Infrastructure builder counts on integration and innovation
INFRASTRUCTURE builder Samwoh Corp has come a long way since it was formed by three lorry drivers in the early 1970s - considering that the plan then was a transportation outfit that served work sites all over Singapore.
Today, transportation & logistics is but one of a range of businesses that span civil engineering, recycling of construction wastes, and even consultancy. Samwoh says it is the market leader in road construction, road and airfield maintenance, as well as pavement engineering.
Looking back, managing director Elvin Koh says: 'This road was certainly not easy. Our founders had to struggle with the slow growth in the 1970s and there is really no short cut around.'
Business began picking up in the 1980s when Samwoh received several infrastructural projects from government bodies such as the Housing and Development Board (HDB) and the then Public Works Department (PWD).
Later, with a larger capital and more shareholders on board, the company decided to diversify. It moved into civil and infrastructure engineering construction - flyovers, bridges, sewage and drainage works.
But this part of the journey was also not always smooth. During the economic downturn around 1997, the whole construction industry was badly affected. Samwoh's receivables came unstuck. Still, the group stuck it out.
'If you want to run a business, you have to be ready for obstacles, you have to know how to handle the setbacks. These are all part of entrepreneurship,' says Mr Koh.
The occasional stumbles are taken as valuable lessons and stepping stones to success.
Samwoh, whose logo sports three stylised symbols representing the Chinese character ren (person) in a circle, puts its vision quite simply: 'We will be the preferred company for our customers.'
Its mission is described in greater detail: 'To excel as a leading integrated engineering and infrastructure company and materials supplier by providing innovative technologies, excellent services and products at competitive pricing, and to inculcate pride and ownership in our work.'
Samwoh's success has been built largely on two strategies - integration and innovation.
The group provides a one-stop station for civil engineering and construction-related services, ranging from the supply of construction materials to transportation, paving, maintenance and consultancy.
The transportation business, of course, was the first building block, from way back in the 1970s. Samwoh then added the manufacture and supply of asphalt premix, with the completion of its first asphalt premix plant in the 1980s. The 1990s brought Samwoh into the civil engineering and construction business.
Since then, Samwoh has also acquired and started companies along its value chain, transforming Samwoh into the group it is today, with some 26 entities.
Innovation has helped Samwoh stand out as a leader in the industry, giving it a competitive advantage. As a prospector according to the Miles-Snow typology, Samwoh seeks to exploit new opportunities through its research and development as well as consultancy services. Samwoh has its own research lab, an industry first. Its $2 million Samwoh Research and Development Centre carries out research and formulates new products, such as Samiphalt, a hybrid of asphalt and concrete, and the Stone Mastic Asphalt Concrete pavement, which is stronger and more durable than the normal asphalt pavement.
Samwoh has also invested heavily in green technologies. It has embarked on a new business venture which involves the recycling of construction waste. This came about because of the lack of natural resources and the scarcity of land for use as landfills in Singapore. The venture involves the usage of recycled concrete aggregates (RCA) in structural concrete.
Hence, Samwoh set up a state-of-the-art recycling plant for the production of RCA. In a bid to showcase its cutting-edge research and development technologies, it is constructing a brand-new building, which should be one of the few in the world to use RCA big in its structure.
Samwoh is also firm on meeting market expectations. 'We value corporate integrity,' declares Mr Koh, 'and so we must provide reliable and quality products and services to fulfil our part of the relationship with all our partners and clients.'
This is true even with competitors. He explains: 'Our competitors are sometimes also our customers. This is because we are a vertically integrated corporation, and some of our subsidiary businesses can be supplying our products to our competitors. In such instances, we do so at a fair price, charging the same amount to competitors as well as our own subsidiary entities. This helps to build good working relationships so that we can all work together to lower prices and achieve market efficiency.'
In the current global economic crisis, Samwoh is not too adversely affected because the government has stepped up infrastructural spending as a way to ride out the recession. According to the Building & Construction Authority, spending on infrastructure will reach a record high of $18 billion-$20 billion this year.
With strong product and service offerings, as well as a healthy financial position, Samwoh is confident of emerging strongly from this downturn. And the signs are good, considering that it's well ahead of the curve in terms of research and development - something which the government has been exhorting local SMEs to get into as a sustainable way of maintaining a competitive edge in a globalised world.
The writers are students of the NUS Business School
Thought this was very well edited!
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