The striking refinery towers and structures that feature prominently in the Thames side landscape will not be dismantled for some time, but things are now moving swiftly for Thames Oilport.
In the first phase, Greenergy, Shell and Vopak are designing the Thames Oilport terminal to have a capacity of 500,000 cubic meters with the opportunity to reach 1 million cubic meters in a second phase.
Thames Oilport will initially utilize the equipment already in place, becoming operational in the second half of 2013. Longer-term, the consortium is looking to transform the historic Coryton refinery into a state-of-the-art import and distribution terminal, for which Greenergy and Shell have signed long-term contracts with the joint venture.
Our business | Executive Board report | Asia
Asia
Our business | Executive Board report | Asia
Key developments
Patrick van der Voort, Division President Asia and Yan Chen, President China Region: “Growing domestic demand for oil and chemical products has triggered an increase in imports of these products into Asia from other parts of the world, and additional product movements within Asia. Benefiting from this trend, Vopak achieved a positive performance in Asia in 2012.
The Asia division’s operating profit -excluding exceptional items- rose 17% to EUR 217.0 million versus EUR 185.3 million last year, despite the global economic uncertainty. This is partly attributable to a 2.5%
increase in our total capacity to 7.3 million cbm, as a result of the completion of our Tianjin Lingang terminal and two other expansions in China.
Occupancy rate in the region remained stable at 94% in 2012. Demand for storage in Singapore and other key locations remained strong, while in India, we managed to improve our contract structure, moving away from spot business to longer-term contracts, resulting also in a higher occupancy rate. Although the storage business is becoming more competitive with the entry of more new players including traders, shipping operators with terminal assets and international oil companies, we are confident that our high operating standards, track record as a market-leading independent storage operator, reputation for trust and reliability and investments in strategic new locations, will keep us ahead.”
Growth opportunities
“We are taking significant steps to expand our capacity in Asia to meet future demand for storage. We see the greatest growth potential in China, Southeast Asia - Singapore, Malaysia, Indonesia and Vietnam - as well as in Korea and India.
Our projects under construction currently have a capacity of close to 3.3 million cbm. These include expansions and greenfield projects scheduled to be completed over the next two years.
Our division currently has two new large terminals under construction. The Independent Deepwater Petroleum Terminal in Pengerang, Malaysia, is a key project for Vopak in Asia. With an initial storage capacity of 1.3 million cbm for crude oil and oil products, it will become the first crude oil storage facility in Southeast Asia. In China, the Vopak SDIC Hainan terminal - with an initial storage capacity of 1.4 million cbm and potential for significant future expansion - will serve as an oil transshipment hub at the crossroads of major shipping lanes for vessels from the Middle East and Africa to the Far East.
In response to rising storage demand in the region, we have also undertaken several expansions of our existing terminals. These projects are located in Australia, China and Singapore. In India, a market we entered in 2011, we are upgrading our facility to attract more international customers who require bulk liquid storage services.
In 2012 we recognized an impairment of EUR 10.1 million for our 49% interest in PT Jakarta Tank Terminal (Indonesia). The progress of deregulation of the subsidized fuel distribution is going much slower than originally assumed. Looking at the growing fuel consumption of Indonesia this is, from a long-term perspective, considered a timing issue.”
Customers, service and operational excellence
“We aim to deliver a consistent service level across our terminals in Asia. This is done through
Our business | Executive Board report | Asia
Our customer satisfaction continued to improve in 2012. This is heartening news for the division and clearly shows that our efforts in refining our service level are paying off. Areas where we are doing well include order management and information and data management.
We recognize that there are areas where we can still do better. These include handling of complaints and operational reviews. Initiatives to improve these areas are currently underway. As part of this process, we increased the number of customer contact points in 2012, and are carrying out more frequent operational reviews with customers.
To improve the efficiency of our operations, we are currently running twelve Lean projects in Asia, which look structurally at ways to reduce inefficiencies in our day-to-day processes. We are investing in new hardware to automate some of our terminals, as well as in software to improve maintenance management and to automate training of operational staff.”
Safety and sustainability
“A continuous emphasis on safety and a desire to further improve in this area are paramount to us. While safety performance improved in general in 2012, we sadly had to report two fatal accidents in the year involving contractors working on the marine construction of new terminals at Pengerang (Malaysia) and Hainan (China). These fatalities triggered an extensive action plan to raise safety awareness and improve safety practices during construction. Moving forward in 2013, we will be stepping up our efforts in safety awareness, both for our own employees as well as for our contractors.
In the last quarter of 2012, a new campaign to ensure full understanding and field compliance to the Vopak Fundamentals on Safety was launched across Asia. This program will run also into 2013.
In the area of sustainability, we reduced our energy consumption by 2% in 2012. One change was the switch to LED lights in some of our facilities. In 2013, we aim for further energy savings. We are also looking at ways to reduce physical waste and, in particular, to lower our hydrocarbon emissions. As an example, we explore the use of geodesic rooftops for floating roof tanks and emission control systems to reduce hydrocarbon emissions.”
Employees
“Given the rapid growth in Asia, one of our challenges is to develop and retain the right people now and for the future. That is why we continue to invest in training and nurturing talent.
To this end, we have developed the Learning Management System, which consolidates and standardizes all our technical training. The system can be used to train in skills and develop competencies whereby employees can access it anywhere, anytime. Originated in Singapore and rolled out in Indonesia and Australia in 2012, this system, now called My Learning Operations (MLO), will be implemented within Vopak globally in 2013.
Also in Singapore, we initiated a junior leadership program aimed at employees in their first supervisory or people management role. This will be rolled out across Asia in 2013. In addition to these local training initiatives, we also participated in Vopak’s global leadership programs.
We feel satisfied that this continuous focus on talent management is contributing to staff engagement and keeping staff turnover aligned with our strategic objectives.”