Q&A: LimTeck Cheng on bunker industry evolution and getting involved
Lim Teck Cheng, Chief Executive of Singapore-based Hong Lam Marine, a leading bunker tanker owner and operator, shares some of his industry insights. He has been an IBIA board member since April 1, 2014, and prior to this he served as chairman of the Executive Committee of IBIA (Asia).
Lim Teck Cheng has been in the bunker business for about 40 years “and still counting” since he was first asked by his parents to join the family’s burgeoning business. At that time, his father owned a wooden barge. The family bought several second hand steel tankers in 1981 and that was how Hong Lam Marine was incorporated. The family company now owns 35 tankers with 12 tankers supplying bunkers in Singapore and Fujairah. Hong Lam Marine is not a physical supplier but a ship owner time chartering the company’s tankers to oil majors and traders to perform their physical supplies.
Here’s our Q&A with Lim Teck Cheng:
Has the bunker industry changed much since you first became involved with this sector?
LTC: The bunker industry has changed or rather evolved through the 40 years that I have been in business. From the strictly regulated industry in the 70s and early 80s to the relaxation of licensing rules where we saw Singapore’s bunkering scene move from four major players (Shell, ExxonMobil, Chevron and Singapore Petroleum Corporation) to a proliferation of physical suppliers, then back to a slightly more regulated industry where there are entry rules to be a physical supplier. I think this was the game changer that propelled Singapore to the top bunker port in the world, also with government’s emphasis of developing the infrastructure for this industry. The government with the industry devised a standard for bunkering that was known as CP 60 and then SS600 – standards for custody transfer of bunkers to minimize conflicts or in which conflicts can be solved within a framework. This still distinguishes Singapore from the rest of the world.
Of course, the latest buzzword is ‘Mass Flow Meter’. The Singapore Government, working very closely with the industry, has come up with a standard for MFM bunkering – which I personally see as a game changer. It brings the Singapore bunker industry to a new level of professionalism and integrity of supplies.
What do you see as the main issues in the Singapore bunker market at the moment?
LTC: To follow up from the above, the main issue in the Singapore bunker market is the success of using the MFM Standard for supplies. All bunker tankers delivering heavy fuel oil have to be fitted with the MFM technology and system, and by 1 January 2017 all supplies are governed by this Standard. As a company and personally, I was involved in the development of this system from concept to reality, and I believe in the efficiency and most importantly the integrity of this system. However to ensure the success and the trust in this system, if there is any attempt to compromise this integrity, it must be dealt with firmly and swiftly by the Singapore Government.
Are there any specific issues that are particularly important to you and your business?
LTC: Overcapacity comes first to my mind when I read this question. We see that in most, if not all sectors of the shipping industry and I believe I am seeing it in the bunker industry as well. Overcapacity leads to more competitive pressures and may lead to less than perfect practices. The other issue is the education of ship owners that the supply through MFM Standard, whilst more expensive at face value, would actually save you money (a lot more) over a period of time because it ensures integrity in the quantity supplied.
What are the opportunities and challenges for IBIA in your region?
LTC: I feel the biggest challenge in our region is that we still have too few members to make a more meaningful impact in this industry. We need more members with diverse views and opinions. The opportunity we have is to be taken as a respected and coherent voice of the industry, and even more so if we manage to expand our membership base.
How does being a member of IBIA benefit your role and your company?
LTC: I have the privilege of meeting many people from different areas of the industry and have benefited greatly from these interactions. As an active member of IBIA, I have been consulted on many issues on an industry level by different stakeholders such as the Maritime and Port Authority of Singapore and other government bodies.
What made you decide to stand for election to the board of IBIA?
LTC: I truly felt that with my experience, I can contribute to the betterment of this industry.
Do you have any message for other members considering getting involved with working groups, regional executive committees or considering standing for the Board?
LTC: I think it is important as with all voluntary membership, you need to come with good intentions that you want to make a difference to the industry and that you can contribute. With good intentions, the rest will follow.
Do you have any tips for someone considering a career in the bunker industry today?
LTC: This is a tough industry but the people are fun, gregarious, eternal optimists (you have to be with the cyclical nature of this business) and truly passionate about being in this industry. So be open and take time to learn the business. I cannot guarantee a smooth career but it will surely be an exciting one.