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‘We are very focused on solving real-world problems’

Interview - October 17, 2018

President & CEO of ST Engineering, Vincent Chong discusses how the Group has moved from solely focusing on developing defense equipment to developing smart cities. Today the Group has implemented around 500 smart city projects around the world, and Mr. Chong says that “Singapore has been a key contributor and enabler of our success.”



Singapore has truly embraced digital disruption. How important is it for you that Singapore upgrade its value proposition by becoming a creation and innovation hub?

Singapore has adopted an open market and open economy approach, so it's natural that Singapore is taking the lead to push for more innovation. In fact, if you examine what digital disruption is about – it’s really about creating new technologies and business models that are so game-changing that they impact existing goods and services. Hence, becoming a creation and innovation hub is in alignment with what Singapore has been advocating for years. It means that at a national and ecosystem level, companies can look forward to greater alignment and support as we grow our innovation ecosystem together. At ST Engineering, we have also been leading and creating niche and proprietary technologies for many years. We have considerable investment in R&D over business cycles as we see this as an integral part of creation and innovation, and more importantly coming up with differentiated intellectual property (IP) that will distinguish us from our competitors and further establish the Singapore brand internationally. We consider this in everything we do – even for smart city solutions.

Internally we've been working on many of these solutions over the years with Singapore as a very key customer for us because Singapore has a very pro-business environment, and this also sets very high expectations on the quality of solutions. Over the years, our businesses have been trained to meet these high expectations. While we provide solutions for our home market, it also prepares us for exporting some of these proven solutions overseas. If you can meet the stringent requirements here, chances are you'll remain competitive when scaling up these solutions beyond the shores of Singapore.


Singapore's value transformation is representative through the smart nation initiative. How important is the smart nation initiative for Singapore? Could you tell us about your collaborations through your suites of solutions with JTC for the Punggol Digital District? How does City Sense incorporate all of these solutions?

Globally, the world is transforming and digitalization is fast becoming a norm. Mass urbanization is now a megatrend, and it has become a necessity for cities to quickly evolve to become smarter to meet the needs of this trend, so that they can better serve their citizens and communities with greater productivity and efficiency. Globally this is becoming an important trend, and so we can see that even for Singapore, as a country that has no natural resources, there would be a strong impetus for the nation to compete globally through digitalizing our economy, readying our people digitally and implementing digital government – these three areas being what the Singapore government is currently driving.

ST Engineering is a key participant in Singapore’s Smart Nation initiative – with a track record of more than 500 smart city projects implemented in 70 cities worldwide. To intensify our smart city expansion efforts globally, we launched a smart city solution suite brand name called “CitySense” focusing on three main verticals: (1) Smart Mobility, (2) Smart Security, and (3) Smart Environment (with our energy management). We also recognize that to participate in these three verticals, we need enablers such as cyber security, data analytics, aside from artificial intelligence, robotics, and connectivity in IoT, satellite communication across these verticals. These enablers are businesses in their own merits.

The Punggol Digital District (PDD) project is a great case study of the importance of strategic partnerships and collaboration in building a smart nation. PDD is the first district in Singapore to adopt an integrated masterplan approach, and involves the Infocomm Media Development Authority (IMDA), JTC, Singapore Institute of Technology and Urban Redevelopment Authority. JTC and ST Engineering will work closely to integrate smart city solutions on to this Open Digital Platform across the 50-hectare District – however following the MOU that we have signed with JTC, what follows will be the establishment of strategic partnerships with companies to develop the Open Digital Platform in PDD. We will also work with industry partners such as local SMEs to further develop solutions and infrastructure for the platform to transform user and community experience – integrating digital infrastructure from the ground up with physical planning and development of the district, while implementing smart city solutions from facilities to district cooling systems to autonomous vehicles seamlessly.

Our Smart City solutions are about improving lives and we have been creating technologies for the last fifty-one years. As we started off as a defense company, we have the advantage of leveraging on the technological know-how of either commercial or defense side to create dual-use technology, or to transfer technological know-how from commercial business to defense business and vice versa. In a resource scarce environment, that's critically important. How do you make sure that you optimize your resources using technology, be it sensors, be it connectivity and robotics? Many smart city solutions are benefiting from this transfer of technological know-how, which helps us as a technology group to move faster and provide a broader range of cutting-edge technologies for our customers.


