China Aviation Oil (Singapore) Corporation LTD

2023

Industry Champions of the Year

China Aviation Oil (Singapore) Corporation LTD

Industry Champions of the Year

2023

about China Aviation Oil (Singapore) Corporation LTD

“Fuelled to Fly”

The company attributes its success to its reputable and strong shareholders, its global network of suppliers and counterparties and its comprehensive risk management framework.

China Aviation Oil (Singapore) Corporation Ltd (CAO) is the largest jet fuel trader in the Asia Pacific Region and the key supplier of imported jet fuel to the civil aviation industry of the People’s Republic of China (PRC). 

Headquartered in Singapore and with a strong presence in China, CAO possesses a well-entrenched global oil supply and trading network, contributing actively to the advancement of efficient and sustainable global aviation.

Leveraging on its core competencies, CAO and its wholly owned subsidiaries namely China Aviation Oil (Hong Kong) Company Limited, North American Fuel Corporation and China Aviation Fuel (Europe) Limited, supply jet fuel to airline companies in Asia Pacific, North America, Europe and the Middle East. 

CAO also engages in international trading of jet fuel and other oil products, as well as in carbon credits trading in line with its ongoing efforts to offset carbon emissions from trading and ship chartering activities, to provide added sustainable value for its customers.

A subsidiary of China National Aviation Fuel Group Limited, CAO is listed on the Mainboard of the Singapore Exchange Securities Trading Limited, and is a component stock in the FTSE ST China, FTSE ST Small Cap and MSCI Singapore Small Cap Indexes.

BP Investments Asia Limited, a subsidiary of oil major, BP, is a strategic investor of CAO.

Maintaining its Market Leadership

Although the oil and gas industry is a very competitive one, CAO maintains its market leadership because of its positioning and established network beyond traditional markets, and also because of its strong corporate governance framework through which it continues to grow its success, sustainability and development.

A Turnaround That Changed Everything

But success wasn’t without its challenges. In 2004, CAO incurred significant losses due to derivative trading losses of US550million caused by lapses in internal controls. Sustaining both financial and reputational loss, CAO underwent restructuring with BP and Temasek investing US130 million into the company. 

Post restructuring, CAO revamped its risk management framework, adopting best practices from the industry and its strategic investors. 

CAO was relisted on SGX in 2006 and has since won numerous accolades from the likes of Singapore Corporate Awards, Securities Investors Association of Singapore (SIAS) and others, for its robust corporate governance, transparency practices and other industry milestones.

Some of their latest awards out of more than 44 won over the years include:

  • CAO included in the FTSE ST Singapore Shariah Index: 20 September 2021
  • Featured in RHB’s Small Cap Top 20 Jewels 2021 Edition: 6 May 2021
  • Awarded “Most Transparent Company” (Winner in Energy Category) by SIAS: 26 September 2019
  • Ranked 48th out of 578 companies on the Singapore Governance and Transparency Index, by The Business Times and the Centre for Governance and Sustainability: 8 August 2019
  • Awarded “Best Risk Management” (Gold Award, Mid Cap Category) at the Singapore Corporate Awards 2019: 23 July 2019
  • Awarded “Best Investor Relations” (Gold Award, Big Cap Category) at the Singapore Corporate Awards 2017: 18 July 2018
  • Ranked 24th among Singapore’s Top 100 Companies in ASEAN Corporate Governance Scorecard 2017: 4 April 2018
  • Awarded Winner of “Singapore Corporate Governance” (Energy Category) by SIAS: 19 September 2017

Sustainability Efforts

As a key supplier of aviation fuel, the increasing focus on environmental emissions and the shift towards net zero by the airline industry is prompting much thought into how best to transition towards a more sustainable business model.

To better meet the future needs of their clients, CAO has embarked on various initiatives including participation in bio fuels, in particular, sustainable aviation fuel (SAF) to help their customers meet their net zero objectives. In 2022, CAO successfully pursued and achieved necessary accreditation for participation in the SAF industry including ISCC CORSIA and ISCC EU.

CAO has also embarked on carbon credit trading to help clients offset their carbon emission while exploring additional opportunities in sustainable energy to meet future needs.

On the home front, to minimise paper consumption, CAO encourages the adoption of electronic documents in its day-to-day operations. In addition to setting the air conditioning temperature at moderate levels and switching off appliances that are not in use, adopting energy-efficient appliances such as light bulbs and other equipment have further reduced their electricity consumption.

Human Capital Development

Human capital is a key asset of CAO, as it believes in equal opportunity and diversity. The company actively seeks to support employee development and provides not just opportunities for training, but also supports employees seeking to enhance their own qualifications through courses and further their studies. To this end, employees are given support where reimbursement for courses to further their own qualifications are provided.

Work related training is conducted to boost the knowledge base of their staff. However, training may not always be technical in nature. For instance, the company organised 14 internal knowledge sharing and information sessions as well as 41 external training sessions, with a cumulative total of 1,918 attendees and a cumulative training duration of 2,903 hours, translating to an average of 19 training hours per staff.

Meals are provided daily to ensure that employees have a balanced intake and a comfortable setting is given to facilitate employee interaction.

CSR Initiatives

Grounded in their belief to operate responsibly, CAO strives to create long-term value in a financially, environmentally and socially responsible manner for their stakeholders and the community at large. It constantly upholds the highest standards of corporate governance while embedding sustainability in their everyday business and in everything they do.

Corporate Social Responsibility has always been at the heart of what CAO does. When Singapore relaxed most of its COVID-19 measures and restrictions in 2022, the company stepped up its CSR related efforts, dedicating time and resources to fulfil its role as a responsible corporate citizen. Their CSR efforts mainly centered on helping the underprivileged, from children to seniors, from low-income families and other disadvantaged communities, as well as preserving the environment

From providing care packs to underprivileged students and seniors to water way clean up and tree planting, CAO actively seeks to give back to the communities they operate in.

Eastern Communications’ talent development and career advancement programmes are put in place to determine talents who are ready for next level, leadership roles or critical roles. The organization conducts a Talent Assessment, which determines readiness; and identifies development programs that the incumbent will need to achieve and be successful in the target position.

Shanggari Balakrishnan, Chief Executive Officer, MORS Group

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