Singapore www.Splash247.com
LIFE BEGINS AT 50
How the Lion City is planning for the next half century
Market Report 2015
CONTENTS
Singapore Straight 3 Editor’s Comment 5 Government 7 SSA 9 Survey 12 Port 15 Owners 21 Offshore 25 Bunkering 29 Maritime Singapore at 50 41 Finance 43 Yards 47 Shipmanagement 48 LNG 50 Haze
51 Piracy 53 HR 57 Events 59 Travel 60 MarPoll
29
Singapore www.Splash247.com
Market Report 2015
The site for incisive, exclusive maritime news and views
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DESIGN Tigersoft Pte Ltd Printed in Singapore Copyright © Asia Shipping Media Pte Ltd (ASM), 2015. Although every effort has been made to ensure that the information contained in this review is correct, the publishers accept no liability for any inaccuracies or omissions that may occur. All rights reserved. No part of the publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means without prior written permission of the copyright owner. For reprints of specific articles contact grant@ asiashippingmedia.com.
UP FRONT
No time to rest on laurels
S
hipping folk do like to whinge. Not surprising in today’s climate, I admit, but even in the best of times they’ll find something to moan
about. We use this title for the local shipping community to have a moan, to raise issues that government should react to – it is the third time we’ve polled Singapore maritime and I am proud to say each time we note how local authorities do genuinely read your thoughts and opinions and try to come up with solutions. As in previous years common gripes include rising costs and the lack of available local talent, and by extension the restrictive immigration laws in place since 2012. Yet, let’s just take a step back and admire how this little island-nation has come to rule the maritime roost in a very short amount of time. Singapore has topped many polls of late crowned as the world’s top international maritime
Esben Poulsson, himself a Hong Kong resident
centre. It has in the space of a decade completely
for many years, warns Singapore’s maritime
usurped Hong Kong’s position as Asia’s shipping
community now is not the time to rest on laurels.
hub. Tellingly, when putting together a magazine
He and the authorities continue to explore what
for Hong Kong this year, of 250 people interviewed
areas of the Singapore maritime setup could be
more than 80% said Singapore would be their
strengthened: finance and insurance are high up
choice to set up in Asia were it not to be Hong
on the agenda. Hopefully, they’ll take some of the
Kong.
suggestions from our readers in the following
Singapore’s rise to the top has been remarkable
pages to heart too.
and is brilliantly charted in the centre pages of this magazine by award winning author Paul French, who takes readers through the republic’s maritime history as our own tribute to the Lion City’s 50th anniversary. What I find admirable is all the talk from the powers that be to make sure that this maritime dominance continues. Here the example of Hong Kong can once again paint its own picture – dithering, hubris and little leadership has seen it throw away its Asian mantle. Singapore Shipping Association president
Sam Chambers Editor
Across the World
www.damicoship.com
Government
‘Human capital is the key enabler for the future of maritime Singapore’ Extra money is being spent to develop interest in maritime careers, but more is needed
T
eo Chee Hean, Singapore’s deputy prime minister, received a rousing round of applause in late
September when announcing a further raft of initiatives designed to get more Singaporeans involved in the maritime sector. In the next five years, the Sectoral Tripartite Committee for Transport (Sea) led by the Maritime and Port Authority (MPA) hopes to attract more than 1,200 Singaporeans to join the maritime sector as seafarers and port operations officers. Speaking as guest of honour at a packed Singapore Shipping Association (SSA) dinner, Teo (pictured) outlined more plans to alleviate the crunch in maritime human resources in the Lion Republic. These included a SkillsFuture Earn and Learn programme for maritime – a one year course with a certificate and S$5,000 ($3,519) for anyone completing it plus S$15,000 for any employer who then takes on a trainee. The government
Teo warned: “We also face intense global
the amount of money invested in
also has launched Maritime Singapore
competition.”
developing local talent, remains
Connect, a new portal for maritime jobs and information. “Human capital is the key enabler for
The news comes as human resources remains one of the most pressing issues
concerned however that maritime is still not viewed as an attractive career option.
for maritime firms operating in the Lion
Matt Conway, from recruitment
the future of maritime Singapore,” the
Republic, as evidenced throughout this
firm Faststream, speaks for many of
deputy prime minister said.
magazine and our annual Singapore
the industry, noting: “Singapore is a
survey.
talent short market, with a very finite
Teo acknowledged the importance of maritime in Singapore’s economic make
MPA’s chief executive, Andrew Tan, is
talent pool of experienced and qualified
up, saying there were 5,000 companies
adamant that government is handling the
professionals in the maritime industry.”
involved in the sector locally, accounting
issue and has put the correct resources in
for 7% of GDP and 170,000 employees.
place to address the perceived shortage,
groundbreaking survey carried in this
telling Splash: “We are on top of this now.”
magazine will resonate with the powers
Despite the nation’s preeminent status on the global maritime map these days,
The private sector, while applauding
Hopefully, the results from Splash’s
that be.
www.splash247.com 5
SSA
Busy agenda Esben Poulsson, the new president of the Singapore Shipping Association, has identified priorities for the Lion Republic to look into as it seeks to bolster its leading maritime hub position amid growing local competition
E
sben Poulsson has hit the ground running as the latest president of the Singapore Shipping Association,
identifying quickly what the city-state needs to do to bolster its maritime position. Poulsson, who took over from Evergreen’s Patrick Phoon this July, tells Splash he has three immediate priorities. First, he calls for SSA to play an active role and make meaningful contributions to the workings and development of the Tripartite Maritime Manpower Taskforce initiatives for both seafaring and shorebased jobs, spearheaded by the Maritime and Port Authority of Singapore (MPA). “We want to create a wow factor for the maritime industry amongst the younger generation,” says Poulsson. Secondly, SSA will support and promote the development of a ‘Singapore Clause’ as an integral part of the Singapore War Risk Mutual. Additionally, SSA will continue to work closely with the Singapore Maritime Foundation (SMF) on promoting the Singapore Sale Form for wider acceptance. A third plank of his tenure will be to
We want to create a wow factor for the maritime industry amongst the younger generation regional and international issues and not
already established a presence here,” he says, “and although I do not have any specifics or figures, I think it is well known in Greece, as it is many other countries, that Singapore is a very attractive country from which to operate a shipping business.” As well as Danish national Poulsson’s
develop the next generation of leaders,
forgetting the educational and networking
commitments to the SSA, the Singapore
something Poulsson says is very much
opportunities that our active calendar of
Maritime Foundation, the International
part of the ongoing efforts of the SSA and
events offers throughout the year,” the
Chamber of Shipping, the Asian
its industry partners in attracting young
SSA president says. The association’s
Shipowners’ Forum and Straits Tankers,
talent to the shipping industry.
networking events are legendary in
the former Torm man is chairman of
shipping circles, often attracting more
Enesel Pte Ltd, a Singapore management
than 2,000 people at a time.
subsidiary of Athens-based boxship
SSA will continue to develop ways to improve Singapore’s ship finance capability across the board, and
SSA now has 477 member companies,
operator Enesel.
promoting Singapore’s capital market
making it one of the larger national
Admitting that times remain tough
“I think shipowners, and indeed all
shipping associations in the world.
for many in the industry, Poulsson has
our members, rightfully expect the SSA
Its membership could swell in the
pushed forward a raft of initiatives to try
to offer value for their membership, by
coming months with many anticipating
and help out. SSA is advising authorities
providing analysis of industry trends,
a big Greek shift to the Lion Republic,
to reduce port dues for offshore vessels,
high quality technical information,
something Poulsson would welcome.
the hardest hit sector in shipping at the
regulatory guidance and updates on
“A number of Greek owners have
moment.
www.splash247.com 7
The road to success doesn’t need to be difficult
Providing executive search, permanent recruitment and project solutions to the Maritime and Offshore sector since 1999. T: +65 6532 7201 E: info-sg@faststream.com W: www.faststream.com
Survey
The value proposition The local shipping community debate whether the city-state is pricing itself out of the market
I
n compiling this magazine Splash sent
vibrant maritime centre the republic has
out a survey to 250 of the top names
become. However, there were plenty of
places, there are few alternatives that
in Singapore maritime to gauge the
moans about the costs of being based
are as safe and stable as Singapore and
here.
none with the same level of support
community on key local issues. The responses form quite a checklist for the
“Rents and salaries are becoming
While there are more economical
infrastructure, argues Norstar Ship
local government to ponder if it genuinely
prohibitive,” says Pankaj Khanna, the CEO
Management’s managing director Chris
wants to grow as an international
of fast emerging local dry bulk owner
Kirton, a popular refrain that others also
shipping centre.
Pioneer Marine.
mention. “What you get back is worth the
The words in September of Esben
“Other locations in the region are
cost,” is the neat summary from Mary
Poulsson, the new president of the
catching up with better efficiency levels,
Singapore Shipping Association (SSA),
and Singapore would be outplaced if
echo through much of the responses
the costs are not contained,” warns Biju
Goodwood Ship Management, points out
below. It is vital for the city-state not to
Oommen, CEO of feeder line, Orient
currency fluctuations are helping out
rest on its laurels; there’s still much to do,
Express Lines.
somewhat with the strengthening of the
he said. See page seven for more on SSA.
The sky’s the limit as long as it’s not obscured by the haze
US dollar this year and the comparative
In general, respondents said that the republic’s very high prices – whether it is for rent, salaries or more general fare – is just about worth it given the hugely
Baey, CEO of Satcom Global Singapore. Captain Ashok Sabnis, founder of
weakening of the Singapore dollar. “When the rate was $1 to S$1.20 last year it was a strain for everyone, but that situation has eased a little now,” he says.
www.splash247.com 9
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Survey
Yes it has, agrees Edna Lim from C&C Technologies, but other currencies, notably neighbouring Malaysia, have
of power in Asian shipping circles over
questions on piracy, which we cover
the past decade.
on page 51 as well as how the annual
weakened much more. “Singapore is not
Government checklist
the most cost efficient place to base Asian
In terms of where the government could
operations,” she reckons.
improve Singapore’s maritime set up
haze from fires in Indonesia is affecting business, something analysed in depth on page 50. Our final question asked if Singapore
the majority of respondents focused on
had peaked as a maritime centre. A
top in our poll of where else companies
the human resources crunch and by
majority – 63% – said the city had not, but
would chose to base themselves in Asia if
extension immigration issues which we
many noted the trend to shift backroom
they were to move away from Singapore.
have expanded upon on page 53.
staff to cheaper climes would continue.
Interestingly, Kuala Lumpur came
However, it was a very close race, unlike
Other ideas put forward included the
Growth for Singapore would continue, but
a survey we carried at the same time in
suggestion by Mike Meade, the founder
Hong Kong. Remarkably, 83% of those
of offshore brokerage M3 Marine, of
surveyed in Hong Kong - on choosing
applying similar tax breaks to shipping
business infrastructure, encourages
an alternate Asian location to base their
services that have been applied to
companies to do business, recognises
operations - opted for Singapore, a telling
shipowners and shipmanagers.
and adapts to the changes in the world
statistic on the handing over of the baton
Rents and salaries are becoming prohibitive
Meade also called for a more diverse
at a slower rate. “As long as Singapore provides the
markets, then the sky’s the limit,”
legal framework that would attract the
commented Captain Jonathan Walker from
leading lights away from London.
London Offshore Consultants, adding: “As
Also featuring in the survey were
long as it is not obscured by the haze.”
www.splash247.com 11
Bladerunner vision The new terminal in Tuas will be revolutionary in its use of technology
F
ifteen years from now Singapore’s
port that could look like a futuristic multi-
port sound like it’ll resemble a Ridley
storey carpark when completed in 2030.
