Kongsberg Maritime, Singapore
Strategically located in Singapore, Kongsberg Maritime has facilitated the rise of Asia Pacific’s thriving offshore market. In this roundtable discussion with EnergyBoardroom, the company’s managing director, regional manager and vice president give their perspectives on how Kongsberg Maritime can continue its expansion in an increasingly competitive region, and explain why Singapore remains the offshore hub to do this from.
Trond Brage Jakobsen, Managing Director, Kongsberg Maritime
Birger Teien Evensen, Regional Manager, Vessel Control Systems, Sales & Marketing Department, Kongsberg Maritime
Morten Stanger, Vice President, Sales Offshore Asia, Sales & Marketing, Kongsberg Maritime
Mr Jakobsen, you joined Kongsberg Maritime in 1997. Can you tell us how your career at Kongsberg Maritime has evolved since then?
Trond Brage Jakobsen: I began my career in the industry, working as an automation engineer for Norske Skog Union. Working in the factory, we also used Kongsberg’s automation engineering system. I moved to Kongsberg Maritime in 1997, starting my career here as a project engineer. In 2000, I made the transition into the sales department, focusing on the Norwegian market, before gaining responsibility for also selling into the FPSO market worldwide.
In 2006, my responsibility was primarily channeled into the leased FPSO market, which was a field we needed to develop a presence in. Gradually, we have managed to forge partnerships with some of the global FPSO players and enhance our reputation in this arena. Moreover, after gauging the additional services our clients demanded, we took the initiative to expand the products we offered to this segment of the FPSO market, through offering a complete EIT package and E-House modules. In essence, we aim to deliver to our client’s electrical, instrument and telecommunication systems as one integrated package, in addition to our engineering services.
Since 2008, many of our Norwegian leased FPSO clients have been drawn to Singapore and have established a base here, hence why I have travelled to Singapore frequently over the years and ultimately, have now positioned myself here.
Kongsberg Maritime has offices in India, Korea and China: three countries experiencing burgeoning energy demand. What is the strategic importance of having a presence in Singapore?
TBJ: To give an example, the combination of the leased FPSO market, and increased service packages facilitating that market, is very interesting for Kongsberg Maritime. Our presence here is validated by the fact Singapore is the longstanding, regional hub for FPSO conversion, indeed Singapore occupies approximately 70 percent of the world’s FPSO conversion market share. Moreover, we have a significant number of staff working on offering our clients EIT packages, which is a project area I am very familiar with and EPC contracting.
Kongsberg Maritime is looking to drive this product package, as well as keeping focus on our core products. This office focuses on delivering an array of services to the FPSO, drilling rig, offshore and increasingly PSV & OSV markets, ship owners and shipyards.
Morten Stanger: Singapore is South East Asia’s maritime and energy hub. In addition, there is unprecedented energy demand in this area, as well as the region being a trading epicenter. Moreover, ships from China and Korea pass through Singapore, many of which are serviced here. This is a bustling network for shipping and offshore service companies, and as such, it makes sense to be where our clients are.
Birger Teien Evensen: Singapore was one of the first sister company’s established by Kongsberg Maritime and over the years has grown relatively strongly. Indeed, what we have done in Singapore, is the blueprint for all the other offices.
TBJ: Kongsberg’s Maritime’s R&D center is based in Norway. They receive input from the company’s global network, understanding what products the company needs to develop to be competitive. As we work in a market of very advanced vessels, our clients continuously demand technological requirements that need attention from our R&D center.
As a Norwegian company, with experience of working in tough environments such as the North Sea, have you been able to leverage such expertise to this region?
MS: With the offshore shift towards deepwater E&P activity – an environment fraught with potential risk – clients demand trust. We can offer clients integrated technological packages and stringent safety procedures, on a deepwater platform, because we have operated extensively in similar environments such as the North Sea.
With growing international and local competition in this region, what makes you the partner of choice?
BTE: Crucially, it is important to point out that we are not a direct competitor to many of the big companies; rather, we focus on harnessing our competitive advantages. Kongsberg’s Maritime bread and butter is its sophisticated control system platform, which is an area we have over 25 years of experience in. In addition to our North Sea operational pedigree, we have an enduring history and strong brand name, and these are traits we have leveraged shrewdly in the FPSO market.
