The Rest of the World and Malaysia. External Challenges to Malaysia s Growth 18th June 2013

Transcription

1 The Rest of the World and Malaysia External Challenges to Malaysia s Growth 18th June 2013

2 Where We Are (GNI per Capita) USD GNI per capita Aspiration: USD 15, GNI per capita : Vision 2020 first unveiled acres yard Headcount: 2,000 Year Source: The World Bank

3 Foreign Direct Investments USD Million Foreign Direct Investment Percentage of Total World FDI Percentage Malaysia Indonesia Thailand Singapore Vietnam acres yard Headcount: 2, Year Year Source: World Economic Forum

4 GDP based on PPP share of World Total (percent) M sia, 0.56% Rest of the World, % EU, % Brazil, 2.77% Russia,3.16% India, 4.63% China, % USA, % M sia, 0.60% Brazil, 2.83% Rest of the World, 34.78% Russia, 3.02% India, 5.63% China, 14.92% China 7,329 12,405 20,440 USA 14,028 15,684 20,077 EU 14,893 16,092 18,932 World 66,982 98, ,909 M sia, 0.63% Brazil, 2.81% Russia, 2.96% India, 6.31% 2007 EU, 19.36% USA, 18.86% Rest of the World, 34.16% China, 18.27% 2012 EU, 16.92% USA, 17.94% Source: International Monetary Fund

5 2012 Competitiveness Between Countries Rating 1-7 (7 = Best) Malaysia Indonesia Thailand Singapore Vietnam GCI Global Competitiveness Index Institutions Infrastructure Macroeconomic environment Higher education and training Labour market efficiency Financial market development Technological readiness Market size Business sophistication Innovation ICT usage GDP (US $Billion) GDP per capita (US$) GDP (PPP) Source: World Economic Forum 4

6 Source: World Economic Forum 2012 Competitiveness Between Countries (specific to FDI attraction) Rating 1-7 (7 = Best) Malaysia Indonesia Thailand Singapore Vietnam Efficiency of legal framework in settling disputes Gov't services for improved business performance Availability of research and training services Extent and effect of taxation Total tax rate, % No. procedures to start a business No. days to start a business Prevalence of trade barriers Trade tariffs, % Cooperation in labour-employer relations Flexibility of wage determinants Pay and productivity Brain drain Availability of financial services Ease of access to loans Domestic market size index Quality of scientific research institutions Capacity for innovation

7 Malaysia CHALLENGES Cost Related Upward Pressure on RM versus USD Increased Cost of Labour Reduction in Subsidies Slow down in US and Europe Economies Brain Drain Aggressive Emerging Economies e.g. Indonesia, Vietnam, Thailand Finite Resources STRENGTHS Strong Domestic Demand Cushions economy from external deterioration Solid Infrastructure e.g. Legal and Banking Systems, IT, Logistics (highways, rail etc) Political Stability Supporting Programmes e.g. GTP to reduce crime, improve transport etc. Growing a highly skilled labour force Conducive Business Environment 6

8 Deindustrialisation Moving up the Value Chain Shifting jobs from the manufacturing sector to the service sector The natural outcome of successful economic development Associated with rising living standards Examples of countries: United States Europe Japan Hong Kong China Singapore Korea 52 acres yard Headcount: 2,000 DEINDUSTRIALISATION

9 Malaysia The Centre of Excellence Agriculture Oil, Gas and Energy Tourism Healthcare Wholesale and Retail NKEAs: 11 Industry Sectors Electronics and Electrical Business Services Financial Services Palm Oil & Rubber Education Communications Content and Infrastructure * Identified from the Economic Transformation Programme Handbook 8

10 Oil and Gas News recoverable resources are estimated to last for the next two centuries at current trends of consumption. Tan Sri Shamsul Azhar Abbas (President and group CEO of Petronas) - Bernama The oil, gas and energy sector is the mainstay of Malaysia s growth This industry contributes approximately 20% of National GDP Petronas is expected to generate RM 31 billion in GNI in acres yard Headcount: 2,000

