Marine sector needs more local players

AS THE only Bruneian-owned company in the offshore marine industry, Belait Shipping Company Sdn Bhd represents a part of the government's vision of enhancing the competitiveness of local firms on the international front.

The company, which currently operates four vessels, recently awarded the construction of two more in Miri, with a seventh to arrive at the end of 2013 from China.

Speaking to The Brunei Times, Hj Awang Hj Ali, the company's executive chairman, said it is due time that more Bruneian players get involved as the government pushes for more local participation within the country's private sector.

How has the industry changed in the past five years?

Now, we are going into deeper waters. Operators like Total and Petronas are working on deep offshore blocks, so it's further than the Champion or the Ampa fields. So now there needs to be more movement of goods to them and it's not logical to travel all the way there with a small amount of food and so on. So you'll need to transfer bigger volumes, which means you'll need bigger platform supply vessels (PSVs).

How did the company come into existence?

We went into it from a local standpoint, as there are no local bumiputra company in this industry operating big offshore vessels. The vast majority of vessels operating in this industry are foreign-owned. At that time, we, the senior management, thought it's high time someone came in to do it and I sat down with my directors, we all agreed we should go into the big boat marine sector, because A, there are no locals at all. We believe, being a local company should give us an edge. And B, we were hoping that the company would support the government call for locals into this industry.

Five years later, we were proven correct, as the (Energy) Minister is now saying the country should look more into the marine industry. The other vessels operating in this field are foreign-owned, which I think, do not have any local ownership, even on a sharing basis. This means that the bulk of payments of the charter rate goes to the owner of the vessels.

From there, Brunei loses out on the multiplier effect or other value added benefits from this industry. So we feel even more now that there is a need for increased local content. Imagine if a car has so many components, what about a 75-metre-long ship? If we have Bruneians to service the engine and its parts whilst other Bruneians own more ships, then the multiplier effect can occur and more revenue can be kept circulating in Brunei.

What kind of challenges do companies like Belait Shipping face in this industry?

The challenge is that foreign companies are almost always bigger in size than us, therefore their economies of scale is far better, is more beneficial to them than to us.

If they have a greater economy of scale, they can therefore afford to give cheaper prices, obtain lower finance rates, bigger pool of capital and human resources etc.

Let's say foreign (financial or bank) rates, the difference is almost five per cent, but it's more expensive here. We don't finance it overseas because there are hurdles, wherever your financing is done, your vessel has to be mortgaged, some foreign banks don't want to hold mortgage in Brunei. So they will say, for example, flag your vessel in Singapore, but we are Bruneian, so we want it to be a Bruneian vessel with Bruneian content.

Say one competitor from Singapore, they have 100 vessels or more, if one vessel don't work, it's no issue to them, they have 99 other vessels. But like us, only two operating in Brunei Shell, if there is an issue with one, then we will be in trouble. So the economies of scale is very different. These international companies have bigger staff and all that, so they do not have to worry. They have the ease of doing business which we do not have and we have other challenges to get over.

What about getting more Bruneian manpower in this field? Is that a challenge as well?

First, We are 100 per cent Bruneian company, we are owned, operated and managed locally, so obviously we want to help more Bruneians get employment. In this field, you don't exactly need to be a very highly-educated person to work offshore but dedication and being motivated is important. Secondly, we feel that this is part of the country's national development.

Third, it's cheaper in the sense that you don't have to spend on all these quotas (for foreigners), travelling so on and so forth. So cost does come into this as well. But the thing is our locals need to really focus on the things that they are doing. Compare with foreign crews from Indonesia or from Thailand and Philippines, these foreign crews are usually hard working. Our locals must change their mindset in the sense that they need to take pride in whatever it is they do career-wise and do it with dedication.

We have to work for something and not take things for granted. Our total workforce is approximately 191, with 82 per cent Bruneians and 18 per cent foreign. The workforce is young, with the average age between 20 and early 30's.

Is it hard to employ Bruneians in the marine industry?

We now have four senior positions master, chief officer, chief engineer, and second engineer which are not filled by Bruneians, but we are developing, training them for the future. We are already having a handful of third officers and third engineers and we keep on sending them for training. Not many people are going into the marine sector, and it's not easy, especially if you want to be a master. It's not easy, and sometimes you'll be offshore for three to six months. A work boat master or captain usually works at sea for three months, the shortest time is two months. It's not like a tanker where you sail out to another port. A work boat stays in one position all the time and only moves in the same area of operations usually. So it can be very stressful at times, demanding, and a responsible job in a hazardous arena. But I must add that it is a rewarding job knowing that you have such responsibility. In terms of progress, it is dependent on the individuals and their capabilities. They have to go through cadetships, fourth officers, third officers, second officers, chief officers and eventually master or captains.

In addition they are required to fulfil the minimum prerequisite for time at sea before they can be allowed to sit for the exam.

They have to serve several hundred or thousand hours in that position before getting upgraded.

In summary, we are grateful that we have been able to serve the country in this way. We have had and continue to get tremendous support from Bank Islam Brunei Darussalam. We are proud to be Bruneians and one of the pioneers in this industry. We look forward to the support from all stakeholders to help this industry grow for Bruneians.

The Brunei Times