atans1

Where S’porean traits produce world-class TLCs

In Energy, Indonesia, Temasek, Vietnam on 28/11/2013 at 6:25 am

More to irritate Temaeek and S’pore (self) haters, especially TRE readers*. There are advantages to S’poreans’ reputation as the Prussians of the East: hardworking, careful, conscientious and mindlessly efficient. These are very qualities that make Keppel and SembCorp world beaters in rig-building.

Singapore’s two main yards, Keppel and SembCorp Marine, have also invested heavily in quality and efficiency. They specialise more in deep-sea rigs than in drill-ships and carriers. Keppel, the bigger of the two, is building a record 20 such monsters this year; next year it will deliver the first of three giant, $600m “jack-up” rigs (ones that are floated into place then jacked up on their legs).

Time is money

The Singaporeans are also good at building things on time, which is vital in an industry where late delivery can cost the operators of rigs and drill-ships over $500,000 a day. Over the past five years, rigs ordered from Keppel and SembCorp were, on average, delivered ahead of schedule, whereas Chinese yards delivered 50-250 days late, says IHS Petrodata, a research firm.

http://www.economist.com/news/business/21590496-korean-and-singaporean-yards-have-adapted-well-chinas-challenge-deeper-better

As to China’s cost advantage, having facilities in Indonesia helps provide cheap labour for SembCorp’s rig building biz. Keppel too has an Indonesian operation, though its tiny compared to SembCorp’s.

And with Vietnam having problems with China over maritime boundaries, one wonders if Chinese built-rigs are allowed in its waters. Remember, energy cos are exploring for oil off Vietnam. Still, the waters do not require the sophisticated rigs built by these TLCs.

Related post: https://atans1.wordpress.com/?s=Temasek+Fab+5

*Though TRE readers will be pleased that these TLCs are not led by ex-generals or ex-Temasek MDs. The CEO of Keppel is a scholar, but I’m not sure of the background of CEO’s SembCorp. But both have worked that these TLs for many yrs. They were not parachuted in like in NOL to teach executives to suck eggs.

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  1. You remind me about ex-PAPies Lim Chee Onn e-business ,shareholders may have to be thankful that ex- Minister Lim is no more.MM Lee made his famous remark that “Ship building is a sunset industry.”
    http://www.kepcorp.com/en/news_item.aspx?sid=298
    The Lee Kuan Yew World City Prize
    http://www.leekuanyewworldcityprize.com.sg/about_prize.htm

    • Jack LKY waz right. Keppel moved on rig building. Lim Chee Onn and Sim Kee Boon agreed to the strategy protected the mgrs from interference when they were implementing the move from ship repair.

  2. Keppel and SembCorp operate in the real world where they literally have to earn their stripes against world competition. Who do SMRT or Singtel compete against? Therein lies the difference.

  3. […] vs The Real Singapore – How Can You Be SURE Of The Truth? – Thoughts of a Cynical Investor: Where S’porean traits produce world-class TLCs – My Singapore News: The benefits of hindsight – Sharing the Lion City: Disabled […]

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