11 Top Global O&G Services Player Within Top 10 of Global Service Provider Peer Group by Market Capitalization (1) Top 5 EPCIC Global Players by Market Capitalization (US$Bn) Keppel Corp 15.8 (US$Bn) Technip Saipem COSL Technip Saipem SapuraKencana Subsea SapuraKencana 7.9 Sembcorp Marine Petrofac Subsea Bumi Armada Dialog Group McDermott 2.1 McDermott MMHE Ezion 1.8 Modec 1.7 Anton Oilfield 1.7 Honghua Group 1.6 STX OSV 1.1 Ezra Alam Maritim Resources Perdana Petroleum SapuraKencana has been included in the MSCI Asia-Pac index Integrated Services Equipment Source: Bloomberg as at 20 May 2013 Engineering & Construction Marine Services Driller Note: (1) Peer group consists of a universe of Asian services players plus global EPCIC players 10

12 SapuraKencana Our Experience in the O&G Industry MOPU Drilling Engineering / Procurement / Construction Turbine Repair Centre Decommissioning Shore Approach FPSO Conventional / Deepwater Rigid Pipelay Topside Installation / Heavy Lift Deepwater Development Project Flexible Pipelay Geophysical Survey Diving Services ROV Services Geotechnical Investigation SURF Capabilities Across the Entire O&G Value Chain... 11

13 E P C I C Executing Our Growth Strategy Typical Life Cycle Positioned as a Global Service provider across the entire O&G value chain Phase Exploration Service Offering Geotechnical & Geophysical Services Growth in project values EPC Diverse talent base of more than 10,000 from close to 20 nationalities Investing in Knowledge manufacturing and operating ROV s Strategic Acquisitions Development Production Maintenance Drilling Operate Oilfields IPF HUC 21 tender rigs & semi- tenders Maintenance Services Creating a Global Offshore Driller Abandonment De - commissioning 12

14 Our recent Acquisition: SK Drilling IN SUMMARY : WHAT THE DEAL WILL BRING Enterprise Value of USD2.825bn Becoming a Global player in Offshore Drilling BENEFITS Transformative and Sustainable growth 56% Market share in tenders rigs Best in class fleet Youngest in the industry Reputable customers - Shell, BP, Chevron, Hess, Murphy & PTTEP Strong & stable cash flow generation balances current project based portfolio Greater visibility of earnings provides steady income stream from long term contracts Highly skilled & experienced management & operations team High EBITDA margin 13

15 Strategic Base Globally to Support Business Growth UK Order Book Geographical Breakdown (1) USA Middle East India Trinidad and Tobago Equatorial Guinea Thailand Kuala Lumpur Angola Indonesia Brunei Brazil Australia Additional coverage Note: (1) As at 4 June

16 In Alignment with Malaysia s Transformation Initiatives SKPB fulfils 6 of the 8 EPPs identified under the ETP Notable transactions / awards Thrust 1 : Sustaining oil & gas production EPP1: EPP2: EPP3: Rejuvenating existing fields through enhanced oil recovery Developing small or marginal filed through innovative solutions Intensify exploration activities Thrust 3: Transforming Malaysia into the number one hub for oil field services EPP6: Attracting multi-national companies to Malaysia to bring a sizeable share of their global operations to Malaysia SapuraCrest & Kencana Merger Berantai Field Development (1 st marginal field in Malaysia) Creating a local EPCIC player Consolidating domestic fabricators Developing marginal field Attracting multi-national company through partnership EPP7: EPP8: Consolidating domestic fabricators Developing engineering, procurement & installation capabilities & capacity through strategic partnership & joint ventures Integration of Seadrill s tender rigs business Stepping into the role of global driller and bringing global operations to Malaysia 15

17 In Summary Currently Malaysia is holding it s ground with regards to the rest of the world. Malaysia s share of the world s GDP (adjusted for PPP) projected to continue to grow from 0.6% (2012) to 0.63% (2017) IMF Leverage On Industry specific competitive advantages (NKEAs) Efficient legal framework Strong financial markets Solid Infrastructure Political stability Business friendly government Build On R&D and Intellectual property Attract, develop and retain skilled human resource Focus on value added services Improve productivity and efficiency 16

18 Thank You 17

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