June 16, 2003
By WONG WEI KONG
FOR former politician David Lim, his first task as the new CEO of Neptune Orient Lines (NOL) may well be to convince the sceptics that he is the best man for the job.
When his predecessor Flemming Jacobs took over the helm at NOL four years ago, there were few doubts that he was the man NOL needed. Even when he was unceremoniously asked to leave the national shipping line earlier this year with NOL bleeding heavily, Mr Jacobs never lost the respect of shipping professionals.
He was seen as a victim of brutal circumstances beyond his control. After all, he had lifted NOL from heavy losses to profits before global factors produced fresh bleeding again. It was speculated his downfall was also because he did not know how to manage key shareholders, including government investment arm Temasek Holdings.
In contrast, the reaction to Mr Lim's appointment as the new CEO of NOL has been muted, even polite to a point.
Yes, he is a former minister, and yes, he has some relevant experience as former chief of port operator PSA Corp. But really, what does he bring to NOL, some are asking.
High standards: The bar was actually set quite high by NOL itself. In an earlier interview with BT, chief financial officer and board member Lim How Teck spoke of what would be required of the new CEO: 'Whoever it is has got to be a recognised leader - it's got to be somebody with a good track record of turning around companies, somebody who is acknowledged as being able to think out of the box, to be able to bring us into the future. We're looking for a change of leadership. We're looking for that extra - sustained profitability in the future.'
Does Mr Lim, who unexpectedly quit as Acting Minister for Information, Communications and the Arts in April, fit the bill?
Viewing it cynically, is his appointment at NOL a golden parachute after his service in government? It's arguable.
Mr Lim, who will be 48 this September, has spent almost all his career in government and quasi-government organisations, and apart from PSA, held top jobs at Jurong Town Corp and China-Singapore Suzhou Industrial Park Development Company Ltd. His most relevant experience, as far as NOL is concerned, was his stint at PSA in 1995.
But views on his time at PSA are sharply divided. Shippers point out that he was at the helm of PSA when it first implemented significant hikes in container transhipment charges in the mid-1990s.
They say it was also during that time that relations between the port operator and the container shipping industry started to sour, eventually leading to open criticism of PSA's high-handed approach which drove some customers to rival ports. In the minds of these critics, this shows that he does not really understand the business.
But some analysts view his former links to the container liner industry as highly useful to NOL, particularly when it comes to consortium networking, alliances or even mergers and acquisitions.
Mr Lim does bring certain strengths to NOL. As a former minister and with his political links, he is well-placed to manage relations with chief shareholder Temasek. NOL, after all, is a government-linked company. His political standing will also come in useful in opening new avenues for the shipping line.
And Mr Lim will enjoy what Mr Jacobs didn't - breathing space. He is taking over when NOL is already turning around and with the worst behind. NOL is expected to sail smartly into the black this year on the back of an industry-wide recovery, post-Iraq war cargo bonuses and aggressive cost cutting, while the sale of its American Eagle tanker division will bring much relief to its balance sheet. And earnings visibility is seen staying strong for the next two years until 2005 when the industry cycle is expected to reverse.
Strategy for the future: Which highlights this point: NOL needs Mr Lim to do a job that is very different from that of Mr Jacobs. While the latter had to stem the bleeding, Mr Lim's task is to keep the ship steady while devising a future growth strategy for the national line. Perhaps that is why NOL decided to hire from outside the industry: to get someone who can take a fresh look at the business.
Mr Lim will have his work cut out proving the cynics wrong.
There is actually a precedent: years ago, Lim Chee Onn also left government and joined the Keppel Group, eventually becoming its executive chairman. Much derided, he disproved his critics by steering Keppel ably. Will David Lim be able to pull it off too? NOL and its shareholders will be keeping their fingers crossed that he does.