It was 1994 and Bintulu was booming.
Following the successful operation of Malaysia’s first liquefied natural gas plant MLNG 1 in 1987 and the incorporation of MLNG 2 in 1992, the oil and gas industry in Bintulu began flourishing. It spurred a chain reaction of economic activities in the energy-related industries and other spin-offs, turning the little fishing village known in the olden days for “head-picking” (Mentu Ulau or Mentulau and later, Bintulu) into an industrial district almost overnight, thanks to million-dollar domestic and foreign investments.
Against this backdrop, the late Tan Sri Celestine Ujang Jilan, a Sebauh native, became inspired to have a share of the pie in Bintulu’s nascent oil and gas development. Bintulu-born, a determined and focused go-getter Ujang felt it was not right for him to just sit back and watch his town’s rapid progress without getting involved.
He shared his vision with his longtime business partner, Datuk Allan Keripin. They took stock of what needed to be done. For a fast start with no baggage, the duo who had already owned a company, decided to form another entity to allow new blood in the management. Having someone with oil and gas knowledge was crucial, so they invited Lin Kim Ping (aka KP Lin) – with 20 years of experience – on board. Amalgamated Plant Engineering Sdn Bhd was officially incorporated in 1994, to participate in and develop the oil and gas industry as a contractor.
“I was a banker for 29 years before I entered this business. My strength is the vast network within the business circle. When Ujang suggested that we ventured into this business opportunity (oil and gas industry) in Bintulu, I agreed. But we needed someone who knew the industry well, and that was when KP Lin came into the picture,” said Allan.
With an initial paid-up capital of RM250,000 and a workforce of 10, they began to provide mainly oil and gas maintenance services.
After 27 years, today Amalgamated has grown into a company with shareholders’ funds exceeding RM27 million and one with a compound annual growth rate of 19 per cent. Their business includes onshore oil and gas services, MLNG maintenance and piping works, steel structure construction and repairs such as rejuvenation of boilers, de-bottlenecking and minor civil works.
Their clientele has grown initially from Petronas MLNG, ASEAN Bintulu Fertlizer Sdn Bhd, Shell MDS (M) Sdn Bhd to Petronas Carigali Sdn Bhd and other foreign multinational corporations such as JGC, Hyundai, Daiken, Mitsubishi and many more. It is now a homegrown Sarawakian company to be reckoned with, receiving tender invitations from as far as Malacca and Johor.
Early challenges and subsequent success
As a new kid on the block, Amalgamated’s initial biggest challenge was competing with established companies in Bintulu and those from Peninsular Malaysia and Singapore. This was understandable. The road to success was never easy.
“When we first started – between 1994 and 2000 – we were competing with these ‘giants’ for most jobs. At that time, our machinery was inadequate. Our facilities were not there. So, we started with small contracts. Whatever profit we made, we ploughed back into the company to buy machinery and increase the facilities in the plant. We invested a lot to be competitive,” Allan recalled the tough times, with both pride and nostalgia.
Sarawak’s general policy of assisting local companies and Petronas’ policy of prioritising local business community and nurturing local contractors also played a crucial part in Amalgamated’s growth.
“Amalgamated had the honour to be nominated by Petronas for its mentor/mentee programme. For many years, Petronas provided guidance and support to us. We also had the priority to be considered for jobs because of Petronas’ policy in helping and providing opportunities to competent local contractors.
“These were instrumental in the development of Amalgamated as a company. To date, Amalgamated has maintained Petronas’ license and many SWEC (Standardised Work and Equipment Category) codes that allow us to participate in multiple disciplines of work.
“I think that really helped us. From works valued at just a few hundred thousand (ringgit) initially, we progressively managed to secure projects that were worth millions. We grew from there,” said Lin.
Other success contributors
Accessibility to bank facilities was another factor for Amalgamated’s success. A banker for almost three decades, Allan who is the company’s Legal and Finance Director was backed up by his network of contacts and bank support.
The other factor, according to Allan was the fact that Amalgamated guarantees delivery.
