For Bryan Kee, who has been in the human resources (HR) business for more than 20 years, transitioning from providing HR solutions for the oil and gas industry to the renewable energy industry in October 2021 was a sensible decision.
“After much consideration, we decided to go into the renewables sector, mainly because we saw that the skill set required in the oil and gas sector was transferable to the renewable energy sector, especially to the offshore wind industry,” says Kee, who is also the CEO of Sheffield Green, in an interview with The Edge Singapore.
The decision was partially driven by the collapse of oil prices in 2015, which pushed Kee to diversify his business from the oil and gas-focused Sheffield Energy amid fears of a continued decline. Before the official incorporation of Sheffield Green, Kee started developing expertise in the offshore wind industry in Europe, gaining valuable experience before launching operations in Asia in late 2018.
Kee opened his first office for offshore wind and renewable energy in Taiwan, and the company was awarded its first commercial offshore wind project, Formosa 1 Phase 2, in 2019.
Since then, Kee says that the company’s management of the project has grown to be highly successful, which he attributes to Sheffield Green’s ability to quickly identify and recruit up to 800 highly skilled workers from neighbouring countries such as Indonesia and Thailand in half a year.
With his physical office in Taiwan, Kee could better service customers than some competing firms remotely from regional headquarters like Singapore. He further gains an advantage by knowing how to address the different needs of different local markets.
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“While our competitors prefer to focus on recruiting middle to senior management groups, we took on 800 people from various nationalities who all speak different languages in a country (Taiwan) whose official language is Mandarin. To solve that challenge, we hired eight coordinators with different language skill sets to act as translators daily,” he adds. Today, the company’s Taiwan office has expanded from one staff member in 2019 to a team of 30, with only one Singaporean and the rest local Taiwanese.
Buoyed by the financial success of Sheffield Green’s Taiwan operations, Kee believes now is the time to list on the Singapore Exchange S68 (SGX) to enhance reputability and score bigger contracts, especially with international players in the renewable energy industry.
Post-listing plans
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On Oct 16, the company announced its intent to raise gross proceeds of $6 million via an IPO to list on the Catalist board of the Singapore Exchange (SGX), with an offering of 24 million shares.
The bulk of the offer of some 20.4 million shares will be via placement, with the remaining 3.6 million shares for retail investors to apply. The shares are priced at 25 cents.
Post-listing, Sheffield Green plans to distribute dividends of 30% of the company’s earnings for FY2023 to FY2024.
Evolve Capital Advisory Private is serving as the offering’s sponsor, issue manager, and joint placement agent in conjunction with CGS-CIMB Securities, which will also function as the joint placement agent and underwriter.
According to Kee, the funds will be used for long-term growth plans in the industry, with its bulk used to fund the company’s moves into emerging markets to gain an early mover advantage.
Among the new markets Sheffield Green is eyeing is Poland. Kee observes that 70% to 80% of the country still relies on coal to generate electricity, highlighting the nation’s emerging potential for the offshore wind industry. He has his eyes not only on Poland, as the office will also be used to manage operations for the Baltic region.
Meanwhile, the state of Massachusetts in the US is another location where Sheffield Green is looking to open an office, where one of its familiar clients from Taiwan operations has already secured three projects in the country. Kee also includes that the US office will be a base for the company to study and possibly manage operations in the Brazilian market.
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Other proceeds to be raised from the listing will be used to expand the scope of its services. For example, Sheffield Green wants to provide more training for workers to gain skills useful for the offshore wind industry, which is seeing a new growth phase along with the wider push by market economies to sustainability.
Kee explains: “We have been collaborating with regional training centres, as we see a huge need for such services (skills suited to the offshore wind industry), and we want to bring it in-house. That has always been the company’s strategy, and our clients also use the training centres.”
In Asia, Sheffield Green has also identified Japan as an important market, but development in the country has been slow due to a lack of government support despite the company having entered the market in 2021.
Kee adds: “In Asia, another potential market we are looking at is Korea, which we have experience working in for the last two years, as most of the structures required for the offshore wind farms in Taiwan were built in Korea.”
Bright outlook
The company’s strategy of identifying emerging markets and establishing a base of operations early is simple but effective and comes from its strong financial stability.
Sheffield Green grew its revenue by 97.6% from US$3.9 million in FY2021 ended June 30, 2021, to US$7.7 million ($10.5 million) in FY2022, which was largely driven by two new projects secured in Taiwan, six new projects in France and one new project in Japan, as well as an increase in personnel provided for the existing projects in Taiwan and France.
In FY2022, the group recorded a loss of US$151,864, compared to earnings of US$204,558 in the previous year. Despite higher revenues, the group experienced higher costs and expenses, affecting the bottom line.
However, the numbers have surged thus far this current FY. For the 9MFY2023 ended March 31, the company reported earnings of US$2.46 million, vs a loss of US$975 in the year earlier. Revenue in the same period was up from US$4.7 million to $19 million.
However, if projections by the International Energy Ageåncy are correct, there should be more room for growth. The IEA expects the offshore wind industry to grow at 23% per annum in capacity additions from 2022 to 2027.
Besides the wider recognition of the need for sustainability, developments in geopolitics have helped spur growth in the global energy sector. Kee says that geopolitical factors, including the European energy crisis from the Russia-Ukraine conflict and the Paris 2030 agreement, have boosted demand for the renewable energy sector.
“Many countries have sped up investment into offshore wind farms because they foresee that they do not need to rely on gas or oil, which is very high (expensive). Because many countries are still in the early stages of offshore wind, there’s still a long way to go from now,” he adds.
Kee also claims that even during the pandemic, the company’s financials were unaffected, as signed contracts meant projects had to keep running. Rather, the main issue during the tumultuous global period arrived as an inconvenience.
“We had to go through whichever Covid-19 measures were implemented in each country. For example, in Taiwan, people had to be quarantined for 14 days. Pre-departure and post-arrival Covid tests had to be issued. It did not have any cost effect on us, as in our contract, these were costs that the client had to bear,” he continues.
Although Sheffield Green usually grants clients a credit term of around 30 to 60 days from the invoice date for trade receivables, a practice that is in line with the industry, Kee is confident of the company’s in-house working capital to ensure liquidity. He adds: “We have sufficient working capital over the years and it’s internally generated now with the short-term facilities we have.”