Scott movie, drones flying around
“The aboveground space development over part of the new mega container port
the place, and driverless trucks delivering
because of land constraints in the
could create significant land area for
containers to and fro. Much of the details
republic. As a result Singapore is
the development of a cluster of maritime
of this Bladerunner-esque landscape
considering using a two-tiered container
and port business activities, including
have been revealed in recent months as
terminal in Tuas, Maritime and Port
amenities and possibly commercial-
authorities accelerate plans to shift the
Authority (MPA) of Singapore’s CEO
residential areas for those working in the
port from downtown to Tuas in the west of
Andrew Tan has said.
area to form a component of the future
the republic. The port is still growing however in
Speaking at the Singapore Maritime Institute (SMI) Forum in October, Tan
its original location – in size, if not in
said that the port is exploring building a
throughput (see box overleaf for the
double-tiered container terminal.
year’s declining container figures). This
Tan said: “We should not restrict
Tuas maritime hub.” There is also the possibility of developing underground storage. Another aspect of the new terminal that will make it a world leader in automation
June the prime minister of Singapore,
ourselves to traditional port layouts.
is the use of driverless automated guided
Lee Hsien Loong, opened phases 3 and
One of these new land-use concepts is
vehicles (AGVs). AGVs are unmanned
4 of development of PSA’s Pasir Panjang
to develop a platform above part of the
transportation platforms used for
container terminal (pictured overleaf with
container port on which port-related
shuttling containers between the quayside
group chairman of PSA International Fock
and industrial developments, such as
and container yard.
Siew Wah).
container freight stations, logistic hubs
Around S$3.5bn ($2.6bn) is to be invested in the next two stages of the terminal’s development, which will enable Singapore to handle 50m teu of containers annually by the end of 2017. While this development is impressive in scale it is nothing as to what is being talked about over in Tuas where dredging is already underway for the new 65m teu
12
Planners have had to get creative
intensify land use.
www.splash247.com
Terminal operator PSA currently has
and other facilities, can be developed to
a fleet of eight AGVs undergoing live
Autonomous truck platooning technology can enable us to make a quantum leap in productivity
operational trials at its Pasir Panjang Terminal. PSA has also signed a memorandum of understanding with the Ministry of Transport to develop an autonomous truck platooning system to transport containers between its terminals on public roads, as well as other potential future trucking uses.
PORT
We will push the boundaries of what defines a port One or more driverless container trucks will be led by a single manned truck, thereby raising productivity with more cargo transported per driver, and encouraging more trips to be carried out at off-peak hours, which will improve traffic flow during peak periods. Permanent secretary for transport Pang Kin Keong, who is chairman of the committee for autonomous road transport in Singapore, commented in a statement earlier this year: “As Singapore’s maritime sector continues to grow and container volumes increase, the need for efficient inter-terminal and inter-port haulage has never been greater. Autonomous truck
while automated cranes are likely to
annual capacity of 20m teu, should be
platooning technology can enable us
feature in Tuas with the whole port
operational in 2020.
to make a quantum leap in productivity
operation making far greater use of
in the port sector, while addressing
predictive analysis. MPA has this year
Singapore’s future port planning: “By
the shortage of drivers in the trucking
teamed up with IBM to look into how best
harnessing technology, by our willingness
industry and adding value to their jobs.”
to harness Big Data for port operations.
to experiment, and by learning from
Deploying drones to drive productivity is also being researched at the moment
The first phase of the Tuas project, including 20 deepwater berths with a total
As MPA’s Tan said in summing up
others, we will push the boundaries of what defines a port.”
Global slump hits port figures The global slowdown in the
handled 6.5% fewer containers in
container trades this year has been felt
the first nine months of the year. The
in Singapore.
23.5m teu handled in the first three
the year wore on – with figures for
quarters is down on the 25.1m teu
September alone showing a 13.5%
The world’s second busiest boxport
handled in the same period last year. The slump became more heavy as
year-on-year decline. This greater drop is in line with carriers’ take on the markets too, with the number of idled boxships increasing rapidly in the latter part of the year, to around 1m teu in capacity – the highest amount of idled tonnage since the global financial crisis started. With many carriers predicting tough times through to at least end-2017, Singapore might have to get used to annual throughputs of under 30m teu for a while yet.
www.splash247.com 13
OWNERS
Sale of NOL leads the news There’s no doubt which local shipping line hogged the most column inches this year
N
name – its boss 40 years back was the
wealth fund Temasek, has had enough
island’s second prime minister Goh Chok
and is looking to sell NOL. Two blue liner
Tong. It has bought, developed and sold
giants, Maersk and CMA CGM have been
APL has seen its global capacity share fall to only 2.8% currently, compared to 4.2% in 2010
many brands over the years – American
revealed as interested as we went to press.
newbuild contracts and delayed another
eptune Orient Lines (NOL) is
peers. Steadily losing market share in
synonymous with the growth
recent years, APL has seen its global
of maritime Singapore in its
capacity share fall to only 2.8% currently,
first 50 years. The line has stood out as the nation’s most famous shipping
Eagle Tankers and APL Logistics are two examples. Its acquisition in 1997 of American President Lines, rebranded now
compared to 4.2% in 2010. NOL’s majority shareholder, sovereign
Were it to be sold, Singapore will lose a valuable chunk of its maritime heritage.
five from 2016 to 1017. Pioneer Marine’s CEO, Pankaj Khanna tells Splash that the funds freed up may
as APL, marked the first major cross-
Pioneer Marine
be made available for acquisitions should
border container acquisition – it also
One of Singapore’s fastest growing
the right opportunity be found.
helped reaffirm Singapore’s position on
shipowners, Pioneer Marine, has just
the global liner map.
made big changes to its orderbook to
Marine owns 13 handysize and one
Founded in September 2013, Pioneer
make the most of opportunities presented
handymax dry bulk carriers with an
much of its lustre, struggling to make
by the continued drop in newbuild bulker
additional eight handysize newbuildings
profits and supersize its fleet like its
prices. The company has canned three
on order.
Since then, however, APL has lost
www.splash247.com 15
OWNERS
Bengal Tiger Line
services all along the country’s eastern
Feeder operator Bengal Tiger Line
coast. We handle about 900,000 teu per
a pair of 173,400 cu m LNG carriers
(BTL) defines the very essence of niche
annum, using the hub ports of Singapore,
at Daewoo Shipbuilding & Marine
marketing. As a common feeder facilitator,
Colombo, Port Klang, Kaohsiung and Jebel
Engineering for close to $400m.
it has managed to remain neutral in the
Ali.”
industry, only carrying boxes belonging
During shipping’s long recession, the
At the end of September BW ordered
Meanwhile, BW Gas clinched a deal to provide Egypt with an FLNG for five years.
to the mainlines and NVOs, and operating
company had its hands full keeping its
The contract, which started in October, is
only on feeder sectors.
nose above water.
worth $60m a year.
In addition, the company refrains from
“We looked at all the services we had,
Earlier in the year, BW Group, via
direct ownership of vessels, preferring
and rationalised where possible, to ensure
subsidiary BW Euroholdings, bought 6m
to go the charter route to avoid any
that we were not overdeploying capacity,”
shares in New York-listed Dorian LPG
conflict of interest with its part-owner,
says Smart. “That is the biggest problem
giving it a 10.2% stake in the company.
the Schoeller Group, which owns and
in the industry – ensuring correct
BW purchased the shares from Scorpio
operates more than 70 ships.
deployment so that the right balance is
Tankers at $15.34 each, making the deal
maintained between supply and demand.”
worth $92m in total.
Nor is there any conflict with Hamburgheadquartered Passat Shipping, which
At BW LPG Martin Ackermann took over
operates three 2,700 teu feeder vessels
BW
as CEO this August. Previously he was
owned by BTL’s founding partner,
It has been another remarkably busy
with Evergas.
Joachim Von Der Heydt, who has since
year for BW, arguably Singapore’s largest
moved to Singapore as executive
shipowner by revenue. Its product tanker
Epic Gas
chairman.
arm, BW Pacific, went for an IPO in Oslo
Charles Maltby stepped into to replace
this November, but at the last moment
Lars Vang Christensen at Epic Gas this
of which just 15 are directly chartered
pulled it on deteriorating conditions
January when Christensen announced
in,” says BTL’s managing director Bill
for shipping investments. BW Pacific
he was stepping down. Maltby had been
Smart, who joined the company as owner’s
currently owns an existing fleet of 33
serving as executive chairman prior to
representative in Singapore in 1990.
vessels, comprising 17 owned LR1s and
taking on the CEO role. Like Epic Gas’s
“We have some 35 scheduled vessels,
16 owned MRs, and a newbuilding fleet of
founders Chris Buttery and Paul Over,
teu carriers to 2,700 teu vessels. India
12 vessels of which six are LR1s and six
Maltby’s background includes time at
forms our core business, and we run
are MRs.
Pacific Basin.
“We have a range of feeders, from 600
www.splash247.com 17
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OWNERS
This October Epic Gas sealed a $120m senior secured credit facility to help finance roughly two thirds of its remaining seven newbuildings. The Singapore-based firm said in a release: “The company remains committed to the delivery of a high quality fleet with an outstanding newbuilding program of three 7,500 cu m vessels and four 11,000 cu m vessels, plus an additional 11,000 cu m newbuilding to be delivered under a bareboat charter to Epic Gas.” Epic Gas, founded three years ago, has been one of the fastest growing players
attract shipping investment to the island
business are clearly propping the
in the gas carrier markets, now boasting a
state. This February Masterbulk turned 20.
maritime division, but also allowing Uni-
fleet of 45 vessels.
China Navigation
Nick Fisher, the CEO of Masterbulk, tells Splash: “It’s been a rollercoaster ride all the way. We’ve expanded, contracted,
Asia to position itself for any uptick in its chosen sector, handysize bulkers. Michio Tanamoto, chairman and CEO
This February China Navigation Company
outsourced, insourced, and expanded
of the company, reckons handies could
(CNCo) ordered its first self-discharging
again. Still, we are proud to have been
make a comeback in 2017, hence why
cement carrier on the back of a
here so long.”
he’s keen to pen a series of contracts for
partnership deal with Golden Bay Cement.
This year the Singapore offshoot
a few Japanese newbuilds soon.
The vessel will be built at China’s Jinling
of Westfal-Larsen Shipping saw it axe
shipyard and will be specially designed to
early plans to get into shipmanagement.
due to coal trade volumes in China, new
operate on the New Zealand coast.
Masterbulk, which owns 20 open hatch
tonnage and the supply/demand gap,”
CNCo’s industrial shipping division,
“The handysize market has been slow
supramaxes, had made plans to diversify
Tanamoto concedes. However of the
Swire Bulk Logistics, is partnering with
revenues by getting into third party
roughly 3,200 handies in the market, he
Golden Bay Cement to build, own and
management. Not only has it now canned
points out 16% are over 20 years old and
operate the 9,000 dwt cement carrier.
this venture, it has also switched its own
30% over 15 years old.
The vessel is scheduled to commence
ships to another third party manager,
operations in late 2016.
Rickmers Shipmanagement.
In June, another CNCo division, Swire
“This wasn’t an easy decision,”
“I don’t expect volumes to pick up the market but scrapping of these older vessels should provide a recovery
Shipping teamed up with Rickmers-Linie, the
Fisher tells Splash, “but the economics
breakbulk and heavylift carrier, to enhance
of running this as a standalone
services in India and the Middle East.
shipmanagement business for the number
Japanese bankers, two in Hong Kong
sometime in 2017,” he tells Splash. Uni-Asia was founded in 1997 by three
A connecting carrier partnership will
of vessels involved could no longer
and Tanamoto in Singapore. Initially the
allow Swire to link breakbulk and project
be justified in the current depressed
company started out providing finance to
cargoes in India and the Middle East,
market. Shipping companies of all sizes
shipping as well as building up a property
through Rickmers-Linie operations, to its
are having to look at where they can
and hotels empire. In 2003 it made its
Australia, New Zealand and South Pacific
reduce costs and maximize efficiencies.
first foray into shipping investment.
network via Singapore.