ST Engineering is traditionally recognized as a defense company. Could you tell us more about ST Engineering’s four business sectors and how you leverage on innovation?

We started off as a purely defense company fifty-one years ago. Defense is still our core and our strategic business but we have moved on quite a fair bit from there.

Over the years, we have established ourselves as a global technology, defense and engineering group specializing in the aerospace, electronics, land systems and marine sectors. We have grown our global presence with offices in Asia, the Americas, Europe and the Middle East, serving customers in the defense, government and commercial segments in more than 100 countries.

We have performed well and established the Singapore brand globally because innovation is an integral part of our differentiating factor. We put a lot of effort into creating good cutting-edge technology. Some of these we do it ourselves in-house. Other times, we recognize the power of collaboration and Open Innovation. We take minority investments in promising technology start-ups through our Corporate Venture Capital unit in exchange for access to their technologies, while giving them access to our global networks and distribution channels. We incubate start-ups with breakthrough urban technologies at Innosparks, an ST Engineering Open Lab, providing them with resident engineers to fast-fail-fast-iterate their solutions from idea to market within 18 months, giving them generous funding, resources and access to multidisciplinary engineering labs. We also collaborate closely with Corporate Labs and Research Institutes to channel deep R&D effectively and quickly towards the commercialization of technologies.

This is all part of our plan to strengthen our core businesses in the four sectors, as well as intensify our growth in the strategic areas of smart cities and defense exports. We project that about two thirds of our growth over the next five years will come from overseas.

What is helpful for us is that we have the ability to integrate seamlessly across multidisciplinary sectors, and to harness knowledge from both commercial and defense domains for the benefit of our customers. For example, our command and control systems are dual-use between defense and non-defense businesses. We've done that for our train electronics and satellite communication solutions.

On satellite communications, we're the biggest enterprise VSAT systems supplier in the world through VT iDirect, our U.S. subsidiary. And we have been harnessing data analytics in our solutions for many years. Today, we have more than eighty data scientists helping us in data analytics to provide solutions for our defense and non-defense customers. We have close to two hundred cyber-security professionals covering dual-use technologies and developing cyber security programs to be integrated into our platforms and products.

We are also very judicious about working with our customers to customize solutions for their demographics, physical, social and economic conditions – building-to-design and making technologies people-centric and well integrated with infrastructure and design, rather than existing as plug and play or in silos.

That’s how we’ve grown over the years using the technology know-how that we have acquired in both environments. Not just limited to the defense sides but also the commercial side, that's moving very fast to help us develop a strong suite of technological solutions for smart-city applications.


Even though you started in defense, you very quickly got involved in the development of Singapore. How intertwined has ST Engineering’s history been with Singapore both inside and outside of the defense sector?

ST Engineering has been 51 years in the making, alongside Singapore’s growth as a nation.  Many ST Engineering pioneers created engineering feats and solutions that established the Singapore brand in innovative engineering both internationally and locally. While much of our track record began in Singapore, we have had an equal number of cases where we experienced international success before applying the solutions back in Singapore. We have always appreciated the opportunities that Singapore’s ecosystem has given us, in both defense and smart cities.

Smart city projects are not new to us. We have so far done 500 smart city projects around the world. We have over 100 projects in rail transportation systems in 39 global cities in Asia, the Middle East, the U.S. and Europe. For intelligent road transportation, it's more than 100 projects in over 20 cities. As for robotics, our autonomous mobile robots are deployed in 180 locations globally across hospitals, hotels and manufacturing facilities.

We have accumulated a lot of experience over time. Singapore has been a key contributor and enabler of our success. We want to use that as our basis for more international expansion beyond our traditional markets in smart city projects. We are quite confident that we will be able to do so. In fact, we just recently had a smart transportation system contract in the Middle East and that’s part of our smart city drive and we’re going to do more of that – a smart transportation system for land and more to come.


