Land Systems - Singapore Technologies Engineering
Land Systems - Singapore Technologies Engineering
Land Systems - Singapore Technologies Engineering
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ST Kinetics’ performance, in light of THE<br />
difficult market conditions, is testimony to its<br />
strong capabilities and demand for its products<br />
and services.<br />
The Commercial Articulated Vehicle and<br />
the Bronco All Terrain Tracked Carrier.<br />
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operating financial review<br />
LAND SYSTEMS SOLUTIONS THAT EXCEED<br />
THE COMPETITION<br />
As ST <strong>Engineering</strong>’s land systems arm, ST Kinetics<br />
provides an integrated suite of state-of-the-art<br />
solutions for the defence, homeland security and<br />
commercial markets. Serving customers in over<br />
30 countries worldwide, ST Kinetics’ capabilities<br />
cover the entire value chain, including the design,<br />
development, production, operation and through-life<br />
support of specialised land systems equipment and<br />
specialty vehicles.<br />
Despite market uncertainties, 2008 saw<br />
improvements in ST Kinetics’ performance, largely<br />
due to defence export sales. Its defence business<br />
continued to perform well during the year, securing<br />
several significant orders, most noteworthy of which<br />
was the £150m order for Bronco All Terrain Tracked<br />
Carriers by the UK Ministry of Defence (MoD).<br />
Other key contracts announced were the supply of<br />
40mm ammunition to the UK MoD and the export of<br />
the 120mm Super Rapid Advanced Mortar System<br />
(SRAMS) to a Gulf States customer.<br />
LeeBoy 9000 Wheeled Paver was launched at CONEXPO 2008.<br />
Faced with challenging market conditions in the<br />
US, the company’s US specialty vehicles business<br />
weathered the impact and grew in market share<br />
in some product segments. In China, its specialty<br />
vehicles companies managed to strengthen<br />
operations and profitability.<br />
ST Kinetics’ performance, in light of the difficult<br />
market conditions, is testimony to its strong<br />
capabilities and demand for its products and services.<br />
Each of its specialty vehicles companies grew more<br />
efficient, flexible and robust. Together with the solid<br />
showing of its defence businesses, ST Kinetics has<br />
reinforced its position as the premier land systems<br />
company in Southeast Asia.<br />
<strong>Land</strong> <strong>Systems</strong> & Solutions<br />
The company participated in various exhibitions<br />
during the year, showcasing both its capabilities<br />
and products. In February, it participated in India’s<br />
DefExpo 2008, where it showcased its automatic<br />
assault rifle SAR21 and Ultimax100 light machine<br />
gun. In the same month, the company participated<br />
in the <strong>Singapore</strong> Airshow 2008, displaying its<br />
range of capabilities for integrated defence<br />
solutions, such as the wheeled 8x8 armoured<br />
vehicle Terrex and Total 40mm Solutions, and<br />
launching its 40mm Low Velocity Air Bursting<br />
Munitions System (LV ABMS). The Commercial<br />
<strong>Singapore</strong> <strong>Technologies</strong> <strong>Engineering</strong> Ltd ENGAGING IDEAS DELIVERING PROMISES Annual Report 2008<br />
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Articulated Vehicle (CAV) for disaster relief<br />
and the Hybrid Electric Tow Tractor HETT20<br />
were also exhibited. The HETT20 incorporates<br />
the latest hybrid electric technologies and is<br />
part of ST Kinetics’ offering of green products<br />
designed to reduce the emission of greenhouse<br />
gases and increase fuel efficiency.<br />
Later in June, the company showcased its<br />
Bronco Heavy Maintenance Vehicle, SRAMS<br />
on Spider Light Strike Vehicle, Total 40mm<br />
Solutions, including the 40mm LV ABMS, and<br />
Compact Personal Weapon (CPW) at Eurosatory<br />
2008 in Paris, France.<br />
ST Kinetics’ specialty<br />
vehicles companies<br />
have placed greater<br />
emphasis on the<br />
development of<br />
higher margin<br />
products, and<br />
export sales.<br />
In September, ST Kinetics’ joint venture company,<br />
Advanced Technology Research Centre, and<br />
Nanyang Technological University (NTU), officially<br />
opened Southeast Asia’s first research and<br />
development centre in cold spray technology.<br />
Through the combined strengths of ST Kinetics<br />
and NTU, this collaboration aims to use the Cold<br />
Spray Research Centre to spin off niche industrial<br />
applications; specifically, advanced coatings for<br />
enhanced wear resistance, as well as bioactive<br />
and anti-bacterial coatings for biomedical<br />
applications.<br />
Toward the end of the year, ST Kinetics<br />