Shipmanagement is an economies scale
Nowadays the fleet is made up of 15
game with increasingly small margins
bulkers, five containerships and two
involved, and I believe we will see further
product tankers. Of this total 13 are in
consolidation in the market.”
joint ventures and the rest 100% owned.
Masterbulk Founded in Singapore as the shipowning entity for the dry bulk fleet of Westfal-
It also owns a shipmanagement
Larsen, Masterbulk was one of the first
Uni-Asia
company in China, Wealth Ocean Ship
Norwegian-owned shipping companies to
These are interesting times for Uni-Asia,
Management, and manages seven vessels
establish themselves in Singapore under
the Singapore-listed diverse conglomerate
with Tanamoto revealing the company
initiatives created by the Maritime and
with interests in hotels, property and
would like to expand more into third party
Port Authority of Singapore (MPA) to
shipping. The first two strands of the
management.
www.splash247.com 19
rolls-royce.com
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OFFSHORE
Doom and gloom Singapore’s OSV community is facing dire financial straits. Consolidation could be on the cards for some, oblivion for others
F
or much of this decade the Singapore
where even in the unlikely event of the
are negotiating with the banks to allow
Exchange was rammed full of
entire rig fleet working, there would be
them to service only the interest portion
releases from exuberant offshore
still be a surplus of offshore support
of their amortising loans in the interim.
vessels.”
Some are seeking refinancing via loan
support vessel operators announcing all manner of dramatic expansion plans
With banks now reluctant to lend cash
top-ups, as they had paid off a portion of
on the back of oil prices being in $100+
to this toxic sector OSV operators in
territory. The past 12 months, however,
Singapore are having to look at higher-
announcements have been limited to
cost alternative funding avenues such
for an amendment of financial covenants.
dire quarterly results, revenues plunging,
as sale and leaseback of assets as well as
In addition, most Singapore OSV players
losses growing and contracts being
tapping up equity partners.
are laying up their fleets and laying off
torched. The hatches have been well and
Leverage at local OSV companies has
the principal over the past years. Meanwhile, some are also negotiating
staff. More desperate measures include
truly battened down among Singapore’s
risen. The median debt to equity ratio
hiring freezes, not replacing employee
large OSV community, but with most
of 18 Singapore-listed OSV owners was
attrition, cutting salaries, reducing
analysts predicting oil prices to remain
up by about a third from a year earlier
onshore and offshore crew as well as
low for at least the coming 18 months
at 1.08 at the end of the second quarter,
consolidating functional teams.
there could be some very high profile
Thomson Reuters data showed.
bankruptcies coming. With utilisation and charter rates
Deutsche Bank, in a recent report,
CIMB does not expect a strong rebound for the sector in 2016, and advised
does not expect the OSV sector to pick
investors to focus on tendering activities
down by more than 40% this year the vast
up anytime soon. Any offshore contracts
to discern the sector’s shifts. More tenders
majority of the industry are struggling,
which are up for grabs are likely to attract
and enquiries mean the prospect for more
hit hard by overcapacity. Comments Mike
aggressive bidders, and hence drive down
work which, in turn, means a positive
Meade from local offshore brokers M3
prices and margins, Deutsche Bank said.
revision in offshore fleets’ utilisation and
Marine, “The market is out of balance
CIMB Research, in another recent
when it comes to supply and demand;
report, notes how some OSV companies
OSV operators in Singapore are having to look at higher-cost alternative funding avenues
day rates expectations. In a legal update from earlier this year Oon & Bazul partner Kohe Hasan suggested low oil prices could lead to greater consolidation within the OSV sector.
www.splash247.com 21
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OFFSHORE
“Smaller and newer OSV operators may not survive in this harsher economic climate and are likely to become targets of larger OSV operators with a healthy cash flow,” Hasan said. “The impact of $50 oil has absolutely decimated the offshore industry,” Fazel Fazelbhoy, the former head of the UAE’s OSV major Topaz Energy and Marine, told the Marine Money conference in Singapore this September. Fazelbhoy, who now runs an offshore consultancy, warned there were another 400 OSVs still to be delivered. A bloodbath seems unavoidable to many in the coming 12 months.
The impact of $50 oil has absolutely decimated the offshore industry
MPA helps out
days to 180 days, with effect from 1
of S$4 for the first five days, six to 90
November 2015 to 31 October 2016.
days will be S$4 plus S$0.50 per day
“The rates will be applicable to
after the first five days, 90-180 days
The Maritime and Port Authority
OSVs approved by MPA that do not
will be S$46.50 plus S$0.50 per day
of Singapore (MPA) has extended its
carry out cargo operations, calling
after the first 90 days, and 180 days
port dues concession for OSVs as the
at MPA designated offshore marine
onwards will be S$91.50 plus S$1 per
waters off the Lion Republic become
locations and/or specific anchorages
day after the first 180 days.
a parking lot for out of work offshore
in port,” MPA said in a port marine
vessels.
circular.
Incremental concessionary rates of
The revised port dues applicable
The MPA’s conciliatory stance to the hard pressed OSV sector follows an appeal from the Singapore
S$0.50 ($0.35) per day for OSVs have
for OSVs where period of stay is one
Shipping Association to ease up on
been extended from the current 90
to five days will see rates per 100 gt
charges for idled OSVs.
www.splash247.com 23
BUNKERING
LNG moves closer to reality The port is leading the world in encouraging gas as the next ship fuel
W
hile volumes at the container
the SS 524:2014 Quality Management
from Veritas Petroleum Services calls
port might have slumped this
for Bunker Supply Chain, will “further
for support and clarity from the local
year – and shipping remains
enhance consistency in practices in the
authorities to ensure bunker surveyor
largely in the doldrums – there is no
delivery of bunkers for vessels calling at
jobs are not eliminated. “The situation is
letting up in bunker sales in Singapore.
the Port of Singapore” according to a note
still very grey,” he warns.
Bunker sales grew 5% year-on-year in the
from the MPA.
first three quarters of the year to 33.5m
SS 600:2014 sets out guidelines and
LNG developments
tonnes, cementing the republic’s position
procedures to ensure that the correct
In July the MPA began the tender process
as the world’s number one place to fill a
quality and quantity of bunkers are being
through which prospective companies will
ship with fuel.
delivered safely and efficiently, and
apply for a licence to supply LNG bunkers
includes better controls and safeguards.
to vessels in the port.
As befits such a dominant position, Singapore often leads the bunkering
SS 524:2014 puts in place a
Applicants had to propose an ‘end-
industry on making changes, improving
comprehensive quality management
to-end’ LNG bunkering system, showing
delivery and eyeing new technology.
system for the bunker supply chain, which
their LNG sourcing, supply, marketing
the MPA said, “is necessary for bunker
and delivery process. The shortlisted
Singapore’s (MPA) revised bunkering rules
operations in Singapore to continue to be
proposals will be announced by the end of
came into effect on September 1 this year.
on par with international benchmarks”.
the year.
The Maritime and Port Authority of
The two sets of guidelines, namely
Another impending change is to
The successful applicants will supply
the Singapore Standard SS 600:2014
do with mass flow meters. With their
LNG marine fuel as part of Singapore’s
Code of Practice for Bunkering, and
mandatory introduction, Rahul Choudhuri
LNG bunkering pilot programme,
By having full-scale LNG bunkering services, Singapore will be able to serve as a key refuelling station for Southeast Asia
scheduled to commence in early 2017. The MPA plans to provide funding of up to S$2m ($1.47m) per vessel for up to six LNG-fuelled vessels that participate in the pilot programme.
www.splash247.com 25
Singapore A Major Bunkering Hub
Searights Maritime Services Pte Ltd Certificate of Accreditation: MPA/AS 04 001 80 Marine Parade Road #16-05/06/07/08 Parkway Parade Singapore 449269
Tel: +65 6344 1108 Fax: +65 6344 1128 email: bunkers@searights.com.sg www.searights.com.sg
BUNKERING
for activity in Port of Singapore for a period of at least five years, the MPA said. Pavilion Energy, the state-funded LNG vehicle, is also working with the MPA to develop LNG bunkering on the lines of LNG bunkering terminals in Europe, and has commenced talks with the Singapore LNG terminal to build jetties for loading ships with LNG fuel. “By having full-scale LNG bunkering services, Singapore will be able to serve as a key refuelling station for Southeast Asia, and can welcome more international and regional LNG ships through Asia,” Seah Moon, Pavilion’s CEO said. LNG as a ship’s fuel was under the spotlight at Gastech, the big annual LNG event, which this year took place in Singapore. The move to LNG as a fuel is a game
Wind gave way to coal and coal in its turn gave way to oil. The move from oil to natural gas is simply the next progression Singapore has been working on developing practical operational
LNG-fuelled vessels. Interested companies can apply for
changer which cannot be ignored, said Angus Campbell, managing director of Bernhard Schulte Shipmanagement UK, (BSM), speaking at Gastech. “Independent industry predictions indicate that the use of LNG as a bunker fuel offers opportunities for early movers to secure a market leading position ashore and afloat,
procedures and standards for LNG
a co-funding grant of up to S$2m per
and global LNG fuelling will become a
bunkering operations at the port since
vessel for a maximum of two successful
mainstream option.
2013.
applications per company.
The MPA has also set aside S$12m
The scheme is only open to companies
“It has happened before,” he said. “Wind gave way to coal and coal in its turn gave
($8.4m) from its Maritime Innovation &
incorporated in Singapore, and the
way to oil. The move from oil to natural
Technology Fund with which it plans to
vessels to be funded must be flagged
gas is simply the next progression in the
contribute to the cost of building new
under the Singapore Registry or licensed
evolution of maritime transportation.”
New giant formed
locations and activities in the city
for BP to gain access to the tightly
world. Both companies already have
restricted Chinese markets.
While the Maritime and Port
significant bunkering presences in
Authority (MPA) continues to cut
Singapore.
back the number of licenced bunker
“The ports served by BP
providers, Singapore welcomed a new
Sinopec Marine Fuels Pte Ltd will
powerhouse bunker supplier this May
be: Singapore; Fujairah, United
with Britain’s BP and China’s Sinopec
Arab Emirates; Antwerp, Belgium;
forming a bunker storage and sales
Rotterdam and Amsterdam in the
joint venture in the Lion Republic.
Netherlands; Tianjin, Qingdao,
The 50/50 joint venture will use both companies’ existing bunkering
The joint venture is seen as a way
and will provide bunkers around the
For the last 11 consecutive years BP Singapore has been the biggest bunker supplier by volume in Singapore.
Shanghai, Ningbo and Shenzhen, China,” a statement said.
www.splash247.com 27
COMING SOON!
Contact Grant Rowles on grant@asiashippingmedia.com for details
SG50
From pirate nest to free port Celebrating 50 years of the republic, award-winning author Paul French writes exclusively for Splash on the history of maritime Singapore
A
s with so many things in Singapore it begins with Sir Stamford Raffles. Raffles was a
visionary and in 1819 he gazed across the naturally deep and sheltered waters stretching between the peninsula that is now Singapore and the small islands of Pulau Brani and Pulau Blakang Mati (better known these days to everyone as Sentosa) and realised he was on the shores of what could be a great port. A captain in the East India Company, William Farquhar, had originally told Raffles of the harbour – inhabited only by orang laut sea gypsies and cutthroat pirates. But it suited the
post. From that moment Singapore was
to be shipped out to the wider world
needs of the East India Company and
to be both a free port and a key naval
like a Shanghai or a Bombay; nor was
the British Empire perfectly. Raffles
garrison. The combination of these two
it the gateway to a potentially giant
claimed Singapore for the East India
roles was to be decisive in the history of
market for western goods, such as
Company (and by extension the British
the port of Singapore.
Canton (Guangzhou) or Yokohama.
