PEMANDU Associates – Page 2 – PEMANDU Associates

Unlocking Quantum Leap Profitability in Private Education

In spite of being a household name in the private education industry, Education Co was struggling with declining profits and student enrolment over the last four years. Meanwhile, its competitors were catching up with newer facilities and fresh entries to the market. The company needed to boost its profitability while remaining true to its purpose of delivering holistic education. PEMANDU Associates dove in to deconstruct the problem and find the best solutions to meet their objectives.

The Story

As one of the private oldest education providers, Education Co had maintained its strong brand heritage through decades of operations, with its university ranked among the Top Tier of Private Higher Education Institutions in its country of operations, and the Top 250 universities the QS: Asia University Ranking. The company’s operations now span business units across a university, college and schools.

Despite its reputation for academic excellence, the company’s net profits had been declining at a 5.1% CAGR over the last four years:

Student enrolment, the key driver of revenue, had dropped by 23% overall due to a decline in university and college students.
Capacity utilisation also declined as a result, with their university operating at 73% capacity and college at 52% capacity.
Group operating costs had been escalating.

Out of the three business units, its college operations in particular had suffered, risking insolvency in two years if it continued operating in the status quo.

PEMANDU Associates was tasked to employ its Big Fast Results (BFR) – 8 Steps of Transformation Methodology© to help the company achieve a quantum leap in their profitability.

Our Approach

Over the course of six weeks, PEMANDU Associates undertook the following steps:

1. Establishing the Lab’s True North
The True North sets out the overarching goal that aligns all the initiatives identified at the labs. At a Strategic Management Workshop involving the CEO and key decision makers, the True North was determined as: “Delivering holistic education by operating at optimal capacity to achieve the targeted profit by 2020.” Success in optimising capacity and profitability would validate Education Co’s value proposition of delivering “whole life education”.

2. Structuring the Lab to support the True North – Workstreams
The True North was broken down into two focus areas for the labs:

a) Holistic Education – Fulfilling its value proposition

To ensure that holistic education relates to tangible outcomes, a framework was developed to clearly define the delivery of holistic education for the organisation

b) Capacity Optimisation – Achieving this requires a function of:

Market growth: Market share and expansion into new segments
Business opportunities: Revenue maximisation, Cost optimisation and Asset management

3. Landscape analysis
This would benchmark Education Co against their competitors in the industry. A study of the industry landscape revealed:

University – Priced at a premium but perceived to deliver lower value
- In the tough economic climate, affordability was the top consideration for student enrolment. While the university had excellent academic reputation, it lacked differentiation to support its premium pricing. Thus, Education Co must enhance the delivery of its value proposition
- The university lacked partnerships with strong international education institutions to support their programme
- Insufficient programmes to cater for future areas of opportunities
College – A 5-year decline due to a static business model that did not respond to increasing competition
- Shifting market demand as students preferred foundation programmes compared to the limited pre-university offerings at the college
- International schools began offering A-Level programmes, capturing school-leavers who were traditionally the college’s target market base
- Competitors were offering lower prices and better facilities
Schools – A risk of 60% oversupply in the market due to new competition
- The number of schools had increased by 124% since the liberalisation of the market five years ago
- New global players and developers were entering the market

4. Internal assessments
To have an in-depth understanding of its operations, the business streams mapped out their programmes based on Gross Profit (GP) Margin vs. Capacity Utilisation (CU). This enabled a high-level assessment of the appropriate strategic action for each programme:

The mapping revealed:

80% of the university’s gross profits were contributed by its top 20% programmes. Thus, Education Co should optimise capacity for these top performing programmes.
Half of the university’s programmes appear unprofitable.
Further analysis showed that cost per student rose to 49% of revenue, mainly driven by facility management costs

5. Identifying key initiatives and opportunities to achieve the True North
This final step began with brainstorming by workstreams for ideas to achieve the True North. These ideas were then prioritised according to their potential impact and related issues. Prioritised initiatives were fully developed into detailed implementation plans, outlining the action items and timelines, persons in charge, the stakeholders involved, resources required and potential issues and mitigation plans. Based on these plans, the initiatives underwent a final prioritisation assessment according to their overall impact on the True North and feasibility of implementation.

The solution: Key recommendations

59 initiatives were developed and prioritised for Education Co across several key areas. Among the key initiatives were:

Holistic Education: To enhance the delivery of the value proposition
- Integration of holistic education competencies and attributes into teaching and learning curriculum across the group
- Establishment of a regional centre of excellence of holistic education
- Industry immersion for real world experience. The university will create a full-fledged business to allow hands-on working experience for students
- Partnerships with established international institutions for training programmes
- Upskilling the current teaching staff and recruiting next generation teachers familiar with constructivist and social learning
- Enhancing student living experience by providing better options for economical food, parking and conducive spaces
Optimising capacity across all business units
- Prioritising the university’s top 24 programmes
- Offering scholarships to compete with lower tuition fees
- Expanding product offering to attract different demographics, such as night classes for working adults, certifications and short courses
- Programme bundling for greater value
Activating alternative revenue streams
- Renting out physical space and facilities for trainings, conferences and meetings with a package deal
- Opening for advertisements at the grounds
- Franchising popular programmes with established education institutions in countries with unmet demand
- Establishing satellite learning centres in other states with high demand
Cost optimisation
- Streamlining support functions and enforcing a cost ratio by pegging support costs to % share of revenue
- Rationalising utilities cost
- Streamlining academic offerings by merging common modules
- Closing unprofitable programmes
Enablers
- Developing business intelligence strategy and data analytics to target the right market with right strategy, to potentially increase sales by 20%
- Setting realistic budgets for sales & marketing
- Campus redevelopment for more flexible facilities required for new programmes
- Robust governance and coordination led by the Transformation Management Office to ensure the delivery of recommendations, thus enabling business units to focus on delivering holistic education

The outcome

The initiatives developed at the lab aimed to yield an increase in profit after tax by 178% in 5 years:

Turning profits from a projected loss in the year
Increasing student enrolment by 147%
Increasing capacity utilisation from 33% to 99%

Providing quality education to generations of students is no easy task. Faced with competition from newer institutions, Education Co sought to boost its profitability while still remaining true to its mission of delivering holistic education.

By performing a landscape analysis and company-wide internal assessment, PEMANDU Associates was able to identify certain projects that could be turned into quick wins and deliver the lab’s true north – enabling Education Co to deliver holistic education by operating at optimal capacity to achieve the targeted profit by 2020.

Thriving in Foreign Lands

By Serene Tan Zheng Xiew, Manager at PEMANDU Associates

Speak to a management consultant and what becomes apparent very quickly is not only the maddening work hours, but the constant travel. While this may bring about glamorous images of consultants with their customary Tumi bags working out of airport lounges, the constant travel can take quite a toll on – both physically and mentally.

