Engineer sets up company to get hands dirty and learn

  • Metro Biz
  • Saturday, 24 Jan 2015

Complex machinery: A one stage steam turbine used for training the company’s engineers so that they know how to carry out the overhauls and inspections in accordance to standard industrial practices.

Starting out one’s career in a large company, with its maze of bureaucracy, may not always be fulfiling. And when career aspirations are not fulfilled, some employees become demotivated.

That was certainly the case with Datuk Dr Mohd Abdul Karim Abdullah, founder of engineering company Serba Dinamik Sdn Bhd.

As a fresh mechanical engineering graduate, he joined a local gas industry giant as a maintenance engineer specialising in rotating equipment and longed to truly understand the theories he was taught in lectures.

But he was not happy that he had to spend a lot of time in discussions and meetings.

“Getting our hands dirty is what engineers should do at the early stage of our career, not spending too much time in the office doing corporate planning,” he told Metrobiz.

So, in 1993, he set up Serba Dinamik Sdn Bhd to get the hands on experience he craved, beginning with doing work on what is called “plant turnarounds”.

A plant turnaround involves making sure a plant complies with Department of Occupational Safety and Health’s (DOSH) requirements. Serba Dinamik’s work included making sure plants in the oil and gas industry were ready for a major inspection every 18 months.

“The plant will shut down and both regulators and owners will be involved in everything from inspection to signing off on certification that it is fit to operate for the next 18-month cycle,” Mohd Abdul Karim explained.

With RM50,000 raised from two other shareholders, he started with one secretary in a small office in Bintulu, Sarawak. The company employed contract technicians according to the jobs it acquired.

He said that, in any given month, there are about 10 to 18 plants in Malaysia that have to go through a plant turnaround. Each contract can be worth anywhere from RM200,000 to RM3mil, depending on the complexity and scale.

During the turnaround, which takes 18 to 30 days, over 200 pieces of equipment is thoroughly inspected. Each piece of equipment has its own checklist and the lead technician has to inspect and then do the necessary maintenance, including replacing worn parts.

Mohd Abdul Karim then compiled the checklists and prepared the necessary reports to be given to the related stakeholders.

With about 100 contract workers under the company’s wings at that time, Mohd Abdul Karim thought about expanding the business so he could continue to employ these workers.

“That kind of talent is not easy to find, so we had to think about how to go beyond the three plants that we were working on in Bintulu at that time,” he said.

Experienced technicians were vital, as a a plant failure could cost about RM1mil a day even in the 1990s.

That was the beginning of the company’s expansion. From having just a maintenance office in Bintulu, it went on to expand to other states like Terengganu, Malacca, Johor, and Kedah. In 2000, it expanded to Middle East.

Raising funds was always a challenge, and he borrowed from his family and friends when he needed them to fund the company’s expanding scope of work.

“I’ve repaid them all with interest higher than the bank’s,” he said with a smile.

In 2003, the company attempted to get listed on Bursa Malaysia’s Mesdaq Market (know known as the ACE Market) to raise RM9mil and although he was not successful, he says he learnt to see things from a banker’s perspectives.

“We kept the name Serba Dinamik Group Bhd, and I was able to retain my stake (which is over 40%),” said Mohd Abdul Karim.

This allowed him to keep the company an engineering-centric business.

“I resigned from my first job because I wanted to understand how things work from the engineering perspective, and that should be how the next generation of engineers should learn,” he said.

Having said that, he also started to take finance and accounting seriously. The company now works with top-notch auditors to ensure all the company’s related-party transactions are trade related in nature.

As the company grew and became more recognised for its performance, Mohd Abdul Karim realised that clients preferred a one-stop centre for their needs. In 2009, it evolved to become an integrated energy solutions provider.

This encompasses upstream and downstream oil and gas plants, and power plants.

“We are no longer just mechanical contractors — our scope includes civil and mechanical engineering, instrumentation and control systems,” he said.

The work involves purchasing motors, pumps, and designing a control system that allows various types of equipment to work together according to client requirements.

To do this, he approached foreign banks for funding. The decision to work with foreign banks was due to the fact they looked at risk differently when it came to providing the financing the company needed. Instead of asking for land or buildings as collateral, he says they insisted that the company put 30% of the financing provided into a fixed deposit account progressively. With the working capital, the company had since purchased equipment and expanded its talent base to 300 full-time and about 500 contract employees.

The company currently occupies three blocks of five storey offices in Pusat Dagangan Umno, Shah Alam. Even then this is not enough to accommodate everyone. As he puts it: “This is a client-centric business where the action is at the site, not in the office.”

The company has completed about a hundred full-scale contracts for the oil and gas industry in Malaysia, the Middle East and some of the former Soviet Republics.

Moving forward, the company is opening a manufacturing and assembly plant in Meru,Klang in the first quarter this year where equipment will be assembled and tested before being sent to a client’s site for commissioning.

They are also in the midst of finalising an acquisition of a UK based oil and gas company that will serve as a springboard for the company to penetrate the European market. The hope is that the work in Europe will lead to the transfer of more advanced technology to Malaysia.

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