Empire), made Farquhar the Permanent
Being a free port meant relaxed
Rather Singapore’s existence hinged on
Resident and ordered Captain Henry
customs and excise conditions to attract
becoming the most important calling
Keppel of the Royal Navy to clear out
trade; it meant a port not exclusively for
station between India and on to the
the infestation of pirates. The Port of
the use of the East India Company and
Far East. For once the much overused
Singapore was open for business.
the British. Being a free port also meant,
saying, ‘geography is destiny’, was true.
However, from the start, the Port of
crucially, relatively few controls on
Singapore’s geographical location at
Singapore was not to be just another
transhipment. This was at the very heart
a crossroads of the East and West was
weigh station on the trading routes of
of Raffles’ dream for the port, according
to be, from its very origin, fundamental
the British Empire, but rather something
to Professor Peter Borschberg, of the
to its success as a trading port. As Peter
distinctly more – a free port protected
Department of History at the National
Borschberg adds, “If you come from
by naval warships. Raffles himself
University of Singapore. “Singapore
West Asia or the Bay of Bengal and you
fell to ill health and returned home to
was always conceived and designed
wanted to go to the Far East, and you’re
England to die in 1826. However, before
as a free port, and it remained so
doing this either in the age of sail or in
leaving, never to return, he gave William
through the nineteenth and much of
the age of steam, there are really just
Farquhar explicit instructions regarding
the twentieth centuries as well.” This
two entry points - the Straits of Malacca
the future of the port - that Farquhar
was a masterstroke in the development
or the Sunda Strait.” Today the Port of
should maintain free passage of all
of the port. Unlike the ports in British-
Singapore remains the world’s most
ships through the Strait of Singapore.
controlled India or the newly created
crucial transhipment point – Raffles’
Further, to support and enforce this
foreign-controlled Treaty Ports of China,
initial dream has long been realised.
order, a military and naval presence was
Singapore was not a major source of
Georgraphy has been Singapore’s
to be established alongside the trading
commodities or manufactured goods
destiny.
www.splash247.com 29
The Port of Singapore’s early
on to tongkangs – light wooden cargo
remote Indonesian islands for
development occurred in tandem with
boats – which took the precious cargoes
transhipment on to markets as far away
other major revolutionary changes to
down the Singapore River to be stored
as London and Amsterdam where they
global trade. The new harbour rapidly
in warehouses and go-downs. The city
fetched extraordinarily high prices;
grew - the first drydock known as
grew up around the port, thriving from it,
Chinese manufactured goods (in those
Number 1 Dock was completed in 1859;
profiting from it.
days including pig bristle toothbrushes,
the second, Victoria Dock, in 1868 to be followed by the Albert Dock in 1879. In 1900 what had been known as the New
Singapore’s rapid growth was based
India tea clippers moored alongside
Harbour was officially renamed Keppel
on the three main networks of trade
Chinese junks. As steam superseded
Harbour – the man who had chased the
that flowed through the waters just
sail so the Port of Singapore became a
pirates away over 50 years before visited
offshore of the settlement. The Chinese
major coaling station. Pirates remained
to witness the renaming ceremony.
Network connected all of Southeast
a problem – in the Malacca Straits and
Captain, now raised to Admiral, Henry
Asia to the teeming southern Chinese
elsewhere – and so British warships on
Keppel was 92 years of age. At the same
ports stretching from Hong Kong and
patrol were also a regular sight.
time as the facilities were constructed so
Canton up through Fujian to Amoy
other changes occurred – in the 1850s
(Xiamen), Ningpo (Ningbo) and Shanghai
the Port of Singapore had become
trade opened with the Kingdom of Siam;
– everything from lacquer ware and
the dominant port of Southeast Asia.
the Straits Settlements were formed in
opium; pig bristles and eggs flowed
It’s success at the heart of the three
1867 giving Singapore greater access
through this network. The Southeast
networks crucial, but its historic
to the hinterlands of Southeast Asia
Asian Network linked the myriad islands
creation as a free port essential, to
and, crucially greatly increasing the
of the Indonesian archipelago with
its success. Its largest regional rival,
volume and speed of West-East trade via
highly valuable spices at its heart. Lastly
Batavia (now Jakarta), under Dutch
Singapore, the Suez Canal was opened
the Indo-European Network connected
control, retained cumbersome and often
in 1869.
the Far East to the ports of the Indian
expensive restrictions. Both the English
out to the world and vice versa. East
Within a decade of its formation
Ocean littoral and on to Europe. These
country traders and the Chinese junk
one of the world’s busiest. Ships crowded
networks were of course complimentary.
traders deserted Batavia for Singapore.
the harbour, labourers unloaded cargoes
Spices flowed into Singapore from
Tanjung Pinang in the Riau Islands,
The Port of Singapore was already
30
fine porcelain, ornate furniture) went
The Three Networks
www.splash247.com
SG50
previously the main port for the spice
Keppel Road and, after 1932, the Tajong-
pass unnoticed in London. Nor did the
trade, lost its position to Singapore too.
Pagar Railway Station – in sight of the
growing power of the Japanese Imperial
By the turn of the century Singapore
port – a wonderful art-deco station of
Navy in the Pacific and China Seas.
was clearly the dominant regional port
white marble with statues representing
Cash-strapped as the British Empire was
rivalled only by Bombay to the west and
agriculture, industry, commerce and
after the devastation of the war money
Shanghai to the east.
transport. A few changes of train might
was found to build a massive naval
be required, but steam trains now
base in Singapore. Construction began
King Rubber and Lord Tin
connected the Port of Singapore to as
in 1923 and was eventually completed
Singapore had once been the sleepy tip
far away as Kunming and Chongqing
in 1939 at the then phenomenal cost
of an often somnambulant peninsula.
in China; across the vast expanses of
of $500m. Adjacent to the commercial
But in the 19th and early 20th centuries
French-controlled Indo-China and even
port the naval base featured the world’s
that changed and brought another bonus
into the heart of Burma.
largest drydock, the third largest floating
to the Port of Singapore. As the British
dock, enough fuel storage tanks to
developed Malaya so Singapore became
War and More War
the Straits Settlements’ primary port of
The First World War was to have
months and all protected by heavy
export. Across the world the demand for
a profound affect on the Port of
15-inch guns positioned in Fort Siloso,
manufactured goods drove demand for
Singapore despite the conflict never
Fort Canning and at the new Royal Air
tin; the development of the bicycle, the
directly reaching the country. The port’s
Force base at Tengah. Upon completion
automobile, modern shipping, all drove
economy boomed as Britain sourced
Winston Churchill, then First Lord of
demand for rubber and Malaya was the
unprecedented levels of crude rubber,
the Admiralty, declared Singapore the
major producer of King Rubber and Lord
oil and tin from the country to fuel the
“Gibraltar of the East.”
Tin. Fortunes were created and invested
nation’s war machine. A new flag was
But it was not to be. Singapore was
in developing an infrastructure of road
also seen fluttering from ship’s masts
to be a naval base without a fleet. As the
and rail that ran the length of the Malay
in the port too – the Stars and Stripes.
Second World War spread from Europe
Peninsula. Their final stopping point?
Between 1912 and 1914 only one major
to Asia in 1942 after the Japanese attack
The Port of Singapore.
cargoship flying an American flag called
on Pearl Harbour, the European empires
at Singapore. In 1915 over seventeen
in Asia crumbled. The Japanese occupied
Singapore Causeway began in 1919.
large American-flagged cargo ships
French Indo-China, took the strategic
It opened to cargo trains in September
called at Singapore. In 1917 (when the
port of Shanghai and then Hong Kong
1923 and to passenger trains a
United States entered the war in Europe)
on Christmas Day 1941. Singapore
month later. Steam trains brought tin,
over twenty US-flagged ships called
was next in their sights. The Battle of
petroleum and rubber to the port as well
at the port and three companies – the
Singapore raged from February 8 to 15,
as passengers for the liners that docked
newly formed Singapore-Pacific line, the
1942 and ended in a British surrender.
on both the coastal ferry services and
Waterhouse Steamship Line of Seattle
The Japanese Imperial Army occupied
the routes west to Europe via Suez
and the Pacific Mail Steamship Company
both the naval base and the commercial
and to all points East – Hong Kong,
of San Francisco - had commenced
Port of Singapore. Now prime minister,
Shanghai, Kobe, Yokohama, Honolulu,
regular services between Singapore and
Churchill called the fall of Singapore to
Los Angeles, San Francisco and
the Pacific coast of the US. Even after
the Japanese the “worst disaster” and the
Vancouver. If you wanted to get to New
the armistice, when the war ended in
“largest capitulation” in British military
York then take your pick – west via Suez
Europe, demand for oil, rubber, tin and
history. The next three and a half years
to Marseilles or Southampton and then
a host of other commodities boosted
were to be dark ones across a Singapore
across the Atlantic, or east to California
the port’s revenues. As it celebrated the
under Japanese occupation. But in
and then either the long route by sea
centenary of its founding by Raffles,
August 1945 Tokyo surrendered and
via the Panama Canal or cross country
back in 1819, Singapore’s port was at
Singapore, and its port, were liberated.
on the new transcontinental railroads.
its zenith in terms of shipping tonnage,
The next phase of the port’s history was
The Port of Singapore really did connect
profits and cargo volumes. It seemed
to be as part of a newly independent
the world. But take a train south from
that both war and peace had been good
Singapore and to take place in a world
as far away as Bangkok, Butterworth
for the Port of Singapore.
which was to see, in technological terms,
The construction of the Johor-
(change for Penang) or Kuala Lumpur and the southern terminus was the
And the port’s strategic importance as a lifeline during the Great War did not
support the entire Royal Navy for six
arguably even more change than the previous 100 years.
www.splash247.com 31
RIQ Pte Ltd
27, MSL BUILDING . UBI ROAD 4 . #03-02 . SINGAPORE 408618
Email email@riq.com.sg
Tel +65 6741 3723
Fax +65 6741 3746
www.riq.com.sg
NIGHT VISION CAMERA HSC code compliance (for ND1200 Predator model)
ENGINE CONTROL SYSTEM Mechanical / Electronic Engine Mechanical / Electrical Activated Gear Box Marine Class Type Approval
STEERING GEAR CONTROL SYSTEM Major Marine Classification Interface to JS/DP Customized Control System
FIFI SYSTEM External Fire Fighting System
THRUSTER Tunnel Azimuth Deck Mounted
SG50
hard to envision that in 1966 not one containership plied the trade routes via Singapore. All the more amazing then that that year PSA announced, to a frankly startled global shipping community, that it was going to build a container terminal at the East Lagoon. Singapore was not a rich nation but did manage to secure
Independence and self-reliance
a S$45m loan from the World Bank to fund the construction of the terminal. Six years later, in 1972, the MV Nihon, sailing from Rotterdam with a cargo of 300 containers berthed and was unloaded with the terminal’s new Hitachi cranes. East Lagoon Container Terminal was
The 1960s saw dramatic local maritime developments
to be renamed Tanjong Pagar Terminal;
ndependence came to Singapore
stream of containerships, growing each
I
in August 1965. The early 1960s had seen a tough time for the Port
entrepreneurship, innovation and trade. In 1964 the Port of Singapore
the lone MV Nihon was to become a year; by 1985 Singapore was the busiest
Authority (PSA) was formed as a
container port in the world. At the
of Singapore. Disagreements with
statutory body, effectively making the
inauguration ceremony for the terminal
the newly independent Malaysia saw
port a development agency to ensure
Lee Kuan Yew told the press: “Singapore’s
Singapore eventually break away as
its continued crucial role to the rapid
raison d’ être is its port; Singapore must
a separate nation and this meant that
development of the country in these
strive to remain a major hub port.”
much of the port’s traditional business
early days. Being small means being
The second visionary decision
from the Malay heartlands moved to
nimble, being able to move quickly
Singapore took was to vertically
other ports. Additionally, much of the
to gain advantage. Singapore was to
integrate their new economy. It was
former tonnage that had flowed through
embrace this advantage and make two
not enough to create a value-added,
Singapore from Indonesia was now
key decisions in the 1960s that, at the
export-oriented manufacturing base
diverted to other regional ports. As a
time, appeared to be massive gambles,
on the island; nor to equip PSA with a
new, small island nation Singapore was
but ones that ultimately ensured the
container terminal ahead of its time.
forced to embrace a greater sense of
long-term growth and continued success
Singapore also decided to create its own
self-reliance and this, in part, meant
of the Port of Singapore. Looking back,
shipping line in 1968 at a time when its
that the Port of Singapore reverted to
with the benefit of hindsight, these
population was barely 2m people and its
what it had been in its earliest days – a
decisions appear obvious. But they
GDP was but a fraction of what it would
transhipment centre. Geography was
were far from that in the mid- to late-
become. Wholly-owned by the Singapore
still integral to Singapore’s destiny.
