Chapter 6 History of DENSO International Singapore
Humble Beginnings: Establishment of the Singapore Office & Expansion of Singapore Office
Singapore was an ideal location for DENSO's regional function and DENSO International Singapore Pte Ltd ("DISP") was established in 1995 as the Regional Aftermarket sales, service, and marketing center for the Asia Pacific region. The headquarters' purpose was to manage the business activities in the aftermarket sales, service, and marketing for the Asia Pacific.
After setting up the regional after-market functions in Singapore, DENSO considered the expansion of this regional role into various functions factoring many positive factors that make Singapore an ideal location for DENSO to establish its Asian headquarters, together with three other regional headquarters worldwide. Some of the few would be Singapore offering a proactive global free trade stance and the needed economic, social, and political stability. With these factors considered DENSO International Asia Pte Ltd (DIAS) was established in 1998 as the holding company with regional headquarter functions.
The office was also the Regional headquarter for DENSO companies in the ASEAN-Australia, Taiwan region.
DISP was in charge of managing the aftermarket business sales, service, and marketing of countries that are not included in the DENSO establishment part of the business expansion, such as Brunei, Hong Kong, Bangladesh, Sri Lanka , Myanmar, Cambodia, Middle East, etc., and is the leading distributor for Regional Aftermarket products like the Spark Plug and Bus air-conditioner. They were later engaged in developing and engineering Bus air-conditioner design and application.
DENSO Singapore contributed to Singapore's public transportation scene which was a massive milestone for the company. They started the business with local public transport sectors by contributing to the community with quality bus air-conditioner products, strong backend engineering support, and a service and maintenance team. The engineering team was sent to DENSO Japan's headquarters to enhance their skills and technical know-how.
A brief timeline run-through started in 1997 when they won the first bus air-conditioner unit contract from Singapore Bus Services, SBS, for 50 double-decker buses. In 1999, they won another contract with Trans Island Bus Services, TIBS, for 83 single-deck buses.
Business Milestone & Establishment of DENSO MTC.
Being the Asian headquarters, DENSO Singapore has played an active role in managing the region's production, sales, finance, and logistics functions, which has helped to improve the productivity and cost efficiency of the regional companies and our customers. The increasing free-trade agreement that was taking shape in ASEAN countries has resulted in changes in the regional production strategy in the centralization of the production of core products in certain countries. This has prompted the establishment of regional function, Logistics Management Centre (LMC), in DENSO Singapore to support the regional group companies in logistics management and improvement.
In 2002, DENSO Singapore introduced the first two-way returnable box scheme across countries to deliver automotive parts among the production plants among ASEAN countries. This is probably the first in Asia. Being a pioneer in the related industry and with years of experience, DENSO Singapore is proud to venture into having sustainable packaging materials for inter-company trades, which will contribute not only to cost competitiveness but also to environmental conservation by reducing paper carton boxes.
With that, the trial of the returnable boxes was so successful that in 2004 DENSO received project funding from the Japanese government, Ministry of Economy, Trade and Industry of Japan. This funding was used to start another regional returnable box project involving pallet-sized outer-packaging boxes and establishing a new system that helps with box inventory management and traceability. This new initiation helped spearhead the speedy and successful escalation of returnable packaging usage for inter-company trades among various ASEAN countries.
DENSO Singapore's further development and contribution to the industry was in 2000 when the DENSO Corporation's third Materials Technical Centre (MTC) was set up. MTC was introduced to promote local material purchasing support, which centralizes parts and material procurement for the regional group companies. In line with MTC's set-up, it moved its office to Science Park 2, with the establishment of its laboratory facilities for testing and verification of raw materials.
Continuous Improvement in Operations
In line with centralizing the production of core products in each country, coupled with increasing inter-company trades due to increasing free trade agreement among ASEAN countries, Re-invoicing of OE parts sales through DIAS (Complementation trade) has been introduced, to centralize foreign exchange (FOREX) risk in DIAS, as part of regional role. The complementation trade has also expanded gradually from ASEAN to other regions like India (2010), China (2011, North America (2013) and Europe (2014).
