Oceanus Group has survived a prolonged multi-year restructuring exercise under new management, emerging stronger and more stable despite challenging times — with the help of technology no less.
First off, Oceanus has shaken off the company’s old descriptor as an abalone farmer. While the company has maintained some interest in food production, the company is reshaping itself into a regional distributor of foodstuffs while providing adjacent and complementary services in logistics and marketing.
In the most recent financial year ended December 2022, Oceanus reported a top line of $233.6 million, led by its distribution segment. In comparison, the company generated a full-year revenue of barely $4 million in the financial year ended December 2017. Better still, the first half of 2023 revenue hit $121.8 million, up 42% y-o-y.
However, group CEO Peter Koh is not just chasing revenue growth. He is casting his gaze far into the future.
He recalls his initial years restructuring the company as cleaning up the “blockage” and “mess”, followed by straightening out its business fundamentals, which meant building a multinational network of suppliers from South America to Australia and selling to buyers from China, Singapore and other Southeast Asian countries.
The products Oceanus distribute now range from alcohol to meat and fruits, as well as commodities such as oil, sugar and grains.
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Using tech to manage risk better
Koh and his management team tell DigitalEdge technology will figure heavily in Oceanus’ future. The company has introduced a new enterprise resource planning platform (ERP) to help beef up its capabilities, which include accounting and financial management, inventory management and procurement.
With the ERP platform, its finance team can now better manage the flow of funds between the headquarters and various operating units in overseas markets, where transactions take place all the time.
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Oceanus also has better visibility of fund flows as the ERP platform pulls different types of data such as invoices, health certificates and bills of lading from the paperwork required for trading and distribution.
With data that is better structured, Oceanus can gain better insights, make better business decisions and pay clients promptly. For example, by empowering its finance team with accurate data, the company can better assess the credit risks involving a certain client or project.
Oceanus’ efforts to level up its tech capabilities have also resulted in the Oceanus Digital Network or ODIN. ODIN has three key pieces, each with the flexibility to meet the market’s diverse needs.
ODINMarket is a global digital exchange designed to streamline and optimise trade processes. It aims to establish itself as a platform for trusted network for buyers and sellers, thus minimising cross-border trading friction and risk. With this platform, users can remotely conduct trades, track shipments and manage financial transactions.
ODINPay specialises in cross-border payment and trade financial services, guaranteeing smooth and secure transactions. It aims to provide competitive exchange rates under favourable terms and utilise supply chain financing capabilities to support users in business growth.
Finally, ODINFinance delivers data-driven financial services, using analytics to guide informed decisions.
Bottom line of transformation
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Oceanus’ efforts to strengthen its digitalisation capabilities to be more efficient come at the right time when the US Federal Reserve is keeping interest rates higher for longer.
Aggressive rate hikes over the past year have caused bigger volatility in foreign exchange markets, pumping up inflationary pressures and costs.
The operating environment will be much more challenging going forward, particularly for a low-margin business like Oceanus.
In 1HFY2023, Oceanus distribution business recorded revenues of $120.3 million but profit came in at $2.78 million, representing a margin of just over 2%. By using ODIN to manage its forex, Oceanus plans to achieve cost savings of between 200 basis points and 250 basis points.
The company’s numerous subsidiaries are now in the “sandbox” to test ODIN and offer real market feedback on the changes needed.
Down the road, Oceanus believes ODIN will be an attractive platform for its external partners to tap into as a form of value-added services and enjoy the same kind of capabilities. “With all this digitalisation, once we have all these things done, we will be a very different company,” says Koh.
