Keppel Corporation SWOT and PESTLE Analysis

Strength

1. One of the largest builders of oil rigs: Keppel Offshore & Marine (Keppel O&M) is concerned with design of offshore rigs, their repair and construction, ship conversion, ship repair and most importantly, specialised shipbuilding. It has 20 shipyards and offices spread across the world. This presence enables them to be close to potential markets if and when the need arises.

Keppel FELS is the headquarters of the offshore division of the company. It specializes in building high-performance offshore rigs. Keppel FELS’ portfolio of designs and production solutions meets demand for a wide range of operating requirements, from deep waters to hostile environments.

The Marine division, maintained by Keppel Shipyard, is in the business of repairing a myriad range of different designs of ships and vessels. The division leads in Offloading and Floating Production Storage conversions, Storage and Re-gasification Units.

The Specialised Shipbuilding division of Keppel Corp is led by Keppel Singmarine. It specializes in building customised vessels, multi-purpose Offshore Support Vessels and tugboats. It also provides advanced solutions to ship-building like ice-capable vessels for worldwide use.

Together, these division create a strong portfolio of products and services that the company has the ability to offer to its customers.

2. Elaborate Sustainability Framework: The Company has an elaborate Sustainability Framework which has all the signs of helping Keppel Corp to sustain itself in the long term. The Framework has three main parameters – Sustaining Growth through resource efficiency and innovation, Empowering Lives through the company’s rich culture, vision and mission and Nurturing Communities to help growth thrive within the company. Thus, with a sustainable business outlook, Keppel Corp aims at growing and enriching lives – a strength in the long term.

3. Strong Investor Relations policy: Keppel Corp’s Investor Relations Policy help is draw in more investors and retain existing ones, thus ensuring a wide pool of source of funds. A few key points that help the company in this regard are:

- Submission of every disclosure to the Singapore Exchange Securities Trading Limited (“SGX-ST”) through SGXNET. The information of these disclosures is also available on the Company’s website.

- Transparency in communication with shareholders to enable them to take well-informed decisions.

- All communications are done through the Authorised Spokesperson of the company to avoid confusion and breed authenticity.

- The company encourages analysts and investors to effectively participate meetings with the Senior Management so that everyone can gain broader perspective on the topic of discussion and take better decisions.

4. Effective Talent Management Structure: The company has a very efficient Talent Management structure that enables young professionals to come up and produce fresh ideas before the senior management, which shall prove to be profitable for the organization in the long run. This effective use of young talent is rendered a strength for the company in order to sustain itself.

Weakness

1. Major chunk of revenue generated from Singapore only: As much as 57% of the company’s total revenue in 2013 has come from its Offshore & Marine Division. Keppel Corp’s main shipyards are in Brazil, The United States and Singapore itself. According to a report on analystreport.com, payments from Brazil were delayed due a corporate scandal. Thus, the major revenue it garnered was from Singapore itself, leaving globalised domination open to competition.

2. Decreased revenue from ASEAN countries: According to the same report on analystreport.com, Chinese shipyards provide offer better payment structures, more efficient financing and lower prices as compared to Keppel Corp. This has led to a fall in the company’s revenue from the ASEAN countries since they are utilizing the offers from the Chinese. Keppel Corp should take another look at its policies and bring about the required reforms in order to re-ensure their stronghold in the ASEAN market.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Political

1. Amicable relations with the Government: The Singapore Government has supported Keppel Corp in most of its ventures since it sees economic growth of the country as a whole with Keppel Corp flourishing. Ocean Mineral Singapore Pte Ltd (OMS), majorly owned by Keppel Corp, recently entered into a 15-year contract for the exploration (associating with the International Seabed Authority (ISA)) of polymetallic nodules within the Clarion-Clipperton Fracture Zone of the Pacific Ocean. The project has been sponsored by the Singapore Government. Over the years, Keppel Corp has maintained amiable relations with the Singapore Government, making political donations and opening charitable trusts as a sign of their acknowledgment of the Government’s support towards their organization.

2. Political Action Committee: The company also has a Political Action Committee, which is dedicated to solving issues related to the political stand of the company, directly upholding Keppel’s vision, mission and practices. The company itself is controlled by the Singapore Government.

Economic

1. Fall in the price of crude oil: The Major economic factor that has affected Keppel Corp recently is the steep fall in the price of crude oil. Fueled by regulations by the OPEC countries, oil prices, after having peaked in the middle of 2014, has seen a stiff fall since, and is still falling. This has resulted in Keppel Corp’s major clientele to reduce business of constructing, repairing and maintaining large scale oil rigs for their offshore policies.

2. Reduction in its share values: Due to falling prices of crude oil the amount of transactions with the company have significantly reduced. The result – Keppel Corp’s share value has taken a toll and has fallen drastically.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

This section is available only in the 'Complete Report' on purchase.