MISC Annual Report 2019

CAPTAIN RAJA SAGER Managing Director/CEO, Eaglestar Marine Holdings (L) Pte. Ltd. Sharing intelligence, working in an open, transparent and transformative way across the organisation will be key to Eaglestar’s continued progression in this evolving industry In 2019, Eaglestar continues to steadily build its brand and reputation in the global maritime industry as an integrated marine services provider and we work closely with other business units within MISC as the key enabler in providing shipmanagement services. One of the key highlights for 2019 was a new five-year business plan which presents a clear perspective of Eaglestar’s goals which includes expanding our services to other external customers. This will enhance cost efficiencies through economies of scale benefiting the Group’s fleet. In addition, the extension of services to third-party shipowners will provide an avenue for our employees to develop their capabilities, therefore allowing them to progress further in their careers. Our 5,000 maritime professionals at sea and shore are the most valuable assets to Eaglestar. The capability of our people reflects our reputation in the market and we continuously engage with them to inculcate a high-performance culture aligned with our aspirations to become a preferred global shipmanagement company. In supporting this objective, we continuously invest on their training programmes that not only focus on individual career progression and performance, but also towards overall operational excellence. As the key enabler to MISC’s business units in growing the Group’s business portfolio, Eaglestar upholds the spirit of collaboration and work very closely with them as their technical advisors during the new project’s bidding process, project managers during vessel construction and shipmanagers for its operation. Through our collaborative efforts, we have achieved notable successes together as a team in 2019. These included securing new long-term charter contracts for two new LNG carriers with SeaRiver Maritime L.L.C (a wholly-owned subsidiary of ExxonMobil), three new DPSTs from Shell and three new DPSTs from Petrobras. Securing these projects reflects the customer’s trust in Eaglestar’s track record as a professional and prudent shipmanager. The year saw a shift of focus towards meeting the IMO 2020 sulphur cap regulation to which Eaglestar continued its role in ensuring that all vessels within the Group would be readily compliant before 1 January 2020. The team successfully met all the requirements and continues to further enhance its operations in this new environment. Today, the big challenge for us will be adapting to the industry’s expectations to reduce carbon emissions from our operations and ultimately decarbonise the shipping industry. There is a rising demand for cleaner fuels and alternative energy sources, while maintaining the highest shipmanagement standards. Shipmanagement companies are also transforming themselves, leveraging on technology and digital-led solutions, driving the maritime workforce to view the future differently. In line with this, Eaglestar supports the Group’s environmental stewardship aspirations and the IMO’s 2050 Greenhouse Gas (GHG) emission targets. Eaglestar plays an integral role by contributing our expertise to the Joint Development Project together with other industry players, namely Samsung Heavy Industries, Lloyd’s Register and MAN Energy Solutions in exploring alternative fuels towards providing a zero-carbon emission vessel, targeted to be operational by 2030. Digitalisation is the game changer that will benefit the maritime industry by harnessing the possibilities offered by digital technologies, artificial intelligence and automation. Eaglestar is exploring the available technologies that can synergise with its current operations. Some of the applications are currently being analysed in terms of their potential to enhance the health and safety of our seafarers, improve our environmental footprint and increase the efficiency of our shipmanagement operations. The future looks to be exciting as it will enable us to move faster, work smarter and operate with the flexibility required to serve the changing needs of our customers. Most importantly, it is an opportunity to enhance the skills of our people for them to be more agile and dynamic in adapting to technological advancements. We believe that understanding the complexities of the markets we operate in and delving into the ‘hows’ and ‘whys’ of our customers’ requirements will set us apart from the rest. Sharing intelligence, working in an open, transparent and transformative way across the organisation will be key to Eaglestar’s continued progression in this evolving industry. CAPTAIN RAJA SAGER Managing Director/CEO, Eaglestar Marine Holdings (L) Pte. Ltd. Management Discussion & Analysis M A N A G I N G D I R E C T O R / C E O ’ S R E M A R K S Market Review For shipowners and shipmanagement companies, the immediate priority is on understanding the requirements and effectively assessing their options. This enables them to take the necessary measures and implement the solutions that comply with these regulations. In compliance with the various regulations, possible challenges may surround the systems to be embarked on by shipowners and ship operators. One example would be the challenges of the BWM Convention. Some 40,000 ships were expected to install Ballast Water Treatment systems and to comply with the requirements which had to be done over a short timeframe saddled with the technology, for the most part, being relatively new and unproven may have led to a rush in decision-making causing uncertainties in its operations. On the security front, piracy and armed attacks against shipping were a global concern that required a concerted response by shipowners and operators. While serious threats continue in the Indian Ocean and Southeast Asia, the shipping community has been particularly concerned with the deteriorating security situation in the Gulf of Guinea where there has been a sharp increase in the number of violent attacks on seafarers. In recent years, sustainability concerns have been gaining more prominence in the global shipping industry with increased awareness of the environmental impact due to shipping activities. Various international and regional regulations have been introduced and implemented, driving stricter requirements for vessel efficiency and environmental performance. The IMO has set its aspirational targets towards decarbonisation of the maritime industry. In addition to the IMO 2020 sulphur cap regulation which came into force on 1 January 2020, shipowners and operators are now working towards the greenhouse gas (GHG) targets for 2030 and ultimately, reduction of the total annual GHG emissions by at least 50% by 2050 compared to the baseline of 2008. The period leading up to September 2019 was also significant as an important implementation stage of the IMO Ballast Water Management (BWM) Convention. This requires ships that were constructed before 8 September 2017 to install a new treatment system for their first International Oil Pollution Prevention (IOPP) renewal survey on or after 8 September 2019. Integrated Marine Services 117 116 OUR BUSINESS PERFORMANCE MISC BERHAD PEOPLE. PASSION. POSSIBILITIES ANNUAL REPORT 2019