OFFSHORE oil and gas company Kim Heng Group may have grown to become a multi-million dollar concern with a subsidiary in as far away as Australia. But for brothers Thomas Tan, 51, and Tan Sek Khoon, 54, the Singapore River is where their heart is.

It was where their father, Mr Tan Eng Hai, started the family business and it will always be remembered as the place where they spent most of their childhood. Their memories are of hopping on and off river vessels and learning the trade that is now their livelihood.

'In those days, kids like us didn't have many opportunities to go out and play marbles,' said the younger brother, who is now Kim Heng's chief executive.

'Even before we started school, we were already out at sea working and learning from our dad.'

Today, the family-run business remains one of the largest locally owned provider of engineering, procurement, construction, installation and commissioning work for the marine and offshore oil and gas industry.

Headquartered in Singapore, with a subsidiary in Darwin, Australia, Kim Heng also has a wide network in South-east Asia to cater to different stages of offshore oil and gas projects.

These range from oil exploration to oil-field development as well as oil production. The group also undertakes shipbuilding and repair services at its two waterfront facilities at Pandan Crescent and Penjuru Road.

In all, Kim Heng's total plant facilities in Singapore and Darwin span a whopping 120,000 sq m - a far cry indeed from its humble beginnings by the Singapore River.

Founded in 1968, Kim Heng started as a tugboat business with no more than a skeleton crew of just 10 men.

Mr Tan's father ran lighters and tugboats to offer towage and other marine transportation services to vessels that called on the newly built wharves in Singapore.

'We also did a lot of work at the anchorage, where ships would anchor offshore and our boats would do transfer work, bringing dry goods like rice sacks from sea into places like Boat Quay and Clarke Quay via the Singapore River,' said Mr Tan.

The two brothers officially joined the business only in the 1970s, Thomas in 1978 and Sek Khoon, three years earlier.

It would be a good decade before the 1986 downturn hit Singapore, but Mr Thomas Tan told The Straits Times that luck would have it that Kim Heng would still prosper despite the economic turmoil then.

'In 1982, before the crisis hit, there were a lot of rigs being built in Singapore and stacked at the anchorage...and that's when we started to undertake rig maintenance work,' he recounted.

'We got most of the jobs then because at the time, there weren't many companies like us - onshore or offshore - in Singapore, but a plus point was that not many in the trade could communicate with the Texans in English like my brother and me.'

Both brothers left school after Secondary 4, but their lack of tertiary education did not hamper their ability to help their father expand the firm.

In fact, it was during the 1980s and 1990s that Kim Heng really started to spread its wings across the marine transportation and oil and gas industry.

'We started getting many jobs from the American firms simply because we could communicate with them and the hardware vendors onshore in Singapore,' explained Mr Tan.

'So the Americans would just leave us to deal with the locals here to purchase parts and that's how we got started in procurement services.'

In 1981, the brothers set up a separate unit in Kim Heng to acquire vessels and subsequently extended the business to provide repair and maintenance of barges for oil and gas companies.

'Over the years, we made many contacts within the marine and oil and gas companies operating in Singapore and around South-east Asia,' added Mr Tan.

'And slowly, by about 1988, we ventured into repair and maintenance work for offshore oil rigs.'

In 1997, their father retired and left the company in the hands of the two brothers.

The following year, they officially took over the running of Kim Heng, with the elder brother becoming executive chairman and the younger, chief executive.

'This was about the time when we started to get into the full swing of things in the oil and gas industry,' said Mr Thomas Tan.

The regional economy at the time was also taking a beating from the Asian financial crisis, but he said Kim Heng - which had a strong balance sheet - then went on a 'shopping spree', acquiring assets at low valuations to expand the firm's base of operations.

'When the crisis came, we got an opportunity to buy the Keppel Fels shipyard in Pandan Crescent,' he said.

'So the timing was just nice, as we needed the facilities to house the new services and businesses.'

From just a 10-man outfit in 1968, Kim Heng now employs almost 900 staff who work from over 72,000 sq m of fabrication yards, warehouse and office space in Singapore.

Last year, Kim Heng aborted a reverse takeover attempt to list on the Singapore Exchange due to 'poor market conditions' but it remains well-poised to grow despite the ongoing crisis.

Sharing his 'three-pronged' strategy, Mr Tan said he intends to continue to drive the firm forward, growing it both organically - by building vessels for the lucrative jobs - and by strategic mergers and acquisitions (M&A) or joint ventures.

'We will identify M&A opportunities with oil and gas companies, in particular those that are in oil development work, to complement our current business to strengthen our revenue and balance sheet, while diversifying our product offering,' said Mr Tan.

He also said he intends to acquire undervalued local and foreign oil and gas companies in the current downturn to position Kim Heng for the recovery ahead.

'This will help us realise future capital gains once the oil prices recover.'

Last year, Kim Heng's group revenue was about $170 million, and Mr Tan remains bullish about this year, forecasting approximately $200 million in revenue despite the downturn.

franchan@sph.com.sg