1960s and deserve to be explained and
government, Neptune Orient Lines (NOL)
remembered.
was to be Singapore’s national line, its
However, Singapore began to emerge as something new; something
Riding the Singapore Cable Car
creation designed to bolster and support
it had never been before really – an
from Mount Fabre out across Keppel
the island’s economic development
export-oriented economy that aimed
Harbour towards Sentosa it’s hard to
through offering local manufacturers
to be a vibrant and value-added
imagine Stamford Raffles standing on
low freight rates to boost exports.
manufacturing economy in its own
the banks, surveying the harbour and
As the 1970s rolled around the
right. Singapore, essentially for the
deciding to create his legacy of the free
question for Singapore, its government
first time, began exporting itself, and
port of Singapore in 1819. Down below
and port authority was whether or not
its locally produced goods, out to the
dozens of ships are moored; hundreds
the initial foundations – the creation of
world. The role of the port was essential
more out to the horizon waiting to enter
PSA, the building of a container terminal
to realising the nation’s inaugural
the port and, aboard them, thousands of
and the founding of NOL – would be
prime minister Lee Kuan Yew’s goal of
metal containers. The pirates and the sea
enough to weather the very stormy
rapid economic development driven by
gypsies are long gone, but it’s equally
weather approaching.
www.splash247.com 33
Competition and crises Oil shocks and nearby infrastructure growth proved challenging in the 1970s southern Chinese port locations as sites of possible future development. Perhaps the major challenge to both Singapore as a nation and PSA in the 1970s was the 1973 oil crisis, which by its end in 1974 had seen the price of a barrel of oil rise from $3 to $12. Between 1965 and 1973 Singapore’s annual average real GDP growth was 12.7%; inflation was generally low and prices stable. However, the high
T
degree of Singapore’s manufacturing he 1970s were to see some of the
Pagar Container Terminal was paying
industry that was foreign owned and/
worst crises to face global trade
off for PSA – those Hitachi cranes were
or invested and the policy of boosting
and the global shipping industry
working day and night.
exports at all costs had the effect of
in the second half of the 20th century.
Goh Chok Tong, who was to go on
exposing Singapore to the oil price
Yet, Singapore initially powered on. By
to become Singapore’s second prime
shocks of the decade. The 1973 oil
the mid-1970s the length of highways,
minister, was managing director of NOL
crisis did put a dent in trade and GDP
streets and rural roads illuminated with
and expanding the line precipitously
growth, down to an average of 8.7%
streetlights had almost tripled from
– embracing the coming wave of
between 1973 and 1979. However,
892 km at independence to 2,281 km;
containerisation as well as cementing
what made the global recession more
planning had begun for Singapore’s
NOL’s (and by extension Singapore’s)
manageable for Singapore than for most
second power station at Senoko even as
position in the Europe-Asia trade
regional economies in the 1970s was its
the new Jurong Power Station was still
through joining the ACE Consortium
traditional position as a transhipment
under construction; work began on an
with partners OOCL, K Line, Cosco and
centre and as an entrepôt economy. Oil
entirely new passenger airport at Changi
Franco-Belgian Services. ACE quickly
may have quadrupled in price but it
while also expanding the old airport
became known as the ‘third force’ in the
was still in demand and still needed to
at Paya Lebar as a dedicated air cargo
global container shipping business.
be shipped and that invariably meant
hub. New manufacturing centres were
via Singapore from the Middle East to
being established in Jurong, Redhill and
country to attempt to revive its economy
oil hungry nations with no domestic
Tanglin.
through expanding low cost production.
reserves such as Japan.
PSA was still expanding Singapore’s
34
But Singapore was not the only Asian
The 1970s was the start of the same
The combination of the global shock
port infrastructure too. It took over the
process for many regional nations
to the system of the oil crises of 1973,
former British naval base at Sembawang
that would, with Singapore, emerge as
and then again in 1979 following the
and established the Sembawang Wharves
the Asian Tigers of the 1980s. Taiwan,
outbreak of the Iranian revolution, and
handling breakbulk and specialised
South Korea and Hong Kong were all
the rise of regional competitors, both as
cargoes including heavy equipment,
attempting similar strategies. Malaysia
export-oriented economies and potential
steelworks, and cables. In part this
was attempting to reduce its reliance
transhipment hubs, meant Singapore
equipment was needed to support
on Singapore’s terminals by developing
had to be radical in its thinking once
Singapore’s massive construction boom
Port Klang as the country’s national
again. And it was. Singapore looked at
that saw the city transform from low-
load centre, and Tanjung Pelepas
where the world was shifting after a
rise to high-rise by the mid-1980s. A
as a regional transhipment centre;
tumultuous decade and decided, against
new terminal was also built at Jurong
Hong Kong was ramping up its port
the popular consensus, that perhaps it
to support the development of the new
infrastructure and Hong Kong-based
was just possible that the long dormant
Jurong Industrial Estate (JIE). The far-
port operators were already, by the
Chinese dragon was about to awaken
sighted decision to build the Tanjong
end of the 1970s, starting warily to eye
from three decades of Maoist slumber.
www.splash247.com
SG50
Look East
well. However, it had learnt the lesson
In the 1980s Singapore moved to get closer to China
to look beyond its traditional trading
S
of exposure and realised that it needed partners of Europe, Japan and North
ingapore weathered the 1979
America to new markets. Today, China
oil crisis and the turbulent
seems an obvious choice, but it was far
economic start to the 1980s
from obvious in the 1980s. The country
surprisingly well. To counter over-
was only a couple of years past the
dependence on exports and foreign
upheaval and turmoil of the Cultural
investment the government spent on
Revolution; it was an overwhelmingly
domestic consumption. This meant
poor, largely agrarian nation with
cash to continue the construction
outmoded industry, dilapidated ports,
boom as well as large public works
a creaking infrastructure where it even
programmes – following technical
existed, and little to no contact with the
surveys in the 1970s, the first trains
world’s major shipping lines to continue
outside world for three decades. But
ran on the island’s MRT system in 1987.
transhipping through Singapore.
where most of the world saw potential
However, by the mid-1980s Singapore
It was also the case that PSA had
chaos and an economic basket case,
faced the double-whammy of a saturated
continued investing – not just in
Singapore’s prime minister Lee Kuan
construction industry seeing fewer
more port infrastructure, but rather
Yew, it seems, saw opportunity.
large-scale projects in the pipeline
in the coming wave of technological
and the slowdown in many key trading
advancement that reduced bureaucracy
Australia’s Flinders University, says:
partners and the markets of Europe and
and made hub ports attractive to
“Lee spotted the rise of China before
North America. Meanwhile, much of the
shippers. In 1984 PSA introduced
anyone else.” Deng Xiaoping, whom
economic stimulus (certainly in terms of
PORTNET - a one-stop 24-hour paperless
Lee described as, “a great leader who
jobs) from oil refining and shipbuilding
electronic system, linking PSA ports
changed the destiny of China and of the
were being ameliorated by new and
with the global shipping community.
world” made a state visit to Singapore in
lower cost competitors in the region.
In 1988 CITOS followed, an enterprise
1978 (pictured) and was impressed with
Singapore moved into recessionary
resource planning (ERP) system that
what he saw. Building on the success
territory economically in late 1984. In
coordinated and integrated PSA’s entire
of the 1978 visit Singapore-Beijing
1985 GDP growth was -1.4%. However,
port operations. The berths, cranes and
bilateral relations slowly emerged
the country managed to make a quick
yards were in place – innovations such
throughout the 1980s. In 1985 Dr
recovery by 1986.
Michael Barr, a professor at
as PORTNET and CITOS made them
Goh Keng Swee had become a special
There were a number of factors
more efficient, easier for shipowners to
economic adviser to China’s nascent
that helped Singapore recover so fast.
use and streamlined the whole business
coastal Special Economic Zones; the two
One was the generally continuing good
saving both PSA and its customers time
countries bilateral trade was growing
conditions at PSA’s terminals. Singapore
and money. This concentration on the
slowly. Singapore was engaging with
had become the world’s busiest
back office processes of the shipping
Beijing before it had actually officially
container port by 1982, achieving
trade by PSA echoed the wider strategy
established diplomatic relations with the
1m teu in a year for the first time.
of Singapore to create jobs and business
country (which happened in 1990).
Buoyed by this growth PSA invested in
through embracing finance and the
construction of the Keppel Container
new knowledge economy. Throughout
phrase for Singapore in the 1990s and
Terminal adjacent to the Keppel Harbour
the 1980s Singapore morphed into
the small island state was to find itself
facilities – it eventually opened for
one of Asia’s foremost banking centres
well positioned to take advantage of
business in 1991 with 14 berths and
attracting multinational regional HQs,
the waking dragon. However, what was
42 cranes in operation. Additionally in
stock listings on the local market and
seen as an opportunity for Singapore
the 1980s Singapore had emerged as a
creating thousands of new, office-based
was also sometimes a threat and, while
major producer of bunker fuel and was
jobs for its generally highly educated
Singapore had survived the economic
able to keep the price low in a generally
workforce.
quakes of the 1980s in robust form,
oil inflationary world. Cheap bunker fuel was a significant inducement to the
Singapore had weathered the storms of the early- and mid-1980s remarkably
‘Engaging China’ was to be a buzz
the 1990s were to provide additional challenges.
www.splash247.com 35
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SG50
A soft landing Asian tiger Singapore fared better than most through 1997’s Asian Financial Crisis
T
he 1990s looked set to be a
Delta. PSA too was becoming
good decade for Singapore, and
involved deeply with China.
its port. In the first year of the
In 1996 PSA established its
decade PSA crossed the 5m teu in a year
first ever overseas project in
mark and became the world’s largest
Dalian. Singapore was moving
container port. The Keppel Terminal
up the value chain; going
began operations and a year later the
global as an exporter and
PSA’s Brani Terminal also went into
an investor and becoming
operation. Volumes through PSA’s
both the world’s largest
terminals surged – by 1994 Singapore
transhipment port by some
passed the landmark of 10m teu in a
margin and also a centre
single year.
for hi-tech innovation in
It was the decade of containerisation
petro-chemical, bio-tech and
as the rising ‘Asian tiger’ economies
pharmaceuticals. In January
emerged as ‘demon exporters’ and
1995 Singapore cemented its position
major regional economy to suffer
China’s experiments with Special
as a global economic power by joining
almost no fall out from the crisis was
Economic Zones paid off and it became
the World Trade Organisation.
China with its protected currency and
a major exporter too and the so-called
Perhaps a high point in Singapore’s
‘factory of the world’. At the same time
economic growth and emergence in the
and textiles. China was now one of
Asian nations’ demand for oil, other
1990s was the 1997 acquisition of the
Singapore’s largest trading partners and
commodities and primary inputs surged
shipping line APL by NOL for $285m.
a major investment destination.
to new record levels and much of this
In response to the growing movement
transhipped through Singapore. The
of goods of all sorts – from refrigerated
been tough ones for Southeast Asia;
lines of VLCCs and containerships
foods to dangerous chemicals – around
recovery would take years in some
queuing up to pass through Singapore
the region APL Logistics was formed to
regional economies who, after having
grew ever longer.
position the company as a major force
to secure loans for multinational
in managing supply chain operations in
lenders would have to impose swingeing
the region.
austerity programmes and see their
At the same time Singapore itself emerged as a leading high-end, valueadded manufacturer of semi-conductors
However, once again it was outside
global demand for its cheap electronics
The last few years of the 1990s had
currencies and markets suffer long-term
and other hi-tech components, while
forces that rocked Singapore. The Asian
damage. But Singapore had had one
also extending its reach into the global
Financial Crisis erupted in July 1997.
major advantage – its oldest and most
finance, banking and knowledge working
Singapore was better positioned than its
reliable advantage. While many of Asia’s
economies. These were record years for
neighbours and close trading partners
economies had been hit exports had
retail sales and tourism too – Changi
in the Association of South East Asian
kept on being shipped and the West’s
had emerged as the major airport hub
Nations (ASEAN) such as Indonesia,
appetite for consumer goods from
for the region.
the Philippines and Thailand, but was
Asia had not slackened at all – indeed
still affected. GDP slumped to just 1.5%
with the availability of easy credit
well-positioned vis-à-vis the emerging
growth in 1998; the island’s stock and
in Europe and North America it had
economy of China. Trade with China
property markets took a severe beating.
burgeoned. The containerships kept on
hit S$3bn in 1990 and kept on growing.
But still the underlying robustness
crisscrossing the oceans and calling at
Singapore put down roots in China –
and the diversification of Singapore’s
Singapore.
most publicly with the much-publicised
economy over the 1980s and 1990s
Suzhou Industrial Park in 1994, close
helped the country to rebound to 5.4%
The 21st century was hailed as being the
to the rapidly emerging megalopolis
GDP growth in 1999. It had been what
era of globalisation. Singapore and its
of Shanghai and in the heart of the
economists termed a soft landing.
port were more than ready to welcome
manufacturing belt of the Yangtze River
Also helpful was the fact that the one
that kind of century.
Singapore appeared exceptionally
And so the century came to an end.
www.splash247.com 37
SG50
The world’s port of call In the 21st century the Lion City has become by popular consent the world’s top international maritime centre
B
y the new century Asia’s port infrastructure looked
the Keppel Terminal. These joint terminals mirrored the
talk of ‘killer apps’ rather than simply advantages but, for Singapore, the
unrecognisable from 1965. PSA
Singapore government’s attempts to
foundation of its success remains the
continued to build – the Pasir Panjang
further cement ties with key trading
same in 2015 as it did in 1819 – its
Terminal opened in 2000 and continues
nations through the agreements between
willingness to open out to the world and
to expand through land reclamation.
New Zealand and Singapore on a Closer
trade with it. That has grown from being
By 2005 PSA announced it was
Economic Partnership and the Free
simply a weight station and a refuelling
handling 20m teu a year, a remarkable
Trade Agreement (FTA) negotiations
depot, a place to take on fresh water
achievement considering 30 years prior
with Japan, Australia and the United
and aggregate goods from numerous
it was handling none. Current plans
States in 2000. More FTAs have followed
regional islands and markets. Today it
would allow the combined PSA terminals
over the ensuring decade. Early in the
is as much about taking expertise into
to handle 65m teu per year – quite a
2000s Singapore’s influential Economic
the hinterlands of China – PSA has
growth over the 1m milestone in 1982.
Review Committee noted that the island
operations in many Chinese ports – or
To secure business against the rise
state should encourage, “A globalised
the old trading partners of Europe and
of other regional ports the PSA began
economy where Singapore is a key node
Japan, the emerging markets of Latin
to enter into a variety of joint-venture
in the global network, linked to all the
America and India, regional nations
terminals. In 2003 the COSCO-PSA
major economies.” Singapore rapidly
such as Vietnam or Indonesia, or other
Terminal (CPAT) went operational
embraced the globalisation concept.
key global hubs such as Saudi Arabia
at Pasir Panjang Terminal; two years
In the nineteenth century Singapore’s
or Turkey. But PSA’s terminals remain
later saw the opening of a jointly
great advantage was its deepwater
its core business and Singapore’s most
managed terminal between PSA and
harbour and location on the most
deeply rooted economic activity – in
Mediterranean Shipping Company
crucial node of East-West trade. This
2014 PSA Singapore was the first port in
(MSC) at Pasir Panjang; 2007 saw PSA
advantage was accentuated by Sir
the world to have cumulatively handled
join with NYK and K Line to open a
Stamford Raffles and his concept of
500m teu. PSA’s slogan ‘The World’s
dedicated car terminal; and in 2008 a
Singapore as a free port and the world’s
Port of Call’ doesn’t look like changing
joint container terminal PIL- PSA within
major transhipment hub. Today, we
anytime soon.
www.splash247.com 39
FINANCE
Exchange to spearhead renewed finance push Expect to hear of more shipping IPOs in the republic once the markets pick up
S
ingapore, regularly topping polls as the world’s greatest international shipping centre, is looking to boost
the finance side of its offerings. The Maritime and Port Authority of Singapore (MPA) is working in a tripartite group to promote shippingrelated listings on the Singapore Exchange (SGX). The Singapore Shipping Association (SSA) is the other partner in the group. The total market capitalisation of the 62 maritime listings on the Singapore bourse stood at S$45bn ($32.69bn) as of the end of September, according to SGX. The group will be benchmarking SGX against the current top bourses in maritime listings: the Oslo Bors and the New York Stock Exchange (NYSE). At September’s Singapore Shipping
freight agreements (FFAs) clearing in
of gravity has been tilting towards Asia
Association dinner, Esben Poulsson, the
Asian trading hours, Splash understands.
where an increasing number of key
new SSA president, told attendees the
The likes of Noble and Cargill have been
European participants have enhanced
republic needed to up its game on ship
urging the SGX to up its FFA game for
their trading and broking infrastructure
finance. “We cannot sit on our laurels,”
years and the SGX is willing to respond
to participate in the Asian timezone.
he said, adding: “We feel we are a little
and give London’s LCH.Clearnet a run
Such growth momentum will continue
weak in the capital markets and listings.”
for its money, sources connected to the
as the number and type of shipping
SGX have told Splash.
players, such as physical participants,
Singapore’s push for more shipping listings comes at a time where other
“In developing the FFA market, SGX
exchanges are seeing their shipping
recognises the importance of a robust
and supported by the underlying activity
exposure diminish. Local shipping
Asian-centric marketplace which is
in the dry bulk market in this region,” the
communities in both London and
well supported with an internationally
source said.
Hong Kong have called for their local
accepted regulatory framework,” a
exchanges to up their game in chasing
spokesperson for SGX told Splash.
shipping listings this year. SGX has been upping its game a great
SGX is attempting to increase the
brokers and banks, increase over time
Once again Singapore is stealing a chunk of business that a decade ago would have been in the purview of Hong
number of Asian participants with
Kong, something not lost on Hong Kong
deal of late when it comes to shipping-
hedging needs or who are seeking
owner, Kenneth Koo, the chairman of dry
related offerings. Its new LNG pricing
exposure to freight prices. It is also
bulk owner, TCC Group. “Hong Kong is
mechanism (see page 48) has been well
trying to reach out to and share with
not identified as ‘Asia; from a shipping
received by the sector, while it has plans
freight participants how to manage their
standpoint, Singapore has assumed
to grow its dry bulk expertise soon.
price risks, the spokesperson said.
that mantle. Hong Kong has also lost
The exchange is taking heed of major customers to try and introduce forward
“Though the majority of the trading may take place in Europe, the centre
its identity as a dry bulk hub,” Koo told Splash recently.
www.splash247.com 41
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YARDS
Harsh winters tend to follow Indian summers The fall in the price of oil has hammered Singapore’s top two shipyards leading some to speculate a merger is the best way to survive
M
eteorologists will tell you
convinced low oil prices are here to
good jobs for Singaporeans, but the
harsh winters tend to follow
stay for at least the next couple of years
continued transformation of the industry
Indian summers. Singaporean
Singapore’s top two yards are doing all
is critical for its long-term success,” Beh
yards can vouch for this swift change. No
they can to make their organisations
said.
other sector in Singapore has been hit
leaner.
so hard by the low oil prices worldwide
Keppel chief executive Loh Chin Hua
Merger mooted
than the republic’s main yards run by
said towards the end of October that
What Keppel and Sembcorp are suffering
Keppel and Sembcorp. The pair - who
his company was readying itself for “a
is by no means unique. Shipbuilders
defied the odds for much of the past
possibly longer winter” by slashing its
across Asia have been whacked by the
decade, building up enviable offshore
workforce. “We are making ourselves
downturn in shipping and then the
orderbooks - have yet to secure any new
more efficient [and] leaner,” the Keppel
drop in the price of oil. In plenty of
rig orders this year, a sharp turnaround
boss said.
other shipbuilding nations – led by
from the recent past where they have
In early November the chairman
South Korea and China – consolidation
the led the world in snaffling up rig
of the Economic Development Board
among shipbuilders is now taking
contracts.
(EDB), Bew Swan Gin, said Singapore’s
place. Could Sembcorp and Keppel join
offshore and marine industries would
forces in this downturn? A far-fetched
combined with a severe drop in new
need to reinvent themselves to ride out
idea considering the ferocity of the
orders, have seen both conglomerates
the downturn.
rivalry between the pair? However, a
Contract cancellations and delays,
report poor results in the first three quarters of the year. With most analysts
“The sector is a significant contributor to our economy, providing
In plenty of other shipbuilding nations – led by South Korea and China – consolidation among shipbuilders is now taking place
recent report by local bank DBS said that consolidation is possible for both companies, as restructuring will allow the two rigbuilders to streamline their cost structure and improve their competitiveness on the international front.
www.splash247.com 43
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YARDS
DBS noted that in the previous downcycle, Singapore shipyards went through a major consolidation during the late 1990s, where various mergers resulted in the formation of the two government-owned shipyard groups.
A potential merger of KepSMM will create a global champion with a powerful combination
This time, the shipbuilders are
Cameron International’s offshore rig business, which includes jack-up rigs and after-sales services. “Conglomerates tend to perform well through crises due to their access to capital,” commented Keppel boss Loh. Sembcorp Marine, meanwhile,
facing an even greater challenge, with
overseas experience plus SMM’s world
recently opened a new steel structure
contract wins sinking to record lows and
class facilities in Singapore and Brazil,
fabrication workshop. The 120,000 sq
manpower woes adding insult to injury.
which complement Keppel’s older
m facility, the largest facility of its kind
“This may force the yards to look for
facilities. KepSMM will account for
in Southeast Asia, will integrate with the
ways to restructure. We do not rule out
almost one-third of the global market
firm’s other capabilities at its flagship
restructuring, mergers and acquisitions
share for drilling rigs by orderbook,”
Tuas Boulevard Yard.
possibilities, as any cost rationalisation
DBS noted.
exercises will boost competitiveness of Singapore yards amid rising competition
In July this year, Sembcorp Marine consolidated from a multi-business-
Ploughing ahead
unit organisation structure into a single
burden of operating shipyards in Brazil,”
Despite the drop in rig orders both
‘Transformation for Growth’ strategy.
said the report.
Keppel and Sembcorp remain in
from Korea and China, and the added
brand and company under its long-term The company now focuses on
expansive moods. Keppel has used the
four key capabilities across its global
will create a global champion with
downturn in the oil and gas industry
operations, namely rigs and floaters,
a powerful combination - Keppel’s
for investment. In August, it announced
repairs and upgrades, offshore platforms
market leadership, branding, and greater
the acquisition for $100m of US-based
and specialised shipbuilding.
