Region

Global Perspective

BP rises in Malaysia

This year sees the continued growth of the Shared Services and Outsourcing (SSO) sector in MSC Malaysia. At present, there are over 200 companies in the SSO cluster, performing various activities ranging from Business Process Outsourcing (BPO), IT Outsourcing (ITO) to Knowledge Process Outsourcing (KPO).

The biggest misconception is that Malaysia is competing against India, China and the Philippines and other bigger locations in offering low-cost labour. With a population of 27 million, the country has long realised the need to focus on KPO.

Based on investors’ inputs, MSC Malaysia is indeed a solid choice for these “high-value” activities against these larger investment locations.

Besides, research firm Frost & Sullivan’s SSO survey, done a couple of years ago, ranked Malaysia in the top five of three high-growth verticals – namely Banking, Financial Services & Insurance (BFSI), Oil & Gas and Transportation & Logistics.

As such, it was no surprise that BP, the 4th largest company in the world, joins other non-financial MNCs such as Microsoft, Shell, IBM, AMD, Schlumberger, BMW and Ericsson to set up operations to support finance & accounting, tax and IT activities within the MSC Malaysia territory.

GROWTH OF BP  IN MALAYSIA

After more than 45 years in Malaysia, BP has progressed significantly. From a modest beginning as a small petroleum marketing operation, the company has established a strong presence with ISO 9002 certified lubricant blending plants together with its marketing team, and has diversified its business activities to become a major player in the petrochemical sector producing Acetic Acid in joint-venture plants in Kertih, Terengganu and Purified Terephthalic Acid (PTA) in Kuantan, Pahang.

BP’s total investments including partner shares amount to US$2.5 billion, making it one of the largest British investors in Malaysia. BP’s share of the capital invested is US$0.8 billion and it has over 850 people under its employment.

Importantly, Malaysia is now also the location for its regional Business Service Centre. The MSC Malaysia status centre, with its highly skilled and diverse work-force, has enabled BP to improve and streamline the way it provides shared services to its business by successfully combining activities previously dispersed across parts of Asia, Europe and the United States.

SOLID LOCATION FOR SSO

According to Angelica Lim, Head of Asia Business Service Centre, one of the key reasons for the company to set up its captive operation in Malaysia was also due to the fact that the oil & gas giant had already established a regional Finance Centre of Expertise (CoE) in the country.

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Angelica said: “The strengths of Malaysia as a solid SSO destination helped to support the assessment of expanding this CoE into a business service centre providing Finance & Accounting, IT and Tax support to BP companies in Asia as well as globally.”

A steady supply of talent that are fluent in English as well as technically strong is a key strength backing Malaysia as one of the most credible and attractive SSO destinations in world.

She added: “The government’s support for Malaysia as a SSO destination is also a strong influencing factor. Cost effectiveness is, of course, an extra solid reason.”

Another important strong point, which is sometimes overlooked, is the attractiveness of Malaysia as a travel destination and the ease of travel into the country. “For a shared services centre to be an integral part of the business it supports, it is important that the leaders of the business spend time at the location – which is why ease of travel is an important factor.”

On the flip side, Angelica added that there are signs that it is increasingly difficult to get affordable talent for the shared services industry. “The speed of shared services operations being set up here is outpacing the availability of talent.

 “Thus, BP is putting in place in-house programmes to develop our own talent.  However, this issue of shortage of good talent is an area that needs to be addressed at a national level.”

AGENCY SUPPORT

Multimedia Development Corporation (MDeC), the custodian of MSC Malaysia initiative, had assisted BP’s efforts to set up and maintain its Asia Business Service Centre in the country.

Angelica said: “From the start, MDeC was helpful in providing BP with information regarding the benefits given to companies who set-up their operations in Malaysia. They also introduced us to other companies who had their centres here and facilitated site visits.”

She added: “During our operations, MDeC has been very supportive when we have issues with some of our service providers. For example, when there was a serious power outage in our building in September last year, MDeC organised a meeting with all the relevant parties and worked with them until the root cause of the outage was identified and resolved.

“The government agency has also been supportive in terms of the programmes and incentives provided to help develop talent for the centre – which is turn, of course, helps to develop talent for Malaysia.”