How TNB REMACO is diversifying from a single market
TNB Repair and Maintenance Sdn. Bhd. (TNB REMACO) is constantly diversifying itself in riding the changing landscape of the industry. Leveraging on technological development and clientele ever-changing expectations, TNB REMACO is set to become a premier brand with holistic solutions in delivering customer’s trust in its services.
TNB REMACO is wholly-owned by Tenaga Nasional Berhad (TNB), of which is the largest electricity utility in Malaysia and one of the largest in the region with an asset base totaling USD30 billion and customer base of more than three million users. TNB REMACO was first incorporated as a subsidiary of TNB in 1995. The company is managed independently as a business organization within the corporate structure of the TNB group. While it shares the group’s core vision, values and culture TNB REMACO nonetheless remains steadfast in the realization of its own corporate destiny.
Managing Director Anuar Yusoff explains the transformation in structure: “TNB REMACO used to be a small department supporting TNB generation. We did repair, maintenance and overhaul for their generating plants - their gas, steam and hydro turbines. It was in 1995 when we became a wholly owned subsidiary of TNB that we diligently gearing our resources and expertise in realization of the vision and mission of the company.”
How does TNB REMACO balance diversification with loyalty to its parent power plants? “Previously, we were exclusively servicing TNB’s existing fleet of power plants, but have expanded our services for newly developed power plants, and are also actively providing services to independent power producers (IPP’s) such as Malakoff and Powertek, as well as oil and gas (O&G) sector,” Anuar Yusoff explains. Among the O&G clients serviced by TNB REMACO are Petronas Gas Berhad (PGB), Petronas MLNG and GE Power.
Not only is TNB REMACO diversifying from the traditional energy market, it’s also exploring different geographical spaces. “In the middle of 2004, we started going into international markets,” Anuar Yusoff explains. The company has business presence within the South-East Asia and MENA (Middle East and North Africa) region, such as in Myanmar, Singapore, Brunei, Indonesia, Yemen, Kingdom of Arab Saudi and Vietnam. Anuar Yusoff explains that TNB REMACO’s goal is to achieve 10 to 20 percent growth from overseas businesses: “I have to look at every opportunity to grow business locally as well as internationally. For the last three years, we started going aggressively into the Middle East,” he says. Currently, TNB REMACO has three operations and maintenance (O&M) contracts in Kuwait, two in Pakistan and one in Kingdom of Saudi Arabia.
Although TNB REMACO has built a global presence, its roots are firmly planted in Malaysia: “As of December 2016, we have executed a contract for a Long-Term Service Agreement (LTSA) with Petronas Gas Berhad (PGB), the national petroleum company of Malaysia,” Anuar Yusoff says. PGB awarded a MYR160 million contract to TNB REMACO for the maintenance of its gas turbine and related equipment for Central Utility Facility (CUF) in Gebeng and Kerteh, for a duration of 6 years.
“Customer requirements keep on changing,” Anuar Yusoff says. “They keep on pushing their expectations. For an example, TNB used to carry out a planned maintenance outage for roughly 50 days in the late 80s, but now client requested for a shorter outage period, and we have to work 24/7 to fulfill their requirements. To support that, we need to have highly skilled and dedicated personnel, and the latest equipment.” When the petroleum price rise in the early 2000s, TNB REMACO losing some of these employees to the O&G sector. However, the firm worked hard to develop teams of adept and robust personnel, and during the last five years has managed to maintain a low turnover. Anuar Yusoff adds, “We have a good remuneration package that is within the best in Malaysia. In terms of competencies, we have a systematic training system which is conducted by TNB owned technical training centre, namely ILSAS. We have a training module where for the first three years of entering into TNB REMACO, all personnel will enrolls into a dedicated training modules that covers both technical and management courses.”
And in embracing the rapid development of the technological changes, TNB REMACO is keeping abreast with the changes by continuously developing highly skilled personnel. “In terms of technology adaption, we regularly maintaining the integrity of that equipment by sending our personnel for various training and certification program, as we definitely cannot afford to have failed equipment or incompetent personnel,” Anuar Yusoff explains. TNB REMACO also has established a comprehensive condition monitoring program for its client in ensuring reliability and efficiency of their equipment. TNB REMACO also prides itself by having a Repair Centre, which is located in Connaught Bridge, Klang. The Repair Centre can be considered a gem for the industry in view of its capabilities for performing various repair and refurbishment activities. TNB REMACO is collaborating with Original Equipment Manufacturers (OEM’s) for refurbishment of turbine parts and its components, apart from capability to perform bearing re-metalling, and reverse engineering services, just to mention a few of Repair Centre’s capabilities.
TNB REMACO also prides itself on having a varied field of services offering to the potential customers. Anuar Yusoff says: “We call ourselves a one-stop service provider - any client in energy related industry can utilize our expertise and services. We can assist them to design and build a power plant, perform the O&M of the power plant, conduct scheduled maintenance for the equipment, perform the test and diagnostic activities and also refurbish the turbine parts. At the end of the power plant life or its Power Purchase Agreement (PPA), TNB REMACO can also perform the decommissioning of the power plant and sell the parts. In a nutshell, TNB REMACO is capable to perform various activities during the whole life cycle of the plant”.
We ask Anuar Yusoff whether TNB REMACO has reached its full capacity. “Our target revenue in 2020 will be MYR1.9 billion and we will be going more aggressively to overseas market, especially Pakistan,” he stated. TNB REMACO also wanted to increase its presence in the oil and gas industry. Currently, its revenue comprises approximately 90 percent from power sector and only 10 percent from oil and gas sector.
“In the current market condition for O&G sector whereby the petroleum price is dipping below USD60 per barrel, there is a promising chance for us in offering our services to the industry players. This is due to the fact that most of the O&G companies are currently opening its door for alternative service providers rather that exclusively engaging the OEMs, of which is of premium pricing,” Anuar Yusoff says.
TNB REMACO also aspired to establish its name in EPC (Engineering, Procurement and Construction) business. “We aspire to be one of the reputable EPC contractor, because before this we were more involved in the Project Management and Consultancy (PMC), but not in the construction side. We are currently preparing ourselves to enter into the EPC business.”
Anuar Yusof’s vision for TNB REMACO is clear, and the expansion of business plan for TNB REMACO was built on a solid track record and coupled by its impressive expansion strategy. TNB REMACO is no longer in a single market platform, and has huge potential to grow rapidly whether it be internationally or into other sectors. We can’t wait to see what TNB REMACO does next.