Date: April 6, 2017
|VINCENT CHONG, President & CEO of ST Engineering since 1 October 2016, joined the Group in April 2014 and was appointed President & CEO (Designate) the following year. In an interview published in the company’s 2016 Annual Report, Vincent shares his plans for preparing ST Engineering for its next stage of growth.|
|1.||Tell us a bit about yourself.
I am Singaporean, 47 years old and I graduated with a degree in Mechanical Engineering from the National University of Singapore.
I used to work for an engineering-focused MNC in the energy sector and I have spent much of my career working in various countries around the world. My international experience has given me insight into the intricacies of running a successful global corporation that is sensitive to local needs and concerns. My international postings have also sharpened my awareness of the accelerated speed of change and how disruption is now the norm, particularly for technology companies like ST Engineering.
Outside of work, my main priority is my family. I make it a point to spend as much time as I can with my wife and two daughters. I try to have meals together with them whenever possible and I also make sure I set aside individual time for each of them.
|2.||What attracted you to ST Engineering?
After spending so many years abroad, I wanted to return to my roots and contribute to Singapore. What better way than joining ST Engineering? It is a home-grown engineering group with a global reputation. As an engineer, I was impressed and inspired by the engineering capabilities and talents within the organisation. I believe I have something to contribute to the organisation.
|3.||What do you think of ST Engineering’s track record?
Since going public, our record has been nothing short of stellar. In terms of revenue and earnings, we are more than four times larger today than we were in 1997. We have also consistently delivered ROE of over 20%.
My predecessors established a rock-solid foundation and Pheng Hock, in his 14 years as President and CEO, brought the Group to great heights. Our success has been the result of the hard work, creativity and commitment of our people.
|4.||What are your plans for the Group?
Our goal for the Group is long-term sustainable growth and value creation.
Key to ensuring this is having good people. Because we are only as strong as the people we have, developing ST Engineering’s human capital is top of my agenda.
With a strong, capable and motivated workforce in place, we will be able to strengthen our core business, leveraging the unique strengths of our four main sectors – aerospace, electronics, land systems and marine – to pursue growth.
At the same time, we will increase cross-sector collaboration and enhance the integration of the strengths and capabilities within the ST Engineering Group. I firmly believe that our whole is much greater than the sum of our parts.
The defence business will remain core to us, and we will continue to invest in building strategic capabilities to further strengthen our ability to support our long standing customers.
As a Group that makes a profitable business out of technology and innovation, R&D is a crucial component of our future success and I intend to ensure that we continue to focus on this area.
Thanks to our strong balance sheet, we will invest across business cycles, but as we do so, we will ensure that these investments track closely with clearly defined group and business sector strategies.
Apart from organic growth, we will also be looking at making long-term investments and acquisitions where these make economic sense. At the same time, we will divest outdated solutions and business lines that are no longer aligned with the Group’s overall strategy and direction.
|5.||Are we looking at a renewal phase?
Over the last 50 years, the ST Engineering story has unfolded over several phases. As we embark on our next growth journey, we are taking a fresh look at ourselves.
The current and future environment demand that we do not merely continue with business as usual. We need to think differently and change the way we do some things so as to keep ahead of global competition. Our focus is not short-term gain but sustainable results over the long term.
In the last few years, with the exception of some businesses, our growth has been flat. The macroeconomic environment has partly contributed to this but that is not the only reason. Some of our businesses are facing fundamental challenges, due in part to the pace of change in technology or structural changes in the industries they serve.
Having said that, there are many growth areas which we are already participating in and the longer-term outlook of our business remains positive.
|6.||What do you see are reasons for optimism?
I think our track record over the last 50 years speaks for itself. Over the last five decades, we have proved repeatedly that we are innovative, resilient and future-oriented.
Our many recent achievements bear this out as well – we are the largest commercial airframe maintenance, repair and overhaul provider in the world and we also developed Singapore’s first commercial Earth Observation Satellite. The US Marine Corps is now evaluating our Terrex 2 wheeled armoured vehicle for deployment in combat after we edged out a number of well-known world class competitors to end up as one of two finalists. I am proud to say that all of our four business arms have impressive lists of achievements and award-winning solutions like these that they can point to.
All these accomplishments demonstrate that we are still an advanced, creative and competitive group.
In addition, I also believe that we are well placed to seize the many opportunities that lie ahead. In a world impacted by the fast pace of technological change, the Group sees numerous opportunities brought about by digitalisation, the proliferation of robotics and the rise of autonomous solutions. We also see great opportunities in the Smart City concept, where technology is leveraged to improve urban environment in areas such as sustainability, connectivity, mobility, as well as public safety and security.
The ability to recognise and harness disruptive technologies is what will separate the winners from the losers in the new economy. We have already developed significant domain expertise in strategically important areas such as cyber security, intelligent buildings, intelligent transportation, satellite communications, autonomous and robotics solutions as well as machine-to-machine communication.
Our investments in corporate laboratories are an example of the value we place on strengthening our capability to innovate. We have set up the ST Engineering-NTU Corporate Lab to develop advanced robotics and autonomous systems, while the ST Electronics-SUTD Cyber Security Lab will work to enhance cyber security solutions and technologies.
With our deep engineering and technological capabilities, as well as data analytics and complex solution capabilities, the Group is well positioned for the future.
|7.||What should investors expect from ST Engineering?
We will continue to be a well-governed Group, capable of thriving in a challenging business environment; we have delivered steady results, our order book is robust and we have excellent revenue visibility. We continue to win new contracts and our balance sheet is healthy. In addition, we have ready access to capital if needed.
We also have the management team, the vision, the capabilities, the business assets, the human and financial capital necessary, and importantly, the will to make the changes needed to overcome current challenges and to retool for the future.
We will invest across business cycles, we will leverage our group synergies, we will invest more in our people and we will enhance our culture of innovation. This will lead us on a path of long-term sustainable growth.
Growth will necessarily require us to take carefully calibrated risks, but we are prepared. And while we are geared for growth, we are also committed to returning excess cash to shareholders as we have done historically.
For all these reasons, I am very confident in ST Engineering’s future prospects and I firmly believe that investors who join us in taking a long-term view will be rewarded.