AFP - Singapore, better known for its clean-cut image and electronics exports, is seeking a place in the global weaponry industry by exploiting technological expertise honed on its own amply funded military.
From armored personnel carriers used by British forces in Afghanistan to ammunition and firearms, the city-state is trying to enlarge the overseas market for its homegrown weapons and defense systems.
Singapore’s arms industries were in the limelight recently when India’s defence ministry banned six weapons manufacturers for alleged involvement in bribery case - one of them a Singaporean company. India accused ST Kinetics, a subsidiary of the multibillion-dollar ST Engineering industrial group, of attempting to use bribes in bidding for an Indian defense contract. The company swiftly and vigorously denied the accusation, though the mere mention of the firm exposed Singapore’s growing ambitions in the world arms market.
The other blacklisted firms are Switzerland’s Rheinmetall Air Defence, Israel Military Industries Ltd, Russia’s Corporation Defense and two Indian companies – RK Machine Tools Ltd and TS Kisan and Co Private Ltd.
ST Engineering, with revenues of SG$5.99 billion (US$4.72 billion) in 2011, is Southeast Asian largest defense manufacturer and the only company in the region to be ranked on the Stockholm International Peace Research Institute’s list of the world’s top 100 defense contractor released last month.
Partly owned by state investment agency Temasek Holdings, ST Engineering dominates the defense industry in Singapore. It is one of the world’s top suppliers of 40mm ammunition as well as portable weapons like its CIS 40mm Automatic Grenade Launcher.
The company was the biggest exhibitor at last month’s Singapore Airshow where among the equipment on display was a new version of the Bronco, an armored all-terrain troop carrier used by British forces in Afghanistan. “Our products are battle-proven. If you need something special, we can also customize to give you an edge in war,” Patrick Choy, executive vice-president for international marketing at ST Engineering, told AFP at the show.
The British Army’s 115 Broncos - first deployed in Afghanistan in 2010 and dubbed the “Warthogs” - are ST Engineering’s pride, and billed as the first armored vehicles built for a Western army by an Asian firm.
Britain has around 9,500 troops in Afghanistan, the second-largest foreign contingent after the US troops in the coalition, operating in the the difficult terrain of Helmand province. Jon Grevatt, a defence specialist for IHS Jane’s, a global security think tank, said the firm “has done a grand job with the Bronco” but noted that “the British Army heavily customized it to suit its operational needs in Afghanistan”.
Beyond Britain, ST Engineering exports weapons and military equipment to a number of other countries but refuses to divulge details. According to the Stockholm institute, Singapore has sold defense products to Indonesia, Chad, Nigeria, the Philippines, the United Arab Emirates and Brazil since 2000, generating US$1.75 billion in 2010 alone.
Singapore has the largest military budget in Southeast Asia, thanks to public funds generated by its phenomenal economic growth. It has set aside SG$12.28 billion (US$9.68 billion) for defense in 2012. The city-state also has the most advanced and sophisticated military in the region.
The countrys high defense expenditure is primarily driven by the threat of terrorist organizations such as Jemaah Islamiah, which seeks to turn Singapore into an Islamic state, and the island’s focus on the protection of important trade routes, such as the Strait of Singapore and the Strait of Malacca, from the piracy.
Surrounded by far larger neighbors, Singapore has pursued a robust defense strategy since its acrimonious split with Malaysia in 1965, and in his memoir, Singapore’s former prime minister Lee Kuan Yew exposed that the country military is advised by Israel. Singapores army is relatively small, resulting in the country using technology as a force multiplier, another factor which increases its defense expenditure.
All able-bodied Singaporean men are required to devote two years of full-time military service upon turning 18, providing additional manpower on top of the estimated 20,000 armed forces regulars.
Despite its diverse customer profile, ST Engineering is still heavily dependent on the Singapore Armed Forces (SAF), Grevatt said. However, ST Engineering’s non-defence sectors contribute about 60 percent of revenues, with the diverse portfolio bolstering growth potential, he added.
Apart from its defense business, the company has worldwide operations in commercial land systems, aerospace, the marine industry and engineering, with over 100 subsidiaries in 23 countries. Its aviation arm ST Aerospace is the largest independent aircraft maintenance, repair and overhaul provider in the world.
“Defense manufacturers today have to be diverse and have their fingers in many pies to survive,” Grevatt said.