The emergence of China as a global economic superpower over the last decade is presenting huge opportunities for the country’s manufacturing and engineering industries. A number of firms have established themselves as integral in a range of industries, growing from modest beginnings just a few years ago. Perhaps a clear example is Hoidi Group, the number one jack-up rig leg fabricator in China (see Fig. 1), which has rapidly transformed itself in its two decades of operation.
Formed as a small fabrication company in China back in 1994, with the goal of being the country’s best offshore engineering supplier, its founder couldn’t have imagined how one event would lead to its subsequent astronomic growth. Hoidi’s current position as the number one jack-up rig leg fabricator in China and one of the best EPC houses in China can be traced back to the trust that the Chinese national oil company COSL (China Oilfield Service) placed in Hoidi in the early 2000s, when it took the chance to support a local yet burgeoning entity and awarded the fledgling fabricator a contract – a break that has set Hoidi’s mission of creating mutually beneficial strategies for its partners, its people and the community.
“Our commitment to sharing our opportunities and creating win-win situations has been instrumental in our success,” says Philip Tan, General Manager of Hoidi International. “We won that all important first tender due to a combination of factors: our previous work, our experience in welding and fabrication, the strong group of employees supporting us and my CEO’s outstanding personality and work ethic,” he explains.
“But it was this project that catapulted us to fame as China’s pioneer manufacturer of jack-up rig legs for the international market, and one of the few non-shipyard firms able to offer leg segment fabrication and erection in the world. From there, we have been in a strong position to include others in our success, which in turn has contributed to our success and further growth.”
A niche market
From this one project, things moved rapidly. In the next two years, Hoidi won leg and piping EPC projects for Noble JU2000E rigs, which gained the company the attention of the international market. The momentum started to build over the next 10 years and over the last decade Hoidi has successfully established itself internationally as a quality and reliable manufacturer to the industry, supported by a strong partnership in its steel supplier, JFE Steel Corporation. “Getting JFE on board was a boon,” comments Dong Xue Yong, VP of Hoidi Group, “as there are only five to six different steel makers capable of producing the thickness that is required for jack-up rigs.”
Our commitment to sharing our opportunities and creating win-win situations has been instrumental in our success
Partnering with JFE was a risk initially, but not one unfamiliar to Hoidi. “JFE was not able to produce the required quality of steel at first,” recalls CEO Geng Yue Jie. “But I remembered the chance I had been given by COSL as we were starting out and I believed that by supporting JFE, we could finally find a strong and trusted supplier.” His faith paid off and JFE came through on every project. With Hoidi finally sure of a firm supply of quality steel, combined with its skill and well-earned reputation, the group was ready to compete in the international market.
Since 2010, Hoidi has manufactured almost 20 percent of the world’s new rig legs and over 50 percent of the new GustoMSC model jack-up rig legs. By 2017, the legs for 25 percent of the 72 new jack-up units to be delivered in China, and a total of 42 ABS approved rigs all around the world, will be created by the company. Hoidi will also be providing fabrication and installation to almost 70 percent of all jack up rig pipeline systems produced in China by the end of this year.
As a testament to its skill, Hoidi is able to produce a complete set of GustoMSC model CJ46 375ft jack-up rig rack and chord within a month, meeting all standard ABS requirements, while a typical whole rig leg production takes the company four to six months, as compared to the eight to 10 months required by its competitors.
Getting in on the success
“It sounds like a cliché, but it is our people that got us to where we are today and will propel us into the future as we branch out into topside fabrication and detailed module fabrication. So Hoidi is committed to creating win-win situations for our staff to ensure that they are recognised for their achievements and that their well-being is taken care of,” says Tan.
With Quality, Health, Safety and Environment (QHSE) measures in place, Hoidi aims to ensure a ‘zero causalities’ and ‘zero accidents’ work environment for all. “We don’t believe that producing products is worth more than life,” he says. “In fact we would rather delay production than compromise safety.” Taking care of one’s staff is essentially taking care of the company, an internal positive representation in action.
