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THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN
CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT.
BUSINESS
OVERVIEW
Our Group is based in Singapore and is principally engaged in the sale of cleaning systems and
provision of centralised dishware washing services. Our businesses can be categorised into two major
segments, namely (a) sale of cleaning systems and other equipment business; and (b) provision of
centralised dishware washing and ancillary services business. Our cleaning systems business started in
2006 and we design, develop, manufacture and sell cleaning systems for various industrial end-use
applications to our customers mainly in Singapore and Malaysia. We also provide centralised dishware
washing since 2013 and general cleaning services since 2015 mainly for F&B establishments in
Singapore. According to the Euromonitor Report, our Group was ranked the fifth in the precision
cleaning equipment manufacturing market in Singapore in 2020, with a market share of approximately
2.0% in terms of revenue, and we ranked first in the precision cleaning equipment manufacturing market
in Malaysia in 2020, with a market share of approximately 27.0% in terms of revenue. We are also a
leading centralised dishware washing services provider in Singapore. According to the Euromonitor
Report, our Group was ranked the second in the dishware washing services industry in Singapore in
2020, with a market share of approximately 15.0% in terms of revenue.
The cleaning systems designed, developed, manufactured and sold by our Group can be generally
divided into two categories, namely precision cleaning systems and other cleaning systems. Our cleaning
systems are generally sold to HDD, semiconductors or industrial electronic equipment/product
manufacturers and are designed for cleaning of surfaces and product parts in various industrial end-use
applications. Leveraging on our engineering know-how and expertise, we are able to design, develop and
manufacture quality and customised products that suit our customers’ varying needs. Ancillary to our
sale of cleaning systems, our Group also manufactures and sells other equipment such as filtration units,
provides repair and servicing of cleaning systems and sells related parts.
For the years ended 31 December 2018, 2019 and 2020, our Group generated approximately
S$11.3 million, S$12.2 million and S$16.9 million of revenue from our sale of cleaning systems and
other equipment business, representing approximately 64.1%, 67.1% and 79.2% of our total revenue,
respectively.
In 2013, we began to provide centralised dishware washing services to mainly F&B establishments
in Singapore, such as food courts, hawker centres and restaurants. Leveraging on our expertise in
designing, developing and manufacturing cleaning systems, we set up our Hygieia Facility in 2014 with
semi-automated washing lines, which were designed and manufactured in-house, for our centralised
dishware washing operations. As at the Latest Practicable Date, we have four semi-automated washing
lines at our Hygieia Facility, of which two are for washing Halal dishware and the other two are for
washing non-Halal dishware. The Halal washing lines at our Hygieia Facility have obtained a Halal
certification, and are thus suitable for the washing of Halal dishware.
In 2015, we began to provide general cleaning services to food courts and hawker centres in
Singapore, which comprise off-site centralised dishware washing services and on-site cleaning services.
The on-site cleaning services are generally out-sourced to third party sub-contractors in order to focus
our resources on our core competencies. Ancillary to our centralised dishware washing services and
general cleaning services, we also lease dishware washing equipment to F&B establishments in
Singapore. In addition, we wholesale STICO anti-slip shoes to mainly F&B establishments in Singapore.
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THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN
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BUSINESS
For the years ended 31 December 2018, 2019 and 2020, our Group generated approximately S$6.3
million, S$6.0 million and S$4.5 million of revenue from our provision of centralised dishware washing
and ancillary services business, representing approximately 35.9%, 32.9% and 20.8% of our total
revenue, respectively.
The following table shows the breakdown of our Group’s revenue by business segments during the
Track Record Period:
Year ended 31 December
2018 2019 2020
S$’000 % S$’000 % S$’000 %
Sale of cleaning systems and other
equipment business 11,297 64.1 12,226 67.1 16,945 79.2
Provision of centralised dishware washing
and ancillary services business 6,334 35.9 5,993 32.9 4,452 20.8
Total 17,631 100.0 18,219 100.0 21,397 100.0
The following table sets out the breakdown of our Group’s revenue by geographical locations of
our customers during the Track Record Period:
Year ended 31 December
2018 2019 2020
S$’000 % S$’000 % S$’000 %
Singapore 11,449 64.9 8,494 46.6 5,527 25.8
Malaysia 3,668 20.8 4,771 26.2 12,289 57.4
Others (Note) 2,514 14.3 4,954 27.2 3,581 16.8
TOTAL 17,631 100.0 18,219 100.0 21,397 100.0
Note: For the years ended 31 December 2018, 2019 and 2020, other countries include Hong Kong, Australia, the U.S.,
Thailand, Belgium, Philippines, India, South Korea, Indonesia, Taiwan, South Africa, Argentina, Colombia,
Cambodia and the PRC.
