Once a regional ferry operator and minor shipbuilder, Penguin International has become a highly successful builder of passenger ferries and mid-sized crewboats. Rebecca Moore speaks to its chief executive James Tham
Singapore’s publicly listed designer, builder, owner and operator of high speed workboats Penguin International has been on a journey over the past decade. It has transformed itself from a loss-making regional ferry business and a minor shipbuilder into a prolific builder of mid-sized crewboats for the offshore and maritime security industries, as well as a designer and builder of passenger ferries.
Backed by a strong balance sheet with substantially more cash than debt and a globally recognised brand – Flex – Penguin has delivered more than 100 crewboats since 2006. Ranging in size from 25m to 50m, most of them were built for stock as part of an internally funded investment programme.
In recent years, the company has included modern International Code of Safety for High-Speed Craft (HSC Code) passenger ferries in its portfolio of products. And late last year it was awarded a US$23 million contract by Singapore’s Ministry of Home Affairs to design, build and maintain two fire-fighting search and rescue vessels for the Singapore Civil Defence Force.
Reinvigoration of the business started when executive chairman Jeffrey Hing and managing director James Tham took over the leadership of Penguin in 2008. Mr Tham recalled: “We saw that Penguin was an undervalued company with a rich history and solid assets. It simply needed a bit of tender loving care to focus, nurture and grow it into the successful company that it deserved to be.”
“Converting ferries is not our normal business and in fact most shipyards shun it. However, our relationship with Sindo Ferry gave us the motivation and the confidence to take on this project.” James Tham (Penguin International).
Under the new management team, which included finance director Joanna Tung, who started off as an accountant in the company in 2000 and defied the odds in a male-dominated industry, the improvements started to bear fruit.
Mr Tham said that the sale of the regional ferry business, Penguin Ferry Services, in 2011 was a major milestone in the company’s transformation. He said: “Penguin used to be seen, by the public, as a ferry operator between Singapore and Batam, Indonesia. However, the regional ferry business was, and still is, fiercely competitive. Disposing of it and investing the sale proceeds into the design, construction and operation of crewboats made good sense at the time.”
The reinvention of Penguin was expedited by a shipyard that it already owned in Tuas on the south western tip of Singapore. Penguin Shipyard International had focused on the repair and maintenance of its own fleet of vessels. However, the site’s 2,500m2 covered workshop with overhead cranes and a 500 ton marine travel lift, on 12,000m2 of fully concreted ground, meant that the yard was ideal for building aluminium workboats and ferries safely and quickly, in addition to serving as a repair facility.
Today, as well as designing and building crewboats and ferries for third party shipowners, Penguin charters out its own Flex crewboats in Malaysia and Thailand, and provides ferry transportation services within Singapore waters.
“We usually own and operate what we design and build,” Mr Tham enthused. “This sets us apart from pure builders and pure operators. As a builder, we understand the trials and tribulations of being a shipowner.”
Mr Tham said that the company’s Singapore base and its heritage were a strong pull for attracting business. “We are a Singaporean company, born and bred. That alone is a competitive advantage. Singapore itself is a brand. It is known for honesty, quality and competitiveness.”
As well as crewboats, designing and building passenger ferries is an integral part of Penguin’s portfolio, a service offering that is helped by the fact that Penguin is no longer viewed as a competitor in the regional ferry market.
That is one reason why Singapore’s Sindo Ferry – the former Penguin Ferry Services – regularly sends its vessels to Penguin’s shipyards in Singapore and Batam for repair and docking.
Sindo Ferry has even ordered three newbuild HSC Code monohull ferries from Penguin. Based on a design purchased by Sindo Ferry and jointly developed with Penguin, the Queen Star series is Sindo Ferry’s flagship vessel type.
In September 2016, Penguin delivered Queen Star 5, followed by Queen Star 6 in December. Queen Star 7 is under construction, with delivery scheduled in the third quarter of 2017.
The series began with Queen Star 3, a partially built West Australian ferry converted by Penguin from Australia’s National Standard for Commercial Vessels to HSC Code, and improved in the process.
“Converting ferries is not our normal business and in fact most shipyards shun it,” Mr Tham explained. “However, our relationship with Sindo Ferry gave us the motivation and the confidence to take on this project. We had numerous sleepless nights, but it was all worth it in the end.”
Queen Star 3 has a registered passenger capacity of 268, including 10 VIP seats and six crew seats. Sister vessels Queen Star 5 and Queen Star 6 look similar to their predecessor but incorporate substantial improvements in passenger and crew comfort. These ferries stand out because their hullforms are sleek and slender, Mr Tham said.
Other ferry newbuilds by Penguin in recent years include three catamarans for the Shipping Corporation of India and four monohull ferries for another Singapore–Batam ferry operator, Horizon Fast Ferry. Both ferries were designed by BMT Nigel Gee in the UK.
Indeed, Penguin has enjoyed a good working relationship with BMT Nigel Gee over the past decade. Commenting on their working relationship, Mr Tham said: “We have learned to manage and complement each other’s strengths and weaknesses. Designing and building a high speed aluminium vessel takes meticulous planning and an eye for detail. You spend as much time thinking about weight as you do about design.”
Penguin’s strategic alliance with BMT Nigel Gee has resulted in the recent contract awarded by the Singapore Government’s Ministry of Home Affairs. Mr Tham declined to comment on this project, citing client confidentiality.
Penguin might have seen its fortunes turned around, but its management are not resting on their laurels. They are keenly ambitious to develop new products and expand the shipbuilder’s business globally.
Penguin’s latest crewboat concept is a 42m, 30 knots triple-screw crewboat powered by three Caterpillar C32 ACERT main engines. Dubbed the Flex-42X, the vessel has 70 business class reclining seats and two VIP cabins on the main deck, as well as 100,000l of fuel capacity and 20,000l of fresh water capacity, plus a 110m2 cargo deck and two external fire-fighting monitors with a combined FiFi ½ half fire-fighting capability.
Designed in partnership with BMT Nigel Gee, the new Flex-42X scores a number of industry firsts for a mid-sized crewboat. These include the fact that it is the world’s fastest triple-screw mid-sized crewboat powered by three conventional Caterpillar C32 ACERT main engines, and the world’s first Maritime Labour Convention certified mid-sized crewboat. It has single and double crew cabins with natural lighting, generous living spaces and in-room conveniences.
The Flex-42X will eventually join Penguin’s product line in its built for stock programme.
Penguin does not yet build passenger ferries for stock. “We are open to building different types of high speed craft for stock, including passenger ferries, but we must first identify or carve out a niche – something that is not too specialised and that is generic enough to cater for a broad spectrum of shipowners,” Mr Tham said.