James Tham explains how his difficult early days as managing director of Penguin International Ltd helped shape his approach to leadership
With Mr Tham’s steady hand at the helm, over the last 10 years Penguin International has emerged as one of the world’s top 10 builders of mid-sized aluminium crew boats, with a strong presence in Southeast Asia and West Africa.
During that timeframe, Penguin has delivered 120 of 207 vessels, and garnered a 44% market share of all the crew boats delivered worldwide, according to an analysis by Lim & Tan Securities.
Penguin builds its crew boats and security vessels at its shipyards in Singapore and Batam, Indonesia, and charters crew boats in Singapore and Southeast Asia. Its portfolio also covers ferry operations, charters and construction and windfarm vessel construction.
Mr Tham’s path to managing director at Penguin was not an obvious one. In fact, he attributes his start in the marine industry to “serendipity and divine guidance”.
After graduating from Ohio University with a Bachelor of Arts degree in journalism and business, Mr Tham was hired as a journalist at a Norwegian-owned oil and gas publication, based in Singapore and later Australia.
Coming from Singapore, it was an eye-opening experience for him. “Talk about a double-whammy culture shock,” he says. “As a conservative Asian, I was blown away by the liberal freewheeling ways of Norwegian journalists and by the gung-ho spirit of offshore petroleum personalities.”
Mr Tham wound up carving out a very successful career and building a reputation as what he describes as “an extremely driven journalist. I was barred by some companies as a result of my fervour. I loved that!”
After eight years as an oil and gas journalist and a brief stint with Seacor Marine, Mr Tham joined Penguin in November 2006 as a business development director. In August 2008, he was elevated to a board member and in October was named managing director.
Along the way, he credits Penguin chairman Jeffrey Hing for being a mentor and friend, providing ongoing encouragement and guidance.
“I am also blessed by independent directors who trust me enough to let me do my job,” he adds.
Despite the challenging offshore market, in fiscal year 2018 the Singapore-listed shipbuilder posted a net profit after tax of S$13.6M (US$10M), compared with S$2.3M (US$1.7M) the previous year. Revenue over the period rose 34.5% to S$107.3M (US$78.8M), while gross profit grew 72.8% to S$33.7M (US$24.8M). Over the same period, shipbuilding revenue rose 44% to S$81.5M (US$59.9M), while chartering revenue grew 17.6% to S$24.7M (US$18.1M).While crew and security boats remain core shipbuilding products, applying the company’s Flex philosophy and team experience to other sectors has buoyed the company’s success.
“The Penguin of today is no longer just a crew boat or security boat company,” Mr Tham emphasises. ”While we are still working hard to maintain our leadership in those two sectors, we now design and build a variety of aluminium high-speed vessels for tourism, such as the Flex Ferry X, and offshore wind, such as WindFlex-27.”
“Last year, we delivered two FiFi-1 classed aluminium firefighting search-and-rescue vessels to the Singapore Civil Defence Force.”
While Penguin builds vessels for stock and to order, it funds its stock programme only with internal cash reserves. “We never borrow to build for stock. Borrowing to build for stock is a one-way ticket to hell,” he says.
Betting on ‘chopper swappers’
As a benefit of its 8% interest in Singapore-listed Marco Polo Marine, which has a steel shipbuilding yard in Batam and a fleet of OSVs, Penguin has a window to OSV activity in Southeast Asia. “From the lens of Marco Polo, we see improved OSV activity, particularly in Indonesia and Malaysia.”
Offshore oil and gas exploration and development activity is also driving increased demand for crew boats in the Middle East, Australia and North Asia.
“For crew boats, utilisation and charter rates have been rising steadily since early 2018,” he says. “The key driver is oil companies switching from choppers to crew boats as a primary mode of offshore transportation. The fact is, modern crew boats such as ours are safer, more comfortable and carry more passengers and cargo than the best choppers out there. It’s not about speed, but about transportation efficiency and safety.”
Mr Tham says Penguin is betting on ‘chopper swappers’ – offshore personnel making a switch from helicopters to crew boats. Making the switch will necessitate a change of mindset for those who have grown used to the speed of helicopter transportation.
“A key element of this change management is the speed and comfort of modern crew boats,” he says. “While one cannot reasonably expect a crew boat to operate at flight speeds, one can expect a crew boat to provide greater comfort and improved safety at reasonable sea speeds. As a matter of fact, you cannot lie back to read a magazine, banter with a colleague or even have a sandwich in a helicopter.”
Oil companies are beginning to see the operational and economic benefits of crew boats in certain applications. “We currently have seven Flex-42X Executive fast crew boats on charter to companies such as ExxonMobil and Petronas Carigali in Malaysia,” says Mr Tham. “I can’t speak for the oil companies, but I can say that we need more of these babies. For the next two years, we plan to build at least a dozen more Flex-42X with new and improved features.”
Key operational features of the Flex-42X are its motion-compensated gangway and its electronic fuel management system, says Mr Tham. “In our ideal world, we would like to install an Uptime gangway in every single one of our crew boats, from the Flex-36 original to the Flex-42X Executive fast crew boat. There is simply no safer or faster way to transfer passengers from a crew boat to an offshore facility. Ideally, this should be an IMO rule.”
Mr Tham is almost as effusive when he discusses the Flex-42X’s electronic fuel monitoring system (EFMS). “We have been working closely with FuelTrax for our EFMS solution. The key to a robust EFMS system that thwarts the brightest minds in fuel pilferage is it has to be reliable, tamper-proof, offer two-way communications and be easy to use. On board our Flex-42X, the FuelTrax EFMS is complemented by an array of well-positioned, tamper-proof CCTVs,” he points out.
If there has been a secret strength of Penguin, Mr Tham thinks it comes from the company’s experiences as both a shipbuilder and a vessel owner. “The uniqueness of Penguin is we don’t just design and build, we also own and operate; we’re like a baker who loves feasting on his own pies while happily passing them around! We understand the trials and tribulations of being a shipowner and a shipbuilder. There’s pleasure in the pain!”
Bio - James Tham
Job title: Managing Director
Education: Ohio University, BA in Journalism and Business
Favourite saying: “The unexamined life is not worth living” – Socrates
Favourite podcast: Business Wars by Wondery
Favourite book: The Road Less Travelled by M. Scott Peck (“I saw my father reading this book when I was nine. When I started reading it, I was blown away by the revelations on life and happiness”)
Favourite movie: Die Hard
Admire most: My father and mother. They are schoolteachers who have led exemplary lives of love and patience