SINGAPORE -- Singapore Technologies Engineering is on the lookout for acquisition opportunities, according to President and CEO Vincent Chong. It is targeting new strengths in not only the new businesses it is building -- such as robotics and cybersecurity -- but also its core defense business. Once a domestic-oriented defense company, ST Engineering is transforming itself into a diversified and international engineering player.
Q: You acquired U.S. robotics company Aethon last year. Are you planning more mergers and acquisitions?
A: Robotics is a nascent field and still evolving. We think there is a lot of upside. That's why we decided to invest. We are looking at applying Aethon's autonomous mobile robot to our own manufacturing process at our own aircraft component production site in Germany. We continue to look for suitable M&A opportunities. It can be robotics, smart city-related, cybersecurity-related, or it could be our core defense businesses as well, if that helps us enhance our scale. For example we invested in an airplane conversion business. We continue to invest, and as opportunities present themselves, we will acquire companies to strengthen the core businesses.
Q: You have launched various non-defense tech businesses such as unmanned vehicles. What is the target?
A: We want to be known as a technology, defense and engineering powerhouse. We are putting our resources into higher growth areas. But we are doing it differently -- through more collaborations and open innovations. We even set up our corporate venture capital fund. All these will speed up our innovation process more than doing it alone. We have to find a way to tap on the engineering of the external ecosystem, because the speed of engineering and innovation is moving very fast.
Together with local research institutions, we operate corporate laboratories. Currently we have two programs, cybersecurity and robotics, with a combined value of close to 100 million Singapore dollars ($76 million) over five years. [Separately, we have] opened innovation laboratories, to which we committed more than S$30 million over next five years to incubate startups in urban solutions. Internally, we are developing interesting technology. One example is wheelchair platoons for airports, which require only one attendant to lead four or five wheelchairs. This will help relieve airport manpower shortages.
Q: What are the challenges in your traditional defense business?
A: I ask myself another way: "What are the opportunities?" As we speak, we are making a bigger push into defense exports. In 2012 we started exporting our defense technology when we sold some Warthogs, our armored vehicle, to the British Army. They have been deployed in Afghanistan and protected soldiers, which makes us confident. In bidding for an Amphibious Combat Vehicle contract for the U.S. Marine Corps, we are one of the final two. The result will be available in the middle of this year and we hope we'll win. ST Engineering started as a purely defense company. Defense business is our core. That is where we draw our strength in terms of engineering capability and knowhow. Over the years we have leveraged the knowhow which derived from the defense business and applied it to the non-defense side.
Q: Some expect that ST Engineering will benefit from the defense budget increase by the administration of U.S. President Donald Trump. Has there been any impact?
A: The Mobile Protected Firepower project is one opportunity that has come out of U.S. military spending. But what we do is look at the specific project opportunities, and make sure those play to our strengths. If the defense budget really does go up, then I think in several areas we will be in a good position to compete for them, more so than before.
Vincent Chong joined the Singapore Technologies Engineering group in 2014. He became president and CEO in October 2016, after serving as deputy CEO. Chong also has 20 years of international experience at ExxonMobil, where he held regional and global positions. He holds a bachelor's degree in mechanical engineering from the National University of Singapore.