SME INC

Geared Towards Global Expansion

Business Times - 20 Apr 2010
 

Marine safety firm TechnoFIBRE sets its sights on building a presence in the top 25 to 30 major ports in the world, reports JASLENE PANG

 

MARINE safety firm TechnoFIBRE may seem to be subsiding with its exit from some countries in recent years, but this is merely part of its plan to ride a stronger returning wave.
 

The company, which maintains and services marine safety equipment such as davits and lifeboats, has closed all its global franchises and reduced its presence from 15 countries to eight countries.

However, TechnoFIBRE has no wish to lie low. In fact, it already has plans to establish its presence in the top 25 to 30 major ports in the world within the next five years.

'In the beginning, due to a lack of funding, we had to try different business models - franchises, joint venture operations... Until maybe about five years ago, we decided that we should get more control over the companies we were involved in, so that we could control the quality standards,' said TechnoFIBRE's founder and managing director, Ramasamy Ramesh, on the reason for closing all his franchises.
 

'And as we were developing a brand name, we had to protect the brand name as well, so we needed to get better control over the training, the technical aspects and all aspects of the management,' he added.

After 'consolidating' its presence in the major ports in the Asia-Pacific region, Mr Ramesh plans to gear his company towards global expansion once more. The company's next springboard is into West Europe and North, Central and South America. An expected $20-30 million will be required to take the project off the ground and have all stations fully equipped.

'We are actually also looking at opportunities of mergers and acquisitions to fit into our programme, so that we can fuel the expansion,' said Mr Ramesh.

Venturing into other bigger seas of opportunities has always been TechnoFIBRE's vision since it was founded in 1993.

'The marine industry is pretty international . . . And there is a huge market - 150,000 life boats spread across the globe, and not all the ships come back to Singapore for maintenance, so we had to find a way to reach out to them,' said Mr Ramesh.

Two decades ago, Mr Ramesh decided to plunge into familiar waters when he was retrenched by Singapore Airlines in the 1980s.

Work in various marine companies helped revive his interest in the marine industry, an area he studied in his polytechnic days.

'I realised there was a kind of gap in the equipment and service sector and I thought I could make a difference there,' Mr Ramesh said.

Hundreds of lives are lost during the monthly launching of lifeboats and davits. In the maintenance of vessels on board the ships, up to thousands of lives are lost yearly.

'Even as we speak now, lives are being lost,' Mr Ramesh said in an interview with the BT.
 

Having decided to serve the marine industry, Mr Ramesh spent some years 'understanding the business' before starting TechnoFIBRE.

'After 1994, we found that there were rules soon to be put in place . . . to ensure that the lifeboats and davits are maintained properly and crew members properly trained, so we started to look at the possibilities of actually expanding our network on a global basis,' said Mr Ramesh.

In 1995, TechnoFIBRE made its first overseas foray into the Philippines.
 

However, the sea of opportunities that TechnoFIBRE ventured into turned choppy because of the vast
cultural differences.
 

'We were naive to think we would be welcomed wholeheartedly,' Mr Ramesh said.

After struggling to stay afloat, TechnoFIBRE finally decided to pull out of the Philippines in 1998. The company made a similar decision in the US four years ago for the same reason.

'Although we spoke English, we never really understood clearly what was being communicated,' he added.

The economic tsunami did not spare TechnoFIBRE either, and the storm in the shipping business caused last year's revenue to dive 20 per cent from a revenue of $20.9 million in 2008.

Despite the economic downturn, 'buoyant oil prices' enabled its other major source of revenue from oil and gas to help cushion the dive.

'As oil prices start rising, investments by oil and gas companies into exploration work go up. As a result, activity in the oil and gas sector goes up. This helps us because as they get busy, maintenance goes up and we get to do the maintenance for the lifeboats and davits; in that sense, the oil and gas market does help us a lot,' explained Mr Ramesh.

TechnoFIBRE's largest sources of revenue come from the shipping and the oil and gas sectors. A smaller proportion comes from the cruise industry and the defence sector.

Now, as the global economy recovers, another wave threatens to rock the shipping business - pirates.
 

However, TechnoFIBRE plans to tackle that by offering anti-piracy training programmes. Only two months into the marketing phase, it has already received some enquiries from various shipping companies.

Citing the Seabourn Spirit as an example, Mr Ramesh explained the importance for ships to be prepared and well equipped in handling pirates, especially if they were to cross the Gulf of Eden - dubbed Pirate Alley - or the Straits of Malacca.

The luxury cruise liner used a long range acoustic device (LRAD) to deafen the pirates, allowing her to escape from the pirates safely. Such equipment, according to Mr Ramesh, is an example of what TechnoFIBRE is marketing as anti-piracy devices.

TechnoFIBRE is also venturing into broader aspects of marine safety such as immersion suits and service capabilities, while exploring and expanding into other seas.

'If you want to do it, do it with passion,' Mr Ramesh said. 'Organisations have to make money, but they must also have a moral conscience to serve the interest of the industry.'