PETRONAS has been very supportive of the development of local players, including having an incubation programme known as the Vendor Development Programme (VDP).
Despite the rout in the global crude oil price since 2014, its VDP curriculum is still ongoing to nurture potential companies to adapt to the new era of the O&G industry.
The market believes the price of crude oil will remain low especially with the continuous production and innovation in shale oil.
Under the VDP programme, the vendors are awarded contracts by Petronas or its production sharing contractors.
The first VDP vendor in Petronas was appointed in 1994. Having 99 companies under its wing, about 64 have graduated from the programme since its inception in 1993, including listed company Serba Dinamik Holdings Bhd, Sabahbased companies North Java Sea Sdn Bhd and Firm Synergy Sdn Bhd, and manufacturer ProEight Sdn Bhd.
Serba Dinamik, which was listed last year on Bursa Malaysia, graduated from the VDP in 2007.
The company is now valued at RM3.7bil in terms of market capitalisation, with about 30% of its revenue coming from jobs in Malaysia while remaining 70% is from overseas namely Qatar and Bahrain.
Serba Dinamik managing director and chief executive officer Datuk Dr Mohd Abdul Karim Abdullah said the Petronas VDP had provided the company with the needed guidance and support to grow its business.
“Under the VDP, we successfully secured Petronas contracts that contributed 70% of the company’s revenue and 10% its profitability.
“During that period, Serba Dinamik’s revenue had shown a gradual yet solid increase. Coming from a low base, growth was significant in the early years of Serba Dinamik as a vendor under Petronas,” he said.
Serba Dinamik secured its first overseas contract in 2001 with a global operations and maintenance (O&M) service provider in Qatar.
“Since then, we have been doing business globally and attracted international partners to work with us in many areas,” Karim said.
Meanwhile, North Java Sea Sdn Bhd (NJS), which joined the VDP programme three years ago, said Petronas had been providing the company with professional guidance to expand its business.
Since then, the company has successfully entered into contracts with Petronas Carigali and Murphy Oil Corporation to supply emergency rope ladder and swing rope.
“Petronas VDP has helped NJS to get a feel of global markets and to nurture and match us with useful contacts and cutting-edge technologies that can prove crucial for our business survival.
“We have seen enquires about NJS’ products from the Middle East and European countries,” said NJS managing director Abdillah Yassin.
“The VDP Programme was designed to grow more resilient and competitive Bumiputra entrepreneurs in medium and high technology manufacturing and technical services with import substitution as the main goal,” he added.
He pointed out that the VDP aimed to create genuine entrepreneurs who were reliable and competitive to produce local products and services to replace imported ones that were used by O&G companies in Malaysia.
“The ability for NJS to be globally competitive is no longer impossible with the support and guidance of Petronas which has been conducting fair and transparent business,” Abdillah said.
Firm Synergy Sdn Bhd CEO Rudy Lawrence Sipayang said the VDP is a well-structured programme with clear key performance indicators and targets for business growth and expansion.
“The company started with only two staff – the CEO and one account personnel. Since then, our workforce has grown to 45 people,” he said.
The Sabah-based company, which provides industrial equipment supply and services for the O&G, was selected for the VDP programme in 2014.
For a company like ProEight, which is involved in design and manufacturing, the VDP programme has allowed it to grow its research and development and come out with new innovations.
“Through proper business strategies and plans, ProEight was able to allocate more than half of its revenue into state-of-the-art facilities, machinery, and equipment,” said managing director Azhar Zainal Abidin.
As a result, ProEight said it graduated from the VDP programme in 2014 with two offices, five manufacturing plants located in Batu Caves, Teluk Kalung, Miri, Bintulu and Labuan, and more than 130 units of machine and equipment.
The company’s revenue has grown significantly to RM19.5mil in 2014, compared with RM1.85mil prior to participating in the VDP.