Throughout my almost two-year stint here with PEMANDU Associates, our work in government transformation and my expertise has provided me with opportunities to not only work in a host of countries but to collaborate with people from different cultures. Projects would usually take ten to twelve weeks and throughout that time, we’re just working tirelessly to ensure that we can facilitate and develop strategies that will help achieve a business’ or government’s True North. And given the firm’s belief in delivering Big Fast Results, we often hit the ground running from the moment we land.

I’ve learned very quickly that one of the keys to a fruitful engagement is to quickly adapt to the people and the work culture of the country you’re in. There are no playbooks for this, so you have to be nimble enough to adapt on the job. This may sound trivial but acclimatising to new work cultures is important in ensuring that you can successfully manage project stakeholders and produce results. This is all part of the Big Fast Results approach that we at PEMANDU Associates consultants anchor our work on – in other words, to deliver tangible results in the quickest, most effective way possible.

To date, I have been assigned to projects in three different countries across three different continents, so you can imagine the vast differences in cultures. However, in preparing myself for the trips, I usually stick to a few ‘rituals’ which have been a lifehack of sorts, regardless of where I’m headed to.

Do Your Research!

Preparation begins way before you take-off!

Like a true consultant, every trip begins with an obsessive flurry searches into available databases shared by the Engagement Manager to study the country, its people and its customs. Next, I’d look out for information about the specific industry related to my assigned workstream and speak with our colleagues who have experience in similar industry experiences.

I’ve been involved in quite a few socio-economic transformation projects so my pre-reading also helps dig up insights on the country’s laws and policies. The last thing you would want to happen is to devise strategies based on policies that didn’t work before!

Call it old-fashioned, but appearances matter. Getting familiar with a culture’s dressing etiquette is another great step to ensure that you adhere to cultural boundaries. Prior to one of my work trips to Oman, I made sure my wardrobe was prepared to suit the Muslim-majority Sultanate to avoid offending my counterparts. Being outcome oriented, the last thing we’d want is for wardrobe mishaps to discount or hinder our work delivery.

Get Off on the Right Foot

My first two days in a new country will determine how the rest of the project will turn out. Ergo, it’s extremely important for me to make the right impression to my counterparts. The early stages of an engagement allow working teams to establish working processes, hours and norms. Use this time to communicate with your counterparts to understand the issues they have been facing so that they know you are here to help. One of the firm’s leadership principles is ‘building a winning coalition’ to ensure alignment towards a common outcome. And taking a people-first approach has been key to helping me achieve this!

R-E-S-P-E-C-T!

Aretha Franklin’s famous lyric has never rung more true. Respect is the foundation to being able to work well with people who are from different backgrounds. Afterall, you’re on their home turf so you have to play to their rules.

In St. Lucia, the people adhere strictly to their working hours (9am-5pm). This means any e-mails or work requests sent after 5pm will need to wait until the next day. For us Asians with a habit of working through ungodly hours, this means, if you promise to deliver something ‘by EOD’ it doesn’t mean end of day by your standards.

The good news is, the firm believes in rigorous planning (we call it a ‘3 feet plan’) which favours granular activity plans toward an outcome or deliverable. This makes it easy for us to plan our time efficiently to ensure that things are done with a clear direction and on time.

Keeping Your Mind on the End Goal

With the limited timeframe that we have on a given project, you need to maintain a razor-sharp focus on the project’s true north. There will be roadblocks in reaching the finish line and when they do appear, there are times where a stand has to be taken, and perhaps unpopular decisions made to move the needle. Problem solve the issue by finding alternatives, and in my case, I would seek information from other individuals who might also have access to stakeholders with greater authority. If there is a need to bypass individuals, seek help from your team lead or Engagement Managers, to get some time with the stakeholder in question (but remember to do so diplomatic in your approach!).

In the business of Big Fast Results, we don’t have the luxury of time to entertain prolonged inaction on a matter. So carry out your tasks relentlessly, monitor progress, and when faced with difficulties, continuously find solutions that can help you overcome them.

Build Camaraderie

Your work assignment is probably going to be the only time you will be visiting the country so why not make friends out of it?

One of the key components of PEMANDU Associates’ Big Fast Results (BFR) Methodology – 8 Steps of Transformation© is to hold a Lab. This is an intensive process where cross-functional groups of stakeholders are brought together over a period of 6-8 weeks to identify prioritised initiatives and action plans toward a common goal. A Lab can get very intense for everyone involved so to lighten up the mood, I usually utilise break times to chat with my stakeholders. Sometimes, we even play simple games just to break the ice! This actually helps build my relationship with my counterparts, which will consequently result in better working relations.

Spend time with your stakeholders, and get them to share more personal things. It will make adapting so much easier once you have newly made friends who can guide you on how to navigate around their culture.

Challenges abound when you carry out work in a different country. And while we may sometimes learn things the hard way, the key is that we learn. Our CEO, Dato’ Sri Idris Jala says that in the pursuit of a goal, even if we slip up the important thing is that we’re transformed along the way. And boy have I learned and transformed!

Growing Pains: Why the proposed Petrol Subsidy Programme (PSP) may hurt now but pay off later

By Endry Lim Zhen Wen, Associate Vice President of PEMANDU Associates

The recent 2020 Budget was meant to elevate the country’s financial well-being and reduce the fiscal deficit – starting with a reform of the current fuel subsidy system. In the announcement, a new fuel subsidy would be introduced to target the B40 group. As part of the government’s drive on delivering shared prosperity, the Petrol Subsidy Programme (PSP) was intended to be implemented together with a gradual float of RON95 petrol and diesel prices.

In many developing countries, subsidies and price controls have been a key feature of the policy toolkit as a way to foster socio-economic growth. However, as economies become more developed, the costs of maintaining such policies increasingly outweigh the benefits. As a result, we’re seeing more countries choosing to scale back on subsidies in favour of more liberalised policies after reaching a certain level of growth.

Malaysia has maintained a blanket subsidy on fuel for the better part of the last decade to foster economic development. However, the end goal is to eventually move to a market-price system to encourage fiscal and environmental sustainability – and the first step to doing so is to scale back on subsidies. The intent of the PSP was to enable healthier fiscal responsibility but still protect those who needed the help the most.

The lead up to the PSP

At its core, subsidies are benefits given to individuals, businesses or institutions by the government. They’re used to offset market failures and externalities in order to achieve greater economic efficiency. There are two types of subsidies:

Direct (or targeted) subsidies involve an actual payment of funds towards a particular individual, group or industry. The PSP is a good example of this.
Indirect subsidies are those that do not hold a predetermined monetary value or involve actual cash outlays – these include mechanisms like price reductions for certain goods and services that allow these items to be purchased below the current market rate. The current blanket petrol subsidy is an example of this.

In the past, Malaysia used a managed float system implemented in 2014. Under this, pump prices for fuel and diesel were set by the government based on an automatic pricing mechanism formula. However, Malaysia has been grappling with a long-running budget shortfall that stretches all the way back to the 1997 Asian Financial Crisis – to illustrate, Malaysia’s fiscal deficit had reached RM35 billion in the first trimester of 2018.

