C&L, Case Studies, CICA, International

UAA bridges gap with Singapore

Underwriting Agencies Australia (UAA) invited the chairman of the Singapore Cranes Association (SCA), Jimmy Chua and his colleague, Akbar Kader, to attend the CICA Conference and Exhibition. It was a fact-finding trip providing both with a better understanding of how the crane sector works in Australia.

The trip was instigated by key personnel from Underwriting Agencies of Singapore (UAS), a business unit of UAA, which specialises in mobile plant and machinery insurance. Marc Crossman, regional manager agencies, Asia, and Vernice Pang, business development manager, have been developing relationships with the crane industry in Singapore, and thought Jimmy Chua and Akbar Kader would benefit with insights into the Australian sector. The initiative was expressively supported by UAA CEO, Michael “Murf” Murphy, and chief services officer, George Grasso and the management team.

According to Grasso, the crane industry works differently in Singapore.

“We thought they would benefit from learning a bit more about how the Australian crane industry works. Akbar Kader is a director of Nan Guan Constructions and has been involved with the crane industry for a number of years.

In Singapore, regular crane inspections are compulsory and there is also a requirement for a crane to be inspected before it moves onto a major project or construction site, but the inspections are always conducted by professional engineers,” he said.

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Chua and Kader were able to meet with CICA CEO, Brandon Hitch, who presented the CraneSafe and CrewSafe programs and explained how they work.

“They were impressed, especially with the CraneSafe program and the point that all inspections are conducted by certified crane assessors. They are studying some of the practices of CraneSafe that may be beneficial in enhancing safety related issues. The CrewSafe program, or an equivalent, is also a program that is of interest to them,” said Grasso.

According to Grasso, repairing cranes in Singapore is not a straight-forward process. If there is an incident, the Ministry of Manpower, which is similar in its role to WorkCover, will get heavily involved. It can take control of the construction site and dictate how the machine needs to be recovered and how it needs to be repaired. Repairs are mainly conducted by the manufacturer or its appointed agent.

Inevitably, owners may be at a disadvantage as there may not be an alternative to get the damaged machine repaired. This may have serious time and cost implications.

“It is also becoming increasingly difficult to do business and Jimmy Chua, who operates a crane company, Huationg (Asia) Pte Ltd, is watching margins compress quite considerably. He has over 500 staff in his business so it’s a very large operation. He’s looking into the future and questioning how sustainable the business and industry is. It’s becoming more and more difficult to do business and he’s looking at the Australian industry practices and CICA as the benchmark to take back to Singapore and hopefully find a way to implement these Australian practices in order to keep the construction and crane industries sustainable in Singapore,” Grasso said.

Jimmy Chua spoke about his reasons for attending the CICA Conference and Exhibition and what he hoped to achieve from his visit to Australia.

“I am very fortunate to have been invited by UAA. Before we came, we had a conversation with George about the state of the crane rental and hire market in Singapore and we were discussing the gap I see between the OEM and the end user. Much of this is leading to ill health in our industry, we don’t have the proper facilities and processes to look into crane maintenance or how to manage the repairs and refurbishment of equipment.

Chua mentioned that the cost of running a crane rental business in Singapore is going up and this is not reflected in the crane hire rates that are chargeable. Rental businesses there are finding that the business is becoming “unattractive” and indeed they could be losing money on jobs.

“As the chairman of the Singapore Crane Association, my intention is to examine this gap and understand how we are going to breach it. We have been speaking to George and others about their experience in Australia,” said Chua.

Chua went on to explain the lack of options the Singapore crane industry has when it comes to maintenance and repairs.

“As far as repair is concerned, we understand Australian crane companies don’t have to put repairs, including structural repairs through the OEM. We have identified this as an area that can really bring the costs down. Unfortunately, we don’t have access to maintenance or repair facilities capable of repairing or reconditioning this type of equipment. Singapore has a number of small dealers for the OEM’s and these simply don’t have the resources to genuinely support the product at this level,” he said.

Maintenance and refurbishment

Part of the SCA’s visit to Australia was to see how service and support works from the OEMs and other independent repairers, and also how the refurbishment of cranes works. Chua mentioned that crane hire businesses in Singapore don’t have the equivalent of a business like, Ben Baden Services and that’s why they need to fill in the gaps.

