Transcript of speech delivered by PM Lee Hsien Loong at Keppel Corporation's 50th Anniversary Dinner, delivered on 3 Aug 2018.
Chairman of Keppel Corporation Dr Lee Boon Yang, CEO Mr Loh Chin Hua, distinguished guests, ladies and gentlemen, a very good evening to all. I am very happy to be here to celebrate your 50th anniversary. This is a very significant milestone for Keppel. I am glad that “Keppelites”, both young and old, are gathered here tonight to celebrate the joyous occasion
Keppel has a long and rich history. Even though you were founded in 1968, your name carries the maritime histor.y of Singapore, which goes back more than a hundred years to our beginnings as a British trading hub.
Keppel was named after a British Navy captain, Henry Keppel, who in 1848 discovered the sheltered, deep water harbour that was critical to Singapore’s early success and our prosperity as a port of call for British steamships. By the turn of the 20th century, Singapore port had become the seventh largest in the world. The colonial British Government, recognising its strategic value, decided to take over and modernise the port, and they built two new docks, the King’s Dock and the Empire Dock. Although the shipyard operations have long moved to Tuas – the shipyards took over these two docks – but the two docks still exist at Keppel Bay. They are no longer dry docks, but have been turned into water features. They have become part of the design of the condominiums there, developed by Keppel Land. Indeed, Keppel has come a long way from a small local ship repair yard to become the conglomerate that it is today.
When Keppel was established in in 1968, that was a crucial moment in Singapore’s history. Britain had just announced that it would withdraw its troops from Singapore, earlier than had been expected. Although the Singapore Government had already been contemplating splitting up ship repair operations and cargo handling, there was now great urgency to put the facilities that the British would leave behind to economic use, and to keep tens of thousands of workers about to be made redundant in their jobs.
Hence the process was accelerated and became a top priority. Keppel Shipyard was thus split off from the Port of Singapore Authority on this very day 50 years ago, 3 August 1968, first as the Singapore Drydocks and Engineering Company, before it was renamed Keppel Shipyard three weeks later. I am glad it was renamed. The Government also converted Sembawang Naval Base into a commercial shipyard, and set up a wholly-owned company to run it.
By 1968, we had set up two new anchors of our maritime economy – Keppel Shipyard, and the other company. Tonight, I will concentrate on Keppel Shipyard, since it is your anniversary. But the two companies were a critical piece of the Government’s industrialisation plan, uplifting the livelihoods of many Singaporeans by creating well-paid jobs, which we desperately needed, and in the long term, helped Singapore develop our engineering capabilities and external wing. The two companies competed fiercely with each other. The competition sharpened both.
By 1975, Mr Lee Kuan Yew was able to declare that “Singapore [was] one of the great centres of ship repairing between Europe and Japan”. Both became world class companies in ship repair, and later on, world leaders in building offshore platforms. For instance, just last year, Keppel Offshore & Marine (KOM) successfully delivered the world’s first floating liquefied natural gas (FLNG) conversion vessel, which has been deployed to Cameroon in Africa.
Over the years, we did try several times to persuade the two companies to merge. I was involved in one of the marriage efforts. But by the time we tried that, the two companies had developed distinct cultures and strong competitive instincts, and they also had their own boards and shareholders, and therefore we never managed to bring them together. And perhaps it is just as well, for without the sharp competition to spur them on, they might not have become world leaders today.
The offshore and marine industry remains an important part of our economy. Today it contributes more than 1% of our GDP. However, it is notoriously volatile – feast and famine are the norm. Either you are thriving, with five years’ worth of order books and twelve month bonuses, or you are in an extended slump, having to cut costs and headcounts, and to mothball projects. Through the years, Keppel Corporation has skilfully husbanded your resources, diversified your risks and looked for opportunities to break new ground.
Keppel has evolved to become a diversified conglomerate. It now has four core businesses: offshore and marine, property, infrastructure and investments. It is seeking to deliver solutions for sustainable urbanisation – as your mission puts it – profitably, safely and responsibly. Keppel Infrastructure is working on the new Keppel Marina East Desalination Plant, the first large-scale dual mode desalination plant in the world that is able to treat both seawater and freshwater.
You have a significant presence in more than 20 countries worldwide. Overseas markets account for more than half of your total revenues. In fact, Keppel was one of the first Singapore companies to venture abroad, with great success, including to developing countries such as China and Vietnam when they were opening up. When Singapore launched Government-to-Government projects with China in Suzhou and later on Tianjin, you were a natural candidate to lead the consortiums. Even as far away as Brazil, your operations have been very successful, although in recent years you did run into some problems.
Wherever Keppel’s business takes it in the world, it is seen as a Singapore company and flies the Singapore flag. Keppel’s roots are in Singapore, and its far-flung operations link back to Singapore, and strengthen our domestic economy. Other Singapore companies, GLCs and non-GLCs, have benefited from Keppel’s trail-blazing expeditions and reputation in overseas markets. Keppel staff too have benefited from valuable opportunities to work overseas and to gain international exposure.
