So I was reading The EDGE and in this article profiling ST Marine, it raised an interesting point:
“Recently, ST Engineering began building on its engineering capabilities to develop an environmental engineering business – similar to the ones that Keppel and Sembcorp Industries have.”
What I find it strange is that why does 3 Temasek-linked companies need to fight for the same pie?
Perhaps that is where Singapore’s ONLY capabilities lie. They can only do these kind of engineering work.
Perhaps this pie is big enough and lucrative enough to be gobbled up by all and still earn supernormal profits.
Perhaps they are given a mandate to pursue this by the government.
Another interesting thought:
How come Keppel and Sembcorp ended up being at the fore front of rig building? Why is it the shipyards in Korea, Greece and China are unable to do what we do?
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Createwealth8888
Wednesday 1st of February 2012
Keppel Corp and SML innovate and stay ahead of their competitors and have their own design. They go into deeper water space with proven design before those China and Korean yards. Keppel corp is developing new technology to drill The Artic.
In another word, they lead and shape their industry.
Drizzt
Thursday 2nd of February 2012
thanks for the explanation uncle.
Interested Beginner
Tuesday 31st of January 2012
Right cost, high quality, new technology, continuous R&D, high productivity, high innovation.
In industrial jargon, on time, on budget
Look at the west coast shoreline on google maps (Satelite mode) from Pasir Panjang Container terminal to Tuas Naval base area, count how many ships, rigs, tankers, FPSO, semi-sub are being built.
You reported recently on "Ship Repair is important as a recurring income business segment" it is important that a location should have other workshops or yards in existence. Few countries around the world check all these boxes.
all these yards also have global reach in important markets, and have sister yards either JV or wholly owned subsidiaries in country or ni the region.
Besides, when Singapore goes in for a bid, it offers 2 or more bids, to the buyer, more choices and competitiveness, ability to offer buyers domestic content requirements.
we read all the time of ship owners paying to cancel the contract of seriously delayed projects and have the vessels towed to Singapore to finish up and launched.
Drizzt
Wednesday 1st of February 2012
hi Interested Beginner, thanks for visiting and sharing. Really interesting thoughts out there and these are probably the answers closest to where we have our competitive edge, the proximity in the global shipping sector.
not to mentioned expertise in delivering successfully working rigs.
Createwealth8888
Monday 30th of January 2012
We create our own competitors and benefit SG; or else the market create another competitors elsewhere.
One good example is P&G, it has created many competing brands under its own group.
Drizzt
Wednesday 1st of February 2012
the thing uncle is that even if you do not create many would have seen this lucrative pie and taken it up. what is so special about rig building that folks in China and Korea are not able to compete internationally.
abc
Monday 30th of January 2012
The best competitive advantage are those that others find difficult to copy. These would be internal skills and an eco-system built up over time in a niche area that others have difficulty to find public info on, and where the market is not large enough or trusting enough for new-comers to enter into easily. Find these companies and buy their shares when they are priced below fair value.
Drizzt
Wednesday 1st of February 2012
hi abc, that fits exactly to where we should be looking for moats that are good. in your opinion which SGX listed company fits or drifts close to these criterias?