Moving in Closer to China
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APRIL 2014 www.kepcorp.com/ekeppelite Building on collective strength 4 Reaffirming business ties 16 Choice employer 32 Moving in closer to China MCI (P) 153/01/2014 11 16 35 Contents SUSTAINING GROWTH Building on collective strength 4 Green honours 30 Fortifying core competencies 8 Roles revealed Strong fundamentals 10 Spurring Innovations Uplifting ideas 31 Creditable progress for Keppel T&T 11 EMPOWERING LIVES Higher overseas earnings for Keppel Land 12 Choice employer 32 Joining the family Keppel REIT’s income rises 14 Gleanings on governance 33 Stable start for K-Green Trust 15 Chill-out evening Reaffirming business ties 16 Keppelites Abroad Marks of sustainability 18 Rewarding journey 34 Investors’ choice 19 NURTURING COMMUNITIES Celebrating Singapore 35 Quality recognition Amazing maritime hunt SPECIAL FOCUS Near market, near customer in China 20 Power hour 36 Cultivating China ties 23 Promoting eco solutions 37 Insights into Keppel 24 Pedal for charity Configured for growth 26 Stirring experience 38 Spirited away Meeting of minds in Asia 27 Keppel Volunteers Resolute friendships 28 Splashes of colour 39 YY on national safety council BACK PAGE Demonstrations of commitment 29 First for Brazil 40 Cover image: Keppel Offshore & Marine (Keppel O&M), through its wholly owned subsidiary, FELS Offshore Pte Ltd, signed a management services agreement on 9 April 2014 with Titan Petrochemicals Group Limited (Titan) and Titan Quanzhou Shipyard Co. Ltd (TQS) to manage the TQS shipyard. Celebrating the partnership are (from right to left) Mr Wong Kok Seng, MD of Keppel O&M (Offshore) and Keppel FELS, Mr Chow Yew Yuen, CEO of Keppel O&M, Dr Xiong Shaohui, Chairman of Guangdong Zhenrong Energy Co. Ltd., Mr Loh Chin Hua, CEO of Keppel Corporation and Chairman of Keppel O&M, and Mr Zhao Xu Guang, Chairman of Titan. Published for people in the Keppel Group by the Group Corporate Communications Division, Keppel Corporation Limited, 1 HarbourFront Ave, #18-01 Keppel Bay Tower, Singapore 098632. Printed by Image Printers Pte Ltd, Blk 1002, Redhill Industrial Estate, Jalan Bukit Merah, #03-12, Singapore 159456. Editorial Advisor Wang Look Fung Editor Say Huan Yuan Editorial Committee Ang Lai Lee, Candice Low, Carol Huang, Cheryl Goh, Chew Chong Peng, Dale Lai, Donald Sng, Eileen Tan, Elizabeth Widjaja, Eva Ho, Frances Teh, Grace Chia, Hayley Teo, Hoo Yao Lin, Ivana Chua, Lee Chin Siang, Lee Wan Jun, Liang Hui Hui, Priscilla Chong, Razali Maulod, Roy Tan, Sam Neo, Serena Toh, Sue Ann Huang, Teri Liew, Tracy Pham, Woon Pek Yong, Yolanda Guo, Yu Zehan Keppelite I April 2014 CO REG NO: 196800351N Editorial Foresight and flexibility At Keppel’s Harbourfront headquarters in many drilling sites have been using the MLT-116C. Singapore, cable cars ferrying tourists are a fixture So, understanding the need for quick market of the scenery. Naturally, I’ve always associated acceptance, Keppel’s engineers designed its new them with holidaymakers. So I was intrigued to rig with similar leg spacing for easier deployment learn about the world’s first cable car system used at existing sites. for daily commute at the Lee Kuan Yew World City Prize 2014 media conference held recently. Adding features to the legs, jack and fixation systems, Keppel incorporated into its rig a further In Medellín, Colombia, the Metrocable provides versatility to accommodate different operational a physical link between less developed hillside and customer needs. These proved key to the communities and the main city, and this has design’s widespread success, and the resultant catalysed urban revitalisation. The cable cars KFELS B Class rig design is now the industry plug informal, poorly accessible settlements into standard for jackup rigs. the formal economy, enabling a flow of people, knowledge, goods and services that transformed a Just as the Metrocable was innovatively used to city that used to be reputed for drugs and crime. unlock the potential of the hillside communities, Keppel leveraged the legacy of an older design By reappropriating a mode of transport typically to gain market acceptance for its new and better associated with leisure to serve the basic offering. Since then, Keppel’s suite of offshore infrastructure needs of low-income communities, solutions has grown to suit different environments, the city’s authorities have demonstrated an from the milder Gulf of Mexico to the harsher experimental flexibility that redefined the North Sea. By evolving our capabilities in tandem possibilities for achieving urban revitalisation. with the exigencies of different environments, In recognition of this, Medellín was bestowed we hone our adaptive instincts not only to stay a Lee Kuan Yew World City Prize 2014 ahead, but also to redefine the boundaries of Special Mention. what is possible. Turning around a city is no mean feat. Whatever Last month, I found myself on board the world’s exists has been established over decades or even largest jackup rig, Maersk Intrepid, during its centuries, so these inherited issues, both good and naming ceremony at Keppel FELS. Looking down bad, have to be accepted as part of the legacy. from a great height, it is easy to forget the legwork But the Medellín example has shown that a little involved in getting up in the first place. flexibility and ingenuity could convert slums into resources and improve lives. Keppel’s brand of tenacity, tempered with flexibility, has helped us battle through tough Likewise, the rise of the KFELS B Class jackup times to emerge a leading provider of solutions drilling rig is story of flexibility and foresight in in the offshore and marine, infrastructure and uncertain times. property industries today. Whether in building rigs, infrastructure facilities or properties, our innate In the late 1990s, the industry was faced with adaptability and relentless efforts at innovation escalating prices and a daunting offshore industry will continue to be defining qualities in our drive downturn. When Keppel was approached to to create value. build the MLT-116C - the most popular rig design at that time - it counter-proposed its more cost- efficient and higher-specification design. But Keppelite I April 2014 4 Sustaining Growth Growth Building on collective strength Mr Loh Chin Hua, CEO of Keppel Corporation, discussed the Group’s performance and developments in 1Q 2014 via a “live” webcast on 16 April 2014. Keppelite reproduces his speech. UNEVEN GLOBAL growth of between 7% RECOVERY and 7.5% in 2014 as its The year wobbled in with a new leadership works on slow first quarter. Geopolitical structural reforms for better- tensions in Europe and quality growth. Advance elsewhere coupled with estimates by the Ministry of concern over the pace of US Trade and Industry showed tapering have contributed that Singapore’s economy to growing uncertainty in grew 5.1% in the first quarter, emerging markets. The US lower than 5.5% growth in was hit by an unusually harsh the previous quarter. winter but more recently seemed to have emerged Clearly, the global economy with stronger sentiments is not out of the woods. Most and encouraging growth developed economies are still indicators. contending with the spillover effects of the financial crisis, The International Monetary in particular the challenges Fund (IMF) projects a 3.6% of taking appropriate rise in the global economy fiscal and monetary policy this year from 3% in 2013, actions. The IMF, in its world and a 2.8% growth in economic outlook, has the US economy, up from warned that a slower-than- 1.9% last year. Asia is also expected recovery across the demonstrating resilience, global economy could keep Keppel Corporation CEO Mr Loh Chin Hua discussed the Group’s strategic developments at the 1Q 2014 results webcast underpinned by healthy interest rates at historical domestic demand. lows for some time. Real interest rates are expected Europe is turning the corner to increase modestly with My leadership team and I are from recession, although the normalisation of global navigating our way in a business recovery remains patchy, and economic conditions, but environment full of challenges but at a longer period of low inflation will likely be curtailed by the same time we are invigorated by could pose a potential drag the uneven performance in new opportunities out there. We will on the economy. Meanwhile, Europe and slower growth volatility in emerging in China. sharpen our core competencies and economies has increased, look for the niches where we with equity market sell- My leadership team and I can consistently add value to. offs and depreciation of are navigating our way in a Mr Loh Chin Hua local currencies. business environment full of CEO challenges, but at the same Keppel Corporation Closer to home, China has time we are invigorated forecasted a lower GDP by new opportunities out Keppelite I April 2014 Sustaining Growth 5 there. We will sharpen our for the period was 13.4% America alone, E&P spending orders that we clinched in core competencies and look while Economic Value Added is projected to rise by 13% 1Q 2014 alone. for the niches where we can was $151 million. in 2014, led by countries consistently add value to. such as Mexico. While We are heartened that BUSINESS OVErviEW international oil majors are our comprehensive suite PERFORMANCE tightening their belts, we of offshore and marine HIGHLIGHTS Offshore & Marine believe they will be highly solutions continues to win the Our business divisions We are confident that long- selective about the areas to confidence of new and repeat continued to perform term fundamentals for pull back on. customers. New orders won creditably in the first the offshore and marine in the first quarter amounted three months of 2014, industry remain compelling Jackup rig fundamentals are to about $1.9 billion while contributing to a net profit of and sound.