To support the complementation trade, in 2000, DENSO Singapore set up the Finance Treasury Center (FTC) for Asia to minimize regional financial costs through centralized forex and fund management.
Taking advantage of the advanced development of Singapore as a financial center, MTC further expanded its function as Finance Treasury hub to provide financial netting services to the APAC region in 2007, to ease efficient fund transfers among group companies. This function has also gradually expanded to group companies in other regions. In 2011, it has also further enhanced its function to provide Cash Management/Monitoring.
Services for regional group companies in APAC and India, further strengthen the strong foothold as a Finance hub regionally. Subsequently, it has also introduced the USD Fund management to provide global loans to group companies and create higher yields through fund investment.
In 2001, a joint venture with a manufacturing company in Saudi Arabia, Abdul Latif Jameel Co. Ltd, was set up as part of the organization’s development plans. This initiation helped to further expand our business network in the Middle East region.
In 2011, DENSO Singapore was tasked to manage the incorporation of DENSO Sales Middle East and North Africa (DSMN) in Dubai, United Arab Emirates. To prepare and process all the corporate, commercial, legal and compliance requirements for the business set up in Dubai Free Zone in close coordination with and support of the Headquarters. DIAS also sent key personnel to support the DSMN team to ensure coherent setup and functionality as DENSO SINGAPORE.
Streamlining Operations & Continuous Expansion
With increasing production facilities being established in Thailand, additional Asia Headquarter (DIAT) has been established in Bangkok, to help support the manufacturing related functions. This has prompted the transfer of some regional functions like Planning, Procurement, HR, IS and Material Procurement to the newly established Regional HQ, DIAT.
To streamline operation in Singapore, DISP merged with DIAS in 2008, with DIAS being the surviving entity to provide for better synergy and more efficient operations for DENSO in Singapore. DIAS continues to retain the Regional After-market, Finance and Logistics functions in Singapore. At the same time, DIAS has also explored other new opportunities.
In 2010, DENSO Wave established in Singapore the regional sales expansion in Auto-Data Capture products, such as handy scanner and QR related solutions, covering sales area in ASEAN, Hong Kong and India.
In 2013, with the strategy or having international procurement center closer to the production sites, news of the establishment of the Hong Kong Procurement Centre came about, where HK Procurement Centre purchase e-parts from mainly China to support DENSO plants in ASEAN and Europe and North America region.
Subsequently in 2013, After-Market sales in DENSO Singapore has also established our investment of "PIT & GO" shop in countries such as Myanmar, Cambodia where there is demand for complete car service, particularly for the used cars. Suitable identified dealers have been chosen and appointed as "PIT & GO" dealer, with full support from DIAS from establishment to training and development support.
In 2014, DENSO also implemented the Retrofit business for bus air-conditioner units. We have also established a Starter/ Alternator repair facility in Singapore for car makers, making it the first outside of Japan. It was also the year that marked the official expansion of OE Complementation Re-invoicing Trade, from Regional to Global, with support from DNJP.
In 2021, DENSO achieved a USD 1 Billion in Complementation for FY21.
Achievement of Automotive Business
Throughout the years, DENSO has expanded extensively particularly in the After-market sales. The sales segment has not only shown improvements but has also grown over the years. With the experience gained over the years from handling the projects, we have gained more extensive engineering knowledge and know-how on bus air-conditioning units, including close communication and various training at regional and global HQ.
Our engineers were trained to acquire sales and marketing knowledge as part of the DENSO plan to strengthen our sales capabilities. This training initiation has resulted in many sales engineers who could handle both the sales and technical aspects.
The strengthening of our capabilities has resulted in us beginning to work closely with various bus builders to supply them with high-quality DENSO air-conditioner products. In 2006, DENSO was awarded the bus air-conditioner unit contract for 200 VOLVO double-deck buses, and in 2007 we were awarded the unit contract for 500 Scania single-deck buses. With more experience accumulated, we were awarded the bus air-conditioner unit contracts for 400 MAN single-deck buses in 2013. In 2021, we won 100% of 3-door double-decker bus contracts for 50 units ADL.
These has strengthened the foundation for DENSO to move forward to challenge further and higher targets.