By Chia Yan Min

INDUSTRIAL engineering firm SWTS has the kind of problem that spells success - it is running out of space.

The company, which specialises in the repair and maintenance of heavy machinery, is a testament to how initiative and risk-taking can pay off.

Formerly owned by United States electronics conglomerate Westinghouse, the company was taken over by another big player, Siemens, in 1998 and renamed Siemens Westinghouse Technical Services.

Six years later, an entrepreneurial itch prompted then-employee Sim Bee Lim and his team to strike out on their own. They proposed a management buyout, which was successfully carried out in 2006. The new management renamed the company SWTS.

'We realised that there would be benefits to both parties if we parted ways,' said Mr Sim. 'It took us some time to convince Siemens that a management buyout would be mutually beneficial.'

Their efforts have yielded tangible results, as SWTS was recently a recipient of two SME Growth Excellence awards. The award, co-presented by HSBC and DP Information Group, ranks small and medium-sized enterprises (SMEs) according to key criteria.

SWTS came in third and 10th in the net profit and sales turnover criteria, respectively.

Last year, SWTS posted sales turnover of $55 million, compared to $50 million in 2006, and net profits of $5.3 million, compared to $6.1 million in 2006. However, the company's 2006 financial year was 15 months because of changes made by the new management.

Mr Sim expects the sales figure for this year to rise above $60 million, and for net profits to be about $8 million.

The business has been continuously expanding, not just fiscally but also physically. Its facility at Gul Avenue in Tuas has undergone three expansions since it was set up in 1973, with 30,000 sq ft added to the facility in 1982, another 25,000 sq ft in 1992, and 20,000 sq ft in 2002.

A second 50,000 sq ft facility is now being constructed at nearby Pioneer Walk.

'We are running out of space (at Gul Avenue). The business has grown and we have to be able to continue to satisfy our customers' needs,' said Mr Sim.

He plans to take his company to the next step by going public in the near future via a reverse takeover, which the firm is currently applying for.

The management's adventurous spirit has also resulted in SWTS spreading its wings abroad. While its Thailand facility was established when it was still a subsidiary of Siemens, overseas expansion has speeded up since Mr Sim and his team took over in 2006.

The company has expanded into China, the Middle East and Indonesia, where a new facility is currently being constructed in Surabaya.

'Within the structure of a larger company, establishing overseas subsidiaries was something we were structurally not able to do,' said Mr Sim. 'It is only natural that we try to address the market more aggressively now that we are no longer part of that structure.'

The key to smooth overseas expansion, he said, is selecting the right partners. 'There is no scientific way of identifying the right partners, there just has to be chemistry and trust between people in the same industry who know the business.'

Mr Sim said the company has been fortunate in that its history as part of a multinational corporation (MNC) like Siemens paved the way for its expansion overseas.

'We have been a lot more exposed to the various aspects of doing business overseas, as compared to a private company. So we have less of a hurdle to cross.'

He added: 'Differences between countries, like language, cultural environment and geopolitical situations, are still differences that need to be addressed, and like every other company, we have to cross these hurdles.'

Indeed, striking out on their own has not been all smooth sailing for Mr Sim and and his team. 'Our business is growing, hence there is rising pressure on financial resources to support that growth. It can be quite challenging without the structural support of a multinational.'

'As an SME, we have to be more careful when taking risks,' he added. 'We cannot afford to take risks beyond what we can manage because there is no fallback, unlike with an MNC.'

Mr Sim attributes the company's success both in Singapore and abroad to its network of customers, associates and shareholders.

'We can be the best company in the market, but without customers, where would we be? Many of them have stayed with us even through the changes in ownership,' he said. The company's major clients include chemical plants, oil refineries and oil rigs.

His tip for SMEs looking to grow? Make your company a 'people-oriented business'. SWTS employs about 185 staff in Singapore, and slightly more than half of them have worked in the company for more than 10 years.

Mr Sim emphasises the importance of engaging employees. 'A business is only as good as the people in it. Take care of the people and they will take care of the business.'

He added: 'You have to make your employees feel proud of what they deliver to customers. Your employees have to feel like they are a part of the business.'

This article was first published in The Straits Times on Jun 11, 2008

Is this article useful to you?