With its hi-tech processes and products, the concrete and cement supplier is breaking construction’s mould as a bricks and mortar industry
A noisy factory packed with cement-caked equipment and workers covered in choking dust are what one imagines a concrete and cement-mix manufacturing facility to look like. Not at Pan-United Corp, Singapore’s largest concrete and cement supplier, though. The 63-year-old company is recasting that stereotype with its swanky command and innovation centres at its Kaki Bukit headquarters.
Powered by Internet of Things (IOT) technology, Pan-United’s Innovation Centre and Command Centre were set up in 2012 and 2014 respectively. These were built well ahead of the current digitalisation wave which companies are forced to ride on because of the Covid-19 pandemic.
According to Pan-United CEO May Ng, that early push towards innovation came from a deep-seated desire to improve the way things were being done. “We were not satisfied with what and how we were going about our work, so we started looking at our processes to see how to do things differently,” Ng tells The Edge Singapore in a recent interview.
“How can we help our customers save time? How can we help our customers have all the information they need when they need it? These are the things where we can actually add value to,” explains Ng.
While scouting around for ways to improve the business, Ng drew inspiration from other industries. She saw hungry customers could order food without having to leave the house. Passengers could hail a cab without having to wait longingly under the hot sun. The positive reception to these offerings led Ng to think: “If consumers can have so much variety, choice and ease of goods and services, why can’t my business do something similar?”
This idea led to the development of goTruck!, a truck-hailing app which Pan-United rolled out to new customers last year. The platform matches the demand of heavy vehicles like tipper trucks and cement tankers with available supply, offering cost-savings and real-time tracking of their movements which is monitored at Pan-United’s Command Centre.
Ng says the centralisation of operations management has also brought about manpower savings of up to 45%. At the command centre, the movement of raw material products is also tracked round-the-clock: From the time they arrive in Singapore, their journey to the silos and thereafter to the batching plant where the specific type of concrete is made, and finally, to their ultimate destination — the construction sites.
At present, the command centre handles a high volume of data from its 30 plants scattered across 17 locations. Between these facilities, an average of 7,000 trips are made by Pan-United's concrete mixers on a daily basis before Covid-19 brought them to a juddering halt. The data is crunched through Pan-United’s AiR or Artificial Intelligence for Ready-mix Concrete platform which optimises operations across its batching plants, trucks, workers and even raw materials.
For instance, concrete mixers are now assigned via AiR to customers based on proximity and availability. Prior to AiR, customers had to manually compile information such as the type of concrete required, the quantity needed and the destination to be delivered to. So successful is AiR that Ng is now marketing the Software as a Service to other concrete companies.
More recently, Ng has also doubled down on technology to better cater to the needs of the construction sector during the pandemic. For starters, she believes innovation and digitalisation can play a leading role in enhancing safe distancing at construction sites as more firms look to resume operations without compromising the safety of workers.
In April, Pan-United introduced e-sampling which allows customers to ascertain the quality of the concrete mixes they order through the remote supervision of tests done at the batching plant. “Our e-sampling is totally contactless with governance in place and ensures the satisfaction of our customers,” Ng explains. Previously, the same tests were mostly carried out at the construction site and often involved as many as five people, she adds.
Another technovation is Pan-United’s electronic delivery orders and customer invoicing system which was rolled out in June. These processes do away with the physical collation and dispatch of physical documents, mitigating the risks of project delays while allowing for a more seamless workflow, Ng elaborates.
Designer concrete mix
Pan-United’s foray into technology is not just restricted to its processes. The company has also been innovating to provide better quality concrete to its customers. One such mix is its self-compacting concrete, dubbed PanU SCC, which was developed in 2008 even before the Innovation Centre was set up. Unlike regular concrete, PanU SCC does not require “compaction”, a noisy, laborious process performed to remove bubbles of air trapped when concrete is cast on an area. With PanU SCC companies can save on manpower and operate with lower noise levels so construction work can be carried out anytime of the day, says Ng.
And PanU SCC has become a big hit. The mix was used by iconic developments such as the Tanjong Pagar Centre, Singapore’s tallest building currently. To build this 64-storey building, 13,500 cubic metres of concrete — enough to fill five Olympic-sized swimming pools — were poured into its foundations for 41 hours straight. The volume is also equivalent of supplying one truck of concrete every 91 seconds throughout the duration.
To support construction works while fulfilling safe-distancing restrictions, Pan-united rolled out a new generation of PanU SCC in February. This improved mix requires one worker to guide the pumping pipe from which the concrete flows. Previously, seven workers were required to man each pump when regular concrete was used, Ng notes. The new mix also cuts the average time taken to cast concrete by 40%, thereby raising productivity by 75%, she adds.
Today, many of the company’s “magic mixes” are concocted at the innovation centre’s labs where research is conducted and different ingredients are melded together. Pan-United’s ability to conjure up new concrete mixes based on the customers’ needs stems from the company’s long history, rich experience, and, of course, having an intimate understanding of what the evolving market needs and wants.
Unsurprisingly, several of Pan-United’s mixes have been used to build Singapore’s iconic attractions, like the Helix Bridge which was constructed in 2010. The structural columns of the bridge — which go into below the river flowing below — uses PanU Watercrete. This designer mix enables concrete to be cast in water, unlike conventional concrete mixes which require water to be pumped out before structures can be filled.
