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Armed forces
around the world are transforming for the future, calling for technology-driven,
network-centric and multi-functional integrated systems designed
to improve their military planning and battlefield effectiveness.
Victory in future battles will be increasingly dependent on access
to design ingenuity and the most advanced technologies, and less
on conventional platforms and weapons.
In 2002, ST Kinetics began the process to align itself in preparation
for this new phase in the industry's development; investing in new
capabilities such as multi-role land systems and guided weapons
for its defence business, and setting up a new division to spearhead
its drive into the commercial business. This is reflected in its
initiatives, investments and products – all geared for the
challenges of tomorrow.
MOBILE, LIGHT AND POWERFUL
To address demands for new generation defence products, ST Kinetics
continued to fine-tune its product portfolio to meet the greater
mobility, improved reliability and rapid deployment needs of the
future.
The prototype of its newly unveiled Terrex AV81 8x8 wheeled vehicle
has performed well under rigorous high speed and mobility trials,
both in Singapore and in the UK. Further refinements are being made
to the vehicle which will be used as a demonstrator for potential
customer evaluation by March 2003. ST Kinetics further sealed a
Memorandum of Understanding with Otokar (a very established Turkish
automotive manufacturer) to jointly develop an 8x8 vehicle based
on the Terrex AV81 prototype to bid for the Turkish Army's requirements.
Other advanced products under development and attracting wide and
close attention, such as the 40 mm Super Light Weight Automatic
Grenade Launcher, the 155 mm Light Weight Self Propelled Howitzer
and 120 mm Super Rapid Advanced Mortar System have been undergoing
firepower and reliability trials. In November, ST Kinetics hosted
many of its customers to a successful demonstration of its 40 mm
Air Bursting Munition System at Oerlikon Contraves Pyrotec's Ochsenboden
Test Centre. Initial trial quantities of the system were delivered
to a European customer earlier this year.
In addition to new products, ST Kinetics continually improves existing
products to offer customers better capabilities. The Bronco All
Terrain Tracked Carrier's versatility for example is being enhanced
with a quick "coupling/decoupling" capability to improve its operational
effectiveness. This radical concept allows each of the Bronco's
twin cabins to be airlifted for quick insertion/withdrawal, as well
as flexibility in adapting the vehicle by swapping roles and capabilities
while in the field.
ST Kinetics continues to leverage on major international exhibitions
to showcase its products and competencies in designing and packaging
capabilities. These include Eurosatory in France; African Aerospace
and Defence in South Africa; Defendory in Greece; and AUSA 2002
in the US.
Additionally, it is pursuing opportunities for a role in various
international procurement programmes such as the US Future Combat
Systems programme and other land systems programmes in Europe.
RE-FOCUSING & STRENGTHENING COMMERCIAL BUSINESS
ST Kinetics continued to look for opportunities to grow its commercial
businesses – investing in new joint ventures and adding to
its wide-ranging portfolio of automotive-related products and services.
This year, it strengthened its core competencies through investments
in companies providing related products and technologies.
In January, ST Kinetics acquired a 25 percent equity stake in Timoney
Holdings Limited, an Irish company with global leadership in independent
suspension systems for heavy vehicles. The company also provides
design and development services for military and heavy commercial
wheeled vehicles.
In May, ST Kinetics acquired a 9.6 percent equity stake in Nesscap
Co., Ltd, a Korean company with expertise in commercial ultra-capacitors
which are applied in electric and hybrid vehicles, standby power
systems, the utilities industry and audio products among others.
In June, further inroads were made into China with the incorporation
of a wholly-owned subsidiary, Kinetics Systems (Shanghai), to manufacture
and market electric and hybrid drive systems and stirling engines
in China.
In line with its efforts to tap on dual-use technologies and expand
into distributed power generation systems, ST Kinetics increased
its shareholding in Solectria Corporation (a US company involved
in advanced electric, hybrid and fuel cells) and in the Silvatech
Group (a company specialising in electro-hydraulic drives, with
its main operation in Canada). Over the year, Silvatech successfully
tested its Hydro Mechanical Continuously Variable Transmissions
retrofit kit for the M113 tracked armoured vehicles and is further
developing the kit for commercial applications. It has also appointed
two Canadian-based companies, Terratech Equipment Inc. and Coneco
Equipment Inc., for the distribution of their "Morgan"
forestry brand products in North America.
While it focused on expansion, ST Kinetics also rationalised its
commercial businesses – the Opel dealership business was divested
in August while a German subsidiary, Siamant, filed for insolvency
in November. It also wound up operations of its used-car trading
portal – www.juzclickcar.com.sg – preferring instead to
concentrate on a more lucrative accident repair parts business.
In Singapore, www.juzclickpart.com, ST Kinetics' B2B accident
repair parts portal is making good progress with 14 insurance companies
subscribing to its service. It has captured a 10 percent market
share of the accident repair parts for Own Damage claims since its
launch in August 2002.
