Carving out a foothold abroad with every nanometre

Venturing abroad to seek growth can be risky business, but some Singaporeans have made it work. In the second of a three-part series, Leow Yong Peng, founder and managing director of Akribis Systems, tells Marissa Lee how a small Singapore firm run by engineers has edged into the world market for precise motion control systems.

Akribis Systems - co-founded by former A*Star scientist Leow Yong Peng - was quick to expand abroad, opening offices in Thailand in 2006 and South Korea in 2009, and setting up a factory in Shanghai in 2010. Having earned $32 million in revenue last
Akribis Systems - co-founded by former A*Star scientist Leow Yong Peng - was quick to expand abroad, opening offices in Thailand in 2006 and South Korea in 2009, and setting up a factory in Shanghai in 2010. Having earned $32 million in revenue last year, it plans to grow its operations further. ST PHOTO: LAU FOOK KONG

In the past five years, five separate companies have approached Mr Leow Yong Peng with offers to buy over his company. Each time, he refused.

Mr Leow, 46, is one of those rare engineers who cannot be lured off the factory floor.

"We're still having fun doing what we're doing. I think we can keep going for 10 or 15 years," he said.

A specialist in precision machine design, he has made automation his business.

He spends his days at the Akribis factory in Ang Mo Kio - chosen for its proximity to his home - building customised motors and positioning systems with parts that can move to a precision of up to 50 nanometres.

Mr Leow explained: "These days, some compact wafers are so small that they cannot be seen optically - you have to use electron beams to image them."

Electrons are among the smallest particles in the world - so you can imagine the level of engineering that goes into the machines to position the wafers precisely under those beams.

The whole process is done inside a vacuum, so that stray air molecules do not knock or bend the beams, Mr Leow added.

He also makes other machines, including ones that squeeze electronic circuits onto chips and assemble smartphones used across Asia, Europe and North America.

Before he set up Akribis in 2004, he was a researcher at the Singapore Institute of Manufacturing Technology (SIMTech), a research institute under the Agency for Science, Technology and Research (A*Star).

As he had just completed a secondment to automation device manufacturer PBA Systems to lead development for a series of robotic actuators, he knew there was a real need in the sector for his skills.

"The secondment was supposed to be for two years, but I finished everything in one year," he recalled. He was ready, he felt, to put his own products on the world map.

As soon as his wife assured him that her income would be enough to pay the bills - their daughter was just three at the time - he ditched his PhD plans and set up Akribis Systems.

Q How did you find your first customers?

A We worked with partners. I started with PBA Systems, building things for them, selling to them.

From there, we looked for local customers. At that time, the company had just three people - an assistant engineer, a clerk and me - so overheads were not high.

Overseas, we worked with point distributors. When we were strong enough in a city, we would start an office there and do direct sales.

Q Akribis expanded very quickly overseas, opening a Thai office in 2006 and a branch in South Korea in 2009. Why?

A There was no way we could have survived in Singapore alone. Only factories that need very high precision need our products - there were not that many companies here.

But Singapore is strong in semiconductors. So we started strong in semiconductors. All the skill sets we had, we "hammered" them in first.

In 2010, we opened a factory in Shanghai. All the high-tech semiconductor makers are there, and you can see that the revenue contribution from China was quite significant. Our revenue last year was $32 million, up from $1.86 million in our first year.

Q Akribis has never been loss-making, even from the start. How is this possible?

A We are very lean, because the four founders work very hard. We have 250 staff, but we are still very active in the development process.

And (once we got out of Singapore), we worked with market leaders. In this world, it's very cruel. You either work with the No. 1 player, or you don't.

If you work with the No. 3's, your price is very depressed, because they cannot sell at the kind of premium that the leader can. But the technology needed is actually the same.

Q Was it difficult to convince the market leaders to give you their business?

A No. I think the ability to customise is very important. A lot of big companies are not willing to do that. We managed to work for big companies that couldn't find other people to do that kind of work for them.

Especially if you need to develop software for some applications - that process can take six months to a year. Other firms don't want to make that kind of investment.

Q So customisation is your main edge?

A All our products start from customisation and, from there, it becomes a series of products.

It's very hard to tell people that these products are my standard ones - you just buy the standard ones. Nobody does that these days.

Companies want to build something that is unique to their applications and optimises the space they occupy - this requires a lot of automation and customisation.

Q Was it difficult setting up the Shanghai factory?

A It was pretty tough, but one of our co-founders, a Singaporean, relocated there, so there is one guy who owns the company who is stationed there. That makes a lot of difference. And he has engineering experience.

And though we set up the firm in 2010, we started going to China in 2007, visiting exhibitions, working with distribution partners there.

Q What's your expansion plan?

A Right now, both our factories are operating at full capacity, so we're expanding our China operation.

We'll open an office in Germany, most likely next year. They have a lot of people in precision engineering, but we've had some success in the United States - in Silicon Valley and on the East Coast - so we should try it in Europe.

We are trying to get into biotech. Right now, our main business is mobile phones, but some US customers are using our products to make stents.

A version of this article appeared in the print edition of The Straits Times on April 25, 2016, with the headline 'Carving out a foothold abroad with every nanometre'. Subscribe