showcased its solutions at two shows in the<br />
US. It displayed its full range of 40mm<br />
ammunition and the Bronco at Modern<br />
Day Marines in Virginia, and at the<br />
Association of United States Army<br />
Annual Meeting & Exposition in<br />
Washington DC, in September and<br />
October respectively.<br />
The Bronco Heavy Maintenance<br />
Vehicle generated much interest at<br />
Eurosatory 2008.<br />
ST Kinetics launched its 40mm Low Velocity Air Bursting Munitions System at<br />
<strong>Singapore</strong> Airshow 2008.<br />
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operating financial review<br />
In October, ST Kinetics and <strong>Singapore</strong> Polytechnic<br />
signed an MOU for collaboration on a new Solar<br />
Energy Test-bedding Application Centre (SETAC)<br />
to facilitate research and development in solar<br />
applications, and the production of Dye Sensitised<br />
Solar Cell (DSSC). DSSCs are new generation<br />
solar cells that are more efficient and up to 60%<br />
cheaper than those currently available.<br />
ST Kinetics expects greater demand for its<br />
Total 40mm Solutions. It will also continue to<br />
pursue opportunities in local and foreign defence<br />
markets for its range of products, as well as new<br />
development and upgrade programmes. Increasing<br />
global environmental awareness and pressures<br />
to reduce fuel consumption are also expected<br />
The ST Kinetics-NTU Cold Spray Research Centre opened in September is<br />
Southeast Asia’s first R&D centre for such technology.<br />
to give rise to a higher demand for electric and<br />
hybrid electric vehicles and more efficient hydromechanical<br />
transmissions, all of which ST Kinetics<br />
offers as subsystems or integrated end products<br />
to its customers.<br />
<strong>Singapore</strong> <strong>Technologies</strong> <strong>Engineering</strong> Ltd ENGAGING IDEAS DELIVERING PROMISES Annual Report 2008<br />
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Total Support & Services<br />
<strong>Singapore</strong> Airport Terminal Services Limited<br />
(SATS), the leading provider of integrated ground<br />
handling and airline catering services at <strong>Singapore</strong><br />
Changi Airport, became the first customer to use the<br />
Hybrid Electric Tow Tractor HETT20 in January.<br />
In June, ST Kinetics launched “STAR BLACK”<br />
– an independent premium service centre that<br />
delivers personalised, comprehensive automotive<br />
services for high-end German cars from<br />
marques like BMW and Mercedes Benz. This<br />
complements the current one-stop automotive<br />
services of STAR Automotive Centre.<br />
These EXPORT<br />
contracts attest<br />
to the growing<br />
confidence and<br />
global recognition<br />
of ST Kinetics’<br />
defence products.<br />
ST Kinetics expects more opportunities to provide<br />
services such as integrated training, logistics and<br />
life cycle cost management. The global economic<br />
downturn would also reduce new acquisitions and<br />
lead to increased demand for MRO services and<br />
life extension programmes for existing components<br />
and equipment.<br />
Specialty Vehicles & Services<br />
In March, ST Kinetics generated strong interest<br />
for three new LeeBoy products and GJK’s mini<br />
excavator at CONEXPO 2008 held in Las Vegas.<br />
VT LeeBoy launched its new 9000 wheeled<br />
Asphalt Paver, 705 Motor Grader and the upgraded<br />
Maximizer III Distributor.<br />
Later in May, the company set up VT Specialized<br />
Vehicles, S.A. de C.V. (VT SVM) – a wholly-owned<br />
subsidiary in Mexico – to sell VT SVC’s specialty<br />
vehicles in Mexico and Latin America. Sales of<br />
VT SVC kits in Latin America have enjoyed steady<br />
growth over the last few years, and the company’s<br />
presence in Mexico will enhance customer service<br />
and facilitate expansion in the Latin American market.<br />
At Bauma China 2008, held in Shanghai in<br />
November, both GJK and BZK showcased their<br />
range of products for the construction and mining<br />
industries. Also exhibited at the show were a new<br />
high mobility telehandler called Chang Jing 6, a<br />
hydraulic excavator, articulated dump truck<br />
ADT-30, CAV, and hybrid electric vehicle<br />
components and solutions.<br />
Besides growing organic sales, ST Kinetics’<br />
specialty vehicles companies have placed<br />
greater emphasis on the development of higher<br />
margin products, and export sales. It has<br />
expanded its market reach through establishing<br />
new dealers in Australia, Indonesia, India,<br />
Malaysia, the Philippines, South Africa, the UAE<br />
and Vietnam. These initiatives will not only help<br />
the specialty vehicles companies to weather the<br />
