Keppel Corp

Well, Keppel Corp is in the limelight again during PM Lee NDR speech.This time, it is about how a few non-graduates made it good in Keppel Shipyard climbing through the ranks despite being non-degree holders and how Keppel management pushed and supported these people along the way to achieve their maximum potential (which many degree holders will not be able to unfortunately). Keppel was in the limelight during a previous NDR where PM again describe with some pride how Keppel built rigs were being used to launch the rescue operations during the BP oil spill in the gulf of Mexico.

Well, I think the few people handpicked by PM are the exceptions rather than the norm as Singapore clearly lack an environment where the non-degree holders can excel in their vocations by choice or otherwise. The fact that Keppel was mentioned on both occasions point to the dearth of organizations locally able to provide the platform to foster such an environment where engineering and vocational competencies are highly valued.If you fire 100 shots at a target, one or two will hit bulleye. NNonetheless, what is needed are 30 targets for every 100 shots fired and we get 30 bulleyes.

However, I am not totally convinced that what Keppel is doing is really 'high-tech' where it is difficult for competitors to catch up and overtake.My gut feel is that what they are doing is integrated engineering ie putting different pieces together on schedule and under stringent safety requirements.The Chinese shipyards are also building submersible and jack-up.They may not have the same quality but it may be a matter of time.Of course, Keppel have the strategy to build their rigs near their customers but their is no intrinsic competitive edge as a financially strong enough competitor can also muscle in to do likewise.I am not certain that there are tons of internally developed IP, processes etc that go along with the building of jack-ups, sub-mersible that make it difficult for the competition to acquire or duplicate based on my observation that Chinese shipyards also can deliver, may not on schedule or with the same quality at this stage.I will be most glad to be proven wrong on this, though.

Hence, I have not added more shares on Keppel beyond what I currently have.I am not as optimistic as PM on Keppel long term prospect.Again, I do not mind being wrong on this too.