With concerns over Malaysia’s national debt rising, the government has made reducing national debt and improving its fiscal rating a priority. This priority is reflected in the 2020 Budget. Described as a ‘fiscally disciplined’ budget, Budget 2020 aimed to trim Malaysia’s budget deficit to 3.2% of GDP this year. To do so, the budget proposed plans for fuel subsidy reform by announcing the PSP and eventually removing the cap on RON 95 petrol prices (with the exception of Sabah, Sarawak and Labuan where the price would remain fixed at RM2.08 per litre). It was calculated that a total of 2.9 million people can expect to benefit from the PSP should it be implemented.

Subsidies. Boon or bane?

It has been argued that subsidies and price controls carry negative effects on the economy – it introduces distortions in the allocation of resources and can have long-term repercussions on economic efficiency. It also adds to a country’s fiscal deficit.

However, subsidies do play an important part in supporting initial growth. When a substantial part of a country’s population is living under the poverty line, subsidies help to ensure that daily necessities remain affordable and that vulnerable communities remain protected from price fluctuations. In addition, in countries where most businesses are still in an infancy stage, subsidies can act as a support for fledging businesses, enabling them to compete on a more level playing field and grow into established brands. Due to the cost and complexity of setting up an effective targeted subsidy, it stands to reason that countries in the earliest stage of development would prefer a more widespread intervention like a blanket subsidy. However, as the country develops, subsidies become less vital to the development of the economy.

Before 2014, Malaysia was using a blanket fuel subsidy, capping the pump prices of diesel, RON92 and RON97 petrol. At the time, Malaysia’s development was still uneven, and the government decided to ensure all communities were protected equally and encourage the growth of the transportation and industrial sectors by keeping fuel prices predictable.

Bank Negara Malaysia did a study on the fuel price control mechanism in Malaysia and found that the existing subsidy had incurred large fiscal cost and was disproportionately subsidising the rich much more than the poor.[1] The study, which was based on the Household Expenditure Survey 2009/2010, showed that the top 20% of households received a significant 42% of the subsidy. In contrast, the poorest 20% received only 4% of the fuel subsidy.

A blanket subsidy therefore allows every segment of society, regardless of their financial background, to be entitled to the same savings. In a way, the largest beneficiaries of blanket subsidies are upper-income households who tend to be the largest consumers of petrol. The subsidy has also led to reports of fuel smuggling[2] as the bigger the price difference between global market price and Malaysia’s pump prices, the more attractive Malaysia’s fuel is to smugglers.

Benefits of a targeted subsidy

With less than 1% of Malaysian households below the poverty threshold, the government’s focus has shifted towards addressing the well-being of the B40. The B40, unlike middle and high-income households, are still vulnerable to economic shocks and increases in the cost of living. Hence, we’re seeing a trend towards more targeted measures to support the B40 mainly in the form of cash transfers to low-income households for daily necessities.

Targeted subsidies are a good way to encourage more fiscal responsibility while still protecting those who need the most support. There are examples of countries who have managed to smooth the transition from a blanket subsidy by employing targeted subsidies as compensation. For example, the Philippines successfully reformed its fossil fuel subsidies by using targeted cash transfers to help build a national safety net alongside lifeline tariffs to protect their low-income communities during the reform process.[3]

A targeted subsidy can help:

1. Rebalance government spending

Attempting to keep the prices of resources low amidst rising global market prices and overconsumption creates a heavy burden on government expenses. This can negatively impact a country’s fiscal position. To put this into perspective, every RM1 billion spent on subsidies could have built 5 hospitals, 20 schools or 50km of roads.[4]

One country who has demonstrated what can be achieved by redirecting resources spent on subsidies towards investing in useful development projects is Indonesia, who underwent a reform in 2015. The International Institute of Sustainable Development (IISD) looked at which parts of the budget was increased as a result of cutting back on fuel subsidies. The study found that the budgets for some ministries were increased – agriculture received a 106% increase, public works and housing 40% and finance 37% – to be used for certain priority programmes targeted for national development such as a programme to provide housing for 60,000 poor households or access to clean water for 10.3 million households.[5]

In Malaysia, the cost of maintaining subsidies on petrol and diesel alone cost up to RM4.89 billion for the first 11 months of 2018[6] – making up a large chunk of the budgeted operating expenditure that year. In contrast, the PSP is estimated to cost the government about RM65.4 million a month – a significant decrease from the RM133 million a week it currently spends in fuel subsidies.[7]

2. Boost competitiveness in the long-term

From a structural perspective, subsidies and price control mechanisms can hinder efforts to improve productivity and efficiency, thus holding back long-term economic development.

The IMF has found that subsidy reforms boost competitiveness over the long term by stimulating private investment, encouraging productive spending and promoting efficient use of scarce resources. In a fully deregulated fuel retail market (the end goal of subsidy reforms), petrol stations would be allowed to set their own prices; this will encourage healthy competition between vendors as they each try to attract consumers by setting the lowest prices or offering the best deals.

In the Philippines, deregulation of the downstream oil industry in the 1900s succeeded in attracting new players to the industry. While major oil companies like Petron, Shell and Caltex still controlled a significant share of the market, new players and small independents have increased their share in the market by offering lower prices or better services.

3. Encourage more environmentally friendly choices

Because fuel is cheap, people and businesses start to use more fuel-based machinery and vehicles and end up becoming heavily reliant on fossil fuel. However, the world is currently under pressure to reduce greenhouse gas emission and move towards more environmentally friendly practices. A number of countries have started to tax fossil fuel as a measure to reduce consumption; however, Malaysia is amongst the few who still subsidises fossil fuel.

A targeted subsidy would encourage more people to take alternative means of transport – for example, take advantage of the integrated public transport system or carpool to get to work. It would also help to direct investment towards more environmentally friendly projects such as towards developing renewable energy or upgrading the existing public transport system. In Indonesia, the consumption of petrol and diesel in the first half of 2015 following subsidy reforms fell by 9% and 6% respectively, and vehicle trips on toll roads were reduced by 10%.[8]

The road ahead

In the words of Milton Friedman, ‘there is nothing so permanent as a temporary government programme.’ Reforming a fuel subsidy is no easy task. There will be roadblocks along the way that will require slight adjustments and judicious recursive problem-solving. Having a clear implementation plan in the form of a roadmap will help to keep everyone focused on the overall end goal. The key is to be clear, transparent and responsive to the people’s needs – this will build trust that the government has the public’s best interests at heart.

We hope that this isn’t the last we see of the PSP. There will be a period of adjustment or growing pains as Malaysians get used to expecting changing petrol prices but ultimately, the reform will lead to a healthier, competitive and more fiscally responsible Malaysia.

[1] BNM (2018)

[2] The Star (2019)

[3] IISD, “Lessons Learned: Fossil Fuel Subsidies and Energy Sector Reform in the Philippines” (2014)

[4] ESMAP (2017)

[5] One of the challenges of tracking subsidy allocation is that most governments, including Indonesia, do not explicitly link savings in one area with additional spending elsewhere. However, in Indonesia’s case, the country’s large subsidy savings made it possible to reasonably assume that any substantial increases in the budget were made possibly because of the reform.

