Beca Asia

Singapore evolves

As chairman Chuan Seng Lee explains, Beca has certainly learned a thing or two about the market.

“When Beca opened in Singapore in the 1970s, the country was still building itself up - it wasn’t seen as a springboard like it is now,” recalls Lee. “But by 1990s, Singapore was certainly becoming a hub – there were a number of multinationals coming in to set up.”

This change was bought about by a “total rethink” during the years when Singapore was in recession in the 1980s. The model that the government decided upon was to continue to bring in investment, but also to promote Singapore as a platform to launch into wider Asia, due to its location, infrastructure and status as a financial centre.

“In retrospect, Beca didn’t think too far down the line,” says Lee of the shift. “Onshore, we had the notion of build up, grow and then establish an external wing. Within Singapore, we realised the need to secure work elsewhere in case of another recession like 1984.”

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Beca internationalises

This led Beca into Indonesia and Vietnam, followed by offices in Myanmar and Malaysia. This thinking stemmed back to the 1960s - George Beca and Sir Ron Carter knew that they had to internationalise. Sir Ron, in particular, knew Beca had to become bigger in New Zealand and to grow internationally

“Ron’s business model was simple: if we find a viable market we will then start a company there. When a company is started, we would need to have a New Zealander to build it up, but we would also require good local partners to develop as future leaders, explains Lee.

“Singapore was good for us because we found a ready pool of well educated people who we could nurture and ‘Beca-ise’. We found that Singapore had much to teach us too.  We could then instil the culture we developed into other places accordingly. In Singapore, you could find people speaking Chinese, Malay, Tamil, Hindi – these are huge advantages in this region.”

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Singapore Government rolls out welcome mat

Assisting Beca’s growth was a range of grants and programmes offered by the Singaporean Government. In the mid 90s Beca was also introduced to the National Productivity Board (now Spring Singapore) a government agency that supports small to medium enterprises.

“They expressed interest because Beca was active in three Asian countries and 20 to 30 percent of our revenue was coming from projects outside of Singapore,” recalls Lee. However Beca’s growth was so rapid, when the NPD was ready, Beca was no longer considered an SME. Instead, the NPD introduced Beca to the Economic Development Board (EDB), who offered the company a grant for strategic planning.

“Through that planning, we realised we had to strengthen Beca’s financial management tools,” says Lee. “We also looked at our IT and technology platforms, and at organisational alignment and organisation change management.”

“These grants were useful, as we were going to do these things anyway, but we managed to do them much faster,” says Lee who credits the EDB for accelerating the company forward. “They led us to be more considered and measured in how we expanded overseas and we also learnt better financial control.”

As a result, Beca weathered the Asian financial crisis of ‘98 and ’99 relatively well.

“Our top line dropped 30 percent, but our bottom line increased 40 percent as we became much more efficient,” says Lee.

“The IT platform allowed us to go paperless, which helped tremendously and we could also work remotely from overseas as well – that helped improved productivity.”

Securing these grants, as well as connections and knowledge provided by the EDB, was possible because of Beca’s original plan to work together with local directors. In the early 1990s Ron Carter had offered shares to Beca employees holding major positions. By 1995, the shareholding by Singaporeans and Singapore permanent residents reached 70 percent ownership – Beca held 30.

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Re-merging hubs strengthens Beca Asia

However, in 2000 there was a drive to re-merge Beca into one entity in order to get more synergy and to have more robust systems across the One-Beca framework. It became one group consisting of three hubs – New Zealand, Australia and Singapore.

“This turned out to be a blessing for the company,” says Lee. “Initially, we were concerned about how to inform EDB that Beca was merging. However, the EDB felt that it was a good move. “In fact, they commended the Singapore shareholders for their maturity in securing a broader and more diversified framework to allow the business to grow more robustly.”

Even with Beca merged, the EDB continued to make business easy for the Kiwi multinational.

“They spoke to us about another scheme called the International Headquarters Programme, which we were then accepted for,” says Lee.

This programme gives Beca reduced tax rates for increased earnings – cutting the percentage down from 22 percent to around 13 percent. It also helped Beca to bring employees from China, Myanmar and Indonesia to Singapore for three3 to six6 months of training and upskilling.

Since then, Beca Asia has gone from strength to strength – winning contracts for two of Singapore’s largest developments, Marina Bay Sands and Resorts World Sentosa.

“We have had to compete with European, American and Australian engineering companies, but we have become known as a New Zealand engineering firm, with tropicalised, well-proven Singapore designs”.

Now that’s the ultimate advantage.