COMPETITIVE STRENGTHS
We have a long and proven track record in precision cleaning in Singapore
We have been providing cleaning systems to our customers for over 13 years and have
accumulated extensive industry experience. We believe our strong R&D and engineering capabilities
enable us to design, develop and manufacture quality precision cleaning systems and other cleaning
systems for various industrial end-use applications, which are catered to each of our customers’ needs.
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BUSINESS
According to the Euromonitor Report, our Group was ranked the fifth in the precision cleaning
equipment manufacturing market in Singapore in 2020, with a market share of approximately 2.0% in
terms of revenue, and we ranked first in the precision cleaning equipment manufacturing market in
Malaysia in 2020, with a market share of approximately 27.0% in terms of revenue.
Our business achievements can be demonstrated by a number of awards and certificates awarded to
us. In April 2018, JCS was awarded the Singapore Quality Class Certification by Enterprise Singapore,
which validates JCS’s commitment towards continuous improvement and sustainable business
performance and commendable management practices. The management system of JCS has also been
assessed as conforming to ISO 9001:2015 and ISO 45001:2018 for design, manufacture, supply,
installation and serving of integrated cleaning systems.
We believe our strong track record in precision cleaning will facilitate the promotion and demand
for our products with both existing and new customers, as well as the expansion of our business. We
will continue to develop products for different industrial end-use applications and to meet the needs of
our customers across various industries by expanding our product portfolio.
We have stable relationships with our major customers
Since 2006, we have developed stable relationships with our major customers and we believe that
our engineering know-how and ability to design, develop and manufacture customised cleaning systems
to meet our customers’ requirements and specifications and our ability to provide centralised dishware
washing services have been the key drivers for them to appoint us as their suppliers over the years.
We have maintained stable business relationships with a majority of our major customers. During
the Track Record Period, our top five customers included renowned HDD manufacturers, a public
transportation operator and F&B establishment operators in Singapore, of which three of them have
more than 10 years of business relationships with us. Our Directors believe that certain customers, such
as multinational corporations, may have stringent selection processes for their suppliers and we have had
to meet certain criteria and audit checks before becoming an approved qualified supplier. We believe
that as we have successfully passed the qualification processes of such customers, this will assist us in
maintaining our established relationships with these customers and in providing continued opportunities
for us to manufacture and sell cleaning systems and/or provide centralised dishware washing services to
them.
We have an experienced team with strong R&D and engineering capabilities that allow us to
design and develop customised products to cater to our customers’ needs
We have an experienced R&D and engineering team led by Mr. Zhao Liang, who is also a member
of our senior management team. Our Directors believe that our Group has strong in-house R&D and
engineering capabilities to design high quality precision cleaning systems and other cleaning systems
customised to meet the standards and particular needs of our customers, including HDD, semiconductors
and industrial electronic equipment/product manufacturers. As at the Latest Practicable Date, our R&D
and engineering team has nine members and five of them have obtained a bachelor’s degree in
engineering.
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BUSINESS
With our strong R&D and engineering team, we are able to design and develop customised
cleaning systems catered to our customers’ requirements and specifications. Against the backdrop of
Industry 4.0 and an increasing demand for digitalised and automated machinery in the manufacturing
space, we have entered into collaborations with a customer, as well as other parties, to develop new
customised cleaning solutions. In addition to previously co-developing a high performance dryer with
one of our customers, we have also developed an initial prototype of a robot floor scrubber, which
comprises a robotic enhancement that can be attached to a floor cleaning equipment, which will then
enable such floor cleaning equipment to be used without manual operation. Following from this, we
have entered into a collaboration with a statutory board whose functions and duties include the
management and operation of the segment of the public transportation system in Singapore which
Customer A is engaged in (‘‘Collaboration Partner’’) to co-develop an autonomous train interior
cleaning robot, which is capable of cleaning the floor of the interior of public trains autonomously based
on the train type and car configuration. Our Directors believe that such customised cleaning systems and
collaborations demonstrate our customers’ belief in the strength of our R&D and engineering
capabilities. Please refer to the paragraph headed ‘‘Research and development’’ in this section for
further details of our R&D and engineering capabilities.
