|‘We Motivate, Inspire and Encourage Hard Work’|
Chairman and CEO, Korean Register of Shipping
|Starting his career as an engineer on a merchant ship, Kong-gyun Oh has come a long way to being the CEO and Chairman of KRS. In his own words he was destined to devote himself to sea. In this candid interview, Oh shares insights about company's recent 50th anniversary and what it would take to deliver the Vision 2020 promise.|
Korean Register of Shipping had recently celebrated its ‘Golden Jubilee’, how do you perceive the performance of the company all through these years?
Korean Register (KR) was founded in 1960 through the genuine passion of a few master mariners and engineers. It began with only a handful of surveyors and a small number of domestic vessels under its register. KR celebrated its 50th anniversary in 2010. Since then, the KR classed fleet continues to increase and has recently exceeded half a million gross tons, which is another step forward to achieving our mission. This milestone is great but compared with other classification societies; we still have a lot more to achieve. But we are definitely moving in the right direction.
Under the climate of global economic uncertainty, it was not an easy decision to stick to our plan ‘KR Vision 2020’ and push it forward. Many companies are cutting their staff, downsizing their organisations and adjusting their business portfolios - all of which are reasonable choices given the economic outlook. But we see things differently and act smarter. We take advantage of every opportunity - we have been recruiting highly skilled and qualified engineers and developing new customer service areas.
My responsibility is to bring the company together as an organisation and maintain and promote our goals. We motivate, inspire and encourage hard work.
However, we do not aim for numbers, we aim for quality. It is an added pleasure for me to record in terms of the quality of our services, KR was honored to have been recognised by the Korean Shipbuilders’ Association (KOSHIPA) as the best performing classification society operating in Korea.
As the year under review was just one year after the Golden Jubilee, it is both a symbolic and meaningful step on our path towards Vision 2020. It is a great achievement and a wonderful tribute to the effort of the men and women who make KR. Do you see any respite from the present condition of the shipping industry? How much time will it take for the shipping industry to return to its original growth path?
The experts will discuss the current freight market situation, shrinking demand for ocean transport, over-supply of vessels, a squeeze on earnings and fierce competition amongst ship operators. These challenges will not be resolved in the short-term but what I find more worrying is the sharp decline in the volume of world trade and the direct and immediate impact that will have on the shipping sector.
But Asia gives a different perspective. The steady GDP growth in Asian countries bears testimony to the robustness of the Asian economy amidst uncertainties over global economic health. According to the ASF (Asian Shipowners’ Forum), more than 50 per cent of the world fleet is owned by Asian shipowners. There is a sign that the volume of sea-born trade, particularly in the Asian region, is increasing and this provides at least some light at the end of the tunnel. If the market fixes the problems of over-supply – which it will, given time - I think the shipping industry will regain its former strength and begin to propel the global economy once again.
How do you plan to achieve the company’s ‘2020 vision’ of placing Korean Register of Shipping among the top 5 register in the world?
I think the Vision 2020 is achievable without being overly ambitious. But it won’t be fulfilled without the combined efforts and dedication of all our employees.
We have prepared a strategic plan and a detailed road-map that will take us to 2020. It sets out how we will realize our vision and how we will work with other, related, sectors (such as shipbuilding and ship operating) to achieve our goals. In doing so, we aim to achieve the highest standards in all the services we will deliver.
In our plan, we put ‘human resources’ at the forefront, as we see people as our greatest strength. One of our primary assets is the knowledge and experience of our engineers which is unmatched in other countries.
Today, Korea is the best place to build ships and offshore plants – and this is the result of Korea’s outstanding science, engineering and technology base and stable industrial environment. We find that the best engineers grow together, as does the respective industry.
Our job is to provide these people with encouragement and support along with practical guidance in how to achieve the goals that the company has set. To help with this, I have introduced practical guidance to reduce working hours and have implemented flexible working hours. Second, we continue to recruit highly educated people while many other organisations are making employees redundant and reducing their intake. But I see things differently. This is an ideal opportunity to educate people, find the best people, and get them ready for new business opportunities.