“We need the right people with the right know how. We need to learn from the best and establish the right processes and controls in the right environment and facility to have the desirable end result of reinstating the machines into prime condition,” said Chua.

According to Chua, the SCA has 60 members varying in size with many smaller members offering basic services. He mentioned that some members don’t have their own workshops and because rates are low, it’s become a competitive market. The maintenance of machines is a real issue and the regulatory bodies and departments are not completely organised to manage this area. He also mentioned that the smaller members are a concern because they conduct make-shift repairs to save on costs and there are questions around about the machines being maintained to their original quality and capabilities – another issue facing the industry there (in Singapore).

“There are other issues beyond these, and I have already kick-started conversations with the authorities in Singapore. This trip is to gather more knowledge and justification as to how the industry should be operating in Singapore. I want to alleviate any fear, because people become fearful of change and we have to ensure any changes are for the better. As the chairman of the crane industry I see this as a key part of my job. I have to provide the authorities with the right information to ensure they are confident with what has to be done. I am pleased that my colleague Akbar was able to make the trip as he will provide other valuable insights,” said Chua.

Akbar Kader has worked in the Singapore construction sector for many years and he is approaching the issue with a slightly different perspective.

Kader agrees that the SCA’s visit provides an ideal opportunity to learn from fellow practitioners and experts in one’s own field, which he believes is the most useful way to learn. To Kader, his priority has always been safety. Maintenance of machinery is a priority for manufacturers, and this has been the case in the car and truck industries through appointed agents and workshops.

“I draw this parallel with cranes. Why can’t we have the same processes available for a multi-million-dollar piece of machinery. We’re not saying the manufacturers can’t manage the refurbishment process, of course they can. We are examining how to bring refurbishment and repairs to a level where the safety of the repairs is assured, but also the turn-around time and the costs are acceptable,” Kader said.

“Today’s economy is all about cost and ensuring the whole process is being underwritten. It’s critical that that the integrity of the repair process is intact, and I don’t see why this can only be done in the traditional way. It needs a lot of the relevant partners to come to the party and the automobile industry has done this.”

Kader’s opinion is that the Australian model is a step in the right direction – something that’s very important in this process is the integrity of documentation. Each step of a maintenance or refurbishment process has to be properly documented and then the authorities provide certification on the strength of the process.

“Even in Australia different states have different requirements. We have to get the authorities in Singapore comfortable and the way to do this is to present the Australian systems as an example of having the correct expertise within industry groups authorities and various levels of governments. There isn’t a reason why we can’t embark on this journey in Singapore. It will take time but ultimately it will benefit the industry,” he said.

Murphy can see genuine opportunities for the Australian and Singaporean crane sectors to work together.

“The Ministry of Manpower is a strong government body and I can see the need for strong regulatory requirements around these issues being very important. The trip is about knowledge sharing and providing our Singaporean friends with the information required to go back and lobby the relevant authorities,” said Murphy

Murphy says the aim is to demonstrate how CICA has been managing these processes in Australia, and for a long time. He said that at the moment, the Singaporean market is very heavily reliant on the OEMs and up until now, it has been working. But the market is getting tighter, the costs of having repairs done by the OEMs, in many instances, are no longer sustainable and the crane business is unable to pass on the costs to the customer.“Things need to happen in Singapore to make the industry more sustainable and there are a number of initiatives we will show the group. There is total confidence in our market that cranes can be competently repaired by third parties and in many cases at a fraction of the costs quoted by OEMs,” said Murphy.

The crane sector in Singapore can fast track it’s repair industry by taking examples from Australia.

“Singapore will need a number of crane repair businesses capable of managing repairs back to the manufacturers’ specifications and guidelines. Ensuring the right processes are adopted, including welding techniques, the right quality of materials used, and including appropriate grades of steel, will be critical.

“Overarching all of this is having the appropriate engineers that sign off on the scope of repairs prior to the repair process commencing. Once the repairs are underway, they will have the ability to examine the repair process to ensure the repairs adhere to the appropriate guidelines before signing off on the job, post repair,” he said.

“That way they own every aspect of the repair. Ultimately, it’s their engineering ability that’s signing off on the job and therefore it’s their liability. In our experience, this process reduces time and loss of revenue, two key issues for the industry. Every machine that we insure is generating revenue of some description so it’s critical to minimise the cost and time so you can get the machine back out and earning revenue as soon as possible,” said Murphy.

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