View - Singapore Technologies Engineering

GROUP TURNOVER INCREASED FROM S$1.76 BILLION IN 1999 TO S$2.26 BILLIONIN 2000, AN INCREASE OF S$495 MILLION OR 28%F-16 cockpit on show at Asian Aerospace 2000.Software Systems group over the past year includes thedevelopment of a used car auction software system and are-usable architecture common application platform.■ The Marine sector has been involved in the designand development of sophisticated warships such as theLSTs. It launched the last of four LSTs ordered by theRSN in February.The first of the RSN’s LSTs sailedaround the world in mid-2000 and participated in theInternational Naval Review 2000 held in New YorkCity in July.Within each one of these programmes, many moreinnovations on sub-systems and componentswere achieved. Indeed more than 30% of oursales each year, on a rolling three to five yearbasis, comes from new products developedover the same period.E-INITIATIVESThe Internet revolution and the evolvingB2B landscape will continue to have farreaching implications to the business ofST Engg.The Group has successfully reducedcosts through use of online dynamic pricingcapabilities and reach out to a global supplierdatabase.We deployed several CustomerRelationship Management portals and applicationsto service our customers better.We havelaunched new business models like our usedcar auction business and invested in severalB2B Internet-related ventures.We are lookingforward to these investments bearingfruit over the next two years. Our entirecompany’s supply chain is currently beinge-enabled with capabilities that will allow afront end reach and link to global marketplacesand a seamless back end integrationwith our different back end EnterpriseResource Planning.The objective is to makeus more cost competitive as we compete inthe global market. At the same time, we areexploiting the technology to achieve higherproductivity like the Aerobook that we havedeveloped for use by our engineers on boardaircraft.We will also be investing in an e-enabledemployee portal that will automate currentmanual human resource processes with theaim of improving staff morale, increasingcompany efficiency, heightening awareness with onlinecommunication and lastly and most importantly servingas a platform for every member of the ST Engg familyto keep abreast with technology.COMING OF AGEWhile we are proud of our achievements during thepast year, it has been particularly gratifying to see ourprogress recognised by others. Of special significancewere our listing in the Jane’s Defence Weekly (JDW) Top 20Index and our winning of the Golden Circle Awardfor Corporate Transparency from the SecuritiesInvestors Association of Singapore.The delivery of two LSTs raised Marine sector’s profits by 41% this year.JDW is regarded as a highlyauthoritative publication withinthe global defence industry.Thefact that it has listed our Group inits Top 20 Index reflects recognitionof ST Engg at an internationallevel as a reputable and world-classdefence player, able to stand incomparison with the best in thebusiness, wherever they are.The Golden Circle Award isgiven to the most “transparent”company in Singapore. On aregular basis, we announce ourgrowth and expansion plans, newbusiness focus, investments ine-business, major projects andother details so that shareholdersare kept abreast of the latestdevelopments in ST Engg.We dothis over and above our quarterly result announcementsand briefings to the press and analysts.We are pleased that shareholders and investorshave acknowledged our efforts. At a time when theinternational trend is for companies to become moretransparent, this award is recognition that we areadopting the best global practices.Towards the end of the year, we were named thesecond best-managed company in Singapore by AsiaMoneyas well as one of the best value-adding companies byAsian Wall Street Journal and also by HSBC Top 100companies in Asia.Our JDW listing, the winning of the Golden CircleAward, the award by AsiaMoney for being one of AsiaPacific’s Best-Managed Companies, together with ourgrowing success in securing contracts for our productsand services at an international level, confirm thatST Engg has achieved broad recognition.LOOKING AHEADINVESTING FOR THE FUTUREWe recognise that there is a limit to how much we candevelop and innovate in-house.We need to tap the hugetechnological base that exists overseas.To facilitate this,we have set up a US$30 million technology fund tocomb the world for innovative ideas and technologies.DIVIDENDSWe continue to create shareholders valuein more ways than one. We are paying74% of our full year’s profits as dividend.This is in the form of normal dividend,which is increased from 23% in 1999 to25%, and a special dividend of 55% taxableand 15% exempt, thus returning atotal of S$213 million to shareholders. TheEconomic Value Added has continued togrow: this year, it has risen from S$135.6million to S$189.3 million, an increase of40%. We ended 2000 with a share priceof S$2.79 and a market capitalisation ofS$8 billion, an increase of 8.8% over theend of 1999 market capitalisation.HUMANRESOURCEOur philosophy for managingour business will be to put ourbest foot forward and send ourbest people overseas. Earlythis year, we will redeploy ourpresidents of the varioussectors overseas to searchout, and manage the overseasthrust. We intend to beef upthe overseas offices with ourbest technical managers sothat they scour the world forthe best technology. Only thencan we sprint fast forward.This fund is over and above the 3% of our revenue thatwe currently spend on research and development in ourcore business areas.The technology fund will allow ST Engg to investand incubate technologies and ideas that will developinto our future star products.While many funds exist inthe market, our focus will be upon engineering relatedtechnology development where we can nurture technologyto help it succeed. Our areas of special interestinclude Micro-Electronics-Mechanical-Systems (MEMS),robotics, alternative power sources and new materials.These investments will give us access to new technologiesthat may not be readily available in the open market.The success of some of these technologies will give theGroup an added advantage in exploiting new technologyas a force multiplier for our customers.EXPANDING THE US BEACHHEADThe sheer size of the US market makes it an attractiveproposition for ST Engg to position itself to capturea slice.We are keenly exploring growth opportunitiesin the US.Our participation in the US IAV programme gavea boost to our US operations.The branding, the publicityand the relationship that we developed with ourcustomers and US industry partners have provided anopening for ST Engg to market other products and services.Following the publicity given to Vision Technologies,38 • visioncover story • 39