Offshore – Nicholas Wagner-Larsen & Max AH Hartvigsen – Singapore
Nicholas Wagner-Larsen & Max AH Hartvigsen speak about Uno Offshore and its presence in Singapore. Describing the city and the connections it offers shipbrokers like Uno Offshore – not just within the city, but to the wider Asia-Pacific region. The interview comments on the broader state of the market including the widening diversity of maritime based offerings present in Singapore.
Uno Offshore’s Singapore office opened in April 2013. What advantages did the city offer Uno?
Nicholas Wagner- Larsen – (NWL)We are a young company, having started in August of 2010. The business had to grow in its capacities organically as a first priority. If the opportunity to open a Singapore office had been available earlier, this would have been advantageous- we did so as soon as practically possible.
Growth needs to be step by step by step, and it was from August 2012 that we had seriously started to plan to open the office here.
Max A.H. Hartvigsen – (MH) From the beginning, Uno Offshore had a significant number of clients in Singapore, and across the wider Asia Pacific region. Even to this day, many contacts of Uno still communicate directly with our Oslo office. An office in Singapore gives us an opportunity to follow up our Asian clients much closer and face to face on a daily basis.
NWL: Many of the shipyards we work with are based in Asia- be it in China, Korea, Japan, Indonesia, Vietnam, India or Singapore. To oversee the new building activity, it is practical to be based here in Asia. Within the first year, we have built new client relationships, and strengthened existing ones.
Given Uno Offshore is such a young company, how are you cultivating these client relationships?
MH: Uno Offshore is mainly hiring industry professionals with in-depth technical and operational knowledge. Our employees typically come with their own personal network from the industry, but we also see new clients with preference for people with industry background compared to brokers with more commercial background. In Singapore, all of us have been working at sea as officers and/or as engineers in large oil companies and oil service companies.
NWL: Across all Uno’s three offices, we work together as one Team. Our company has technically informed and qualified individuals, as well as those with an operational and technical background. If I need information on a sector I am less familiar with, I have the full “Uno Team” to support me in my role.
Particuarly in Asia, clients have a greater need to sit down with a potential business partner to gain a comprehension of their sincerity to work in the best interest of them and to obtain an understanding of your experience and competence to add value for them in their dealings.
What proportion of your business is derived from Asia Pacific?
In terms of deals signed, more than half originate in Asia in the last year. It does vary, however, year to year. The year we entered Singapore, we received a particularly large contract in Asia.
MH: So many of these deals are truly international, between for example, a Norwegian shipyard and an Asian Owner. This makes it difficult to put exact figures on the proportion of our business derived from any one location, but in simple terms, the amount of business Asia Pacific offers Uno is substantial.
This market is volatile by nature; how has Uno Offshore couched itself to deal with this?
NWL: In late 2010, there were still some difficulties existing caused by the fiscal crash not long before. Times were not exactly easy, but Uno has always been able to make money and to grow. To be honest, 2010 is the moment when market trends started to improve. I think that Uno Offshore timed its emergence into the market quite well in this regard.
Good projects are always going to be considered even in a difficult market. One simply has to put together well thought through projects for the clients and for the circumstances at hand.
The scope of your work is broad, from new build projects to conversion and upgrade projects, to market analysis. What is your growth strategy?
MH: The Oslo and Singapore offices are mainly focused on project work while the Haugesund office in western Norway focus on the chartering market. Between our offices, we strive to cover all major segments of offshore field development and have a particular strong foothold in the subsea chartering segment worldwide. We will continue to build UNO Offshore with the sole focus on Field Development.
NWL: It is somewhat dependent on the sector one is looking at. With regards to Singapore and the rig segment, we will among others emphasis more on sale and purchase. To improve our position on second hand sale of rigs, we will need to add capacity to our Singapore office the coming years. We welcome all industry professionals with more than two years of experience within the rig segment – with commercial background, an interest and desire to become a broker – to make contact with us.
What are you doing to stay ahead of the competition?
NWL: The key consideration is how to add as much value to what one is delivering to the client as possible. As we are quite small, our principal strategy is to work closely with a small number of clients that we understand well, and are therefore able to tailor our offerings to them. This allow us to properly following up each client better making use of the right internal resources and expertise from our team worldwide.
Many of the AHTS and PSVs are aging- around a quarter of the fleets respectively of these class of vessel are over 25 years’ old. Yet simultaneously, newbuild costs are rising. How is the fleet age profile affecting your business?
MH: Traditionally, many of these vessels were built in Northern Europe. However, now a huge proportion of the order book is built in China and South East Asia. There are new emerging designs out of Asian origin as well, and there seems to be two segments to the market- one of high spec’ed, harsh environment designs, and the other of more standardized, cost-effective designs. This means that although production costs are increasing, Asia is still producing cost- effective vessels, and simplified designs.
NWL: What is being built now is still to be absorbed by the market. There is a risk of oversupply in several segments both for vessels and rigs these days and same will slow down the continuous build-up of the order book. To secure work going forward, we believe shipbuilders and vendors will have to lower their price levels for new vessels and rigs.
MH: In Asia, there are many speculative vessels and rigs being built as an investment only. These units are contracted by Owners who does not have the intention to Own or Operate the vessels on delivery. This provides opportunities for both Owners and Charterers to secure “younger” vessels even though they have not initiated the newbuild project from the start.
How do the regulatory frameworks around the region affect the shipbrokering business?
MH: Many of the markets are closing up- Indonesia is a country where the cabotage laws have had a significant effect on market dynamics. This makes it more challenging for international ship owners and brokers to conduct business in this area.
Mr Larsen- your speciality is in FPSOs and MODUs. The former market is slightly depressed at the moment. How should Singaporean business react?
NWL: The FPSO owners have not been making sufficient money the past years. I believe they understand that a collective action is required to redress this issue in order to continue to have interest in the segment. High costs are inherent in this business. The key issue is that of cost overruns which is difficult to control.
The owners should consider to change the structure of contracts where they are better covered by potential cost overruns. However, this is difficult with newcomers to the industry aggressively penetrating the market, often with assets from their own tanker fleet.
Where do you see Uno Offshore in five years’ time?
NWL: At the moment we have three offices, Singapore being the most recently opened. We will seek to consolidate this expansion and at the same time grow the business here, but we will also build up offices in new regions.