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Driving Business Growth Through Mergers and Acquisitions

Despite having to batten down the hatches just like other offshore marine SMEs, Nordic Flow Control continues its strong growth momentum both in Singapore and abroad with a strong financial management and a sound acquisition strategy.

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Published by Enterprise Singapore
on 11 Oct 2019

Driving Business Growth Through Mergers and Acquisitions

Dorcas Teo, CEO of Nordic Flow Control aspired to become a businesswoman from a young age, yet after graduating from a local polytechnic, she took the “regular” work route. She first tried to satisfy her calling to the sea by enrolling in the Navy but was rejected. She then worked in an American multinational company for a decade focusing on valve remote control systems, becoming one of their top sales people.

In 2003, she finally fulfilled her entrepreneurial desires at Nordic Flow Control – a global systems integration solutions provider for marine, offshore, oil and gas industries. She shares her backstory, insights and experiences in running a company in a challenging and competitive industry.

What inspired you to run your own business?

I grew up in a family where both my grandfather and my father ran their own businesses, and I always believed I had the entrepreneurial bug in me. My grandfather ran his own provision shop in Paya Lebar while my father was an electrician who sold all types of refurbished electronic equipment back in the 1970s. My very first job when I was young was answering phone calls for my father. Without realising it, that was my first on-the-job training in telemarketing.

What are the key lessons you have learnt coming from a family of entrepreneurs?

My grandfather ran his provision business successfully and I remember him as very hardworking and business savvy. Besides running his provision business out of his 10,000 square feet property that housed the shop as well as our home, he also rented out the unused rooms. My father’s business on the other hand, did well in the beginning — he purchased his own car when he was 20 — but ran out of steam later on. Business stagnated and workers started leaving. This left a strong impression in me and made me realise that it is crucial to stay ahead of the curve by constantly improving, innovating and keeping your employees happy and engaged.

When my father’s business hit tough times, he decided to migrate to China leaving his family behind, unfortunately passing away there not long after. I was the only one of five children working at that time and my mother was a housewife. Going through this tough period made me understand the need to stay relevant to keep up with changing times. I also learnt the importance of not putting all your eggs in one basket. With the $100,000 left to us by our father, my family and I started a restaurant business, Mum’s Kitchen, because my mother is a fabulous cook. We all pitched in and helped after work and school. Our food business is still thriving and is run now as a catering company by my siblings.

What made you join Nordic Flow Control?

The entrepreneurial spirit in me never died and I have a passion for the marine industry. In 2003, I joined Nordic Flow armed with years of experience in both the industry and multinational companies. The business faced some financial challenges then, but I saw potential and opportunity in the company. One of the first things I did was to put standard operating procedures in place to give the company more structure.

What made you join Nordic Flow Control?

What are you proud of achieving with Nordic Flow?

Starting off with just five people and two desks in 1998, we now supply our systems to more than 1,500 vessels and rigs globally. In 2010, the company reached a new peak when it listed on the Singapore Exchange, which made me proud. We are achieving our dream of flying the Singapore flag in the marine and offshore sector which traditionally has been dominated by Western companies, particularly in the past.

While we are now in a challenging economic environment, as a group, Nordic Flow is doing well because we have evolved to cover both the upstream and downstream oil and gas value chain — this has enabled us to enjoy favourable year-on-year growth.

What do you think is the key turning point in Nordic Flow’s growth?

We have had several key turning points including growing from a mere service agent in marine control systems to establishing a manufacturing capability and a large-scale marketing team over time. This has enabled us to become a fully integrated solutions provider for the marine, oil and gas industries.

A more recent turning point would be our foray into other industries by providing PLC (Programmable Logic Controller) based automation solutions and utilising existing expertise in industrial automation software.

The strategic possession of new capabilities, diversification of our business and penetration of niche markets via Mergers and Acquisitions (M&A) are also major push and growth factors for us. While our first attempt to acquire a foreign company did not go through, we did not give up, deciding to look to companies closer to home.

In 2004, we acquired our very first company, Avitools – a Singapore company serving the aviation industry. Since then, there has been no looking back. Our latest acquisition is Austin Energy in 2015, which extends our reach into the petrochemical and pharmaceutical industries.

Now that we have grown, we have the luxury of choosing the companies we want to acquire. We normally target companies that rank as the top three in their field, and integrate the company into our business.

Based on your experience, what are your tips when it comes to growing through M&A?

While M&A might be one of the fastest routes to growth, companies need to be aware that it is not just about buying companies but also integrating companies. When embarking on M&A, it is important to select companies that align not just with your growth strategy but also your business’ vision, mission and culture. At post-acquisition, it is crucial to ensure that the new employees embrace your company culture and processes by setting firm ground rules that should be followed at the start.

What are the key factors that contributed to Nordic Flow’s growth?

We are in an industry with many large international competitors. To differentiate ourselves, we need to be nimble and quick so that we can keep adapting and evolving with the market and our customers’ needs.

Being able to diversify through M&A has played out well for us and will continue to be a key strategy of ours. It was only when we were preparing for our third M&A that we realised that we could use SPRING Singapore’s (now Enterprise Singapore's1) Capability Development Grant for some of the components of our M&A project, such as the costs involved for the financial and legal due diligence.

Our people have also made Nordic Flow a success story. They have stood by our products and our brand even during these tough times when we need to secure the hatches. We have a number of mentorship programmes in place to foster staff unity and cohesiveness. We want our employees to grow and better themselves and we believe that investing in our people is absolutely paramount to our success.

1SPRING Singapore merged with IE Singapore to form Enterprise Singapore on 1 April 2018.

Last Modified Date: 11 Oct 2019