It is absolutely necessary for Keppel to go overseas, and to operate all over the world. Keppel could not be the company that it is, if it operated solely in Singapore. Yet it is equally necessary for Keppel to maintain high standards of integrity and performance, and keep its own operations and culture clean and transparent, even when operating in complicated environments where different norms prevail. We may not be able to convert the rest of the world to Singapore norms, but we must uphold Singapore norms and rules in our own system, wherever our business may take us in the world. When things go awry from time to time, it is important that the company is resolute in putting things right, as Keppel has done in the recent case in Brazil. It is not an easy path to tread. Other MNCs face the same challenges. But it is essential to maintaining Keppel’s, and indeed Singapore’s, reputation, built up with such enormous effort for so many years.
Another challenge Keppel has faced in recent years is getting young Singaporeans to put on hard hats and work in the offshore and marine industry. As a home-grown company, you must redouble your efforts, because a Singaporean core will always be important for Keppel.
It was so from the start, when Keppel was first founded and we had no expertise. Mr Hon Sui Sen, who was the EDB Chairman in 1968, before he became a Minister, hired one of the biggest ship repair companies in Britain, the Swan Hunter Group, to manage both the Keppel and Sembawang Shipyards. One of Swan Hunter’s stipulated tasks was to create a strong bench of Singapore managers to understudy them, so that in four years, the locals could take over the reins. But even then, Mr Hon did not leave this entirely to the British. He appointed young talent, like Mr Chua Chor Teck, in charge of Keppel’s wholly owned subsidiaries, over the protestations of the Swan Hunter managers. Mr Chua and a group of his Singaporean colleagues were eventually emboldened to write a detailed blueprint for what they called “the localisation of the yard”, and secretly submitted this to Mr Hon without the knowledge of their British supervisors. Mr Hon was impressed enough to make the decision eventually to allow the Singaporean managers to replace the Swan Hunter team in 1972.
The drive and passion of the Singapore team made all the difference. As Mr Lawrence Mah, one of the team, recalled, “We were young, and inspired by Lee Kuan Yew and his people in the PAP Government. We said, why can’t we run the show ourselves? And so we were all driven by this mission.” Many of you would have seen the picture of the Singaporean team marching under a Majulah Keppel banner in the yard, at the time of the changeover.
Over the years, Keppel has been led by leaders of the highest calibre. Mr Sim Kee Boon was Chairman for many years. He was the driving force in the company, shrewd and energetic, with a sharp business sense, and a clear strategic vision. Mr Sim was followed as Chairman by Mr Lim Chee Onn and now Dr Lee Boon Yang. All of them understood what Keppel, as a local success story, represented and stood for.
I am therefore glad that Keppel has continued to invest in your people. You have training centres and a leadership institute to equip workers and management with skills and qualifications. You have forged tie-ups with the Institute of Technical Education (ITE), and sponsored scholarships with the Nanyang Technological University (NTU) and the Singapore University of Technology and Design (SUTD). I am happy that Keppel will be taking this further by making a $10 million donation to the ITE Education fund this evening. This will be used to establish the Keppel Care Foundation Scholarships and Keppel Merit Awards in ITE.
Keppel is a sterling example of a successful GLC that is run completely on a commercial basis. It is a publicly listed company. Its largest shareholder is Temasek Holdings, but its operations and investments are not directed by Temasek, and even more, not by the Government. Nor does either the Government or Temasek have a Board seat. The Keppel Board and management are fully responsible for running the company, and they are accountable to all the company’s shareholders, including the majority of non-government shareholders. Of course Keppel enjoys strong support from the Government, just like all other Singapore companies big and small. This is a unique governance model for government-linked companies in Singapore. It is one model that has served Singapore, and also the companies, well.
Keppel’s journey in the last fifty years mirrors our nation-building story. You turned adversity into opportunity. You looked outward and broke new ground in external markets, businesses and technologies. You transformed yourself as the world changed, developing new capabilities and businesses beyond your original focus. Your success is also Singapore’s success as you contributed to our economic growth and international branding, and uplifted the livelihoods of many Singaporeans.
The world around us is changing very quickly, competition has become stiffer. The mood is shifting away from globalisation and openness as countries become more nationalist and protectionist. You have felt it across your various businesses, but I am confident that you can weather the storm because Keppel has experienced greater challenges and emerged stronger each time. You have a firm foundation of dedicated and competent Keppelites. You have over time established a solid reputation of reliability, which has given you the ability and the goodwill to recover from setbacks and mistakes.
As you celebrate your 50th anniversary, I hope that you will remain steadfast to your core values and build on your legacy of excellence, so that Keppel and Singapore will continue to shine brightly on the world stage. Happy 50th birthday!
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