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New frontiers beckon for Linnhoff Technologies
THE road ahead for Linnhoff Technologies Pte Ltd, a manufacturer of asphalt mixing plants, is one of expansion, and the wheels are in motion to go global.
Lee Yen Meng, CEO of Linnhoff Technologies, says that the company is looking to expand into new frontiers over the next five years and has his sights set on Africa and South America.
He adds that Africa is a huge market with lots of potential, and although the expansion there is in its nascent stage, the prospect is promising.
"Africa is a large continent with a number of countries. Most of those countries are still developing their infrastructure sector. The lack of road infrastructure and poor transport links in these countries in Africa are opportunities for Linnhoff to expand into the market as the demands for asphalt mixing plants will be there. For example, World Bank projects, African Development Bank-funded projects, airport projects, highway projects, and road maintenance are increasing."
The firm distinguishes itself from its competitors with the screen drum technology, which is unique to Linnhoff Technologies.
Mr Lee, who is 54 years old, says that unlike the conventional asphalt mixing plant, the Linnhoff Screen Drum Asphalt Mixing Plant has lower maintenance cost and consumes less fuel, which translate to lower operating costs.
"The screen drum system allows the screening and drying of the materials, or aggregates, to take place in one drum concurrently, whereas the drying process has to take place in a separate drum for the conventional plants. Hence, it is a longer process and there is much more heat loss and wear-and-tear that is associated with the conventional asphalt plant."
The other selling point of the firm is its containerised asphalt plant, which can be shipped in a container vessel, and easily set up when it arrives at its destination.
"The simplicity of this system differentiates us, and Lintec (its parent shareholder), is the first to produce this 100 per cent containerised asphalt plant in the world," Mr Lee notes.
New Doha International Airport in Qatar utilises four Linnhoff asphalt mixing plants.
Mr Lee explains: "The asphalt mixing plants are supplied to our customers who will then obtain materials from the quarries. They will obtain bitumen or asphalt from petrochemical firms such as Shell, ExxonMobil and Chevron."
They are the ones who do the mixing of these raw materials to produce what we call the hot mix asphalt that you see on the road, he adds.
The company has always been in pursuit of quality and excellence since its entry into Singapore in 1984, when German firm Linnhoff & Thesenfitz bought over the Singapore factory of Wibau, a well-known manufacturer of asphalt plant at that time.
The firm was acquired by IPS-Lintec Group Pte Ltd (formerly known as IPS-Lintec Asia Pacific Pte Ltd) in 2002, a joint-venture of IPS Group Pte Ltd and Lintec GmbH & Co KG. The company has increased its manpower by more than five times since its initial staff strength of just three.
The company has also managed to reverse its fortunes since 2002, before which it was making a loss. It is now in the black with profits in the millions.
One of the problems the firm faced was cash-flow issues in the manufacturing of the asphalt plant, especially when it came to convincing suppliers to grant credit, Mr Lee says.
Also, the system is unlike that of the conventional asphalt mixing plant and explanation to the clients was needed.
Hence, baby steps were taken to promote the screen drum technology and, by word of mouth, the business slowly gained traction.
Fortunately, this period did not last long as the company had a headstart in entering the India market when the country experienced a boom in its infrastructure and network in the late 1990s. "In fact, the Singapore market is quite saturated and 95 per cent of our business are for exports overseas. We don't put all our eggs in one basket and that gives us a better ability to absorb any shock if there is a downturn in certain markets."
According to Mr Lee, the fact that Linnhoff Technologies is a lean company has helped it through the economic downturn. "We are not a company with big factories. We outsource certain projects to our sister companies in India and China so we are not entangled when times are bad."
The fact that the company utilises German technology and know-how adds to its allure and helps in promoting its brand to the regions around South-east Asia, South Asia, Middle East and Africa.
Expansion, of course, comes along with certain "issues like language, culture, time, and location".
Hence, these are some of the reasons for finding suitable and reliable local dealer/distributors in the country, says Mr Lee.
The company is also a total solutions provider. "We are talking not only about the engineering aspect, but also quality control, after-sales service, as well as providing a service to our customers by constantly getting feedback from them."
TEAM SPIRIT AND HARD WORK
It is this foresight that helped the firm clinch the E50 Awards for the fifth time.
Mr Lee says that the achievement is a reflection of the company's ability and he attributes the success of the company to its customers, which include hot mix asphalt producers and pavement contractors, the stakeholders, and the staff.
"Our customers are the ones who provide for our turnover; our shareholders have supported us in the manufacturing and financial aspects. We also believe in team spirit and the staff members are rewarded for their hard work."
He adds that it is this partnership that propels the firm to success year after year.
As the staff are integral to the firm, there are activities done to promote bonding among them. For example, the regular badminton games - once every fortnight - are a must. The vendors are included in the activities as well to further build a relationship with them.
With 25 years of experience under his belt, Mr Lee is poised to take the firm to greater heights.
"I was working in a construction company in the initial stage of my career. I also worked in a road equipment distributorship for German agencies, and a hot mix asphalt producer. Hence, I know the requirements of each sector and each stage of road production. In a way, you could say I have come full circle," he adds, with a grin.