JEP Precision Engineering has delivered precision machining solutions for over 25 years. Could you describe the company’s relationship to JEP Holdings and outline your service offering?
JEP Holdings Ltd. is a solution provider of precision machining and engineering services, with a primary focus on the aerospace industry. There are a total of three subsidiaries under the Group: JEP Precision Engineering, Dolphin Engineering and JEP Industries. JEP Precision Engineering Pte Ltd was acquired by the Group in 2007 and is the Group’s main operating subsidiary.
Accredited with AS9100, OSHAS, and NADCAP, JEP Precision Engineering produces high-level precision machine parts and our capabilities lie within machining high-tensile material such as inconel, titanium, and stainless steel. Over the years, we have become established within the precision manufacturing industry and have evolved into a leading supplier that provides complete turnkey services for aerospace, oil and gas, electronics and machine tooling industries. From the machining and engineering of engine casings for the B777, A320 and B737, our business has expanded into other aerospace components such as landing gear components for the B787 and A350, as well as air management system components for the B787 Dreamliner. In line with our goal to move up the supply chain and to provide our customers with complete manufacturing solutions, a NADCAP accredited chemical processing facility was set up at Tanjong Kling in 2014 for the provision of secondary processes.
What is the importance of the aerospace segment for JEP Precision Engineering comparatively to other industries, such as oil and gas, and electronics?
The aerospace segment currently represents about 70% of JEP Precision Engineering’s revenue. In the last five years, we have also expanded into the oil and gas sector. Unfortunately, due to the downturn of the current oil and gas market, we are seeing a slowdown in orders. The remainder of our business is derived from the semi-conductor and machine tooling sectors. We are growing the other sectors and are always looking for opportunities to expand into other industries such as the bio chemical industry, but aerospace will remain as the key focus and pillar of our business.
JEP Precision Engineering grew from 10,000 sq ft to 200,000 sq ft with the new factory acquisition. Could you describe the new facility, and when it will be fully up and running?
With the rapid growth of the oil and gas, and aerospace industries five years ago, we started looking at expanding our operations. We considered various countries in the SEA region, but decided that Singapore was still the most suitable place for us to grow. We approached the respective government bodies that assisted us in securing an 18,502.10 sqm plot of land within Seletar Aerospace Park. We are currently in the process of moving and will be completely operating out of our new facility by the last quarter of 2017. This brand new facility will house a production space that is 80% larger than our current premises. Although there are no signs of the oil and gas industry recovering in the next year, the aerospace sector is still growing at a steady rate. Boeing has reported about 5-7 years of backlog in their orders and they are always on the lookout for suppliers to increase their capacity to be able to fulfill the demand. With our added capacity, we have also started exploring other sectors, bringing the JEP brand to wider networks.
Manufacturing companies make up 10% of the Singapore aerospace industry and there is a strong interest in growing this segment of the market. What future trends do you expect to see in this realm?
I believe that manufacturing will continue to be a key pillar of Singapore’s economy. However, Singapore is becoming a challenging market to operate in given the rising cost of living and salaries. Asia-Pacific countries with lower operating costs such as China, India, Thailand and Malaysia are able to offer much more competitive pricing.
To overcome this, we are continuously looking at ways, such as Six Sigma principles, for continuous improvement and to increase productivity, keeping our costs competitive. The other challenge is the tight labour market, which has a huge impact on most Singapore companies. Singapore is a small place with 5.5 million people, which includes foreigners. There is a tight quota on foreign hires and it is getting increasingly difficult to hire locals who are interested in this line of work. To overcome this challenge, we have a close working relationship with educational institutions. I sit in one of the committees that review the curriculum for our industry to promote precision engineering and hope it will be a way to attract the younger generations.
Which are JEP Precision Engineering’s targets for the next 3 years?
The industry is currently moving towards a SMART factory concept, adopting automation and DATA driven systems to stay competitive in today’s challenging environment. For the next couple of years, we will be starting to introduce new technology concepts and equipment into our production. We will start by implementing automation on a small scale, such as robotic unloading and loading. Once the pilot run is successful, we will look at implementation on a larger scale.
We are installing two sets of flexible manufacturing systems (FMS), where two lines of five machines would be fully automated in our new facility. With this system in place, we will have less reliance on people and machine utilization will be improved at the same time. Keeping up with technology is no longer a choice but our key to survival in today’s competitive market. I think the beauty of adopting new technologies in our operations, is that productivity and quality will be improved. Automated data collection will help us in making effective decisions within our business. However, for successful adoption of new technologies, it is also important to work on changing people’s mindsets so that they become more accepting and open to new changes.