challenging periods of downturn, but also to<br />
emerge stronger on the upswing.<br />
PERFORMANCE OF THE LAND SYSTEMS<br />
SECTOR<br />
Half Yearly Performance<br />
Turnover of the <strong>Land</strong> <strong>Systems</strong> sector in 2H2008 of<br />
$618m was 6% or $38m lower than that achieved<br />
in 1H2008. The lower turnover was mainly due to<br />
lower turnover from the US operations and lower<br />
project deliveries.<br />
Compared to 1H2008, PBT in 2H2008 decreased<br />
by 54% or from $31.3m to $26.7m. The lower<br />
PBT was mainly attributable to lower turnover and<br />
lower margins from product mix, as well as the<br />
impairment in value of a quoted investment.<br />
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operating financial review<br />
Full Year Performance<br />
<strong>Land</strong> <strong>Systems</strong> sector’s FY2008 turnover of $1,274m<br />
was higher than that achieved in FY2007 by 8% or<br />
$96m. The higher turnover was mainly contributed<br />
by the Munitions & Weapon (M&W) business group’s<br />
higher export sales, but this was partially offset by<br />
lower turnover from the Automotive (Auto) business<br />
group. The lower turnover in the Auto business<br />
group was mainly due to lower sales from the US<br />
operations, but this was partially offset by higher<br />
project deliveries.<br />
Compared to FY2007, <strong>Land</strong> <strong>Systems</strong> sector’s PBT<br />
of $84.7m for FY2008 was higher by 6% or $4.7m.<br />
The higher PBT was mainly contributed by the M&W<br />
business group, but this was largely offset by lower<br />
PBT in the Auto business group. The higher PBT<br />
of the M&W business group was in line with the<br />
higher turnover recorded, while the poorer results<br />
of the Auto business group was mainly due to the<br />
impairment in value of a quoted investment, lower<br />
interest income, weakness in US operations and<br />
lower margins from product mix.<br />
Acquisitions<br />
On 10 September, ST Kinetics acquired the remaining<br />
13.76% stake in STAR Automotive Centre (Zhejiang) Co<br />
Ltd (STAR (ZJ)), making it a wholly-owned subsidiary.<br />
The acquisition was in line with ST Kinetics’ growth<br />
plan in China’s expanding automotive repair market.<br />
STAR (ZJ) has seen growing demand for quality aftersales<br />
services in the provinces of Jiangsu and Zhejiang,<br />
where it is the only workshop that provides quality<br />
one-stop services for owners of premium cars such as<br />
Mercedes Benz, BMW and Porsche. Using state-of-theart<br />
equipment, STAR (ZJ) has one of the largest facilities<br />
in the city, and is recognised by insurance companies in<br />
the Jiangsu and Zhejiang provinces.<br />
Major Projects<br />
In August, ST Kinetics announced the $110m<br />
redevelopment of its facilities at Jalan Boon Lay and<br />
Chin Bee Road, where it will consolidate its facilities<br />
and operations located at its Portsdown Road and Ayer<br />
Rajah Crescent premises.<br />
Visitors watching a demonstration of the 120mm SRAMS at Eurosatory 2008.<br />
An export contract for the mortar system was announced in February.<br />
During the year, ST Kinetics delivered the Bionix II,<br />
Bronco, Pegasus, and other weapons and munitions.<br />
It also saw the sales of specialised truck bodies,<br />
trailers, off-road dump trucks, excavators, and road<br />
construction and maintenance equipment to various<br />
commercial customers.<br />
In February, ST Kinetics was awarded a US$31.6m<br />
contract for 120mm SRAMS by a Gulf States<br />
customer. Under the export contract, ST Kinetics<br />
will supply its unsurpassed low-recoil SRAMS, with<br />
delivery to be completed by 2011. In the same month,<br />
the company was awarded a contract worth about<br />
$42.5m by the UK MoD for the supply of 40mm<br />
ammunition.<br />
2008 ended on a high note for ST Kinetics with the<br />
announcements of two contracts from UK MoD -<br />
a £150m order for over 100 Bronco All Terrain<br />
Tracked Carriers and a £35m order for 40mm<br />
ammunition. The Bronco order was a significant<br />
export milestone as it is the first sale of a locally<br />
designed and produced armoured vehicle and to<br />
one of the world’s leading defence forces. UK MoD’s<br />
repeat order for more 40mm ammunition was also<br />
notable as it demonstrated the customer’s trust in<br />
the product’s quality and performance. These export<br />
contracts attest to the growing confidence and global<br />
recognition of ST Kinetics’ defence products.<br />
<strong>Singapore</strong> <strong>Technologies</strong> <strong>Engineering</strong> Ltd ENGAGING IDEAS DELIVERING PROMISES Annual Report 2008<br />
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