“Amalgamated takes every job very seriously. We are prompt in our delivery. We always complete on time. Overall, our clients are happy with our performance.”
Allan also credited the far-sighted management team who realised very early on the necessity of a well-equipped plant. The company built its plant on a piece of land purchased from the Bintulu Development Authority and fully equipped it with machinery such as cranes and other specialised tools, which later proved to be a major factor propelling its growth.
“We believe that owning the right assets and equipment will put us on par with other contractors. Otherwise, we would not be able to challenge them,” said Allan.
Having a talented and committed workforce is also another contributor to the success of the company. Citing Lin and other staff as example, Allan said the company’s success relied heavily on its ability to retain talents with attractive remunerations and perks.
“We have a high retention rate of 80 per cent, where many of our staff members have been with us for more than 10 years, and many have grown with the company since 1994. We provide them with training and empowerment, which are key to our success. We pride ourselves in developing Sarawakians as about 88 per cent of all our permanent and contract staff are locals,” said Allan.
The company currently has 159 employees, 80 of whom are permanent and most have been with the company for more than a decade. Amalgamated’s friendly and approachable management and its practice of open and transparent policies have resulted in a high sense of belonging among its staff. This is augmented by company activities such as family gatherings and festive celebrations that help strengthen bonds and internal relations further.
Understanding that a company must grow together with its community, Amalgamated has a vibrant corporate social responsibility programme that encourages participation and volunteerism in community activities, providing minor construction and repair works for schools and neighbourhood, giving motivational talks to students as well as providing internship for management training. Their most recent contribution was a financial assistance to SMK Sebauh when the school’s boarding quarters were razed in a fire.
Lessons learnt: Safety and Quality
“Safety first” is a constant reminder ingrained among the staff of Amalgamated. This culture, which has been practiced and inculcated among its employees, has enabled the company to be recognised as one of the top engineering firms in Sarawak.
“In this industry, safety is top priority. Amalgamated always emphasises on safety first. The oil and gas industry has strict safety regulations. However, we don’t just want our employees to follow rules just for the sake of following. We want them to practice safety, regardless of whether they are on-site or off-site, even on their way home,” said Lin who is also the company’s Technical Director.
Employees and sub-contractors are regularly reminded of safety through quarterly health and safety (HSE) executive meetings and daily toolbox talks.
Since its inception, Amalgamated is proud to have accumulated 13.9 million consecutive safe man hours with no lost time injury (LTI). This could be attributed to the hard lesson learnt by the company in 1998.
That year, Amalgamated was awarded piping work in a liquefied petroleum gas plant by a multinational company. A delay by another party involved in the project had also caused the team from Amalgamated to be partially removed from the project.
During the transition, a quality failure was discovered in one of the piping joints in manifold. After several investigations, Amalgamated was prevented from tendering for any contract for more than six months. During this difficult time, one of Amalgamated’s investors left and withdrew all facilities, such as the plant and equipment that were crucial for the company’s operations.
“The remaining shareholders, however, were committed to resolving this issue and through multiple discussions and actions, Amalgamated was able to survive through the ordeal and rebuild the company’s reputation. The incident taught Amalgamated a crucial lesson and become much more committed to prioritising safety and quality above monetary gains in any contract,” said Lin.
Looking beyond: Listing the company
Despite the prevailing pandemic, Amalgamated’s prospects are looking bright and promising. Its ability to secure an estimated RM400 million worth of contracts for the next five years puts it in a good position to strive without looking back at its earlier hardships.
There is no doubt that the company has made it and is heading to reach its next milestone – a listing on the stock exchange.
“We have the ambition to get the company listed. So, what we need is more jobs, particularly from Sarawak where we believe there is a lot of opportunities in the energy and petrochemical industries.
“We have plans to expand our services in the electrical and instrument and civil department and focus more on EPCC (engineering, procurement, construction and commissioning) works, in view of a potential listing in the Kuala Lumpur Stock Exchange,” said Allan. — DayakDaily