[6] New Straits Times (2019)

[7] Paul Tan’s Automotive News (2019)

[8] IISD (2018)

Training Wheels Not Provided: Seizing Opportunities for Self-learning

By Ng Chean Yeaw, Vice President of PEMANDU Associates

Life as a consultant is a challenging, albeit rewarding one. Consultants are often put in a situation where they are expected to resolve issues and problem solve independently. More often than not, there are distinct deliverables requested at the behest of the client or stakeholders to be fulfilled in a short span of time. When put in situations of high pressure and time constraints, there’s only so much collective guidance and help one can receive – the rest depends on the individual’s approach in tackling these arduous challenges.

At PEMANDU Associates, the concept of ‘learning by doing’ is deeply embedded in our work culture. Our President & Chief Executive Officer, Dato’ Sri Idris Jala often uses the analogy of learning how to ride a bike to explain the concept. How does one learn to cycle? Do you take up a course on cycling and learn the theories behind it? Or, do you simply get on a bicycle and learn how to cycle by actually doing it?

Sure, you are bound to fall in the process of learning, but that also gives you the opportunity to learn to pick yourself up and try over and over again until you get (over even master) it. In other words, take the bull by the horns and figure out ways to tame it. Or for us consultants, how to do it smarter and faster.

But does experiential learning apply to non-physical skills? What about skills like Microsoft Excel?

My first assignment as a fresh graduate starting my career in consulting was to create a Key Performance Indicator (KPI) Dashboard for every Cabinet Minister of the Malaysian Government. But the rush of excitement was very quickly swept away by a wave of anxiety of being entrusted with this huge responsibility.

As someone fresh out of college, where would I even begin?

Back then, everyone was tracking and computing monthly KPIs manually on a PowerPoint dashboard. Generations of these dashboards were designed that way – a tedious task that no one enjoyed. Not only was it laborious, there was also plenty of room for human errors, especially in the aggregation and computation of scores. The task assigned was to take the existing manual dashboard, and to transform it into something more user-friendly for the ministers. To top it all off, I was expected to conjure this fully functioning new tool within the span of a week, with my then-limited knowledge of excel. Talk about playing the Game of the Impossible, a principle that all PEMANDU Associates consultants are expected to embrace from the get-go.

So how did I do this?

A Method for Success

When you work at something long enough, chances are you will eventually learn how to do it. A methodical approach, however, makes your chance of succeeding much greater and faster. In this case, I was aware of the significant gaps that I needed to fill in order to deliver this task, and I needed to find solutions quickly and effectively.

1. Resourcing for knowledge

The good thing about the internet era today is that you have a plethora of information and knowledge at your fingertips. An obvious first point of resource is… drums rolling – Google. But this still requires a bit of research to find a resource that is reliable and easily accessible to you. I spent a significant amount of time poring through the internet and Googling solutions to understand the functions and formulas of Excel.

In my research, I’ve discovered some great pages that can provide you step-by-step guides on Excel like Exceljet and Tech on the Net, just to name a few. Forums on Stack Overflow and Mr. Excel were also very useful in providing real-life scenario examples and solutions by other Excel coders. Every difficulty that I encountered, I resolved it with hours of heavy research on Google.

2. Planning and learning for execution

With the ultimate goal in mind, that is to positively impact an organisation by automating the monthly KPI tracking and monitoring, the structure of the dashboard needed to be effective and efficient. Hence, I came up with the plan to structure the dashboard based on the 3 principles required of Excel modelling that is to do it fast, do it right, and make it look good. In other words, create a dashboard that allows for faster and easier auditing to leave room to correct errors and produce a well-structured model. Having core principles was imperative in guiding me through the implementation of strategy as it became the base of what needed to be done.

3. Discipline of action

Another part of the task was the execution part, which entailed a robust experiential learning experience. In other words, numerous iterations and trials (with plenty of sleepless nights and failures) to customise the features on Excel to fit the dashboard’s purpose. I was spending the full 40 hours a week of my job to create this tool. The repetitive process of testing, failing, reformatting, and then, testing again pushed me to learn quickly on the job. Failure was an inevitable part of this stage and it can be demotivating at times. I’m not going to lie. However, failure also taught perseverance and to never give up.

By the end of the week, I was whizzing through formulas and cleaning up the dashboard with final touches.

4. Milestones

I finally managed to create an Excel semi-automated dashboard that significantly reduces the time required to generate a monthly report. Subsequently, the dashboard along with the built-in features was exported as an online tool to be extensively utilised by key stakeholders in the Ministries. This tool was handed over and implemented for the following seven years or so. It was a huge accomplishment for a fresh graduate like me with the minimal experience that I had to have accomplished.

Going back to the question asked earlier, “Can we apply learning by doing beyond non-physical skills?” My answer to that would be a resounding yes.

As I reflect back on this experience and relate it back to Dato’ Sri Idris Jala’s “learning by doing” analogy, seizing opportunities for self-learning is very much at the core of who we are as consultants here at PEMANDU Associates. With every project spanning across diverse industries and requiring different capabilities, the opportunity for us to grow is boundless – for as long as we have the correct attitude and mindset. And without this experience, I would not have been able to master Excel within that one-week span to eventually become PEMANDU Associates’ “go-to Excel guy.” I believe that with the right mindset, determination, and absolute tenacity, it is entirely possible to learn a wide range of knowledge and skills without needing to attend any physical training on the subject.

Transformation happens not upon attainment of a goal, but through the process of actually doing and getting there.

Learning Academy Masterclass – High Impact Delivery for Effective Decision Making

Time is money.

More often than not, the success of an organisation depends on the effectiveness and quality of decisions made by its leadership. Therefore, it is important that one has the accurate, concise information and value-added thinking on potential solutions that are required to make the big decisions!

PEMANDU Associates Learning Academy recently held a one-day workshop titled High Impact Delivery for Effective Decision Making where 30 participants from 14 companies across 5 industries had an opportunity to learn and apply best practices to craft compelling presentations. And while they were at it, participants were also privy to a talk on building a results-oriented strategic communication programme, presented by Alex Iskandar Liew, one of our Executive Vice Presidents & Partners as well as Managing Director of COMMUNICATE by PEMANDU.

This workshop covered:

Module 1: Critical Thinking to Solve Problems
How using the right tools for problem-solving can help you critically evaluate information and address real organisational issues.

Module 2: Getting the Storyline Right
Why structuring the right storyline ensures credibility and helps you deliver impact to capture the attention of decision-makers.

Module 3: Presenting What’s Needed to Get the Decisions You Want
How a clear, concise structure can help to bring the work to life through visual presentation. This session includes a “Gallery Walk” where participants will showcase what they’ve done during the workshop.

Want to get updates on future workshops by Learning Academy? Follow us on Facebook and LinkedIn!