Over at the Flower and Cloud Forest Domes, a key attraction of Gardens by the Bay, Pan-United’s PanU Green Concrete — a concrete mix with a high content of recycled raw materials — was used. The project is a key milestone in Pan-United’s sustainability journey because since then, all of the company’s concrete mixes contain some sort of recycled materials, says Ng. These include washed copper slag, a by-product from sandblasting ships to remove paint and rust.
Another interesting concrete mix Pan-United has developed is for the upcoming National Cancer Centre. For this, the company will use its PanU Shield in the centre’s proton therapy room. The high-density concrete mix is said to prevent radiation hazards.
Other projects the company has created special concrete mixes for include the upcoming Changi Airport Terminal 5, Thomson-East Coast Line and the Tuas Mega Port. Each of these infrastructure projects have different needs and will require a different type of concrete mix.
Ng uses the analogy of baking to explain how each mix is created. “If you add more of one ingredient or the temperature you use changes, the taste of the cake will be different. Just like that, you will get different kinds of concrete mix by using different ingredients,” she explains.
Hardware beginnings
Looking at Pan-United’s innovations, one may think of Ng as a seasoned engineer. However, the business graduate says she had to learn on the job when she started work right after graduation. Joining Pan-United, which was founded by her father, was a natural choice as it was expanding rapidly at that time. Despite being the daughter of the CEO, Ng says she was never given special treatment. She was told to just roll up her sleeves and get cracking. “My father tends to be more demanding of the people close to him,” she recalls.
“Having lived through the War, my father is hardworking and does not like to waste anything. When he sees an opportunity to save, he tries to seize it,” says Ng. The history of Pan-United dates back to Sept 1, 1958, when the older Ng started a hardware business called Hiap Soon and Company with three friends who pooled together their savings. Over time, the business branched into cement production and logistics and was re-named Pan-United.
An entrepreneur at heart, the older Ng sold youtiao or fried dough fritters in his younger days to supplement his family’s income. As arduous as this was, it forged in him a can-do attitude which saw him through his leadership of Pan-United. The younger Ng clearly embodies this same mindset, having worked her way up to become CEO. She started off in the finance department before taking on bigger tasks such as setting up its concrete business in 1990 and seeing the company through its listing in 1993. In 2011, she took over as CEO from her older brother Patrick who became deputy chairman.
While most companies seek growth by selling more of the same, Ng wants Pan-United to be a leading tech company in the concrete and logistics space. And this, she says, can be achieved with a mindset that challenges conventional thinking. “The concrete business is very interesting because we have the capability to research and further develop [products],” she mulls. For instance, waste and by-products can be used in the production of more sustainable concrete products, elaborates Ng.
Immediate challenges
Ng is now looking at how Pan-United’s products and processes can be improved to generate revenue and engage customers. Additionally, she is looking to disrupt the industry by changing the way things are done.
“This is a journey we are on to change the way we do things we typically take for granted, to better serve the industry and our customers,” she says. The way Ng sees it, she hopes for Pan-United to be a game changer for the industry while monetising its expertise – particularly in technology-based solutions – to benefit all operators.
Given Ng’s ambitious plans, the 52-year-old is not slowing or stepping down soon. However, she says there are no plans for the family to be active managers of the business forever either. “We have many talented people who are not from the family and who can bring the business to even greater heights,” she says. “I look forward to the day when they do that”.
Ng’s immediate concern is the coronavirus and the damage it has wreaked on the construction sector. The stay home notices and quarantine orders imposed on migrant workers has brought stalled operations in the construction sector. “We first have to make money,” she quips, adding that with limited financial resources, firms will not have enough liquidity to re-invest and fund their output. In 1HFY2020 ended June, Pan-United’s earnings plunged 97% to $277,000 from $9.1 million posted a year ago. On a fully diluted basis, earnings per share stood at 4 cents in 1HFY2020, down 97% from the $1.30 in 1HFY2019.
This follows a 53% year-on-year decline in revenue for 1H2020 to $190.4 million, due to the suspension and delays of construction activities and a lower revenue from its trading business. The company was also hit by a 38% decrease in its revenue from its concrete and cement business to $181.3 million. To cope with this, the company has imposed a wide-ranging cost-cutting exercise on items including raw materials and subcontracting expenses.
In spite of the bleak outlook, Ng believes Pan-United’s financial prudence and liquidity what is helping the company tide through this health-turned-economic crisis. With cash and cash equivalents of $92.9 million as at end June, up from $41.3 million a year ago, the company seems to have the financial means to see it through.
Looking ahead, Pan-United expects to receive more orders as construction activity picks up in Singapore, Malaysia and Vietnam — where its operations are concentrated. RHB Securities analyst Lee Cai Ling sees this as good news for the company. In particular, she foresees an expansion in its ready- mix concrete segment which is slated to grow in tandem with the pickup in construction activity. However, she cautions that a resurgence of Covid-19 cases, especially among the migrant workers who account for a substantial proportion of employees in the construction sector, can put a dent in Pan-United’s sustained operations.
As concerning as the situation is, it means that Pan-United will need to dive even deeper into technology as well as learn from disruptions in other sectors to see how best it can survive the crisis and set itself apart from the competition — just as it has been doing all this while.
