Since the beginning of his venture into the world of business 26 years ago, Datuk Dr Mohd Abdul Karim Abdullah has faced his fair share of obstacles as he climbed the proverbial ladder of success.
The Serba Dinamik Holdings Berhad (SDHB) group managing director and chief executive officer (CEO) has elevated Sarawak’s oil and gas industry to greater heights through his astute vision and ambition.
SDHB was founded in Bintulu in 1993 by Mohd Abdul Karim himself, whereby it had humble beginnings as a service provider for rotating equipment.
Since then it has expanded rapidly, developing in leaps and bounds to become a notable contender on the global market.
One of Mohd Abdul Karim’s most current achievements is becoming the non-executive director of Sarawak Consolidated Industries Berhad (SCIB) as of August 1. He was then appointed as its non-independent chairman on October 1.
The remarkable businessman managed to take some time off of his busy schedule to sit with New Sarawak Tribune for an exclusive interview just recently, during which he candidly discussed his business values, advice for budding entrepreneurs, and aspirations for SDHB. Here he shares his views with TANIA LAM.
ST: What inspired you to enter into the world of business?
Mohd Abdul Karim: I think the trigger point for me to enter into business was my urge to actually put what I had learnt in university into practice.
When I graduated as a mechanical engineer from University of Technology, Malaysia, we were filled with lots of theoretical knowledge and ideas. I then joined one of the Petronas subsidiaries.
During that time, a lot of the daily activities very much involved attending meetings, reading papers and plans, and so on. What I had learnt from the technical engineering aspect I could not really practise.
Of course, while Petronas had given me a good training ground what with the entire process plant being in front of me, I could not really go hands-on as much of the contracting work at the time had already been engaged by contractors.
The only platform which would suit my urge to practise what I had learnt was to become a contractor, so after four-and-a-half years with Petronas, I resigned and took up that very task.
Becoming a contractor challenged me to practise what I know, and the rest is history.
Of course, I had to go through a thorny journey and face many difficulties before I reached where I am today.
What were the main hurdles and obstacles that you had to overcome, and how did you do so?
Well, one of them was managing cash flow. As a company that started up with next to nothing — it was just myself and the secretary — we needed money to run the operations.
So we struggled. But you must have the passion, otherwise you will give up. From there, we began to slowly take up different contracts from small to average and later to larger contracts.
I always tell people that if you want an end result of sizeable sales or revenue, there are two ways to achieve this.
One is to have big contracts, but only a few. To get these, you need to have financial strength, a good financial track record, and of course contacts so they would be able to put in recommendations for you as well.
When we started, we did not really have that advantage — what we had was knowledge, a good track record, and an average financial strength.
So the second way, which is what we did in the early stages, is to take on smaller contracts — but a larger number of them.
Therefore, at the end of the day, you will still get the same results because with a large number of smaller contracts, in total you can get quite a sizeable revenue.
What is your advice for the youth and budding business people?
Dream a lot and never give up. A dream is something you really want to do but you haven’t yet because of all kinds of different reasons — it is something out of reach for the moment.
If you have a dream of something that you like, then you can really work out a plan to move on your journey to achieve that.
To start that journey and move towards that goal is definitely not easy and will harbour a lot of challenges and difficulties.
However, you must have a strong spirit and motivation to ensure that you do not give up.
What values would you say are key in business?
I always stress that discipline is very important, as well as focus.
What I mean by focus is that you can diversify your business, but that diversification has to be linked to your core competency.
For example, in SDHB we started off as a service provider for rotating equipment. Rotating equipment is just a component of the entire process plant. So, once we gained recognition and strength in that area, then we embarked on other types of equipment, such as static equipment.
Then from there, we moved into associated engineering like piping, structure, and so on — but our core competency was still there. It’s just that we branched out into other facets which are still tied to our core competency.
Besides this, good managerial skills are also essential.
I have seen a lot of SMEs (small and medium enterprises) which have good products and big customers, but the operations and company collapsed because they did not have the ability to manage the work force and cash flow.
What is it that keeps your zeal in advancing and acquiring new investments and companies?
It goes back to sustainability. So how does sustainability relate to acquisitions?
When SDHB goes overseas to acquire other companies, it is very much related to technology. We are actually buying into the technology, and we make a condition whereby the shareholder who sold the shares to us does not restrict us from transferring this technology to Malaysia.
When we started off as a service provider for rotating equipment, there were three components — the fuel service capability, the workshop repair capability, and also the manufacturing capability. In terms of the latter, we need spare parts for carrying out repair and maintenance work.
To manufacture parts, you need to have proven high-end knowledge of the design capabilities and necessary tools to manufacture said parts.
If we were to go the conventional way to reach this level, it would take a long time. So, what we do is look at the companies that have this capability and we acquire them, as I mentioned with the condition that they allow us to transfer the technology.
Meanwhile, some of the acquisitions we have done are intended for geographical positioning.
Around 17 years ago, we started our positioning and business expansion in Middle Eastern countries. Then from there we entered into the UK, Italy, Switzerland, Houston, and so on.
