Ezra Holdings is a company that offers offshore support services. Throughout its lifespan, it has exhibited a successful rapid growth and is now deemed as an example of the entrepreneurship and wise business decisions. It began in 1992 as a relatively small company that offered the management and operation of offshore support vessels. It has steadily grown its capabilities by partnering with the local contractors until the Asian currency crisis of 1997 when the already stagnating O&G market has experienced a dramatic throwback.
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As a result, Ezra (then known as EMAS) has lost the majority of its fleet, as one of the clients has sold all of his OSVs which Ezra has managed. This has led to the decision to buy their vessels instead of relying on the small and vulnerable client base. By 2003, the company had six OSVs at their disposal. At that time, the major shift towards fast-paced growing has begun: the first bank loan was acquired, and the management team necessary for operating a large business entity was assembled.
From 2002, when the market has recovered, and the demand for vessels surged, the company has collected funds intended for the purchase of new OSVs, but with the arrival of the Initial Public Offering in Singapore, the company’s policy has changed. Until 2007, it still expanded its fleet, now working with international clients, but it also started expansion through acquisitions. It began with the 50-50 joint venture with KS Tech Ltd.
Since then Ezra proceeds to acquire small companies that boost its capabilities, like the ability to undertake fabrications and engineering instead of outsourcing it. Finally, with the decline of the O&G boom, Ezra ventures into new fields, investing in the Deepwater Subsea segment in 2009 and the ice-class vessels in 2009, both of which are promising areas for the long-term development.
Throughout its entire lifespan, Ezra Holdings has exhibited all of the risk mitigation and contingency strategies essential to the rapidly growing entrepreneurship firms. In the case of Ezra Holdings, which dealt with the oil and gas industry, risk management was inevitably focused on technology and production. Ezra reacted appropriately to every predicted recession and rise of the market. For example, when the recession of 2007-2008 threatened the integrity of operations, the company has issued the review of ordered vessels, canceled the orders with the Norwegian and the Singapore-based contractors, and thus cut the unnecessary expenses.
It also launched the new vessel-operating agreement that allowed it to manage and operate four new anchor handling tug supply vessels without the need for major capital outlay (Geok, Chong, & Batra, 2009). On the opposite end of the spectrum, in 2007, by the beginning market surge, Ezra has placed an order for ultra-large pipelaying, well service, accommodation, and maintenance vessel, and thus has effectively secured the sufficient infrastructural and logistical base for further operations (Geok, Chong, & Batra, 2009).
Thus, effectively managing the resources, Ezra has evaded almost all the risks of the financial kind. At the same time, with the emergence of the multitude of possible competitors, Ezra has immediately invested in the new promising branch – the deepwater offshore support. This allowed the company to maintain its fast-growing pace and be ahead of the competition. However, such a strategy is highly dependent on financial resources.
The financial risks were also averted, as the company has always been successful at securing new resources: through bank loans at the earliest stage and by the extremely successful partnerships and ventures from 2003 onwards. In late 2009 the majority of funds were acquired by issuing bonds for $97 million. Finally, the talent acquisition risks were averted by carefully reviewing the staff from the acquired companies to build their human resource pool.
Taking all of the above into consideration, the successful strategic management team is the one that can timely react to the long-term changes. The company already has the experience of entering new areas, but still, more remain open to growth, like the recently surging LNG market (Coote, 2016). It also should consider the continuing environmental debate, which, if not timely addressed, can potentially ruin the entire industry. The operational management team should primarily be focused on the cyclical nature of the O&G market, which has threatened the company more than once (Khoo, 2016). Besides, the synergistic acquisitions may be a worthy opportunity to look into, as have been continuously proven by other companies (Rust, 2005), and the strategy of growth is stable but slow.
Coote, B. (2016). Surging liquefied natural gas trade. Web.
Geok, W. B., Chong, Y., & Batra, R. (2009). Ezra Holdings: entrepreneurship and capability building. Web.
Khoo, L. (2016). Hot stock: Ezra shares take a beating on proposed share consolidation. Web.
Rust, H. (2005). Let’s buy a company: how to accelerate growth through acquisitions. Franklin Lakes, New Jersey: Career Press.