A contract manufacturer is trusted for what its plants do after the customer's auditor has gone home.
I am the chief operating officer of Kelvorne Precision Limited, a fictional Singapore-headquartered contract manufacturer listed on the SGX Mainboard. We build vacuum parts, ultra-high-purity gas-line weldments, frames and sub-assemblies to our customers' drawings, and about 71 per cent of our S$1.06 billion of revenue in 2025 came from makers of semiconductor equipment. I am responsible for 6,700 colleagues in five plants: Batu Kawan in Penang, Senai in Johor, Bac Ninh in northern Vietnam, our Woodlands cleanroom in Singapore and a smaller plant in Suzhou.
The customer owns the drawing. What we own is whether the part is right on a Tuesday night in Johor, whether the person welding it paid an agent for the job, and whether a line moved from China still runs once our trainers have flown home. I learnt this from both sides. I spent almost eleven years at Varunda Systems, a wafer-equipment maker that buys from companies like ours, the last four auditing its Asian suppliers, before I crossed over to run Kelvorne's Penang plant in 2013.
The decisions I am asked about most were the expensive ones. In 2021 and 2022 we repaid RM 15.8 million in recruitment fees that our migrant workers had paid to agents at home, money Kelvorne never received. In 2023 and 2024 we sent 138 weldment part numbers from Suzhou to Penang rather than to the cheaper Vietnamese site our chief executive preferred. Each time the cheaper course was defensible. I have tried to record, case by case, where my argument proved right and where I was simply lucky.
Recruitment fees repaid, not only prohibited
Between October 2021 and March 2022 we repaid RM 15.8 million, about S$5.1 million, to 1,412 migrant workers in Penang and Johor who had paid agents in their home countries. Voluntary attrition among those workers fell from 19 per cent to 11 per cent within a year.
A Suzhou transfer judged by its night shift
We moved 212 part numbers out of Suzhou in 2023 and 2024. The move took fourteen months and S$19.4 million, both over plan, but weldment first-pass yield in Penang reached 98.4 per cent on both shifts, and the plant won next-generation gas-line work worth about S$60 million a year.
A Vietnamese plant led by Vietnamese supervisors
Bac Ninh opened in August 2020, five months later than planned, with four expatriates instead of thirty, after 46 local supervisors and technicians trained in Penang. It reached planned output within seven months and earned S$150 million of revenue in 2025.
Quality cost nearly halved
Group cost of poor quality, counting scrap, rework, returns and customer charges, fell from 2.9 per cent of revenue in 2021 to 1.6 per cent in 2025.
Current focus
I am preparing the board's decision on a S$85 million third building at Batu Kawan for next-generation gas systems, including whether its welders should be recruited and certified before the building is finished rather than after. I am also extending our shared audit to a fourth customer.
Conversations I welcome
I am not seeking to leave Kelvorne. I would consider one independent non-executive directorship at an industrial company listed in Singapore or Malaysia, outside the semiconductor supply chain, joining its risk and sustainability committees. I can give about twenty-five days a year, with my board's consent and after a conflicts review, and I accept a few invitations to speak to manufacturing and director audiences.