Giving students the tools to experiment

By Tengku Azian Shahriman, Executive Vice President & Partner of PEMANDU Associates

“WHAT is your name?” I asked. “Muhammad,” whispered the young boy wearing a jubah, who was representing his tahfiz school at the recent Young Innovators Challenge. When I asked him to tell me more about his project, Muhammad began to shyly describe the security device he and his team mates developed to protect his school from intruders. However, as he continued to explain to me the intricacies of the system, he couldn’t hide his enthusiasm for the project as his face grew visibly more animated and his voice became more confident. His excitement for the project was both endearing and contagious, and I was eager to see the other innovations on offer.

I didn’t have to look far. In the next booth, Usha was already a clear winner as the project lead of another security system. I listened in rapt attention as she went into detail on the sophisticated security device her team developed specifically for gated communities. Her team’s security device would enable visitors to be tracked from the point of entry at the guard house until they exit. The choice of a gated community as a focus reflected the demographics of her school’s student body, which she added was lucky to be able to enjoy coding, robotics and programming lessons at private learning centres as an after-school activity.

One encouraging shift I noticed was that girls are no longer strangers in science competitions. Speaking to a petite innovator who confidently explained to me the details of her electronic flag raising device in perfect English, I thought perhaps years of efforts to encourage young women to pursue their interests in science have finally paid off. This self-assured young lady also shared with me how technology has made the process of learning more efficient, fun and intuitive, declaring she learned to speak English and Korean, thanks to the internet.

Not being very scientifically minded, I was impressed that she and her two team mates enjoyed coding and programming as hobbies, but I was disheartened to hear that they cannot pursue their interest much further as science is not offered after Form Three in their school.

The challenge held earlier was refreshing because it was inclusive and diverse, bringing more than 200 students from 22 schools in Selangor ranging from national schools, national religious schools, international schools, vernacular schools and tahfiz schools together to celebrate their creativity and creations. The excitement in the air was palpable, generated by students who had a keen curiosity for innovation with many of them seizing the opportunity to experiment and invent without being boxed in by rigid curriculum and learning methods.

Ironically, these young inventors were given the space to explore and innovate simply because their teachers didn’t know enough about coding and therefore couldn’t “instruct” or “direct” their students. This is not a criticism of the teachers, and indeed they were very supportive of their students. While coding is taught (under the Asas Sains Komputer and Reka Bentuk & Teknologi subjects) in schools, teachers find it a challenge to catch up with technology which changes at a pace that few can keep up with. To prepare for the Young Innovators Challenge, the students and teachers were supported by the secretariat, Chumbaka, which offers coding, programming and STEM programmes at their centres, and by the students of the engineering faculty at Universiti Teknologi Mara (UiTM) in Shah Alam.

Students taking part in the Young Innovators Challenge. (Source: The Star)

When we read countless articles on Malaysia not being able to move up the value chain in manufacturing or that we are still stuck in IR3.0 while the world is accelerating towards IR4.0, we must look for answers to this conundrum.

The answers lie with our young generation, whether they are in vernacular schools or national schools. Being young, they are not able to suppress their natural curiosity to learn and explore. The Government and teachers can stimulate learning by giving them the tools and space to experiment and innovate. These tools can be inexpensive, such as using open-source embedded systems and software. Teachers should also feel comfortable stepping back and be facilitators and not “teach” a prescribed curriculum to students. It is no wonder when I learned that the Education Ministry has introduced coding in schools, I cannot help but fear if the rigidity of the teaching and learning methods or curriculum that characterise our national schools will curb the students’ inquisitiveness and steal their enthusiasm. My mind also wonders about the petite young budding scientist I spoke to and whether her interest in STEM, clearly ignited by this competition, will be sustained or just simply fade away after Form Three when there is no science stream in her school.

Another thing that struck me about the challenge is that we can use a common interest to bring all Malaysians of various demographic groups, race and religion to engage and speak to each other, in a common language of coding. This diversity, from the varied participation of schools, the organising committee and the panel of judges, should be celebrated.

I urge the Government, the Education Ministry and the Academy of Sciences Malaysia to provide stronger collective support to offerings of alternative approaches to the teaching and learning of STEM and technology, if indeed we are to produce innovators and scientists of the future.

The challenge is an annual programme that aims to catalyse maker movement in secondary schools. It has been held yearly since 2013 and has so far involved more than 5,000 students. This year, the state-level competition for Selangor was hosted by UiTM Shah Alam under the sponsorship of Yayasan Sime Darby and Malaysian Technology Development Corporation with Chumbaka as the competition secretariat.

This article was also published in the Star on 1 Dec 2019. Read it here.

Learning Academy Masterclass: Achieving Organisational Breakthroughs

Ensure continuous performance improvement by knowing the trends that impact organisations and discovering the right remedies for you.

This one-day programme, a collaboration between PEMANDU Associates Learning Academy and &samhoud, will allow you to explore techniques to attain quick and effective organisational success (painkillers) and embed a culture that sustains success (vitamins).

We welcome key players who champion organisational change and transformation to join this programme to refine business strategies and achieve breakthroughs.

Date: Tuesday, 18 December 2018

Time: 9.30 am – 4.00 pm

Location: &samhoud Rooftop, The Icon Tower, Jalan Tun Razak

Fee: RM1200 per person (HRDF claimable)

This programme will cover:

Trends impacting organisations in Malaysia
Breakout sessions for the following topics:

Painkillers
– Re-invent yourself (Game of the impossible)
– Finance and decision making
– KPIs, monitoring and problem solving

Vitamins
– Building a culture of trust
– Understanding the millennial heartset
– Living your organisational values

Seats are limited. Register here by Tuesday, 11 December 2018 to secure your seat!

Click to download the Masterclass Programme Overview.

For further enquiries, kindly email [email protected]

Fishing for Gold – Diversifying and Boosting Oman’s Fisheries Sector

By Marc Fong

The Sultanate of Oman has had a long and rich history in the fisheries sector, with fishing activities taking place as far back as the birth of the Sultanate. Oman has the longest coastline amongst the Gulf Cooperation Council (GCC) countries with over 3,000km of coastline facing the Gulf of Oman, the Arabian Sea and the Indian Ocean. In addition to this, Oman contributes to over 31% of produce amongst the GCC and is the only net exporter of fish in the region. Oman has a strong regional position but despite historical growth of 5% or more, the fisheries sector contributes less than 1% of GDP¹.

An analysis of the sector showed that fisheries in Oman is heavily reliant on subsistence fishermen who accounted for over 99% of production. Limitations on traditional methods and equipment, coupled with the need for additional capacity within regulatory authorities such as the Ministry of Agriculture and Fisheries (MAF) to accurately define sustainable fishing levels meant that certain fish stocks were in danger of over-exploitation and potential collapse. In addition to this, with limited adoption of modern fishing technology, there is limited room for future growth.

Globally, aquaculture production is nearly on par with fish harvested from the wild but in Oman the aquaculture industry is minuscule. Similarly, fisheries processing and exports are largely limited to raw fish and primary processing with little value-add.

