Singapore defence tech company aims for bigger global presence
SINGAPORE’S biggest defence technology firm wants to be a major global player, focusing not just on defence capabilities but also smart city solutions. It aims to help growing urban centres tackle pressing issues such as traffic congestion, management of water resources and physical and cyber security.
“Our plan is that two-thirds of our future growth will come from the global market, outside Singapore. We want to be much more global than we are today and make our mark in the international defence business and in the area of smart city solutions,” said ST Engineering president and CEO Vincent Chong.
Currently, just over half of the group’s revenues from its key business clusters – aerospace, electronics, land systems, marine – come from customers outside of Singapore.
A significant chunk is from the US.
In a rare media interview, Chong told the Straits Times last week that the team is keen to expand in Southeast Asia.
“We think we have good solutions to offer the various cities and governments in this region. We already have a solid track record in rail electronic solutions implemented in this part of the
world – including in Thailand, Malaysia and Vietnam. We want to explore opportunities to expand this business.
“For smart city solutions, we are looking at intelligent transport systems to solve urban traffic congestion issues, for example. Other areas where we can offer our expertise include smart street lighting solutions, as well as solutions for security and environment challenges,” he said.
While defence and security are still at the core of ST Engineering’s business, the firm has had to adjust to changes in the external environment and, in particular, advancements in technology which it has used to sharpen its competitive edge, Chong said.
“We are very focused on strengthening our core business while pursuing new growth areas, and this cuts across all our four key sectors.”
In the last few years, ST Engineering has divested several of its overseas investments in the construction (vehicles) business in India and China, and pulled out of a pilot training venture in the US.
Chong said: “We will continue to look at our portfolio and whether businesses have a long-term strategic fit with our vision.”
ST Engineering is also growing its capabilities in robotics and other such areas that require a higher level of expertise and technological know-how.
Innovation is a big part of the plan, he said.
Since setting aside $150 million late in 2017 to invest in promising start-ups and initiatives, it has invested in five firms – two each in Israel and the US, and one in Singapore. It has also set up a technology office in Silicon Valley in the US, with plans for a second office in Israel.
Talent development is another key focus for ST Engineering, which has over 22,000 employees around the world. Of these, about seven in 10 are based in Singapore.
Even as the group continues to innovate and rationalise its businesses, it is mindful of external conditions, including a slowdown in the Singapore and global economies, Chong said.
“We are not immune to global trade challenges, so there has been some negative impact, though not significant, on our business. But because we have a diverse portfolio, we have so far been able to mitigate this,” he said.
Overall, ST Engineering is confident of growth prospects, he added.
Chong said: “We will continue to watch the developments while working on the areas that we have control over, for example, making prudent investments even in this difficult market environment.
“We have to look long term instead of being affected by short term considerations.”