“A potential merger of KepSMM
www.splash247.com 45
Shipmanagers
Rethink needed if sector is to prosper High costs and a lack of local manpower mean shipmanagement in the Lion Republic has not taken off as some had expected
S
ingapore’s shipmanagement sector looks stale with no real large contenders appearing on the
global scene. On the contrary, the sector, which is, like so much else in shipping these days, ripe for consolidation, could see any number of local shipmanagers swallowed up by other players from around the world. Location has not been helpful here. The cost of doing business in the republic, the aspirations of the local youth, the lack of a genuine shipmanagement culture have all meant that while the republic has thrived as a hub for all manner of other maritimerelated businesses when it comes to shipmanagement it is still relatively
others might be thinking in the same
business here, many shipmanagers in
small fry without any champions that
way.”
the republic have moved to shift as
can boast more than 200 ships under full technical management. Like so many sectors in shipping
It is well known that many European
much of their back office operations to
shipmanagers have been looking at
cheaper climes, led by the Philippines.
making a beachhead in Asia with a
These high costs locally are also
these days, perhaps more so in fact,
possible acquisition in Singapore, but
inhibiting many owners from shifting
economies of scale are deemed vital for
willing sellers thus far have proven to be
here. Despite significant wooing from
prosperity in shipmanagement. By way
hard to come across.
Singapore delegations, Greek owners,
of example, the architect of this year’s
The fact is, in actual headcounts,
many of whom are looking for new
mega shipping merger, Peter Cremers,
Singapore’s shipmanagement
homes in the wake of the ongoing
who combined two Hong Kong entities,
community is declining, more so than
financial meltdown in Athens, are not
Anglo-Eastern and Univan, tells Splash:
most other major shipping centres.
convinced the Lion Republic is the
“There are clear advantages of size so
As a result of the high costs of doing
answer to their needs. High costs and a
When it comes to shipmanagement it is still relatively small fry without any champions that can boast more than 200 ships under full technical management
lack of the right manpower are cited as reasons. When it comes to shipmanagement, despite many concessions and initiatives by the authorities, it is clearly a sector within Singapore shipping that needs to be relooked at if it is to prosper.
www.splash247.com 47
Gastech serves as coronation for city’s hub ambitions As with many other commodities in Asia, Singapore is positioning itself as the best place to trade gas
O
n the face of it when Singapore
Asia has prompted plans to establish a
importing terminal since 2013. It has
domestic natural gas trading market in
become Asia’s LNG hub the aim
three tanks with capacity set to rise from
Singapore.
should have looked fanciful. This tiny
6m tons a year 11m tons by 2017 with the
The city-state’s government plans to
country has no gas resources, no real
addition of a fourth tank. Work to identify
set up a Secondary Gas Trading Market
gas infrastructure at the time, and was
where to position a second terminal to
(SGTM) in Singapore for trading LNG
some distance away from the key demand
the east of the republic continues. The
and natural gas domestically on a short-
drivers in the region: Japan, South Korea
government has intimated a second
term basis. The plans were announced
and China.
terminal could be operational by the early
by S. Iswaran, minister for trade and
part of the next decade.
industry, at the opening of Singapore’s
However, this is the Lion City, a place where government, once it has made up its mind to be a hub of a certain sector, throws everything at it. This year’s Gastech, the LNG’s big annual roving confab, held in Singapore this time round, seemingly served as a the republic’s coronation as Asia’s LNG centre.
48
Singapore has had an operational LNG
set out about five years ago to
www.splash247.com
Rising LNG supply and demand within
International Energy Week in late October.
Enhancing the maritime supply chain is in our blood in Singapore, honed by many decades of experience as a seaport and trading hub
LNG
A well-supported Asian LNG price will be helpful for LNG trading in Asia Teo, in his keynote address at Gastech in late October. Teo said the Singapore SGX LNG Index Group (SLInG), a weekly index based on the submissions from international LNG players who offer their assessment of LNG prices this end, could “evolve to be the Asian LNG price over time”. The index, launched by the Energy Market Company in September, now comprises about 20 players. “Singapore is well-equipped to host this new and more open way of doing business in the LNG sector,” said the chief executive of Pavilion Energy Seah Moon Ming at the same conference, adding that the country, as neither a significant LNG seller or buyer, will provide a “neutral platform” for regional and international markets. Home-grown LNG company Pavilion Energy is growing its business. Seah told Gastech delegates that the firm, backed by state investment company Temasek Holdings, has signed a 10-year LNG agreement with a unit of Russia’s gas “An SGTM can yield several potential
will aim to provide more detailed
benefits. It will allow domestic gas price
information on the long-term energy
discovery that reflects Singapore’s
outlook, the minister said.
demand and supply conditions. Second,
The city-state is also assessing
giant Gazprom . It has also inked a memorandum of understanding with Chinese energy company Huadian to supply LNG from
gas users will be able to complement
proposed land allocation frameworks for
2020 onwards, in addition to a similar
their portfolio of long- and medium-term
new power plants. Currently, more than
agreement with Japan’s Jera Co to jointly
supplies with short-term supplies,” the
90% of Singapore’s electricity is produced
procure and invest in LNG.
minister told delegates.
from imported natural gas, including LNG,
“It will also pave the way for the potential establishment of a gas futures
purchased under bilateral contracts. Singapore can also lead the formation
market,” Iswaran said, but did not specify
of a neutral LNG price in Asia, just like
a timeframe for the scheme.
it has done for other commodities such
“We aim to remain competitive and effective by responding to shifts in all aspects of demand, supply and price,” Seah said. “Enhancing the maritime supply chain
The Singapore Exchange plans to
as oil, rubber or iron ore, according to
is in our blood in Singapore, honed by
create an Asian benchmark for LNG,
International Enterprise (IE) Singapore
many decades of experience as a seaport
which will negate the commodity’s
chief executive Teo Eng Cheong.
and trading hub,” Seah noted presciently.
reliance on oil-linked pricing. Singapore’s Energy Market Authority
“A well-supported Asian LNG price will be helpful for LNG trading in Asia,” noted
The city’s gas hub credentials are growing fast.
www.splash247.com 49
HAZE
Maritime drawcard trumps annual toxic fires Just 18% of those surveyed for this magazine say they’d relocate if this year’s smog from Indonesia became the annual norm bulk owner Pioneer Marine, comments: “If two months out of the year are spent with the haze, expats will not want to live and work in Singapore.” Matt Cannock, managing director at insurance firm Markel International Singapore, says it’s unlikely his company would reposition from the city-state as a result of the haze, but it would certainly make he and his team deliberate about expansion plans. Mary Baey, ceo of Satcom Global Singapore, complains: “It does disrupt the day-to-day operations of the business especially where engineers working on ships installing satellite communications hardware are put at risk due to decreased
S
ingapore, famed for its commitment to green urban living, has long been bedeviled by the land-clearing
actions of neighbouring Indonesian plantation owners. This year’s haze induced by Indonesia’s fires has been especially bad, the worst in the Lion City since 1997. The toxic smoke has brought significant disruptions to business as Indonesians went about raising 21,000
In just a few months the fires alone have emitted more carbon than the annual emissions of Germany or Japan It is testament to the remarkably strong
Steve Dillon, from BBC Chartering’s Singapore office, relates how staff there have been advised to take holidays if possible away from Singapore during the haze period. More incredibly, Dillon reveals one solution the German heavylift operator has mulled to keep working in years to come as the thick deadly smoke hoves into view. “We have also considered to build or purchase an office purpose-designed
sq km of forests and peatland by the end
drawcard that is the maritime cluster in
accommodation barge, which can be
of October. 21,000 sq km – that’s around
Singapore that just 18% of the 250 people
towed to healthier climes,” he says.
30 times larger than the island republic of
surveyed for this magazine said they’d
Singapore. In just a few months the fires
leave the country if the recent bout of
Offshore Consultants’ Singapore office,
alone have emitted more carbon than the
haze became the annual norm.
who remembers the horrendous 1997
annual emissions of Germany or Japan.
Nevertheless, many expatriates –
Captain Jonathan Walker from London
haze well, says it is vital people stand up
These emissions – which have harmed up
especially those with young families – will
to 75m people in the region this year –
mull alternative destinations if the smoke
are likely to add about 3% to total global
does repeat to similar levels next year, our
be accepted as a norm. It needs to be
greenhouse gas emissions from human
survey found.
urgently addressed by all the regional
activities for 2015.
50
visibility and dangerous air pollution.”
www.splash247.com
Pankaj Khanna, ceo of fast growing dry
to make sure action is taken. “We do not believe that the haze should
governments,” he stresses.
Piracy
Hotspot cooling off? Beefed up patrols by the littoral states appear to be working
S
hotspot for piracy, but could
efforts to tackle these incidents by
posed by robbers and pirates in the
the worst be over? According to
the authorities and shipping industry
region the Malaysian and Indonesian
piracy watchdog, ReCAAP, there were
collectively and the importance of timely
navies did form a joint rapid deployment
183 incidents of sea robbery or piracy
reporting by shipowners/operators/
team this August.
in the region last year. Moreover, in the
masters, and prompt responses by
UK security firm Dryad Maritime
first nine months of this year there were
maritime enforcement agencies,”
says this measure is not enough, urging
another 161 incidents, leading to some
ReCAAP urged.
authorities in the region to establish a
outheast Asia is the world’s
to speculate the scourge could hit new records in 2015. “High demand for illicit oil, together
“There is need for continuous
The majority of the incidents reported during the first nine months of the year involved perpetrators operating
In response to the growing threat
permanent presence on the Singapore Strait. More could be done to tackle the
with a well-established black market,
in groups of one to six men, consistent
root causes of piracy, argues Matt
will continue to drive maritime attacks
with past trends.
Cannock from insurance firm, Markel
in Southeast Asia over the coming
In 83 % of the incidents, the crew was
International Singapore.
months, meaning small tanker owners
not injured, although there were reports
face operational, financial and security
of crew being threatened and taken
Authority (MPA) of Singapore, Andrew
threats,” warned maritime security
hostage.
Tan, tells Splash the republic is doing all
provider PVI in a release earlier this year.
Captain Ashok Sabnis, founder
However, what is most noticeable is
of Singapore-based Goodwood Ship
The CEO of the Maritime and Port
it can to fight maritime crime. “Tackling the sea robberies and
the recent drop off in attacks as littoral
Management, tells Splash that the local
fuel siphoning incidents in region will
states around the Malacca Straits,
maritime crime spree needs to be tackled
require strong cooperation between
Malaysia and Indonesia get their act
by the tripartite system of cooperation
regional countries. On the part of
together. The International Maritime
between Singapore, Malaysia and
Singapore, we have beefed up our
Bureau notes there were just two
Indonesia .
security presence in our waters/area
hijackings reported in the third quarter this year. “The robust actions taken particularly
“A joint force of naval patrol and rapid response teams would go a long
work with our neighbours to tackle the
way towards solving what has become
threat,” he says.
by the Indonesian and Malaysian
a major problem for shipping in the
authorities – including the arrest of one
region,” he says.
the alleged masterminds – is precisely the type of deterrent required,” said IMB director Pottengal Mukundan. However, ReCAAP warned in its latest report this October that there was no room for complacency when transiting these waters still.
of operations and will continue to
Fourth quarter piracy figures should paint the full picture.
The robust actions taken particularly by the Indonesian and Malaysian authorities – including the arrest of one the alleged masterminds – is precisely the type of deterrent required www.splash247.com 51
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HR
Talent pool exhaustion Like it not, the government needs to change its immigration rules
F
or the third year running the single
Quite so, concurs Captain Ashok
The HR professionals
issue that vexed respondents to
Sabnis, the founder of Goodwood Ship
So what do the professional recruiters
our Singapore maritime survey the
Management.
make of the local market? By and
most was in the field of human capital.
“Sadly the fact is most Singaporeans
large, the four maritime HR experts
Despite some measures by government,
do not see a life at sea as a viable or
we contacted for this report concur
the city-state clearly appears to be talent
attractive career choice,” he says, adding:
the market is indeed very tight, but
tight – and not cheap either.
“I have heard Singaporeans refer to a life
activity remains fevered in what is by
at sea as being in a floating prison for
many recent polls the world’s brightest
which you have committed no crime.”
international maritime centre.
