Aker Kvaerner Expanding In Malaysia

Winning the contract last year for delivering subsea equipment to Murphy Oils Kikeh field development was really a stepping stone for Aker Kværner’s expansion in this region, he says. Located offshore Sabah in East-Malaysia in 1350 meters of water depth, the Kikeh field is the first deep water development in Malaysia, and the contract is worth approx. 90 million US dollars.
The subsea market is growing worldwide. Thus, the Aker Kvaerner subsea division needs more production capacity, and will be investing MYR143 million to set up a new manufacturing plant in the free zone of Port Klang, Malaysia. The construction started on the 1st of February 2006, but has been in planning for almost a year up front. The plant is expected to be operational January 2007.  This manufacturing facility will produce diversified subsea equipment for the oil and gas industry, such as Christmas trees, subsea manifolds and deep water drilling risers. As well as producing for the ascending Asia Pacific market it will also contribute with deliveries in other parts of the world.
Egil Martinussen claims many reasons for choosing Malaysia as a location for the new deep water production hub. The quality of the workforce here, with almost everybody speaking English, plays a very important part. Another favorable point is that the general educational level in Malaysia is high. In addition to the fact that the political climate is stable, which is imperative, the relatively reasonable labour costs have also been taken into consideration.  But, the most important factor would be that Asia Pacific presents a deep water growth market, and this is a field where Aker Kvaerner can provide reliable and proven subsea equipment, he says.
Asked how he feels about the local authorities’ attitude to the new manufacturing facility, he is very impressed. The Malaysian authorities generally and the Selangor state authorities especially have been very positive indeed to the new facility, he says, and everything considering the licences and approvals has turned out very smoothly. Probably the Norwegian authorities would not be able to provide such speed and attention during a complicated process, he laughs.
To attract foreign investors and companies the Malaysian authorities have created the Port Klang free zone, where companies amongst other advantages are granted such as Pioneer Status with tax exemption for up to 10 years for certain products.
A major international player in the field, Aker Kvaerner Subsea will be utilizing key resources from other countries to get the manufacturing facilities operational, but eventually the manufacturing facility in Port Klang will employ several hundreds of local technicians and engineers. The first group are already sent for training at the Norwegian facility in Tranby outside Oslo. The plant will also use local suppliers extensively.

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