kopi-C with Dyna-Mac’s CEO: ‘We went from near-bankruptcy to having a record order book’

When Lim Ah Cheng, also known as AC Lim, became offshore oil and gas contractor Dyna-Mac’s chief executive officer in 2020, the firm was in crisis. Its founding chief executive officer had suddenly died of a heart attack, and its poor cash flow was threatening to lead to bankruptcy.

“I chose to work very hard and lead by example. If you push hard to try and turn things around, the staff has to follow,” says Lim, who is also Dyna-Mac’s executive chairman.

To save the business, he took a different approach to customers and contracts. At the time, partly because of the Covid-19 pandemic, the firm was relying on work from one customer to survive. “Of course, this company took advantage and drove our fee very low, and constantly told us they had other options, meaning our competitors in China.”

With Dyna-Mac losing money on the contract, Lim took the bold move of contacting one of those rivals, China Merchants Heavy Industry, successfully proposing a joint venture. “It’s a win-win. They provide all the manpower and equipment, which cuts our costs, and get to use our name in the industry, which we have built up since we were founded in 1990.”

With the partnership, Dyna-Mac’s fortunes began to turn. Lim also instituted another change as more contracts became available. “Previously, the company only did one project at a time, which was not efficient. Now, by overlapping projects, all our trades and workshops are always occupied, which maximises our use of labour and revenue per square metre.”

Under Lim’s leadership, the firm started to make a profit in 2021, when many other businesses were still showing losses during the pandemic. In the 2023 financial year, it raised its revenue by 32 per cent and increased its profit margin from 4.5 per cent to 7.4 per cent. More recently, it announced a record S$896 million net order book, with project deliveries stretching to 2026.

Bringing a can-do spirit to business

Lim adds that part of the company’s turnaround is due to its new, more assertive attitude to courting clients. He explains: “In the past, we were just passively waiting for opportunities, or going to see potential customers only after we found out about possible work from the news or other sources. This was not good enough.”

“Now, we go and talk to them even when they do not have jobs for us. We meet them three times, four times, so that they feel our sincerity. Some of them have given work to us directly, instead of us having to go through another contractor. When some of them become bosses in other companies, they remember us too. We have not had to tender for any jobs.”

This can-do spirit extends to solving problems and overcoming obstacles. Lim recalls one client who wanted to bring a construction job to Dyna-Mac’s fabrication yards in Singapore during the pandemic. “We didn’t have any manpower at the time, but he believed in us and gave us the chance to prove that we could get it done.”

Since the start of the pandemic, Dyna-Mac had kept in contact with the relevant government agencies in Singapore, its banking partners and other stakeholders to update them regularly on its status. Leveraging on its relationship with the government, it made an offer. “We would take charge of bringing workers in: booking the airplane, arranging quarantining, everything.”

The big swing paid off handsomely, with Dyna-Mac even helping to bring in workers for some of the government agencies. “With our agreement, we were able to get more than 1,000 workers to come to Singapore during the pandemic. This goes to show that you can always find a way forward if you have the tenacity and creativity.”

He notes that heads of firms have to take the lead in inspiring, motivating and guiding staff. “You have to be on the ground, walk the talk. I go to not only our sites but also our dormitories to find out what our workers are thinking, to talk to them and gain their trust. This encourages communication, breaks down silos, and ensures that we continue to be one united team.”

Strategies for dynamic, dynamite growth

Having set Dyna-Mac on a profitable course, Lim has plans to drive further growth through upskilling, diversifications and acquisitions. “For organic growth in our core competencies, we will continue to partner other firms to grow and share the pie, even if this means giving them more of the profit,” he says. 

“Singapore companies tend to think that they must have the lion’s share in any collaboration, but I don’t agree with this. If you work with others to expand the sector, everybody benefits and gets something. Even if you take only 30 per cent of the profit and they get 70 per cent, why not? Something is better than nothing.”

At the same time, he is eyeing other fields that could use Dyna-Mac’s expertise. “We’re being very careful in this. For example, I’m a strong believer in sustainability, and we cannot stick to the oil and gas industry for all of our work. But we cannot just go into, say, the solar or wind power sector as we do not know enough about them. Firms have lost their shirt doing that.”

“Fortunately, what we do know, and are very strong in, is fabricating exotic pipes, and pipes are a key component of emerging renewable energy systems that use hydrogen and ammonia. We can move into liquefied natural gas modules. By making use of our core capabilities as we diversify, we can meet the changing demands of the energy industry and stay ahead.”

Lim adds that acquisitions will help accelerate Dyna-Mac’s growth. “We’re promoting organic growth, but that can take very long. Also, it may be difficult for us to enter sectors where we have no track record. Buying other companies will enable us to address these issues,” he says. “Of course, you must also be humble and open to learning new things.”

Looking to the future, he believes that Dyna-Mac can achieve “explosive” growth in the next few years. “We’ve put ourselves in strong positions for organic and inorganic growth, including being financially prudent and accumulating a cash reserve of over S$200 million which we can use for acquisitions. I think our coming years will be, like our name, dynamite.” 

About Dyna-Mac

Dyna-Mac is a global multi-disciplinary contractor who undertakes the detailed engineering, procurement and modular construction of energy equipment and services. Dyna-Mac’s focus on excellence, high safety and quality standards enable Dyna-Mac to build its track record to execute and deliver offshore projects, such as for FPSOs (Floating Production Storage and Offloading Vessels), onshore projects for land-based facilities and with focus on LNG, hydrogen and ammonia products. 

Headquartered in Singapore, Dyna-Mac is listed on the Mainboard of Singapore Exchange. The company’s website is https://www.dyna-mac.com

Related links:

• Dyna-Mac's share price and analysis
• Dyna-Mac dividend history and forecasts

About kopi-C: the Company brew

kopi-C is a regular column by SGX Research in collaboration with Beansprout that features C-level executives of leading companies listed on SGX. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.

Join the Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs.