GLOBAL ASPIRATIONS

Turkey 2020 | SHIPBUILDING | INTERVIEW

Having made a name for itself in markets close to home, Arena Offshore is now expanding its presence across Asia, Africa, and South America.

M. Ömer İnce
BIOGRAPHY

M. Ömer İnce founded Arena Offshore in 1998 with a primary focus on vessel brokerage and chartering services, largely for the offshore oil and gas industry. He later set up the shipyard department and started Arena's new building program, which to date has delivered more than 25 vessels. İnce studied international trading.

Arena Offshore operates in three primary business segments: sale and purchase, chartering and brokerage, and shipbuilding and ship design. How does each segment fit into Arena Offshore's overall strategy?
At present, around 60% of our revenue comes from the brokerage business. We are focused on providing the offshore industry with the highest standard of sale and purchase, chartering, and market intelligence services. Due to our high deal flow, in 1998 we assumed an active role as a bridge in the offshore industry, facilitating coordination among the buyers, sellers, and charterers from all over the world. Shipbuilding and design go hand-in-hand with each other as a lot of our design work ends up supporting our shipbuilding process as well as the brokerage side with its technical knowledge in deals. We are seeking to increase our brokerage business while maintaining our current levels of design and building. Our clients have been happy with our shipbuilding work and the majority have become repeat customers. Our customers' satisfaction is both a result of our quality work and of their trust in us. These aspects hold true for many Turkish shipbuilders; we offer high-quality services and products and value our relationships with clients. Arena Offshore built trust first through its brokerage services, and that relationship of trust carried on into the shipbuilding and design businesses.

In 2011, Arena Offshore acquired a 35% stake in Alfa Marine Design—a Turkish naval architecture and design company. Why did you seek this acquisition?
Having a design department or office is a huge advantage for any shipbuilder. Prior to our acquisition, our new build process sometimes faced a bottleneck at the design stage because we were contracting out the work. Firms with strong design capabilities don't face this problem. This advantage was the primary motivator for our acquisition. A short, efficient production process is one of the most important parts of the shipbuilding business. Therefore, our acquisition was not purely profit motivated; rather, it was a way to run a better vertically integrated shipbuilding company.

Arena Offshore is now building some of its vessels abroad. Why did you decide to diversify your production facilities, and how does it provide you with a competitive advantage?
In our new build business, we are constantly seeking competitive advantages that allow us to offer top-quality vessels at attractive prices. Our decision to build vessels abroad is a business decision, and it came down to some price structures that make it advantageous to build in countries like China, Singapore, and Indonesia. The dynamics of the global shipbuilding industry have evolved over time. Since there are only a few shipyards in Europe, the world considers Turkish shipyards to be the leaders. However, competition is getting stronger. The input prices and labor costs for Asian shipbuilding industries I are lower than ours due to the dynamics of international trade and their national economies. I now offer my clients the opportunity to build their vessels in a different part of the world with the same maker list at a lower price. We control all aspects of the process to make sure the delivery date and quality of the vessel is determined by my company, not by the shipyard we are working with.

Within Arena Offshore's shipbuilding business, what kinds of vessels are you currently focusing on?
Our new-build vessels are mainly for the offshore oil and gas and marine construction sectors. These vessels are capable of operating in marine constructions, harbors, towage, and offshore extracting activities.

Where are you expecting to see demand in the future?
We have greatly diversified our customer base so that we are not overly-dependent on a single market. While we have dealt or built mostly for the European, Mediterranean, and Middle Eastern markets in the past, we have diversified into Asia, Africa, and South America of late. In order to reach these markets, we have offices in Singapore and Nigeria.