Management views the company like a basketball team. Not everyone gets to touch the ball for the entire game, but every player is key to the game’s success. With its people as a top priority, Hoidi has set up several incentive programmes to ensure that employees stay motivated and contribute to Hoidi’s competitive edge. Yue Jie believes in rewarding hard work, understanding that it is through its people that Hoidi continues to grow and gain competitively.
One key programme is Hoidi’s Freedom of Project Platform (FPP) scheme, aimed at allowing people to grow by giving them the freedom to make decisions. On a project basis, trained members who have performed well in their division in past projects are given the chance to lead future projects or tasks while adhering to the company’s values of creativity, progression, high quality, hard work and commitment. They are given standard managerial controls such as ‘check ins’ and ‘update meetings’, but are mostly left to their own devices to see how they are able to express themselves. If they fail, they learn. If they do well, they grow.
“There are many ways to get things done, and not just my way,” Yue Jie admits. “Having this platform with the right amount of controls will expand our people’s talent and creativity and, if they make a mistake, they can always come back and clarify. I am always willing to teach, to listen, to see how we can do things better the next time.”
Sharing successes
Ever cognisant of its mission to create a win for all, Yong confirms that “Hoidi is all about relationships and building something greater than what we are.” Forming and strengthening local partnerships all around Southeast Asia is a top priority as the company expands, now that it has been strategically headquartered in Singapore since 2012. “We believe that the best way for us to proceed forward is to develop partnerships with local companies, as we have expertise in fabrication and also the track record, whereas some local yards may not have similar experiences,” he explains.
Hoidi has a strong corporate social responsibility programme in place that ensures that the company gives back to the communities it impacts
Hoidi also sees opportunities in the Southeast Asian region where there is a high demand for rigs and the lack of local expertise to fabricate them. “With plenty of shallow water, over 75 percent is under 200 metres in depth in oil production areas, and ever growing demand for the region; we are currently exploring with certain companies to form strategic partnerships to work with each other’s strengths,” says Tan. True to the company’s philosophy of sharing its success, Hoidi aims to ensure that both the country and the company win in terms of increasing the region’s offshore capability and oil production for growing energy needs.
In addition to sharing the benefits with other local or start-up companies and its employees, Hoidi has a strong corporate social responsibility programme in place that ensures that the company gives back to the communities it impacts and showcases the benefits of the win-win strategy.
Harsh weather conditions in the fabrication yards of China pose a continuous problem for the company in keeping its working environment safe for its workers. In early 2008, heavy snow and freezing temperatures in Hoidi’s Shen Zhen yard impacted production and morale. Hoidi initiated an employee emergency programme and started the ‘although the cold is here, so are we’ slogan to let the employees know that the management was there for them. The project site emergency response team promptly distributed quilts for ancillary workers and applied other measures to ensure that everyone had the warmth they needed. The workers responded well and even maintained the datelines needed for production.
The warmer months also present their own challenges. In the summer of 2009, with continued high temperatures plaguing the southern region, the safety and morale of all was severely impacted. Sunstroke was a concern for those labouring under the sun, and especially for employees welding in confined areas. To negate the potential health issues, Hoidi initiated sunstroke security protocols such as requiring covered areas to be set up and installing additional fans in confined areas. Work schedules were also changed to provide extended work breaks and to avoid employees working outdoors at midday in an effort to reduce the effect of the heat. Although time was shorter, workers work more efficiently in a comfortable environment, and produced higher quality of work on time.
From a simple start-up 20 years ago to China’s pioneer in jack-up leg production globally, Hoidi has never forgotten the opportunities it has been given along the way. Its commitment to creating winning opportunities for the companies, people and communities it touches has become an indelible and ingrained pillar of its corporate culture, and the very reason for its rapid growth over the last decade.
