Defence contractor soldiers on overseas

ST Engineering wooing clients with new equipment like the Terrex 2 troop carrier

Singapore's largest defence manufacturer is gearing up to expand its presence overseas with new equipment to win new customers.

In particular, Singapore Technologies (ST) Engineering's Terrex 2, an armoured infantry troop carrier with eight wheels, has drawn interest from Australia, Britain, the United States and even Mexico.

Its land division arm, ST Kinetics, joined hands with a US-based partner, to become one of two contenders shortlisted to provide the Terrex 2 to the US Marine Corps last November. They beat industry heavyweights such as Lockheed Martin.

ST Engineering is now looking to build bigger variants of the Terrex vehicles in a bid to replace ageing armoured vehicles in the Australian and British armies, its chief marketer Patrick Choy told The Straits Times ahead of the Singapore Airshow, which starts tomorrow.

"We are competing with the big boys... People are selecting us not just because we are cheap but because we are seriously good and world-class," said Mr Choy, ST Engineering's executive vice-president for international marketing.

COMPETING ON WORLD STAGE

We are competing with the big boys... People are selecting us not just because we are cheap but because we are seriously good and world-class.

MR PATRICK CHOY, ST Engineering's executive vice-president for international marketing.

The Singapore Army currently uses the 24-tonne Terrex.

ST Engineering has spun off the 20-, 30- and 35-tonne variants for potential clients in the US, Britain and Australia respectively.

Military procurers Down Under will next month announce the shortlisted contractors which will make the first 200 vehicles, while work on the British vehicles is likely to start in two years.

Clinching the US$1.5 billion (S$2.1 billion) US Marine Corps deal for the Terrex vehicles, which is likely to be inked next year, will be the biggest coup for ST Engineering.

A growing global presence has not come easy, said Mr Choy, adding that the odds were stacked against the firm set up in 1997.

"We didn't have any natural resources and needed to import everything into Singapore to build stuff. The national defence industry was still in its infancy. We were and still are at a disadvantage.

"But despite that, we are getting recognised and moving up to the forefront," he said.

One of the first breakthroughs overseas happened in 2008 when the defence contractor sold more than 100 Warthog - also known as the Bronco - armoured personnel carriers to the British military for $330 million.

Although shrinking defence budgets are causing militaries to tighten their belts, Mr Choy still sees bright spots in Latin America, the Middle East and Asia.

ST Engineering, for instance, has secured clients by upgrading old or existing war machines. It is poised to clinch a US$200 million deal to replace the transmission systems of 500 amphibious assault vehicles of the US Marine Corps.

Other deals that Mr Choy's firm is eyeing include the upgrade of the Republic of Singapore Air Force's ageing C-130 fleet.

"Nobody will throw equipment away. They will need to do something with them... and we have become very visible to these customers and are at a global level."

A version of this article appeared in the print edition of The Straits Times on February 15, 2016, with the headline 'Defence contractor soldiers on overseas'. Print Edition | Subscribe