Despite these challenges, there remains significant room for growth in the Oman fisheries sector. Although it is the top producer in the GCC, analysis indicated that Oman is only addressing 2-3% of the total flora and fauna (biomass) in its seas. Furthermore, its long, largely undeveloped coastline with multiple coastal and water conditions are ideal for a variety of large-scale aquaculture projects. High levels of seafood-based processed products from neighbouring countries such as the UAE, which largely use produce imported from Oman, also indicate a potential to develop its downstream sector.

In 2017 MAF adopted a collaborative, result-driven approach for Oman with the introduction of the Fisheries Lab via PEMANDU Associates’ Big Fast Results (BFR) Methodology – 8 Steps of Transformation©. The lab focused on three key pillars; Catch (focused on tapping Oman’s natural biomass potential in the Gulf of Oman, the Arabian Sea and the Indian Ocean), Aquaculture (focused on developing higher-value aquaculture projects in collaboration with the private sector) and Processing & Exports (focused on downstream projects to add value to raw produce).

A bottom-up development of initiatives

Oman’s legacy with fishing meant that the sector had grown organically for centuries with minimal government intervention. However, the lack of associations or cooperatives – key features in developed nations – meant that growth was limited at an individual level with the vast majority of economic activity generated by individual fishermen using artisanal (traditional) techniques. It also meant that their issues and needs were not aggregated and channelled formally to the government, sometimes leading to interventions and initiatives that were incorrectly targeted.

The lab ensured that voices from both traditional fishermen as well as private businesses across the Sultanate were collated, and top issues prioritised. This approach was instrumental in ensuring that the government was cognisant of key pain points in the overall value chain. For example, obtaining permits to utilise land for aquaculture was often a lengthy and arduous process – in some instances taking over five years and requiring documentation from four or more ministries.

This had the effect of deterring private sector interest in the sector, while the government lacked an aggregated voice to prioritise this issue for urgent resolution. Through the extensive consultation in the labs, the private sector was able to collectively demonstrate the vast potential of unlocking private sector investment into the aquaculture sector. The lab succeeded in obtaining agreement from key ministries for a greatly simplified land use approval structure, potentially reducing time taken for approvals by up to 90%.

The development of a National Fisheries Management programme also ensured that a longer-term view was adopted within the ministry to ensure the sustainable exploitation of fish stocks. Amongst others, this programme involved better and more regular mapping of existing fish stocks to ensure that clear fishing quotas could be set to maintain and grow the industry.

Additionally, the government was also better able to prioritise its resources. By understanding where the greatest demand for services was, the government was able to focus on developing ports in three key areas in three years instead of seven ports over a course of nine years. The ports were prioritised on the basis of identifying return on investment and number of fishermen served as well as potential flow of catch.

The net effect of this, coupled with other initiatives, succeeded in unlocking over 20 projects worth approximately OMR640 million (US$1.6 billion) in investment over five years, including the world’s largest shrimp farm in Bar-al Hikmah.

Balancing multiple objectives

The true north of the lab as well as the Economic Diversification Programme was economic growth. However, recent events in Oman placed pressure on the government to create large numbers of jobs for locals. This need presented a conflict as the majority of labour in the fisheries sector came from foreign (sometimes illegal) workers. Omanis were mostly averse to taking up fishing as a job as it was labelled as ‘3D’ (dirty, dangerous and difficult) as well as being a relatively lower-income job.

Ultimately, the government faced a trade-off. Mandating Omani jobs in the sector would increase costs (due to minimum wages for Omanis), reducing the competitiveness of the sector and potentially reducing productivity (due to labour shortages). The government reached a compromise with initiatives to modernise traditional fishing vessels which would improve working conditions and form fisherman’s villages to create a better living environment for fishermen.

Further to this, initiatives to promote modern fishing techniques as well as developing traditional fishermen were introduced, paving the way for access to deeper waters and larger as well as niche fish stocks. The National Fisheries Management scheme also greatly simplified fishing permit approval processes as well as committed government funds and institutions to providing co-financing for artisanal fishermen.

These initiatives were also complemented by over 20 private sector-led projects including an initiative for the private sector to co-develop training programmes and apprenticeships with the government. This aimed to ensure that Omanis were adequately equipped with modern technology and trained to pursue larger and higher value fish stocks.

In addition to this, the government had previously banned trawling – a commonly utilised fishing method – due to environmental concerns over damage to the sea bed and marine by-catch. New proposals for mid-water trawling – a technique used in developed countries such as New Zealand, Norway and Ireland – were also rejected due to fears over public sentiment regarding the term ‘trawling’.

However, through the lab’s data-driven analysis – identification of huge untapped fish stocks that this initiative would unlock, coupled with analysis on acceptable fishing levels and usage of modern monitoring technologies that would allow the ministry to monitor impact of the new techniques, eventually convinced the minister to allow a pilot project. The private sector’s strong commitment including allowing ministry officials to sail aboard the ships and the use of electronic monitoring devices on the trawling nets themselves gave the government a level of comfort to proceed with the trial.

With these initiatives in place, Oman’s fisheries sector is poised for the next phase of growth. A traditional fishing powerhouse in the Gulf region, the country’s shift to a private sector-led growth model has brightened its future.

¹Source: Ministry of Agriculture and Fisheries, Oman. National Centre for Statistics & Information, Oman

Promoting Collaboration to Deliver Faster Emergency Services

By Dato’ Dr Amin Khan and Farah Intan Burhanudin

Collaboration between emergency service providers has been increasing in the past few years, especially in the form of co-responses and shared emergency centres.

In the UK, Buckinghamshire and Milton Keynes Fire & Rescue personnel have been co-responding to emergency medical calls with South Central Ambulance Service since 2011. Similarly, the Hungerford Community Fire Station was built to serve as a new emergency tri-service hub for Royal Berkshire Fire and Rescue Service, Thames Valley Police (TVP), and as a Dynamic Activation Point for crews from South Central Ambulance Service (SCAS). Most recently in 2017, the UK Government introduced a new statutory duty on the three emergency services (police, fire and ambulance) to collaborate with one another to improve efficiency and effectiveness.

In Hong Kong, ambulance services are provided by the Hong Kong Fire Service, in collaboration with the Auxiliary Medical Service and the Hong Kong St. John Ambulance. The service provides emergency transport to 17 publicly operated Hong Kong Hospital Authority facilities which operate Accident and Emergency departments.

Closer to home, in January 2018, the University Malaya Medical Centre (UMMC) mooted the idea to conduct a pilot study by collaborating with the Fire & Rescue Department Kuala Lumpur branch to co-respond to medical emergencies within their area of jurisdiction. With our past experience working with hospitals in Malaysia for process improvements and operational efficiency, PEMANDU Associates was approached to provide advice and assist in mobilising the initiative.

UMMC currently provides emergency response services in the Klang Valley within a radius of 25km as the main responder and acts as secondary responders in the surrounding area outside of coverage. Dr Salleh, the Head of Accident and Emergency Department in UMMC, was spurred to propose the collaboration due to the urgent need to reach the emergency scene as fast as possible.