In your opinion, what are the core adjectives that define ST Engineering's ability to compete?

As the name of the book we published for our 50th anniversary says, our “engineering with passion” attitude is what got us to where we are. We are very focused on solving real-world problems that make a difference in people's lives, improving their lives. That's what we do and that continues to be our guiding principle.

Our core strength is derived from our people. We have 22,000 people around the world, 16,000 of them are in technical and engineering jobs. That's our driving force: creating solutions that differentiate us from our competitors or our competition. Our success is really driven by the whole team. It's not one individual.


Smart solutions are going to be one of your key drivers for growth along with defense exports. What are your expectations moving forward, not only for Singapore but also for other clients around the world?

We have a nice suite of defense solutions that are globally competitive. Thus defense exports is a growth lever for the group. The expertise that we gain from competing in global programmes also help us further strengthen our defense capabilities. We were very pleased that we got down selected, in partnership with SAIC, for the amphibious combat vehicle program from the U.S. Marine Corps, eliminating global competition in the earlier rounds to be the one of the final two for the U.S. Marine Corps program. We made sixteen vehicles for the U.S. Marine Corps for trials and tests under the Engineering, Manufacturing and Development (EMD) phase of the program.  While we did not ultimately win the contract, we are very pleased that we eliminated global competition along the way, which in itself validates the maturity of our defense engineering capabilities.

So yes, defense exports and smart cities are two growth areas for us, in addition to strengthening our core businesses. Our core businesses are still important. We will still invest in our aerospace business. In fact, aviation growth is expected to continue to be very strong and healthy. We are the largest airframe MRO provider in the world for more than 15 years running. We will continue to invest. We have just started up a new hangar in Pensacola, Florida, and will explore other capacity expansion opportunities. Those core businesses will continue to be a focus. Where I’m seeing beyond core are new growth levers in defense exports and smart city projects – these are new frontiers for us.


The U.S. represents more than 20% of your revenues today. It’s also a destination for some of your investments. You were awarded the U.S. government proxy agreement to pursue classified government contracts. What role does the U.S. playing your operations today?

The U.S. is our single largest market outside of Singapore, contributing about one-quarter of our overall revenue.  Our U.S. business has been there for more than 20 years. We feel good about what we have achieved and the growth plans that we have in place in the U.S.

In the U.S., we offer the same capabilities in aerospace, electronics, land systems, and marine.  We have major operations in 16 cities in the U.S. over a spectrum of various businesses. We expect more investment dollars to go into the U.S. In Defence, we continue to seek opportunities in various programmes as US defence spending continues to be the world’s largest, with steady growth expected. For Smart Cities, U.S. cities are increasingly moving towards smart applications, with vast opportunities for our suite of solutions, including deployment of our smart street lighting sensors and airport security solutions. 

For example for smart cities, it is kind of the early days for us in the U.S., we’re pushing smart city solutions there, but even as we speak we have already implemented more than ten million smart nodes in the U.S. We're talking about Internet of Things, smart meters, smart lights. We have executed projects for rail electronics, specifically passenger information systems and ticketing machines for the metro systems in Chicago, Washington DC and San Francisco.

We operate our businesses under a Special Security Agreement (SSA) with the U.S. Department of Defence in order for us to be able to undertake defence business.  Under an SSA, the majority of the Board would have to be U.S. security cleared personnel and all key positions needed to be U.S. citizens with the appropriate security clearance. We are also a trusted partner of the U.S. military forces, providing military communications technology in the U.S. and servicing aircraft components for the U.S. Navy that comes directly from the U.S.

We also own LeeBoy U.S. which is a company for road construction equipment. Even for Aerospace which is our core, we are building new hangars because it is also a very large because we see many investment opportunities coming up.

We are there for the long-haul and we will continue to invest in the U.S., and export our services from the U.S., as well as create good jobs where we operate.  As it is, many of our solutions e.g. satcom are selling beyond the U.S. to Latin America, Africa and the Middle East.  And that is our growth plan moving forward, and the U.S. will be featured strongly.