ST Engineering: My biggest wish for ST Engineering is...

Some 24 years ago, an armoured vehicle designed and built in Singapore was the only Asian representative in a hard-fought United States Army evaluation for an air-transportable, well-protected yet lethal armoured fighting vehicle (AFV).

The US Army's requirements were tough to meet because excelling in one category (say air mobility) could come at the expense of another (e.g. heavy armour protection) or firepower (since turrets or weapon stations are heavy too, or take up space for troops).

The field of 36 contestants from 11 countries who entered the US Army's search for an Interim Armored Vehicle (IAV) in Nov/Dec 1999 shrank to four contenders a year later.

Among the four shortlisted platforms, Singapore's Bionix, designed and built by ST Engineering at Portsdown Road, was the only design that did not come from defence companies from America or Europe. It was a major achievement for ST Engineering, which spearheaded the bid.

I remember it well, because I covered the evaluation as a Business Times reporter. I spoke to ST Engg's management and engineers involved with the ICV project frequently and could sense their excitement and awareness that this was a major milestone in Singapore's AFV development. Analysts who covered the stock also recognised the significance of ST Engg making inroads in the American AFV market. If successful, it could enhance shareholder value immensely.

At the time, the South Koreans were nowhere in sight.

In November 2000, the US Army named its winner: the wheeled LAV III Stryker from General Motors-General Dynamics Land Systems. The Stryker traces its genesis to the Piranha from a small Swiss company, Mowag, whose designers dared to challenge the ascendancy of the then-powerful and influential US defence industry, which had amassed experience supplying AFVs to the US Army since WW2.

Those 20+ years since the ICV bidding have flown by in a blink of an eye. {I kept ST Engineering's Bionix press releases and ads, which you see here)

Today, we see South Korea's defence industry winning contracts in markets that Asian companies found tough penetrating. Poland has ordered tanks and self-propelled guns from South Korea. And just yesterday, South Korean conglomerate Hanwha, became the first Asian company to win an Australian Army contract for AFVs. Hanwha's Redback design beat Rheinmetall's Lynx from Germany for a massive contract worth billions of dollars. Also noteworthy: South Korea is co-developing a fighter plane with Indonesia. Korean warship designs have also earned international stature.

At its current tempo, South Korea's ambitious defence industry looks set to make its mark on the world's defence market. As more international orders are won, the South Koreans will gain critical mass that would in turn generate global awareness, respect and recognition that they are a new force to be reckoned with.

So, what happened to ST Engg's early and promising run in overseas markets like the US?

One would hope ST Engg never loses its innovative streak that saw it become a first Asian player in the US - way ahead of its Asian peers at the turn of the century. But that was 24 years ago. And the cut-throat environment of the defence industry isn't given to sentimentality or philosophical musings.

There are bright spots: 100 Bronco all-terrain tracked carriers served the British Army with distinction as "Warthogs" after these tracked vehicles were purchased to serve in Afghanistan under an urgent operational requirement. This contract is proof that platforms designed for the Singapore Armed Forces' specific operational requirements can be adapted for overseas customers who value properties like platform survivability, superior mobility and ease of maintenance plus low lifecycle costs.

The next quarter century will flash by quickly. To stay relevant to its shareholders and major client(s), ST Engg needs to power up, or risk being left to eat the dust of faster moving rivals who made the leap from unknowns to major players on the world's defence market.

I am confident ST Engg can do better. It has done much to enhance Singapore Army war machines - way more than what is reported from open literature. Land platforms like Bionix, Bronco, Terrex and Hunter have all been lauded at Singapore's annual Defence Technology Prize (our highest award for excellence in defence engineering). What it needs is to nail that big, elusive international win with one of its award-winning platforms. That's my biggest wish for the company. Go for it!

Note: The author does not own any ST Engg shares.