We have an experienced management team
We have an experienced management team, led by Ms. Hong, our Chairwoman and executive
Director and one of our founders, who has been instrumental in spearheading the growth of our Group.
Ms. Hong has over 16 years of experience in the cleaning solutions industry in Singapore and she is
primarily responsible for planning and execution of our Group’s business strategies, including product
development, as well as managing our Group’s relationships.
Our Group is supported by a senior management team with substantial experience in the cleaning
solutions industry. Our senior management team includes members such as Mr. Zhao Liang, who is the
head of our R&D and engineering team and has over 13 years of experience in the precision cleaning
equipment industry.
For details of the profiles of the senior management team, please refer to the paragraph headed
‘‘Directors, Senior Management and Employees — Senior management’’ in this document.
BUSINESS STRATEGIES
We intend to expand our business and strengthen our market position in the cleaning systems
industry in Singapore, Malaysia and other countries and the centralised dishware washing services
industry in Singapore by implementing the following business strategies and future plans.
Expand our product portfolio and R&D and engineering team
We believe that our R&D capabilities and engineering expertise are vital in maintaining our long-
term competitiveness and driving our business growth. According to the Euromonitor Report, Industry
4.0 is the current trend of the automation of industrial manufacturing and it has been an ongoing process
in Singapore. As part of the Industry 4.0 initiatives, the Singapore Government has allocated investment
into R&D projects that speed up industry transformation projects to help local manufacturers undergo
the industry transformation. Such ongoing initiatives help create the demand for both digitalised and
automated machinery in the manufacturing space.
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BUSINESS
(1) Expand our product portfolio
We have a long track record in the manufacture and sale of precision cleaning systems and other
equipment and we are committed to continue building up our R&D and engineering capabilities so as to
align ourselves with the Industry 4.0 initiatives and to cope with the continuously increasing standards
and requirements of our customers. Going forward, against the backdrop of Industry 4.0, our Directors
expect a growth in demand for total automation products and solutions and we intend to leverage on our
established reputation, engineering know-how as well as industry expertise to capture opportunities
arising therefrom. In this regard, we intend to further grow our automated cleaning systems and
equipment segment by expanding our product portfolio and developing cleaning systems which can be
used across various industries for industrial and/or commercial uses.
To expand our product portfolio and as part of our R&D efforts, we have developed an initial
prototype of a robot floor scrubber, which comprises a robotic enhancement that can be attached to a
floor cleaning equipment, which will then enable such floor cleaning equipment to be used without
manual operation. The development of this initial prototype had led us to enter into a collaboration with
our Collaboration Partner, to co-develop an autonomous train interior cleaning robot which is capable of
cleaning the floor of the interior of public trains autonomously based on the train type and car
configuration. Our Group intends to further develop, build on and customise our initial prototype of a
robot floor scrubber to develop an autonomous train interior cleaning robot, which can operate in the
required space and configuration of public trains, for the collaboration with our Collaboration Partner.
Pursuant to the terms of the collaboration, the collaboration was initially agreed to be for a period
of 12 months from 30 April 2019. We had agreed with our Collaboration Partner to extend the timeline
and in-house testing of the functions of the parts and components of the prototype of the autonomous
train interior cleaning robot was conducted in the second to third quarter of 2020. The operator training
and documentation, as well as the final project report for the development of the autonomous train
interior cleaning robot, are to be completed in the fourth quarter of 2020. As at the Latest Practicable
Date, we had conducted the final on-site testing of the autonomous train interior cleaning robot at the
train depot and had submitted the final progress and project report to our Collaboration Partner.
Under the terms of the collaboration, our Group provides in-kind contribution by undertaking the
agreed scope of work to develop the autonomous train interior cleaning robot, which includes
conducting the engineering study and data collection, prototyping and system testing, whereas our
Collaboration Partner provides monetary funding. The total value of the project is S$350,000. We had
incurred approximately S$272,000 of investment cost for development of the autonomous train interior
cleaning robot as at 31 December 2020. Our Directors do not anticipate that the investment cost for the
project will exceed the project value and thus we do not intend to use the net [REDACTED] from the
[REDACTED] for the development of the autonomous train interior cleaning robot.
