have manufactured our own products and saved costs in the process.
Currently, as our facility is relatively small, we are incurring high costs and not leveraging economies of scale. In addition, we are incurring a lot of unnecessary logistic costs because a substantial amount of our work is sub-contracted out. Consequently, with the transition to our large and cutting edge Waterfront Facility, we will be able to bring functions in-house, which further reduces costs. In essence, the new facility will enhance our capability to take on larger projects and bring in higher revenue.
Since 2010, the offshore market has operated in favorable market conditions: strong oil prices and a thriving offshore market. What core regional investments has the company made to take advantage of such conditions?
The company has evolved from a 10-man business to one that exceeds a hundred. To spearhead the business and project it onto the next level, we had to hire a lot of quality talent. Indeed, one of EMS Energy’s core objectives in recent times has been the development of our human talent. In Singapore’s engineering sector this was a challenging task because there is a dearth of engineers. As a result, we had to keep the momentum and draw the best of the local content through offering roles that encompassed independence, responsibility and room to grow. In pursuing this path, we now have highly capable employees that are well qualified and offer expertise in certain areas. Such specialization has helped the business expand considerably.
EMS Energy recently signed a contract with major shareholder Koastel to build a Derrick equipment set for a tender-assisted drilling rig. What is the significance of this project?
We hope that the contract will lead to a domino effect of similar contracts. This derrick set that we are to build is not our first one and certainly will not be our last. We can draw on our previous experience where we have delivered four in the last few years. These are smaller and do not represent a full project, but by leveraging this know-how we have started to offer and deliver an integrated and bigger package, focusing on bigger orders and higher margins. Aligned with our business strategy, we believe bigger products representing bigger value.
With the development of our new facility and improvement of our track record, we expect large shipbuilding companies to look towards local companies like EMS Energy, rather than look all the way to Europe. I believe we can offer at least a similar standard of quality; our products are not inferior.
Can you elaborate on EMS’ Strategic Business Units and how they are supporting the growth of the regional O&G industry?
In the drilling sector, we aim to play a central role in the supply chain of our customers. EMS Energy offers a variety of rig services and solutions; for instance, we supply our mooring system products to Seadrill. With the thriving offshore activity in Southeast Asia, I can see strong demand in rig building and we want to capitalize on this by going to the shipyards and offering our product range and services. Ultimately, we also build rigs and are striving to build more. When the right opportunity arises, we will ratchet up production.
Another key area of the business will be the ‘aftermarket’ sector. If a rig is operating, it needs maintainers. This allows us to maintain the longevity of our products and also enables us to support third-party equipment too. This area is a growing market.
In a competitive market, what makes EMS the partner of choice?
First of all, we are based in Singapore and as a Singaporean company, we are synonymous with quality and efficiency, which is a considerable benefit. In addition, we are prudent with our expenses and costs, always looking to maximize shareholder value through pragmatism. Indeed, the company has got its financial house in order and has built a strong and sustainable platform for growth.
What are your international aspirations?
The core difference between a fabricator and solutions provider is that a fabricator is rooted to Singapore. A solutions provider enables you to service a global market and our products are now represented in numerous countries in Southeast Asia—Indonesia, Thailand and Korea, for example—in addition to countries where we have a tangible presence, such as China, Malaysia and Singapore. With our track record, experience and expertise—coupled with accreditations from the American Petroleum Institute—we are an increasingly reputable partner in the drilling solutions sector.
What is your direct message to shareholders; why should share investors invest in EMS Energy?
Over the last five years , EMS has built a very solid foundation. Through our business strategy, cost cutting measures and development of our Waterfront Facility, I believe that the company is positioned to follow an upward trajectory of growth. The facility is a game changer for EMS Energy—enhancing our productivity and capabilities—and our existing order book is very encouraging. We have very exciting times ahead of us.EMS, Oil & Gas, Drilling, Innovation