Now, we are focusing on Central Asia and Africa.
Why is this geographical positioning important?
We believe that every country has its pros and cons. Every country has its geopolitical risks; no country can be always stable with no political turbulence at all.
When a country that we have entered has political turbulence, it is not a good place to be doing business. So, we would have to pull those resources to another country which is more stable. This means that we need to have our presence in many different countries.
We need to do this as we have made a commitment to our shareholders and investors that for this one year, for instance, the sales and profitability will be as such.
We also have a dividends policy to tell the investor that this is what we are going to pay them based on the investment and trust that they have placed in our company.
In terms of SDHB’s performance, what percentage is local and international?
Approximately 30 per cent comes from the domestic market, the other 70 per cent is from outside Malaysia. Of this 70 per cent, around 45 per cent is from Middle Eastern countries.
Some may say that it is challenging to do business in Middle Eastern countries, but you have shown an exception. How is this so?
I think many people overlook the importance of local enterprises to support you. That is why our slogan is ‘Think Globally, Act Locally’.
Different countries have their respective entrepreneurs there. What ‘act locally’ means is to subcontract work to the locals. With this, they also feel part of the developments and contracts we are securing.
In our case, about 25 to 40 per cent of contracts we secure are subcontracted to the locals.
It is a win-win situation because this would help to reduce mobilisation and operational costs. At the same time, the local enterprises are also happy because they have gained a certain part of those localisations.
In some of these, we have also transferred technology in terms of bringing them into our training programmes and upgrading their knowledge.
Some people may say that what we are doing is not a smart business model, but we have a philosophy — do not be afraid that other people will overtake you if they know about your business tricks and technology.
I always tell these people that unity is strength; you cannot work on your own. The locality aspect is very important — we need their support.
Could you elaborate on why there is little risk in transferring technology as you mentioned?
Technology is advancing extremely fast especially in this decade. While you educate and train the locals with a certain technology, your research team and their knowledge and experience continue to grow and they will improve upon the technology.
So, you will always be ahead of those people whom you are training in technology. You will not be missing out.
Speaking of manpower, many say human capital is the key component of a successful business. What percentage of your revenue goes into human resource development?
Yes, I fully agree and support that statement. However, for us as a mobile entity, we view that time is of the essence.
What this means is if we cannot readily train up an individual to the level that is required, we will buy into the resource pool that is available in the open market. We negotiate and pull these experts into our organisation.
At the same time, we also have our own internal training division which looks into all the upgrading and training needs for our people.
We do external training as well for organisations and companies which are in the oil and gas sector, power generation industry, and other sectors we are dealing with.
Could you brief us on how SDHB views and applies research and development (R&D)?
We believe that R&D is a core aspect that every successful company must invest in because this is the strength that will determine value-added technology.
When one is out there doing actual tasks based on engineering practices and knowledge, they would encounter problems and difficulties.
And that is when they go straight to the R&D team and explain to them the difficulties faced. The R&D team will then look into this and try to find solutions to help improve upon the challenges that the implementation team is having.
What sort of allocation do you give for R&D?
In our company, we practise a needs-based principle. For example, if SDHB wants to achieve a certain technology by this year, we would put in how much is required to cover the cost. If it is 10 per cent, then it is 10 per cent.
There is no restriction to it. Some years it can be 10 per cent, and some years it can be two per cent — it is not fixed.
You have been acquiring quite a few companies. Do you have plans to acquire more in the future?
Yes, it is a continuous journey because acquisitions have quite a number of objectives. I have mentioned technology and geographical coverage.
One example is when we started, we did not have access into the US. However, when we acquired CSE Global Ltd, a Singapore listed company, we could then position and enter into the US.
From US, Mexico is just nearby, so we could cross over to make our presence there, too.
Some of the other acquisitions are made to complete the supply chain capabilities. For instance, I personally acquired SCIB because it is a company that is recognised for civil construction and the manufacturing of related products.
SDHB has never been recognised as a civil construction entity — it is very much into mechanical and electrical, so I need to have this pool of capabilities to come in for support.
Some people question this, saying that you could outsource or subcontract the work out.
That is true, but then I have experienced being taken advantage of by some subcontractors. So, you must have your own in-house supply chain capabilities to tap into. It must be something under your control.
These are the things that we are moving forward with stage by stage. Thus, the company is sitting on a very strong foundation.
What are your future projections for SDHB?
We want SDHB to be a household name. We want people to know what SDHB is when it is mentioned.
Now, when people said ‘SDHB’, they think of us as just a rotating equipment service provider, but we are trying to expand our capability base.
We have entered into information technology (IT) solutions and we are embarking into Industrial Revolution (IR) 4.0, which is a frontier technology which any forward-thinking company must have.
It also adds value to our role as a rotating equipment service provider by collecting data, analysing it with artificial intelligence (AI), and coming up with diagnostic solutions. All of these are interrelated.
At the end of the day, what I really want to achieve is to tell people that engineering is a solution for day-to-day life.
Photos: Ghazali Bujang