STA Inspection was appointed an approved Independent Damage Assessment
Centre by the National Trade Union Congress and General Insurance
Association of Singapore to assist the Singapore motoring public
in accident reporting, inspection and assessment of damaged vehicles
on the insurance companies' behalf. It also created the first
Accident Reporting and Assessment portal to differentiate and enhance
its service standard in the industry.
STAR Automotive Centre is now the appointed Accident Repair Quality
Workshop for 18 insurance companies in Singapore. ST Kinetics plans
to franchise the STAR business over the next one to two years to
spread its operations island-wide.
CityCab strengthened its market share by expanding its fleet to
over 5,000 vehicles in 2002. It also launched a variety of booking
channels using WAP, SMS and the Internet, as well as the TeleCab
Pilot Project in April which allows commuters to pay taxi fares
using their mobile phones. It continued to place emphasis on its
drivers through the launch of the Drivers' Management Portal
in March, allowing easy access to administrative functions from
the convenience of home, as well as efforts to upgrade IT literacy
skills among drivers.
On the laboratory and industrial testing front, Singapore Test Services
enhanced its capabilities this year with a new facility to analyse
Legionella bacteria found in water in air-conditioning cooling towers
and fountains.
MILESTONE ACHIEVEMENTS
The year saw ST Kinetics making yet another unprecedented achievement
in the local defence industry when its Director of Engineering Development
Centre, Dr Richard Kwok, bagged the prestigious Defence Technology
Prize (Individual) Award from the Ministry of Defence for outstanding
contributions in engineering and technology solutions for national
security.
The Six Sigma programme, initiated in 2001, is bearing fruit in
its second year of implementation. To date, a total of 324 staff
have been trained and projects with potential savings of S$5 million
are in various stages of implementation.
ST Kinetics continues to place great emphasis on safety. Its automotive,
weapons and munitions facilities have been fully audited to international
System Safety standards, while the Behavioural-Based Safety system
has been introduced across all subsidiaries. A Crisis Management
system has been institutionalised in all key locations, with two
simulation exercises completed at the Bukit Timah and Portsdown
facilities this year.
RARING TO GO
To compete effectively in the new international defence and commercial
markets, ST Kinetics took proactive steps to re-engineer its operations
in 2002.
After intensive deliberation and efforts to rationalise the businesses,
the company took a very difficult decision to retrench 460 employees
in October. The Management took due care to ensure that the exercise
was executed responsibly and compassionately, with all affected
employees receiving comprehensive severance packages as well as
professional counselling to help them cope with the situation.
Moving forward, the new business structure – comprising Defence
and Commercial Business Divisions – reflects the twin approach
ST Kinetics has adopted to meet the challenges posed by the transformation
in the defence industry and the need to move up the value chain
to produce more advanced land systems solutions as well as the need
to expand wider into the commercial business arena. This two-prong
approach is ST Kinetics' strategy to chart a course for its
long-term business growth.
The Defence Business Division will focus on accelerating capability
development in areas of strategic importance, including Multi-Role
Land Systems, Guided Weapons, and Operations and Support.
In order to grow international defence sales, the Defence Division's
key efforts will be to establish a presence in the West – through
possible acquisitions and alliances as well as increased participation
in major international programmes via various means. The development
of advanced military products like the Terrex AV81 and the 40 mm
Air Bursting Munition System will also help establish ST Kinetics'
place as a leading provider of defence solutions and help secure
recurring sales from existing and new customers from around the
world.
The Commercial Business Division will continue to nurture those
companies under its care, and leverage on the company's defence
capabilities and dual-use technology investments to grow its commercial
revenue. Two areas of specific interest are Heavy Automotive sub-systems
and Alternate Energy products.
ST Kinetics is set to take its place among the trailblazers of the
21st century.
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Mobile,
Light And Powerful
Re-Focusing And Strengthening Commercial Business
Milestone Achievements
Raring To Go
1
All ST Kinetics' products undergo rigorous tests: the Terrex
AV81 going through mobility and reliability trials in the UK.
2
Pushing the limits of our products: the Bronco ATTC thriving under
harsh desert conditions at Sand Mountain in Nevada, US.
3
Expanding our reach: Hybrid-electric buses with ST Kinetics'
drive system and components in China.
4
Capitalising on dual-use technologies: Silvatech's Synchrotrack
Powerpack in use for forestry equipment.
Tan Wan Chin
Senior Engineer
LAND SYSTEMS
"What I enjoy doing in my spare time is sketching portraits of
people, usually from magazine photos. I believe there is something
special about every face that defines a person and I do my best to
re-create that in my sketching.
In my job as a design engineer, the same level of observation and
creativity needs to be applied in the product development process.
After listening very carefully to what the customer requires, I'll
spend time brainstorming to come up with innovative ideas to meet
those requirements. Sketching helps me conceptualise these ideas and
identify workable solutions for new product development."
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