Case for Change

In the past 10 years, UMMC has seen an increase of 312% in emergency calls, from 2,651 to 8,271. On average, it can take up to 50 minutes from the moment the call is received, to the time of arrival to location, to returning to UMMC. The international standard for emergency response is 20 minutes, which many countries have set its benchmark to. UMMC’s target for their emergency response is to achieve the ‘Golden Hour’ state as much as possible.

*Including the time of return to hospital. Source: UMMC, data as of August 2017

Motorcycle Emergency Response Pilot

On 2 January 2018, UMMC in partnership with the Kuala Lumpur fire department, BOMBA KL, commenced a pilot Motorcycle Emergency Response initiative (MER.

This initiative involves the sharing of skills and resources between two public service providers aimed at improving excellence in responding to medical emergencies, where BOMBA personnel act as the first responder to assess, treat and stabilise patients while the UMMC ambulance is on its way. The ability of the motorcycle responder to arrive faster and earlier has the potential to save a life and prevent more serious injuries.

This partnership further aimed to equip BOMBA KL personnel with basic first aid and medical training with formal certification while UMMC can leverage on additional resources to respond faster to medical emergencies.

A series of sessions were held involving UMMC, BOMBA KL and PEMANDU Associates to design the process flow, finalise the response schedule, stock take the BOMBA motorcycles and discuss the medical training certification.

By leveraging on the BOMBA personnel and its motorcycles, UMMC’s total response time to medical emergencies is expected to reduce significantly with the following benefits:

Reduction of Dispatch Time – Currently, mobilisation takes time before the ambulance can leave. Valuable time is spent between receiving emergency calls at 999, Malaysia’s emergency services phone number, notifying UMMC of the call, mobilising paramedics and available ambulances and reaching the scene, often with traffic and road construction. With motorcycles, the trained BOMBA personnel on duty can leave immediately once notified.
Reduction of Time to the Scene – As motorcycles are smaller than ambulances, they are able to spend less time in traffic reach the scene faster.
Faster Medical Care – The BOMBA emergency despatchers are able to arrive to the scene early and administer immediate basic medical attention.
Reduction in Mobility, Mortality and Emotional Trauma – Early arrival may prevent initial injuries from progressing to a serious stage and in some instances reduce the chances of death and increase in patient’s confidence level while reducing stress and emotional trauma.

The Results

During the pilot, BOMBA KL personnel underwent intensive training at UMMC and responded to emergencies with the following results:

Source: PEMANDU Associates, raw data collected by UMMC

For the pilot, BOMBA personnel were dispatched together with the ambulance for familiarisation and to gain experience. Moving forward, BOMBA personnel will be dispatched out first once they have fully immersed themselves in the experience.

The game changer in this initiative is the ability of the motorcycle to arrive faster and earlier which has the potential to save lives and prevent more serious injuries.

Key Learnings

BOMBA KL are unfamiliar with locations in Selangor. Action Point: To approach BOMBA Selangor to partner with BOMBA KL moving forward (after syndication with BOMBA HQ) and to look into the possibility of GPS installation.
Due to the rotational nature of BOMBA’s work, attendance of BOMBA personnel on certain days was low. Action Point: UMMC will work together with BOMBA Selangor and BOMBA KL to design a sharing roster based on rotation and personnel availability.
Some of the BOMBA motorcycles are damaged/not outfitted to carry medical supplies. Action Point: To explore the options of fixing the motorcycle units/outfit working units according to medical requirements i.e. 2 pocket boxes (Emergency Kit + Auto External Defibrillator)/purchase of new, lower cc units
Personnel assigned are not permanent, presenting a challenge to ensuring continuity. Action Point: BOMBA HQ to issue a formal directive on the collaboration with UMMC, continuous engagement with BOMBA personnel on the benefits of participating in this programme i.e. upskilling opportunities through medical training

Moving Forward

Given the budgetary constraint faced by the government, UMMC and BOMBA KL have proven that innovation and creativity can still thrive to improve public service performance by maximising opportunities to drive efficiency and effectiveness, in the interest of public safety.

As seen internationally, collaboration between service providers to overcome limited resources and leverage on shared skills is well established especially in the emergency response sector.

The pilot had provided valuable insights and both parties are committed to moving forward with the initiative. A formal partnership will be entered between UMMC, BOMBA KL and BOMBA Selangor in 2019 for full roll-out in Klang Valley.

Charting the Course for Cruise Tourism in Malaysia

By Yong Yoon Kit and Jade Swan E

In 2010, the global cruise tourism industry was looking to Asia as a major growth engine, with cruise passenger arrivals growing 7% per annum, more than double the annual international tourist arrivals of 3% from 1990 to 2008. However, Malaysia was not capitalising on this opportunity.

Many global cruise itineraries bypassed Malaysia’s ports, mainly due to the lack of terminal infrastructure and quality shore excursion tourism products and services that met the requirements of the cruise operators. This, in turn, was a result of stakeholders working in silos, causing inefficiencies and wastage of time to tourists, as they are unable to provide a seamless experience to tourists. Ultimately, Malaysia was deemed unattractive as a cruise destination. In contrast, neighbouring Singapore had invested heavily in developing cruise tourism, thus successfully securing its position as a home port, where vessels choose to base their operations, in the Southeast Asian region.

In an effort to improve the sector’s prospects in Malaysia and harness the potential of the global cruise tourism industry, the development of the Straits Riviera cruise playground was proposed as part of the Tourism National Key Economic Area (NKEA) under Malaysia’s National Transformation Programme implemented from 2009 to 2017. Anchored on five main ports; Penang, Sepang, Melaka, Tanjung Pelepas and Kota Kinabalu, the project also aimed to revitalise port cities with a focus on waterfront areas and identified supporting tourism sites. To ensure the success of the project, Malaysia needed to improve its terminal infrastructure, cruise tourism experience and governance & coordination.

Enhancing the Cruise Tourism Ecosystem

The Cruise and Ferry Integrated Seaport Infrastructure Blueprint for Malaysia was commissioned by the Economic Planning Unit in 2011 in collaboration with the Ministry of Transport and the Ministry of Tourism, Arts and Culture (MOTAC), detailing the vision and policy for cruise industry development in Malaysia until 2020. This blueprint considered the infrastructure development and improvement plans for each key cruise terminal and port, making recommendations to reinforce theme-based cruise circuits as well as community-based infrastructure, perimeter attractions and connectivity.

The blueprint identified six ports as having potential to contribute significantly to the Malaysian cruise industry. These six ports were Penang, Port Klang, Kota Kinabalu, Langkawi, Malacca and Kuching. These ports had existing cruise infrastructure, a network of cruise arrivals and/or access to immediate tourism products. In 2013, Kuantan port joined the line-up of primary ports due to its growing strategic importance for international cruise lines developing their East Asia sectors. Kuantan’s emergence as a core port supported a projected traffic increase of cruises to the countries along the eastern coast of Southeast Asia, Hong Kong and Taiwan.

