IT IS not often that companies here aspire to achieve an ultimate business target other than profit. But mainboard-listed Inter-Roller Engineering has a focus far beyond next year's bottom line.

The airport logistics systems provider aims to be a 'living company' that will survive its founders and thrive for generations, says the company's managing director Oon Chong Howe.

'The average life span of companies in Japan and the United States is about 12 years, but there are others like Sumitomo that have been around since 1590. We want to be one of those living companies' that survives generations,' declares Mr Oon.

Quoting from a book with the same title, Mr Oon explained that living companies share qualities such as the ability to adapt to their environment, form a persona, be tolerant and decentralised, and financially conservative.

'So if ensuring the company's survival requires Inter-Roller to be small at certain periods, we will remain small. We will not set targets like capturing a certain market share by a particular timeline, because we may over-stretch ourselves as a result. We are very sensitive to our external environment and we will seize any good opportunities that come along,' says Mr Oon.

Perhaps this is what drove Inter-Roller to transform itself from a factory automation and materials supplier in the 1980s to an airport logistics solutions provider today. The company specialises in designing and building airport logistics systems such as baggage handling, air cargo handling and in-flight catering systems.

Founded in 1979 by Yap Lem, Low Kok Hua and the late Chan Chin Wah, the founding members shared a common belief and laid the foundation for success through meritocracy. 'Meritocracy defines the way we operate at Inter-Roller. It has been instilled into our culture right from the beginning,' explains Mr Oon. Till this day, none of the family members of the founders are in the company.

Inter-Roller rode on Singapore's industrialisation drive to propel its business in its early years. Under Mr Yap's leadership over the years, Inter-Roller has become a significant player in the global airport logistics industry. In 2005, the baton was passed to the current CEO, Lim Yee Min, while Mr Yap remains on the board as deputy chairman.

Mr Lim explains that competition in factory and industrial automation was rife as most projects carried little engineering content. For example, the material handling system was a relatively simple one. There was little equipment design and value-add, thus making it easy for other suppliers to compete in terms of price.

'In the early years, our business focus was on industrial automation and the projects done were at a smaller value and scale. Our focus now is on airport logistics systems which are much larger in value and scale as well as more sophisticated in terms of engineering content and computer controls,' he says.

As a subcontractor, it clinched its first supply project with Changi Airport in the 1980s, and the company soon went on a regionalisation drive that saw it embarking on projects in Malaysia, Thailand, India and the Philippines.

'At that time, our management saw huge potential in airport development due to the rapid economic progress in this region, and set our sights on airport logistics,' explains Mr Lim.

This was followed by a breakthrough in 1995 when Inter-Roller clinched many airport projects in China worth several million dollars each. Today, the company stands as the non-Chinese firm with the most number of airport logistics projects in China.

Today, the worth of its projects typically ranges from US$2 million to over US$70 million. As at end-FY06, its total book order stood at $86 million, and Inter-Roller has since added another $28 million as of Feb 9. With all this work in hand, the group's after-tax earnings showed a hefty rise of 52 per cent to $25.7 million for 2006 while sales hit $147.6 million.

In spite of its success in providing basic airport logistics equipment such as conveyors and programmable logic controls for baggage handling systems, Inter-Roller soon realised that it had to develop its capabilities in high-level computer controls to fuel its growth. High-level computer controls serve to integrate an airport's baggage handling system with other airport and third party sub-systems such as airport management systems, security systems and airport maintenance systems.

That would allow Inter-Roller to move up the value chain, providing the full spectrum of computer software solutions for airport logistics systems. In 2006, Inter-Roller successfully completed the baggage handling system project for Tocumen International Airport in Panama, incorporating a complete high-level computer control system.

'Being a latecomer may not be a bad thing because we don't have the cumbersome problem of replacing old platforms,' notes Mr Oon. Inter-Roller, he adds, uses modern Web-based platforms which cut costs with shorter development time and reduced licence fees. Inter-Roller has just delivered its first complete software solution for baggage handling systems for an airport in Arizona, US. Besides this, the company also prides itself on its efficiency and quality service. Among the accolades it has won are a commendation from the International Civil Aviation Organisation (ICAO) for its excellent design, quality and on-time completion of the baggage handling system for the Tocumen International Airport.

Awarded by ICAO on behalf of the Tocumen International Airport Authority, the $9.5 million project was Inter-Roller's first in Latin America and took about 10 months to complete.

The company stationed a team of 20 project engineers in Panama for the project. 'We were told that Inter-Roller staff form the largest Singapore contingent in Panama,' says Mr Oon. The company is this year's winner of the Enterprise Award at the Singapore Business Awards.

To better meet customer requirements, Inter-Roller also performs simulation and scenario analysis to test the system design for baggage handling. In this way, adjustments can be made relatively easily without incurring a huge cost.

The key markets for the company in recent years have been Asia, China, Europe, Latin America and the Middle East. Across the globe, its share of the world baggage handling industry is still less than 10 per cent, meaning there's plenty of room for the company to grow. The company has set its sights on the US, which makes up half of the baggage handling market.

'Our people are the driving force behind our business. Without them, there would be no success story to tell,' Mr Lim said proudly of Inter-Roller's team of dedicated engineers and support staff.

《The Business Times》