Chris Kirton, managing director at Norstar Ship Management, does not
So many respondents urged the
Matt Conway, managing director
talent pool in Singapore is exhausted
government to review the work permit
of Faststream’s Singapore operations,
with many substandard people in the
issue again.
highlights the squeezed nature of the
mince his words, commenting: “The
market.”
Says Caroline Huot, head of lube
available workforce.
supplier, UniMarine: “The decision
“Securing good local talent with
owner Pioneer Marine, bemoans the
of authorities to restrict foreigners
the right career motivations is of a
fact that salaries in some cases are now
employment in Singapore is an issue
premium,” he says. For expatriates,
higher than London.
when looking for specialists and
Conway explains it is becoming
“The local labour market is almost at
particularly when language skills or
increasingly difficult to attract the best
100% employment,” he warns, calling like
specific technical skills are needed.”
talent to Singapore due to the high
Pankaj Khanna, the ceo of dry bulk
many others in our poll to 250 people
Other suggestions included this from
cost of living and the fact that most
for easier rules on immigration so
Edna Lim from C&C Technologies who
companies no longer offer the traditional
expatriates can see a path to citizenship
said the government should provide
expatriate package including housing
or permanent residency. “This will attract
better schemes to encourage business to
and schooling allowances.
talent,” he insists.
send their staff for training.
Biju Oommen, ceo at feederline Orient Express Lines, tells Splash: “It is getting increasingly difficult to find suitable talent in Singapore. The shipping industry seems to have lost its glamour to attract new talent from the local pool.”
The talent pool in Singapore is exhausted with many substandard people in the market
“If you consider that private schooling in Singapore is amongst the most expensive in the world, this can in many cases essentially rule out the possibility for expats with children which clearly further narrows an already very finite talent pool,” Conway points out.
www.splash247.com 53
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HR
According to Jason Tay, managing director of Singapore’s Direct Search Asia, 2015 recruitment activities continue to be busy for the shipping and commodity sectors, but the same cannot be said for the maritime and oil and gas
I have heard Singaporeans refer to a life at sea as being in a floating prison for which you have committed no crime “It is very unlikely that the creation of
Parry observes that Singapore is
sectors specifically with shipbuilders,
new blood – locals – will catch up with
in the same boat as any developed
OEMs and offshore drilling and
the demand for talent in the industry, at
country where its people have many
production asset owners, as the market
least for the next few years,” Tay says.
opportunities other than shipping
continues to be affected by the sluggish oil price. “With more mergers and acquisitions
Phil Parry, chairman of recruitment
competing for their attention.
firm Spinnaker Global, admits of the
This is a view also held by Rory
local HR scene: “High staff turnover
McGuire from Flagship Management
happening in the market, employees
and difficulties recruiting have become
who tells Splash: “Singapore is no
working for these companies feel less
a perennial complaint.” He notes how
different to any other global locations
confident with the business, hence
the industry has been honing in on
– the talent pool is generally small and
triggering interest to look out for better
ever more specialist skills meaning that
is not helped by owners and managers
opportunities. With this in mind, the
candidate supply is tight.
identifying office-based staff as the
majority of hiring activities in 2015 are related to filling existing vacancies,” Tay says. The government decision since 2012
“When a good one floats by, lassoo them quickly,” Parry stresses. Given the paucity of local
principal source of cost reduction.” McGuire says clients are still focusing on technical and commercial
seafarers, Parry has a specific urgent
positions, something our survey also
to promote locals in favour of foreigners
recommendation, telling Splash that the
backed up.
is hurting maritime employment, with
government would be well advised to
Tay reporting there simply is not
identify the shipmanagement function
Splash survey, recruitment will remain
enough local talent to match Singapore’s
as a shortage occupation in need of
the number one issue for the local
broadening maritime hub status.
relaxation of work permit rules.
shipping industry.
As it stands it seems come next year’s
www.splash247.com 55
16 - 18 March 2016 Level 1 & Basement 2 Marina Bay Sands, Singapore Join us at one of Asia’s biggest maritime and offshore exhibitions and conferences: • • • • •
6 exhibition halls and 21,000sqm of exhibition space 14,239 visitors from Asia 1,518 participating companies from 60 countries 16 official pavilions High-powered conferences and seminars
APM 2016 exhibition space almost sold out. Book your space now!
APM 2016 visitor registration now open. Register now!
T: +65 6780 4586 E: apm@reedexpo.com.sg W: www.apmaritime.com
Marina Bay Sands
EVENTS
Bring your business cards Splash guides you through the events to attend in Singapore in 2016
W
ant to meet shipowners and managers? Need more options for suppliers or
partners? Networking at events is a great way to make contacts in the maritime industry, we all know that, and Singapore is probably the best place in the world to do so on a regular basis. As the industry mostly struggles, making new contacts and turning them into new customers will be crucial in 2016. This is a guide on what events you
will be the centre of attention again as
chance to meet plenty of shipowners
should attend in order to do so.
Singapore Maritime Week returns for
from Singapore and beyond. There are
In March comes the largest exhibition
the eleventh time. The slogan for the
always owners from Greece, Hong Kong
of the year, Asia Pacific Maritime.
week is People, Ideas, Opportunity and
and Thailand in attendance amongst
Taking up two floors at the iconic
there will be plenty of all three. In 2015
others.
Marina Bay Sands complex, this show
the week played host to around 30 events
brings a host of big name companies
involving more than 50,000 attendees.
from Singapore and around the world.
If you’re a member of the Singapore
On the Friday of the same week is the Singapore Shipping Association annual dinner. For this event, our
You’ll find plenty of industry people
Shipping Association (SSA) then June
advice is clear, get there early and fill
at the event, it draws around 15,000
provides a good chance to catch up with
all your pockets with business cards!
visitors and there is usually a host of
Singapore’s shipowning community as
In 2015, the event played host to more
conferences being held both within and
one of the association’s quarterly cocktail
than 2,200 people and that was on
external to the venue.
parties follows on from SSA’s annual
the day after a public holiday. Expect
Making its debut during the same
general meeting. The AGM is where the
more to attend in 2016, including all
week will be the Maritime CEO Forum,
council and committees are formed, and
of Singapore’s shipowning community
organised by the team behind this
so plenty of shipping’s top bosses will
including offshore owners. Bankers,
publication. The event is designed as the
be in attendance. If you’re not a member,
brokers, managers, yards, it would be
anti-shipping conference, in that it will
you can always attend as a guest of a
hard to find an industry segment not
be a half-day with panels packed full of
member, just make sure you bring plenty
represented at the event. The pre-dinner
shipowner and shipmanager ceos. No
of business cards as there will be well
networking is second to none, and once
presentations, no slides, no selling, just
over 500 people in attendance.
the early speeches are over attendees
the top people in the industry discussing
September is synonymous with the
wander the ballroom in search of
pressing issues. The Maritime CEO
Singapore Grand Prix and F1 excitement
friends, colleagues and clients. There
Forum will be limited in size to ensure
soon turns into excitement from the ship
are several after parties for those that
all attendees can make the most of the
finance community as Marine Money
haven’t had enough by the end.
day, network and then attendees can
returns on the Tuesday and Wednesday
relax at the afterparty which will include
after the race. Located at the St Regis
then at the end of November the iconic
additional invited guests.
Hotel, the event not only draws the entire
OSEA event will be held at Marina Bay
ship finance community but it’s a good
Sands. This exhibition and conference is
Moving onto April, the industry
The Maritime CEO Forum is designed as the antishipping conference: no presentations, no slides, no selling, just the top people in the industry discussing pressing issues
Lastly, if oil and gas is your thing,
unchallenged in Singapore in terms of size and crowd. Over four days expect to see more than 1,500 exhibiting companies and more than 28,000 visitors - so once again, our advice is, print more business cards.
www.splash247.com 57
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TRAVEL
Beyond the obvious Graeme Somerville-Ryan teases some off-the-beaten-track places
M
aritime conferences are
Labrador Park (or Labrador Nature
generally hard work and
Reserve) is a great escape from the
educationally focused. Barely
concrete jungle. A reminder of colonial
and ‘exclusivity’ of the speakeasy concept… Operation Dagger: (7 Ann Siang Hill,
a day goes by in Singapore without some
times and the Second World War defence
Singapore, 069791): An underground
shipping-related event (see page 57). As
of Singapore, this reserve combines
cocktail bar with great décor and
such, a smart attendee should plan for
thick vegetation, gun emplacements, and
an impressive set to ceiling lights
both diurnal and nocturnal ‘networking’
a waterfront park. It’s also handy to the
(I wouldn’t want to be the lighting
opportunities. After all, too much focus
MPA building if you find yourself in that
manager).
on the state of the markets is now widely
part of town.
accepted to be an HSE issue. So, where should you take a key client
Lunch: The second or third most
Location: Try and find the glass door with a rectangle and inverted crown.
important meal of the day. Laksa is a
The bar is located at the bottom of the
for a nice bite to eat, and perhaps an
coconut curry dish made with chicken,
staircase.
event-appropriate sundowner? And, if
seafood, and noodles. It has a bit of
you’ve got a spare hour during the day,
spice to it, and it is a local favourite.
shop’ front in the spy movie Kingsman:
how can you make the most of the local
The Zhen Mei laksa on Bukit Merah
the Secret Service, The Library comes
experiences at hand? Pay attention…
Lane has a great local reputation and
with a ‘front ‘ business and a secret
your marketing ROIs and KPIs just might
the claypot spin on this recipe results
door. However, it also comes with great
depend on the following.
in wonderfully rich flavours. Again, this
cocktails and food. So…if you fancy
is a local outdoors dining experience.
yourself as a covert operative (with a
Breakfast—it’s the most important meal
This hawker centre is relatively hard to
possible drinking problem), this is the
of the day. Roti prata is a local favorite.
find, tucked in between local shops and
place to be.
A flour-based crispy pancake, roti is
apartments (ask a taxi driver to show
one of Singapore’s signature dishes. To
you the way). The surrounding area is
47 Keong Saik Rd, Singapore 089151,
get the best roti you have to ‘go local’
also well worth exploring.
PH: 6533 2001
Let’s start at the beginning.
so this will mean an open-air restaurant
The Library: Much like the ‘tailor’s
Location: Through the Tailor’s Shop,
28 Hong Kong Street: Located
or hawker centre. Located a little out
Nocturnal drinks
at, er, 28 Hongkong Street, through a
of town, one of the best roti stalls in
Although the haunts of Boat Quay,
non-descript, unsigned, door 28 Hong
Singapore is Mr and Mrs Mohgan’s
Clarke Quay, and Club Street still pull in
Kong Street is Singapore’s original
Super Crispy Roti Prata. The trip
the crowds, Singapore is going through
‘unbranded’ bar and a Splash favourite.
is worth it, and this is one of the last
a bit of a speakeasy phase. This offers
Internationally lauded, this is one of
places to (reputedly) still make their own
up a few different options for client
Singapore’s best ranked establishments.
dough.
entertainment. So…ruining the surprise
Reservations are essential.
www.splash247.com 59
MarPoll
Your thoughts The results are in from our latest Singapore poll in which 250 people were surveyed Do you consider Singapore to be the most cost efficient place to base your Asian operations?
Is the government doing enough to protect vessels from piracy and theft in the region?
Yes 61%
Yes 52%
No 39%
No 48%
If Singapore was not your preferred option as an Asian base, what would be the preferred option?
If the recent bout of haze becomes the annual norm, would it force you to move operations out of Singapore?
Kuala Lumpur 24% Hong Kong 15% Dubai
14%
Mumbai
11%
Manila
11%
Bangkok
9%
Jakarta
4%
Yes 18%
12%
No 82%
Other
Can you find sufficient talent in Singapore to satisfy your business needs?
Has Singapore reached a peak as an international maritime centre?
Yes 38%
Yes 37%
No 62%
No 63%
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