Saturday, 19 April, 2014

Published March 27, 2013
Total engagement puts the roar in Rolls-Royce's engine
Group's strategy of embedding itself in the market here has made it a major Asia-Pacific aerospace player, reports VEN SREENIVASAN
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'Today, we in Singapore are no more an outpost of the UK. Today, senior management here gets a seat at the table and an 'Asian' voice that can influence policymaking at the headquarters. Meanwhile, we have input into policymaking here.' - Jonathan Asherson, Rolls-Royce Holdings' Singapore-based regional director for Asean and the Pacific - PHOTO: ROLLS-ROYCE

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ROLLS-ROYCE is a name synonymous with excellence and prestige around the world. While the average person associates the company with the luxury car bearing its name, the London-listed company itself is a very different animal.

Rolls-Royce Holdings plc is a £12 billion (S$22.6 billion) a year global power systems giant specialising in the aviation, marine and energy sectors. And it has a history in Singapore which stretches back decades.

Over the past two decades, its Singapore-based Asia-Pacific footprint has grown significantly in tandem with Singapore's growth as a major Asia-Pacific aviation and aerospace hub. Today the company is an integral part of Singapore's aviation success story. As Jonathan Asherson, the group's Singapore-based regional director for Asean and the Pacific, puts it, Singapore is no longer just a branch plant of the UK parent.

"Today, we are at the core of the company," Mr Asherson says. "Relations between our senior managers here and headquarters in the UK are broader and closer due to the size and importance of the market and activity here."

Singapore is now Rolls-Royce's Asia-Pacific headquarters for its aerospace, marine and energy businesses. And not only does the Singapore-based operations of Rolls-Royce contribute hugely to the group, it has also become a major player in the Singapore economy.

In 2010 an economic impact study by independent Singapore-based research company Blackbox Research, in association with Professor Li Zhi-Feng from Nanyang Technological University (NTU), projected that Rolls-Royce's activities in Singapore will sustain nearly 25,000 local jobs, including both direct and indirect employment across the economy and supply chain, and contribute more than $1.5 billion - approximately 0.5 per cent of the Republic's gross domestic product (GDP). The study took into account the new $700 million Trent engine and Wide Cord fan blade manufacturing facility at the Seletar Aerospace Park (SAP).

But Mr Asherson points out that the success of Rolls-Royce in Singapore and the Asia- Pacific region has not been due just to luck and fortuitous market circumstances. "It was the result of a deliberate strategy by the leadership of this company to deeply embed Rolls-Royce into the local market, to become a proactive partner in this country and the region."

Rolls-Royce has also established its regional headquarters for several group functions here, including finance, procurement, learning & development, human resources, communications and health safety & environment.

Mutually supportive

It has also established major maintenance, repair and overhaul (MRO) operations and engineering joint ventures with regional giants like SAESL, a tripartite joint venture between SIA Engineering Company (SIAEC), Hong Kong Aero Engine Services and Rolls-Royce, as well as IECO, a 50:50 joint venture between SIAEC and Rolls-Royce, and entered into R&D collaborations with such bodies as A*Star (Agency for Science, Technology and Research), Nanyang Technological University and the National University of Singapore.

Two years ago, it established Singapore as the hub for the group's marine business, including siting its global headquarters for Rolls-Royce's Merchant Marine business here. Singapore is also the location of Rolls-Royce's marine global repair and overhaul service centres.

This kind of commitment to a market requires both vision and an ability to weigh risks, notes Mr Asherson, who has been leading Rolls-Royce's regional operations since the late 1990s.

"You have to devise mutually supportive strategies which benefit both the company and the market where it is embedded," he says. "Your leadership must prioritise the need to connect into the local business culture, learn the local conditions and local requirements. You have to identify the capabilities, resources, skills base, and study the potential in the market. You have to constantly engage government agencies, academia and key organisations and see where your corporate priorities dove-tail with national priorities. You have to find partnerships and invest in R&D and innovation. And you must know the risks involved in the venture."

He points out that in Singapore, this all-encompassing long-term strategy has enabled Rolls-Royce to even influence policies which mutually benefit both the country and the company.

The single biggest result of this "total engagement" has been the construction of its $700 million Rolls-Royce Seletar Campus at SAP, which was officially opened by Prime Minister Lee Hsien Loong in February last year.

This modern manufacturing, testing, training and research facility rivals that at the group's headquarters in Derby, England, and has the capacity to assemble 250 Rolls-Royce Trent aero engines per year and manufacture 6,000 hollow titanium Wide Chord Fan Blades per year for these engines.

In November 2012, it produced the first Trent aero engine in Singapore - a Trent 900 which was delivered to Airbus.

The facility also trains and employs staff from over a dozen countries.

"Our overriding human resource management strategy has been to acquire different skillsets and cultures, while maintaining a single entity and single strategic purpose," Mr Asherson says.

Today, Rolls-Royce accounts for more than 15 per cent of Singapore's aerospace industry output. And Asia and the Pacific account for over half of the group's £60 billion orderbook and almost a fifth of its revenue, thanks to the growth of key markets and the loyalty of customers like Singapore Airlines, Cathay Pacific, Air China, Garuda, Air New Zealand and Etihad.

And Rolls-Royce continues its strategy of proactive engagement with Singapore. One key initiative with government agencies here is the Advanced Re-manufacturing Technology Centre, which will test-pilot cutting-edge manufacturing technologies to reduce costs, improve productivity and shave off manufacturing lead time.

Specialist training

It is all about doing things better, Mr Asherson says.

He adds that leadership has to have the ability to constantly gauge changes in the marketplace and the priorities of these markets.

"No country can do everything, all the time. But the fact is that Asia will remain the fastest-growing market for us in the foreseeable future. The issue is to work out which countries will value us, and what we do five or 10 years down the road, then engage these governments."

Another key success factor is the ability to identify and recruit talent in the local context.

"Human capital management is critical. That is why we located our human resource head office here. Our central philosophy is to hire, train and retain."

Rolls-Royce has training and development initiatives with organisations like the National Trades Union Congress, e2i (Employment and Employability Institute) and the Singapore Workforce Development Agency to develop specialist training and qualifications to support the aerospace and marine industry as it continues to develop in the region. The company also participates in the EDB's Training and Attachment Programme (TAP), which aims to help companies develop manpower capabilities and prepare for growth.

"Today, we in Singapore are no more an outpost of the UK," Mr Asherson says. "Today, senior management here gets a seat at the table and an 'Asian' voice that can influence policymaking at the headquarters. Meanwhile, we have input into policymaking here."

To make that happen, leadership has to commit to a strategy of deep engagement and constant communication, he concludes.

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