SME Spotlight

Getting down to the nuts and bolts

Mr Jackie Lau, managing director of Seng Heng Engineering, with the American Petroleum Institute certificates and samples of fasteners that the company makes.
Mr Jackie Lau, managing director of Seng Heng Engineering, with the American Petroleum Institute certificates and samples of fasteners that the company makes.PHOTO: DIOS VINCOY JR FOR THE STRAITS TIMES

Adhering to stringent industry standards can be tough, but this sort of discipline is vital to carving out business opportunities. This week, Seng Heng Engineering's managing director Jackie Lau talks to Yvonne Lek about how complying with standards has given the company an edge over its competitors in the oil and gas industry

Q Tell us more about your company.

A Established in the 1940s, Seng Heng Engineering is a family-run business in its third generation.

We are a manufacturer and supplier of fasteners (bolts and nuts) to companies in the oil and gas industry. Currently, we have 136 employees over eight departments. With regard to the annual revenue, I would prefer not to share.

Q Did the company start out manufacturing fasteners?

A Previously, we were based in a small 1,000 sq ft shophouse in Geylang, doing metal works and fabrication. Now, we are in a 93,000 sq ft compound in Joo Koon and we also have another plant in Malaysia.

Q Who are some of your customers?

A Some of our customers are Shell and ExxonMobil, and We have been supplying them with our products for close to 20 years.

GOOD NAME

We have a good relationship with the oil majors and contractors, that's how we slowly get our name out in this industry. The business we get depends largely on the good track record that we have built with the oil and gas companies over 30 years.

'MR JACKIE LAU, on growing the business

Q How are the bolts and nuts used?

A Our fasteners are used in many applications - in the construction of refineries and oil rigs, for equipment on the seabed, holding structures together and so on.

For example, the company's bolts are cast beneath the ground to hold the Singapore Flyer up.

Q How did you grow the business?

A We have a good relationship with the oil majors and contractors, that's how we slowly get our name out in this industry.

The business we get depends largely on the good track record that we have built with the oil and gas companies over 30 years.

COMPETITIVE EDGE

Based in Singapore, we have an advantage in Asia as compared to other companies in the world. This is because we can produce quality goods at an attractive price.

'MR LAU, on global competition

Q What prompted you to apply for the industry standards certifications?

A A few years ago, there was a rig that burnt down in the Gulf of Mexico; lives were lost and the incident became an environmental disaster.

This changed the oil and gas industry because our clients demanded higher-quality fasteners.

We saw the demand for quality suppliers as a need that we could fill, and also to differentiate ourselves from our competitors.

Q Which industry standard did you apply for?

A We applied for the American Petroleum Institute's (API) certifications for manufacturers of bolts and nuts and were certified in 2013 and most recently, this year.

At present, we are API certified for both our system processes and our fasteners.

The first API standard that we have been approved for shows that we have a better organisation system process. It covers areas like the manufacturing and delivery of products, and also the documentation of every step.

The second certification represents that we have high quality products that adhere to the API benchmark.

Q Why get certified?

A We did this because customers started to focus more on the quality of the products used and began to tighten their standards of their suppliers. Getting the certifications would show that we manufacture quality products that are held to strict standards.

Q What were some of the challenges the company faced when applying for the certifications?

A Managing people's expectations and getting them to change their old ways of doing things were difficult.

For 20 years, many of our long-time employees have been working based on the old ISO9000 standard. When we implemented the new API standards, it was tough for them to break out of their habit to do more than what was required previously.

For example, there were more inspections and testing procedures on the products to ensure the integrity and quality of the fasteners.

We then had to explain to our staff why the additional work and documentation (a part of the stringent API standards) were needed.

Q How long did it take for the company to adjust to the new standards?

A It took us about three years to settle down, get our manufacturing processes right and our organisation structured correctly.

The new standards involved all the departments in the company and their work procedures were affected in one way or another.

In the initial stages, our management representative and consultant needed to look at these gaps within the company and see how to close them.

During that time, we also had to constantly retrain all our existing staff to be proficient in these new requirements and manufacturing processes.

Q How has complying to industry standards helped the company's business?

A After being API approved, it has increased our sales for the subsea industry by 20 per cent.

Since our fasteners play a critical part in the safety of the equipment and structures, and API certifications are becoming an industry trend this year, most of our customers check if we are certified first before signing an agreement with us.

Q What is the company's advantage over other manufacturers in Asia?

A In South-east Asia, we are the only fastener company with the certifications. Seng Heng is also one of the 10 fastener companies in the world that are API certified.

Hence our name is recognised by many in the industry as a preferred supplier of bolts and nuts, putting us in the spotlight.

Q What about the company's edge over manufacturers globally?

A Based in Singapore, we have an advantage in Asia as compared to other companies in the world.

This is because we can produce quality goods at an attractive price.

Also, we benefit as companies in Asia will tend to choose a supplier that's nearer to them.

Q Does the company plan to break into any new markets?

A There are no plans to target a specific market since projects could be based anywhere in the world.

However, most of these companies are based overseas, so we hope to reach out to them.

The idea is for customers to consistently recognise us as a supplier of fasteners, and to think of us when they want to do any work related to the oil and gas industry.

A version of this article appeared in the print edition of The Straits Times on August 19, 2015, with the headline 'SMESpotlight Getting down to the nuts and bolts'. Print Edition | Subscribe