Taking chances and knowing when to jump into business is never an easy thing as VG Offshore Containers International (M) Sdn Bhd executive chairman and founder Ramasamy Menon has learnt.
When the oil and gas industry in South-East Asia was booming, Menon decided to start a company in 1993 to manufacture containers used by the industry.
“We now build containers that are able to withstand the roughest of seas, including the North Sea,” Menon told Metrobiz.
He says he decided to apply the engineering experience he gained for more than 20 years as an automotive engineer – from vehicle manufacturing to delivery – and as a plant manager in a container manufacturing outfit after he found no one produced it locally.
He said containers found in Malaysia then were bought from European countries.
The company’s containers are used to carry things ranging from expensive equipment such as diamond cutters for drilling to everyday items such as food. Its clients include hardware manufacturers, catering companies to container rental companies.
While a container might look like a simple metal box to the uninitiated, Menon said there was more to it than that.
One of the important aspects in the design of containers is the “lifting eye”, the parts designed to connect to the top, side or bottom of a shipping container so that it can then be lifted by cranes.
“We need to ensure the container remains in a stable, horizontal position to ensure safe lifting and transporting. If you get the angle wrong, it could tilt dangerously,” he explained.
In terms of the container design, he has to study customers’ requirements, from how the containers will be lifted to how they can be shipped to the offshore oil and gas platforms.
“For customers who know what the containers have to carry, but have no idea of the design they want, we recommend that they chose any of the 150 containers that we have created,” he said.
Apart from just designing and manufacturing containers, Menon said they also had to prepare the documentation for the specifications that could run up to 600 pages.
“People think it is just a box, but the safety requirements are crucial, to the extent that clients come to do spot checks on our work all the time,” he said.
There are also no minimal orders as the company handles projects ranging from one unit to 600 units, with the value ranging from RM1,000 to RM1mil.
Starting the company was a risk for Menon at the time as two of his children were beginning their college education and he had to manage his finances carefully.
“Our biggest cost at that time was for manufacturing equipment. Luckily, we managed to get favourable credit terms as we had good relationships with the suppliers. We also managed to get 100% payment upfront from our first client as they trusted our ability,”he said.
The company has come a long way since its first project to manufacture rubbish skips for a Singapore client in 1994.
The order for 12 rubbish skips with load capacities of 3.5 tonnes were to be used to transport waste from an offshore oil and gas facilities.
The requirements were so stringent that the design had to be sent to Bureau Veritas, a global testing, inspection and certification body, to test the structural durability of the lifting eyes, welding and primary structures.
“Two decades later, we are proud the rubbish skips are still being used,” he said.
In the days when the company was first set up, there was no software to help with calculations and the simulation of loads. As such, the design work had to be done using the old fashioned way.
Asked how he coped with the task, Menon said they simply buckled down and did not cut corners.
“When we say the plate thickness is 6mm, we don’t use 3mm. When we do load testing, we follow exactly what the standards require, which is 2.5 times the load specified,” he said.
He takes certification tests seriously as it involves the company’s reputation, and also without it, the containers would not be allowed to go offshore.
Apart from steel, the second highest cost component for the company is certification fees.
The company works hard to make sure it is able to meet the latest certification codes, some of which require its containers to be able to withstand punishing weather and temperatures of up to -20°C
When the company first started in a rented 1,000sq ft lot in the Kampung Jawa industrial area in Klang, it had two employees doing the fabrication work.
Other processes such as sand blasting and painting were outsourced. These days, VG Offshore has a team of 150, including electrical and mechanical engineers, working in a 250,000sq ft manufacturing site in Pulau Indah, Port Klang.
The current manufacturing facility is a one-stop centre that does everything from fabrication to welding and the testing of electrical fittings for workshop and accommodation containers.
“Some of our containers are used for accommodation in hazardous areas where there are poisonous gases or risk of fire,” said Menon.
The company continues to invest in its operations, having spent RM1mil for new equipment and another RM500,000 to recruit and train its staff last year.
“As we speak, a new forklift is on its way here,” he said.