Third, we continue to expand our overseas survey network. Shortly, a new office will open in Vancouver, Chennai and St. Petersburg. Other overseas offices are also planned. This is important to reach out to our customers. I believe that a prompt, efficient and professional delivery of ship surveying services is the key to the success as a classification society.
Today we have 59 branch offices around the world, and we plan to have more than 100 by 2020 with a view to provide maximum global coverage to our customers.
Being a not-for-profit organisation, how difficult is it to fund R&D as R&D being an integrated part of KRS? For any classification society, investment in R&D is a good indicator of its continued competiveness, particularly in view of the increasingly globalised and technical nature of our business.
R&D plays an important role in the innovation process which is increasingly vital to our current and future success. It results in the technology that brings new products and services to the shipbuilders, shipowners, flag states and other customers. There is a positive relationship between R&D investment and company performance.
The more we invest in R&D, the better we are able to serve our customers. As I said earlier, classification is becoming increasingly competitive and I hope to maintain this healthy competition among societies.
As a result of our R&D activities, we have produced Seatrust CSR software (IACS Common Structural Rules), KR-CON (search engine of IMO instruments), KR-SERS (safety evaluation and emission reduction system), to name just a few.
That said, I firmly believe that R&D is an essential part of KR. Many of our R&D projects are self-funding but we also participate in a range of Government funded R&D projects. As far as we are concerned, there is no funding barrier to our R&D activities.
How was your experience of attending the SMP world conference and exhibition 2012?
First of all, I want to say thank you for an incredibly well organised and exciting event, particularly when the main speakers were invited to the podium for their inaugural speeches. I think a large part of the success of the event was due to the commitment of the organisers. This was an opportunity for us, an Asian classification society, to meet, face to face, with people from the industry in India. We have a lot to offer to Indian shipbuilders and owners. KR participated in the exhibition, as we have done in previous years and will hopefully continue to do so.
How do you perceive the role of Asia in the Shipping industry in the future?
The Asia region’s importance for the global shipping industry has increased significantly over the past two decades. Today, Asian ship owners control nearly half of the world’s commercial fleet and three countries in the Far East – Korea, China and Japan – build nearly 90 per cent of all new ships.
As global trade patterns have shifted eastwards and more and more decision-making takes place in Asia, the Asian shipping community needs to clearly express a louder ‘Asian voice’ in the international shipping arena.
Although it is important to think in global terms, it is beneficial for the industry to have Asian based companies and organisations participating in the debate about future direction and policies.
In this regard, the formation of three organisations - namely the Asian Shipowners' Forum (ASF), the Asian Shipbuilding Experts' Forum and the Association of Asian Classification Societies - in the Asian maritime community recently shows that real progress is being made in efforts to encourage a stronger, more unified voice for shipping and maritime related companies from the Asia region. It is early days for these three organisations, but they are important as they can help Asia show its leadership qualities and make its voice heard.
Your suggestions as to how Asian countries can contribute to bring shipping industry back on its growth path?
Since the financial crisis in 2008, the global economy and trade has shrunken significantly. Though the worst seems to have passed, we still have pressing issues and obstacles to tackle such as the Greek bailout.
Considering that the economies of western countries are, at best, uncertain, the only alternative that will give a momentum for the global economy to escape these dark times will come from Asian countries. And here, the contributions of Asian countries arise. Some of the ways in which Asian companies can contribute are mutual growth of shippers and shipowners, expansion of free trade, restructuring of shipping industry and promotion of regional ship finance.
Where do you see yourself five years down the line?
Looking back at my career, I have to say that I was destined to devote myself to the sea. I started my career as an engineer onboard a merchant ship. Then after a long time serving as a government official, this precious chance as Chairman of KR was given to me.
This season of next year, I will step down as the Chairman of KR. But that does not mean that my call for the industry will expire. With the experiences and relationships that I have built-up throughout my career, I am sure that I will continue to be active in the maritime field. For the moment, I am only concentrating on the management of KR and our contribution to the global community.