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Published September 23, 2004, The Business Times, Singapore
S'pore a home base for Altus
A decade after shifting here from Hong Kong, Altus' CEO tells UMA SHANKARI why he still believes it is the best choice for his headquarters
IN 1992, the Altus group's headquarters was located in Hong Kong, but CEO Robert Sumantri was understandably nervous about Hong Kong's impending merger with China, scheduled for 1997. He thus started looking around for a new base for his company. Singapore immediately came to his mind.
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| Mr Sumantri: since moving to Singapore, he and his family have settled in well here |
'There really is nowhere else we could have gone,' Mr Sumantri said. 'The infrastructure provided by Singapore and Hong Kong had, and still has, an edge over most of the other countries in the region.' Although Mr Sumantri added that neighbouring countries are catching up, he still feels that Singapore remains the best choice he could have made for Altus' headquarters, even after a decade.
A subsidiary of the Altus Group, Altus Shipping and Logistics, recently applied for and received a 10-year extension to the Approved International Shipping (AIS) enterprise scheme this year.
Under the scheme, international ship-owning and ship-operating companies that base their strategic management activities for their regional operations here in Singapore get tax incentives for a period of 10 years.
Altus Shipping and Logistics had previously been granted incentives under the scheme in 1993, and when it ran out last year, Mr Sumantri did not hesitate before applying for a 10-year extension, which was recently granted, thus committing his company to another 10 years in Singapore.
The company also won an International Maritime Award, which is awarded by the Maritime and Port Authority to honour leading maritime companies and recognise their growing operations and continued contributions to the Singapore economy.
Set up in 1973, Altus aims to offer one-stop supply chain management to the customers whose goods it transports. The group was set up by Harjoko Sumantri, the father of the present CEO, to service the export of commodities from Indonesia to North Asia.
Since then, Altus has grown from originally owning and operating a fleet of log bulkers to a diversified fleet of multi-purpose vessels, bulkers, containers and tankers that are able to service the group's growing trade in clean petroleum products, chemicals, edible oils and higher-value-added exports in the Asia-Pacific region.
The company presently has six vessels, of which four are registered in Singapore. 'At the peak, we had 27 vessels,' said Mr Sumantri, explaining that the company trades its vessels in order to achieve greater profitability. The company currently has about 98 employees worldwide, of whom 55 are in Singapore.
Altus moved to Singapore in 1993 when the then Trade Development Board (now IE Singapore) sent missions to Hong Kong to encourage companies to relocate here.
'We were very impressed with their presentations. It made it easier for us to pack up and leave,' said Mr Sumantri, adding that he was also offered a chance to be a permanent resident here, which served as a secondary incentive.
Since his move to Singapore, he has settled in well here. His five children are embedded in the Singaporean academic system. Together with the extension to the AIS scheme awarded to Altus this year, that fact serves as an indication that Altus has made this country its permanent home.
'We'll be here for quite some time,' said Mr Sumantri. The company has received a substantial amount of help from the government, which Mr Sumantri praises as being 'very supportive and pro-active'.
Relocating to Singapore from Hong Kong also proved to have advantages for Altus other than those that are purely economic. As the bulk of its business is in South-east Asia (mainly Vietnam, Indonesia and Singapore), Singapore's central location comes in handy. For example, Mr Sumantri travels frequently to Indonesia, where the company has its historical roots, and that's just a stone's throw away from Singapore.
'The fact that Singapore is a big transshipment hub is also very useful as most of the cargo for the particular sectors that we are looking at go through the Singapore port before reaching their ultimate destination,' said Mr Sumantri.
He believes that as the company looks to expand in Asia, having the group's headquarters in Singapore will prove handy due to the established infrastructure and the central location. 'We feel that growth in the next decade will come from this part of the world,' said Mr Sumantri.
According to him, Altus has a strategy that focuses on Asia exclusively. 'There are so many countries that we can still set up in here in Asia, so we're not actively looking outside Asia at the moment,' he explained. He believes that especially with China booming the way it is now, there will be many more Asian owners, and Altus will see a lot more business from this part of the world.
Mr Sumantri also has words of praise for the financial infrastructure in place here. 'Most of the investment and financing for our business is being driven from here, so it makes sense to locate the group headquarters here,' said Mr Sumantri.
He explained how when Altus first came to Singapore in 1993, there were hardly any banks that offered ship financing, but that has since changed. 'Some services are a bit slow in coming here as compared to Europe, but they are getting here,' he says.
Altus is currently a private business, but Mr Sumantri said that he would want to see the company listed eventually. 'It (listing) is something that we are definitely thinking about because our business is capital conscious,' he said.
'At some point, one of the best ways to have access to long term capital is by being listed.' However, he believes that the company has to grow further before it can get listed.
While Altus has looked at different markets, Singapore would be Mr Sumantri's prime choice for going public since it is, after all, the company's home base.