ASEAN countries are currently one of the hotspots for several Oil&Gas and Power projects, some are already ongoing and others are close to the award or in planning phase.
To support the needs of its clients, SupplHi is heavily working on the mapping, scouting and assessment of local vendors, with all data made available on the digital ecosystem for the benefit of all Buyers.
For all international Buyers that are approaching and working in these geographies, it is crucial to know the market for local supplies and foster the growth of the local economy. Several countries have Local Content regulations in place (e.g. Indonesia) that represent an opportunity for Buyers that know what are the real capabilities of the local vendors.
The logistical proximity to the construction site is also increasingly relevant in procurement decisions and local vendors have an advantage. Furthermore, since early project phases End Users are requesting the submission of vendor lists which contain local players to the bidding EPC Contractors. This represents one criteria – among the several others – of selection of the Contractor.
As a Buyer – how can I know the local vendors?
This question is particularly relevant especially in the case of past limited exposure to local ASEAN vendors.
While the list of vendors can be quite long, it isn’t easy to really understand the true capabilities of each vendor. It takes time and costly effort to scout, visit and assess vendors individually. The DIY (Do-It-Yourself) approach clashes with the ever increasing shorter schedules of projects since the bid phase.
The SupplHi digital ecosystem supports all these efforts, strongly reducing time and costs in sourcing such information on local vendors. By centring the digital ecosystem around the SupplHi Standard Categorization of goods and services, SupplHi is able to accurately allocate Vendors in the right categories and identify their main competences through the information they provide when completing the free-of-charge Vendor Registration process on SupplHi.com. The incentive in doing so for Vendors is on being visible to multiple Buyers at local and international level.
Assessment visits to local vendors’ facilities is performed in technical partnership with Lloyd’s Register through the Vendor Passport TM. Currently, about 50 local inspectors in the ASEAN countries are specifically trained to deliver the Vendor Passport TM. They are all selected according to their expertise on specific categories of supply (e.g. heat exchangers, cables, …).
Some considerations by the SupplHi Team on the local market that is growing in competences and references:
- There is a strong presence of manufacturers, mainly focusing on structural steel and related components. However, few players are developed to a point where they can provide more complex, highly engineered equipment such as critical heat exchangers, complex valves or rotating machinery. In fact, most Vendors for these more critical goods are Traders or authorized Dealers acting on behalf of foreign companies;
- A second trend is the presence of foreign, often European (German mainly) and Japanese, companies who – in the past – had set up manufacturing facilities in the ASEAN region and that gradually become independent companies years later. This is particularly true for the Thai market;
- The local Fabrication capacity has been growing fast in recent years and assembling and yard-related services are not difficult to come across;
- There is a strong presence of multinational companies with operations and offices in this region for sales and after-sales assistance, including support to commissioning;
- In the past the Power and Mining industries – especially in Indonesia with coal-based plants – have been the ones driving the most the growth of local players. Oil&Gas-related players have related expertise mainly on Operations & Maintenance.
It’s also important to mention that some local vendors are already delivering to several Buyers that procure for global sourcing and not only for Local Content purposes.
The local value chain has great potential for growth that will be also supported by local governments who have major stakes in the largest local End Users.
SupplHi currently hosts approximately 1000 local vendors from the main countries of the area, in particular: 220 in Thailand, 360 in Indonesia, 100 in Vietnam, 230 in Malaysia, 170 in Singapore and 150 in the Philippines.
Cambodia is a new entrant on the Oil & Gas market, officially commencing its oil production in 2018. The latter country had so far imported almost all its Oil & Gas from Thailand, Singapore and Vietnam, receiving contributions from large players in the neighbouring countries for the construction of plants (e.g. PTT from Thailand).
If interested in the scouting and assessment of local ASEAN vendors, contact the SupplHi Team to join other Buyers acting on all levels of the supply chain.