All these 7 ports were suitable as call ports, as identified in a white paper by the Asian Cruise Association (ACA) in 2013. Call ports need not necessarily be infrastructure heavy and only require an adequate wharf facility such as enough coaches to bring passengers to shore tour destinations, access for buses as close as possible to the wharf or jetty and a variety of sights, attractions and shopping areas within driving distance of the port. With regard to becoming home ports, Kota Kinabalu, Port Klang and Penang had the highest potential as these ports had capability for berthing alongside the wharf with adequate length and draft, road access and a secure perimeter.

With some expansions, these ports would have efficient terminals to process passengers and baggage and to provision vessels. These ports were also well-positioned with adequate air connectivity between turnaround city and source markets and were reasonably close to local airports, with sufficient access to ground transportation to handle the potentially large volume of passenger movements. Hotels were available for pre- and post-cruise overnights for guests coming from afar. The ports could also potentially capitalise on income from their terminal buildings through mixed-use developments combining cruise terminals, function and conference centres, restaurants and/or shopping complexes, thus allowing infrastructure investments to provide recurring earnings throughout the year.

In April 2011, the Ministry of Transport and MOTAC formed the Malaysia Cruise Council, a public-private stakeholders’ advisory committee, to address the lack of coordinated focus on cruise industry development. Co-chaired by the Secretaries General of both ministries, this council gave a coordinated voice to provide the direction for policies, developments and framework required by the cruise industry in Malaysia.

Sub-task forces were also formed for each of the seven primary cruise ports in Malaysia with representatives from local port authorities, agencies and private sector cruise industry players to address port specific issues and develop focused initiatives which also covered land-side attractions.

The setting up of these sub-task forces saw that operational matters were streamlined, and ports were also better positioned with international cruise terminal operators. One such success was the coordination of business owners to be located near cruise berthing areas, thus increasing tourist access and boosting spend.

To encourage foreign cruise vessels to provide services between Malaysian shores, the Cabotage Policy was gazetted in March 2012 to exempt all cruise vessels. This Policy previously only allowed for vessels that were registered in Malaysia to load and unload passengers in the ports of Malaysia. With this exemption, international cruise ships were able to disembark and re-embark passengers at more than one Malaysian port in any of its stopover destinations.

Breaking Down Silos

While these policy and governance issues were being addressed, MOTAC and the various State Tourism Boards continued to work with cruise terminal operators to promote their surrounding attractions and work with local tour operators to better develop targeted cruise tourism products. With the support of PEMANDU Associates (then known as PEMANDU, a delivery unit within the Prime Minister’s Office), Tourism Malaysia also worked closely with the lead agencies of each sub-task force to market their respective destinations at notable international cruise conventions such as Cruise Shipping Miami and Sea Trade Asia, and to engage regional cruise liners at these conventions.

Despite the facilitation provided, there were still many challenges as many ports were catered towards commercial activities with cruise handling still relatively new. Therefore, a Cruise Berth Allocation Workshop was conducted in 2015 to provide clarity in terms of general timelines, processes and persons responsible for berth arrangements at both dedicated passenger terminals and commercial ports.

From the workshop, different process flows were developed to address the needs of the different types of terminals, i.e. passenger terminals, cargo terminals and destinations with no port infrastructure. With the standardisation of SOPs across the board, both the authorities and the private sector cruise industry players had a clear understanding of the processes in place and were able to plan based on arrivals up to a year in advance.

The breaking down of silos between the multiple stakeholders involved marked one of the key achievements of this concerted effort to develop the cruise tourism industry. In May 2013, the inaugural Malaysia Cruise Industry Workshop was held in Penang in collaboration with the Cruise Liners International Association (CLIA) Asia.

The workshop marked a milestone as it was the first-time key decision-makers from international cruise lines and local industry players were able to directly engage with one another. It was attended by key representatives from five international cruise liners who were present to engage with representatives from the six sub-task forces to provide constructive feedback on the respective ports’ infrastructure, operations and future.

Results of these engagements were positive and remedial actions were taken by the respective sub-task forces to address the issues raised. During Cruise Shipping Asia-Pacific 2013, the largest cruise-focused convention in Asia-Pacific, which was held in Singapore in October 2013, Malaysia was singled out amongst other Asian countries by key international cruise industry representatives with high commendations on its ongoing efforts to facilitate the industry in a coordinated manner.

Smooth Sailing Ahead

The growth of international cruise tourism in Malaysia serves as a testament to the efforts put into developing the sector since 2009. As at 2017, Malaysian ports recorded 471 international cruise calls, bringing in 924,885 passengers at primary ports in the country, an increase of 78% from 523,272 in 2013. This brought the total calls made to Malaysian ports in 2017, including local cruise ships, to 599, a 68% growth from 359 cruise calls in 2013.

These were further supported by new developments which enhanced Malaysia as a cruise destination, including the deployment of Star Cruises’ Superstar Gemini vessel East Asia and Vietnam in 2014, averaging two calls a month. In June 2016, the 4,905-passenger Royal Caribbean vessel Ovation of the Seas made its maiden calls to Penang and Port Klang. The Royal Caribbean fleet is estimated to bring to shore more than 190,000 cruise passengers to Penang, Port Klang and Langkawi for the cruise season between October 2016 and May 2017.

Moving forward, one of the industry’s key players, the TUI Group, a Germany-based travel and tourism company, is designating Langkawi as a homeport in 2018. The “TUI Discovery” will be home-porting in Langkawi starting December 2018 to cater for the winter season market.

The route will cover Langkawi, Port Klang, Melaka, Singapore, Koh Samui and Laem Chabang in Thailand, Sihanoukville in Cambodia and Phi My in Vietnam. Based on the cruise schedule, there will be eight sailings with a capacity of 1,800 passengers for each sailing.

Star Cruises has also expanded its offering with multiple homeports and fly-cruise options to cater for demand from Southeast Asian tourists as well as those outside the region. This provides greater flexibility to tailor cruise routes and itineraries to suit the needs of various consumers.

To cater to the increasing demand in Langkawi, Star Cruise is expanding the berth at the Langkawi Cruise Jetty. This expansion, which is targeted for completion in early 2019, will include a wharf extension to accommodate larger cruise ships as well as a full customs, immigration and quarantine (CIQ) facility.

Additionally, now that Port Klang has been established as a Star Cruise homeport, tourists have greater ease to fly in and out of Kuala Lumpur. Furthermore, Royal Caribbean Cruises has formed a joint venture with Swettenham Port Cruise Terminal to extend its berths to accommodate larger cruise ships. The planned extension covers the lengthening of the pier from the present 400 metres to 688 metres and will cost RM151.9 million. The extension will enable the docking of two mega cruise liners simultaneously – with each carrying 4,900 passengers, an increase over the pier’s present capacity of simultaneous dockings of cruise ships carrying a maximum of 3,000 passengers.

These developments bode well for Malaysia’s cruise tourism sector and are expected to build on the regulatory and policy frameworks put in place to drive the sector’s growth, strengthening the country’s attractiveness as an international cruise destination.