THE ultra-competitive electronics industry leaves no room for error. And Aldon Technologies Services (ATS) boss Allen Ang has positioned his company at the very forefront of the industry.
Set up in 2001, ATS now offers more than 1,000 specialised products and services to customers in the semiconductor and wafer fabrication sectors across Asia.
Managing director Mr Ang recalls: 'The company was literally set up from scratch. Don Koh, the other director, and myself came from different industries - logistics and oil and gas, respectively. To prepare myself for the totally new business, I had to take short courses on the wafer and semi-conductor production process and materials science. During the initial set-up phase, working 16 hours a day was normal.'
But ATS was not playing catch-up to competitors for very long. 'In those days, customers preferred products from the US because they were proven,' says Mr Ang. 'However, we managed to convince them to try products from Korea and Taiwan, which cost less logistically, were price-competitive and had shorter lead times. It was also our belief that there was great potential in Korean and Taiwanese products.
'We were, in fact, the first to introduce those Korean products in the semiconductor industry in Singapore, and it was subsequently proven that our decision was right. Now, 50 per cent of the wafer manufacturing equipment products are Korean and Taiwanese.'
While ATS started out as a technical trader, sometimes reverse-engineering the parts needed by customers and then sending the blueprints to partners overseas for manufacture, it decided to manufacture parts itself - despite management recognising the myriad challenges in manufacturing versus the relatively simple business of trading.
'At ATS, we are driven by the needs of customers; and if we can lower costs and production times for them, both our business and that of our customers will benefit,' says Mr Ang. ATS has set up offices in China and Malaysia to better serve its customers.
The company's winning formula of innovation, good planning, decisive execution and good effort has proved resilient - even during a slump in the electronics industry.
Mr Ang remembers: 'The downturn hit the industry in 2002. Customer orders were held back or cancelled. Our revenue plunged to 25 per cent. We immediately cut overheads and successfully negotiated with customers on consignment programmes to ensure our products were given priority to be used over other products. In this way, we enjoyed a bigger piece of cake during the downturn.
'In addition, we realised that our customers had plenty of spare capacity so a lot of that equipment was free to be used to test our new products. We figured that it was a good time to test the products, and aggressively sent new parts and products for testing and qualification during this period.
'We pulled through, and when the market recovered, our products were already qualified and business picked up with flying colours.'
Last year, although revenue declined from 2006, mainly because some special projects were put on hold, ATS made a bigger profit due to cost-control measures and the introduction of new products and services with higher profit margins. This year, it hopes to continue to clamp down on costs and pursue higher value-added jobs.
It also sees continued investment in the research and development of new products and services - especially its Advance Plasma Coating technology - as vital to growth.
Mr Ang explains: 'To achieve higher quality in the end-product of Advance Plasma Coating, we jointly developed a better coating material and technique with our technology partner, which gives a better bonding result. Our R&D is partly supported by local banks, though of course we are constantly approaching Spring for R&D grants, which helps us tremendously. We expect our Advance Plasma Coating operations to contribute up to 80 per cent of future revenue.'
More than just a new and exciting technology, ATS sees Advance Plasma Coating as a value-added service that will differentiate it from competitors, as well as a way to diversify its business - a necessity in the volatile electronics industry.
Applications for the technology are still being explored in diverse industries, and not just electronics. In fact, diversification into the aviation and repair and overhaul industries through this technology will be ATS's immediate focus.
'Even though ATS is the only firm offering this service in Singapore, we constantly strive for technology innovations, coating different base materials,' says Mr Ang. 'The prototype samples have been under evaluation by customers and so far, results have proved that the lifespan of coated parts is much longer.'
More than just hardware, the management of ATS believes that people are the backbone of the company. A strong R&D team that constantly develops new services and products, and like-minded successors to ensure continuity of vision and the company's direction, are top priorities.
'We focus on doing a few things extremely well, things that focus on connecting our employees to the business, thereby giving them a passion to achieve amazing results,' explains Mr Ang.
On the company's outlook, he says: 'We foresee good growth prospects with the application of nano-technology in wafer manufacturing becoming increasingly mature and the fact that MNCs in the wafer fabrication and green energy industries are coming to Singapore. In addition, the aviation market will pick up momentum with the recent invitation by the government to invest in the aviation and aerospace clusters.'
NINE finalists have been unveiled for the inaugural Emerging Enterprise Award 2008. They are:
AG Delta Pte Ltd
Aldon Technologies Services Pte Ltd
KinderGolf Pte Ltd
McCoy Components Pte Ltd OAAG (S) Pte Ltd
San SeSan Global Pte Ltd
Scrawl Studios Pte Ltd
Sparkfury Creative Consultants Pte Ltd
Wang Jiao Group Pte Ltd
In the fourth of a daily series on the finalists, BT features Aldon Technologies Services.
Emerging Enterprise 2008 is jointly presented by The Business Times and OCBC Bank, which is also the sponsor. It is supported by Spring Singapore, HP Singapore, RSM Chio Lim and NUS Enterprise.
The new award caters to small enterprises with an annual turnover of between $1.5 million and $10 million, which have been operating for at least three years but not more than seven years.
But this is not just another award - the three winners will receive not only a trophy but also $380,000 of interest-free loans, grants and business services.
OCBC will contribute a $150,000, five-year interest-free loan to each winner. The bank also has the option to invest in the company. Spring Singapore will give a $150,000 grant to each winner to meet half the expenses of selected business projects. The other three partners - HP Singapore, RSM Chio Lim and NUS Enterprise - will contribute a total of $80,000 of IT, consultancy and education packages.
This article was first published in The Business Times on May 12, 2008
