Story ID: 352
STEengg Celebrating 50th Anniversary
By: Chris Pocock
Caption: Singapore's aerospace and defense giant Singapore Technologies Engineering, founded in 1967, is now a $5 billion company. 
Word Count: 864
Over the past year, Singapore’s premier aerospace and defense company has been celebrating its 50th anniversary. Singapore Technologies Engineering (or STEngg) is now a multinational conglomerate with 22,000 employees and annual revenues of about $5 billion. But when founded in 1967, it made only ammunition for the rifles of the army of the young island republic.

Today, STEngg is a publicly traded company, although the Singapore government still retains a controlling half-stake through Temasek Holdings. The group has four sectors specializing in aerospace engineering and MRO (ST Aerospace); IT, simulation and training, satellites, satcom, and public transport systems (ST Electronics); shipbuilding and repair (ST Marine); and land warfare, including armored vehicles (ST Kinetics). It has expanded overseas with major operations in the U.S., China, and Germany, and more than 100 subsidiaries and associated companies in 46 cities across 24 countries. The group earns more than two-thirds of its revenue from commercial, rather than defense, sales.

The development of Singapore’s state-owned defense companies was driven by the philosophy outlined by the country’s first defense minister, Goh Keng Swee. He insisted that they be managed at arm’s length from the Singapore Armed Forces (SAF), and that they be profitable in their own right. Nevertheless, over the years, some overseas defense companies seeking business in Singapore have grumbled quietly that the Singapore government has favored or subsidized ST. But these concerns have generally been outweighed by the country’s reputation as an "intelligent customer" that does not require opaque "commissions" when buying from abroad.

ST Aerospace (Stand G01, L01) is responsible for more than one-third of the group’s turnover and is the most profitable sector. It started as the maintenance depot for the Republic of Singapore Air Force (RSAF), before developing upgrades for the RSAF’s fighters and transports and seeking similar work from overseas air arms. Then it diversified into commercial work, and today is the world’s largest airframe MRO. It has converted more than 400 airliners to freighters.

ST Aero’s first major engineering challenge was to continue the refurbishment of retired U.S. Navy Douglas A-4 Skyhawk attack jets that had been acquired in large numbers from the U.S. They served the RSAF as A-4S models until the late 1980s, by which time ST Aero had designed the A-4SU Super Skyhawk upgrade. This included re-engining with the GE F404 and a major modernization of the avionics. The company then designed a major upgrade for the RSAF’s F-5E/F fighters and the conversion of some into RF-5 reconnaissance versions, with help from Elbit Systems of Israel. It has since upgraded F-5s for Venezuela, Turkey, Brazil, and other countries.

Later came the tasks of maintaining and modifying the RSAF’s F-16 fleet. At the same time, ST Aero’s own engineers began writing operational flight programs (OFPs) for this and other fighter aircraft, followed by the development of its own mission computer (again with the unacknowledged help of Elbit Systems).

ST Aerospace remains effectively the extended engineering arm of the RSAF. It also does first-line support for many RSAF types, including the C-130, the Super Puma, and fighters. A major upgrade was designed and implemented for the RSAF’s "Herks" (C-130s) from 2007, and also for the Royal Air Force of Oman.

But the diversification into commercial MRO, to leverage the company’s engineering talent and to spread overheads, has dominated the history of ST Aerospace since the early 1990s. A joint venture established in the UK, Airline Rotables, became one of the first companies to offer power-by-the-hour programs for aircraft components. As the airline industry expanded rapidly, so did the company’s MRO business, especially in the U.S. Since then, ST Aero has expanded its service offerings in this field, and in maintenance-by-the-hour. More than 600 aircraft operated by 17 airlines are now supported in this way by subsidiaries of ST Aerospace.

The company’s first passenger-to-freighter (P2F) conversions were Boeing 727s for Federal Express. In 2008, ST Aero gained its first supplemental type certificate (STC), for the Boeing 757 P2F, and a huge conversion contract from FedEx. At the Changi facility, the company has worked progressively on P2Fs for the DC-10, 767, and MD-11.

Meanwhile, ST Aero has been part of the unmanned systems revolution, designing the Skyblade fixed-wing for the SAF, and other systems such as the USTAR VTOL UAV for commercial applications.

At the ST Engineering group’s kick-off 50th anniversary event last year, chief executive Vincent Chong looked forward as well as back. “We see great opportunities in smart city initiatives…in public and cyber security, machine-to-machine communications, satellite communications, as well as autonomous and robotics,” he said.

More recently, Chong summarized STEngg’s business philosophy. “Just as a company can only be as strong as its people, a country can only be as effective as the talent that it has. Innovative countries are magnets for talent, which in turn drives economic growth for these countries, while enabling firms operating there to enhance shareholder returns,” he told Singapore newspaper The Business Times.