Moreover, we focus on offering clients an array of quality software and equipment, and we have also worked tirelessly to enhance our customer support capability. Ultimately, we hold the ambition to be the world’s best service provider. We are establishing service offices around the world, positioning ourselves at the very heart of where our customers are operating their vessels.
Many international energy reports project Southeast Asian E&P investment to reach a record high in 2014. How is Kongsberg Maritime positioned to capitalize on this forecasted growth that will consequently be seen in the offshore service market?
TBJ: It is important for us is to have a service hub close to these regions of activity. Today, in addition to the Singapore office, we have service bases in India, Korea and China and are looking to establish a service platform in Australia. As such, we are well poised to take advantage of the forecasted growth wave.
MS: We also have a service presence in Japan through a partnership, though the emphasis there is our training platform.
BTE: Currently, the company’s primary growth engines are outside of Norway. Indeed roughly 70 percent of our business is outside Norway, with a substantial proportion of that stemming out of Asia. Asia is a major market for us, and an arena where we want to extend our foothold in.
MS: Since this market is price driven, there has been a shift in the last five years In terms of where many vessels are built, from Europe to Asia. There has been noteworthy increases in the cost of developing oil fields, and thus oil companies, ship owners and operators are focused on keeping operating costs down. Asia is an area which still offers these parties relatively good vessel and rig prices and operating costs. Due to this trend, and the fact our customer base is increasingly shifting to Asia, Kongsberg Maritime Asian outlets, are well positioned to grow.
What other markets have you earmarked as areas where Kongsberg Maritime may establish a base?
BTE: Perth, in Australia is a destination where we are establishing a customer support office. Simply put, Australia is a flourishing market, particularly in the LNG sector. Consequently, we need a physical presence there. Initially, this office will come under our Singapore’s remit, and as it establishes itself, it will be its own office, reporting to Norway.
Considering businesses in Singapore are facing rising overheads, productivity issues and there are emerging neighboring countries with increasingly attractive business environments, do you envisage staying in Singapore for the long term?
TBJ: Singapore has a very dynamic and strong decision chain. Together with their top down organization structure, the business environment is extremely efficient. These are characteristics that some of their potential rivals do not currently have.
MS: A wave of ship owners are establishing themselves in Singapore and this is partly because of the highly conducive, long term focused, stable economic environment
BTE: I believe Singapore can maintain its regional hub status. Singapore is a very interesting place to be. It is strategically located in the heart of Asia, which is a huge natural advantage. Nonetheless, there are emerging competitors such as Malaysia, with large engineering offices becoming increasingly present there, which may change the shape of the industry landscape in this region.
The offshore oil and gas industry has faced a longstanding ‘talent gap’ problem. Could you expand on the numerous training initiatives Kongsberg Maritime has in place to support the development of human resources in this industry?
TBJ: Our Singapore training facility has a simulator, where we are training operators on vessel and deepwater operations. It is a service we are providing to our customers, and is increasingly in demand.
BTE: We are not marketing this training service. Currently, the training center is reaching full capacity and as such we need to expand our capacity. Furthermore, there are training centers that we supply equipment to, as we do not want to go into direct competition. For instance, there are some academic institutions which desire our training equipment for educational purposes.
How big a problem for Kongsberg Maritime, is the lack of engineers and offshore serviceman in Singapore?
BTE: Singapore is facing acute challenges in the engineering sector, especially on the ship yard side, partly because of a lack of manpower and experience.
Nonetheless, the effect of this on Kongsberg Maritime is abated by the fact we have excellent projects, utilizing cutting edge technology, which entices engineers to stay with us. Moreover, our aim is to support ship yards and owners by providing greater engineering capacity – as we pro-actively do on FPSO projects and plan to do so on other projects.
TBJ: The problem with the lack of local engineers is additionally eased as we attract engineers from other corners of Asia.
In three years’ time, what would you have liked Kongsberg Maritime to have achieved in this region?
TBJ: We have grown from 25 to around 220 people in the last few years. I cannot foresee us expanding at such a rate over the coming years. Nonetheless, based on Singapore ability to remain price competitive, I believe we will continue to grow here, delivering projects out of this office. We are seeking new space to continue our expansion and plan to remain a strong hub in this region.
BTE: We started in Singapore as a sales and customer support office. Slowly, we evolved to do commissioning, and undertake project engineering operations. Now we are striving to do more project management down here. The extent and speed at which we grow is dependent on regional activity. Nonetheless, we anticipate a steady demand for offshore services over the next few years.
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