Terminals Singapore – Seow Ling Teo, Managing Director
Seow Ling Teo, Managing Director of Vopak Terminals Singapore, discusses the company’s positioning in Singapore as the leading independent tank storage provider, the recent opening of a JV in Pengerang and the LPG project that he has spearheaded since becoming Managing Director.
As a native Singaporean, and with the city being a major trading conduit, I was wondering what the strategic significance of the city was for Vopak?
Singapore for Vopak is a major strategic location. It is one of four major hubs for oil for the company, the others being Rotterdam, Fujairah and Houston. Singapore has contributed greatly to the company in terms of the size of the operation developed here and in terms of the knowledge developed. For these reasons, the city is very important to the company. Of Vopak’s total revenue in FY2013, about 19 percent is generated here in Singapore.
The business here connects well too with Vopak’s other operations in the region, such as those in Malaysia. The ‘greater Singapore area’ is really one single market. Land is scarce and difficult to access in Singapore. For this reason, our recently commissioned oil terminal in neighbouring Pengerang in southeastern Johor supports our business in this region.
Vopak owns majority shares in the Banyan, Sakra, Penjuru and Sebarok Terminal- can you tell us a little about the capabilities and capacities these terminals have?
In Singapore we have over 3.5 million cubic metres of storage capacity. This includes oil, chemical and industrial tank facilities. Our latest developments include Southeast Asia’s first cryogenic LPG storage facility with 80,000 cbm storage capacity located in our Banyan terminal and the joint venture operatorship of Phase One of the Jurong Rock Caverns with 1.47 million cbm of capacity for oil products. In Singapore, we have a full range of storage facilities for products of the entire supply chain. Banyan, Sebarok, Penjuru and Sakra all serve as centres of excellence in their operation.
Sebarok, our first terminal in Asia, was commissioned in 1983. It serves as a 3rd party distribution hub for petroleum. Fuels at this terminal can be unloaded, blended and reloaded efficiently. It has a capacity of nearly 1.3 million cbm.
In 1994, Vopak came by a opportunity at Sakra on Jurong Island. This was for an industrial terminal; we provide storage for the manufacturing plants in close proximity to the plant. The plants are connected by pipeline to our terminal- we are the direct supplier, and this is a very different business model to the one run at Sebarok. For the manufacturers, we are able to store either their raw materials or the final products, and can even pass these products directly to companies falling later in the production chain. We form a node in this network.
In 2001, Penjuru terminal was brought into our network. It is not a new terminal, but was bought over, having been built in the 1970s. Having been acquired by Vopak, this facility greatly complements our business by being a third party chemicals distribution terminal. We recently expanded this terminal by another 47,000 cbm for chemicals storage.
In 2006, we added Banyan terminal to our portfolio. The vision for this terminal was to make it an integrated facility, from import / export of oil, chemical distribution to industrial set-up. In addition to our newest LPG facility development, we also further expanded our capacity by over 100,000 cbm for chemicals over the last year.
Recently you were awarded a contract to construct an LPG facility At Banyan; what is the importance of this facility to your company?
Talks of an LPG storage facility has been in the works for many years. For this to work, there has to be a right economic model. LPG requires low temperature storage of about -40 deg C, which raises cost. With support from EDB, we finally announced the investment of Southeast Asia’s first independent cryogenic LPG storage facility in December last year. With an initial capacity of 80,000 cubic meters (cbm)., the LPG terminal is expected to be completed in 2016. This project fits well in Vopak’s overall strategy, as gas will become an interesting alternative for naphtha. This LPG facility not only caters to the rising petrochemical needs of alternative and cost effective feedstock in Singapore, it also has the potential to lead in the facilitation of regional imports. Asia’s appetite for LPG is growing. Supply developments in the US, the Middle East and potentially Australia will cover a growing LPG demand in Asia. As such, we see the opportunity to capture these imports with an independent LPG terminal in the region.
Vopak already has experience in handling liquefied products. In Asia alone, Vopak handles liquefied ammonia at several locations. In China too, we have LPG storage in Tianjin and Caojing. The business has technical and operational experience and we consider ourselves to be the most experienced player in the market in handling LNG product.
Your website states your company has total commitment to client success. How do you achieve this in practical terms?
We focus on frontline execution. We pursue quality training for our staff to ensure best delivery. This goes from the basics, such as telephone etiquette to more complex issues, such as solving logistical or shipping schedules. Service also incorporates how the business provides its hardware too. The business ensures it runs flexible systems and production mechanisms, so that we can quickly adjust to clients’ needs.
Vopak seeks to serve its clients through delivering fast turnaround of vessels and pumping products quickly and efficiently. By berthing more vessels, we serve both the client and our own interests; slow progress limits profits. The business is also proactive in seeking improvements in its customer service.
How do you find access to skills and human resources in Singapore?
We are fortunate that in Singapore, staff are well trained, and speak a high level of English. This means it is possible to train everyone in a similar manner and can staff can communicate with coworkers and clients well. Having said that, when a person joins Vopak, we do deliver a constructive, structured training to ensure standards are kept high. Staff entering from other organisations have to undertake a year long’s training modules, over an online learning platform with examinations too.
Quality and safety are two priorities of training. Retaining good people is key to delivering growth for the company.
When you returned from China in 2012, your pursued cost management and fiscal performance; but how did you deliver this whilst maintaining client services and safety standards?
Cost management is something that I consider very important as a manager. I do not think costs should be considered in the frame of ‘cost cutting’ however- as sometimes it is nessecary to spend. It is more about waste elimination and utilising fit-for-purpose practices.
Waste elimination can be as simple as switching off lights when they are not required. In the last two years, there have been a great emphasis on identifying and reducing waste.
Indeed, it should be emphasised that cutting costs should never in any way be allowed to compromise safety at work. Safety is and our number one priority, and Vopak energetically emphasises a safety awareness mindset to its employees.