FOR the Maersk Group, a conglomerate of worldwide businesses focusing on the shipping and energy industries, Singapore is the only place outside Denmark where all its business units are represented. The group operates in some 130 countries and is headquartered in Copenhagen, Denmark.
Maersk has been established in Singapore since 1975 and has grown its operations here substantially in tandem with Singapore's growth as an international maritime centre. It is the top Singapore Registry of Ships (SRS) client with about 140 vessels and the Singapore office operates over 100 of its vessels.
Significantly, despite the current gloom and doom in the global shipping industry, the number of Maersk employees in Singapore remains stable at around 650.
Says Rene Piil Pedersen, group representative Singapore/Asia-Pacific, Maersk Group and managing director, AP Moller Singapore Pte Ltd: "With all of our major businesses having activities in Singapore there will always be some who are scaling down while others are growing their number of employees, and right now we are growing the number of staff in Maersk Line's commercial office based in Singapore as part of a restructuring of the business in South-east Asia.
"Even though the company was formally established in 1975, our vessels have been calling at Singapore since the late 1920s."
Mr Pedersen sees shipping companies playing a strong role in Singapore's growth as an international maritime centre (IMC) going forward.
He says maritime Singapore is built on three pillars: competitiveness, that is, a globally competitive taxation scheme, ease of doing business, etc; stability, ie, a consistent, long-term transparent government policy executed by competent government and institutions, rule of law and strong anti-corruption policy; and finally multicultural meritocracy, which gives access to talent with an international and competitive mindset.
"This gives a very strong fundament for Singapore as an IMC, and this is also the reason why the Maersk Group has registered close to 140 vessels and drilling rigs with a value of some US$12 billion in Singapore," he says.
The Maersk Group in Singapore is made up of a diversified portfolio of business units, ranging from containers, tankers, offshore drilling, port terminals, oil, tugs to logistics businesses. It employs around 650 people in Singapore - all white-collared jobs.
"Today, our container business, Maersk Line, in Singapore is made up of AP Moller Singapore, our ship owning and ship management company; Liner Operation Cluster for Asia Pacific is responsible for global stowage of the entire Maersk Line fleet and operations of vessels in Asia-Pacific ports; as well as a commercial office which oversees business activities in the South-east Asia market," says Mr Pedersen.
"Singapore is key to us as one of the main transhipment ports in South-east Asia; as well as our trusted supplier for our offshore oil and gas businesses. For instance, Maersk Drilling has around 30 years of relationship with Keppel Fels in the construction of offshore rigs, of which the most recent project was for three ultra-harsh environment jack-ups worth around US$2 billion. We have also awarded a contract to Sembcorp Marine through Maersk Oil to build topsides worth US$1 billion for the Culzean Field development in the North Sea," he adds.
Established in 1904 the Maersk Group employs about 89,000 people globally today. Its 2015 revenue stands at US$40.3 billion with an underlying profit of around US$3.1 billion. It comprises five core business units:
- Maersk Line, the world's largest container shipping company;
- Maersk Oil, an international oil and gas company with a track record spanning more than 40 years.
- Maersk Drilling, which supports global oil and gas production by providing high efficiency drilling services to oil companies around the world;
- APM Terminals, which provides port and inland infrastructure to drive global commerce;
- APM Shipping Services comprising Maersk Tankers, which owns and operates a large fleet of refined oil product tankers; Svitzer, which provides towage and related marine services throughout the world; Damco, a provider of freight forwarding and supply chain management services; and Maersk Supply Service, a leading provider of global marine services.
"At the Maersk Group we have a distinctive set of group core values which drives the way we do business, namely: Constant Care, Humbleness, Uprightness, Our Employees and Our Name. These values laid the foundation for success over the years. They remain constant despite the complex and challenging business environment we are faced with today, and allow us to make sound decisions in the spirit of our Maersk founders," says Mr Pedersen.
Asked how Maersk is handling the current downturn in the global shipping environment, he says: "2016 started on a rocky note. Container freight rates are extremely low and an oil price of US$30-40 per barrel has pointed to a challenging start. In spite of the adverse market conditions and headwinds, it is important to stress that all Maersk core businesses were profitable in 2015. This is a result of our business units having taken measures to further improve competitiveness and we will continue to do so this year while maintaining activity level so that we are in the best position to serve our customers."
The Maersk Group also has the flexibility and financial strength to capitalise on the downturn through its strong balance sheet as a conglomerate. It is confident that its current market leadership in the shipping and energy industries will allow it to make investments for future growth by building on its key strengths and focusing on its customers and innovation.
Looking ahead, Mr Pedersen says that the global economy is challenged by both cyclical as well as structural changes and at the same time he sees emergence of disruptive innovations across different industries.
"All this, of course, influence the Maersk Group, whether we are talking about low growth rates, changes in trade flows or behavioural patterns and expectations from our customers. However, our company was established in 1904 and this is not the first time that we have weathered a storm.
"Our focus is on delivering a great service to our customers combined with a strong business performance and a differentiation through technology and innovation makes me a strong optimist on the future of the Maersk Group both in Singapore and the rest of the world."