Further, under the terms of the collaboration, the intellectual property rights developed jointly by
the parties in the course of the project belong to our Group (save for those developed solely by any
party or its personnel without contribution from the other party, which shall be the sole and exclusive
property of such party). In addition, we grant our Collaboration Partner an irrevocable, non-exclusive,
royalty-free perpetual licence to use the intellectual property for certain purposes, including non-
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BUSINESS
commercial, research, development and academic purposes. Accordingly, the intellectual property and
design of the autonomous train interior cleaning robot developed by our Group under the project can be
further customised for other uses in the future, including for commercial sale and use in other industries.
We believe that this collaboration to develop a new and technologically-advanced cleaning system
demonstrates our Collaboration Partner’s belief in the strength of our R&D and engineering capabilities.
Our Group intends to develop and commence commercial sale of the autonomous train interior cleaning
robot to Customer A, a public transportation operator in Singapore, by mid 2021. Customer A currently
operates train lines covering over 148 kilometers of rail tracks across 106 stations with more than 250
trains in Singapore. Total ridership of its trains amounted to approximately 830 million in 2019.
Furthermore, we have an existing business relationship with Customer A, our Group’s largest customer
for the year ended 31 December 2018. The sale of cleaning systems used for the cleaning of the train
exteriors to Customer A accounted for approximately 19.1% of our total revenue for that year. The sales
to Customer A during the Track Record Period were not related to such collaboration for the
autonomous train interior cleaning robot. Our Directors believe the extensive operations of Customer A
will provide ample demand for the commercial sale of the autonomous train interior cleaning robot.
Following the development and commercial sale of such autonomous train interior cleaning robot
for the public transportation industry, we intend to leverage on our know-how from the design and
development of the autonomous train interior cleaning robot to expand our product portfolio by further
developing autonomous robot floor scrubbers of varying sizes and functionalities to cater to potential
customers in other industries, including industrial properties (such as manufacturing facilities, factories
and offices), commercial properties (such as medical centres, shopping malls, commercial buildings and
hotels) and F&B establishments (such as food courts and hawker centres). Our Directors believe that as
such properties are typically larger in size, with higher footfall and/or more stringent requirements for
hygiene and cleanliness, such industrial and commercial properties are more likely to require automated
cleaning equipment in order to reduce the manpower required for cleaning, given that cleaning is labour-
intensive in nature, and to ensure consistency in the standards of cleanliness. Our Group expects to
develop and commence commercial sale of the autonomous robot floor scrubbers for industrial
properties, commercial properties and F&B establishments by the second half of 2022. Whilst our Group
has not yet commenced the development and/or marketing of such autonomous robot floor scrubbers for
such potential customers, our Directors believe that the increasing awa7reness of hygiene standards and
the growth in demand for total automation products and solutions as well as the increasing labour cost in
Singapore will drive the demand for our Group’s autonomous robot floor scrubbers in the future.
In particular, our Directors believe that we will be able to market and sell the autonomous robot
floor scrubbers to our existing customers in the F&B industry for our centralised dishware washing and
ancillary services, given that such customers are already using our products and services to automate the
dishwashing process at their respective F&B establishments and commercial properties. Based on the
Euromonitor Report, there is a push by the Singapore Government for Industry 4.0 initiatives to elevate
productivity in the F&B services sector, including the introduction of centralised dishwashing services at
hawker centres, allocating investment into research and development (R&D) projects that speeds up
industry transformation projects and strengthening the workforce’s skillsets, to boost productivity in the
face of manpower challenges in the F&B industry. In light of the fact that such push will drive a growth
in the dishware washing cleaning sector, our Directors consider that there will also be a corresponding
increase in demand for other automation cleaning products and solutions by F&B establishments. On the
other hand, our existing customers, such as cookhouses, eldercare homes and hospitals that we have
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BUSINESS
provided centralised dishware washing and ancillary services, may become our potential customers for
the sale and marketing of the autonomous robot floor scrubbers in the future. Our Directors believe that
we can leverage on our existing customer base to market and sell the autonomous robot floor scrubbers
in place of or to supplement our on-site cleaning services, whilst still retaining the customer base for our
centralised dishware washing services. Our Directors believe that there will be sufficient demand for the
autonomous robot scrubbers, which will also reduce our reliance on third party sub-contractors given
that our on-site cleaning services are generally outsourced to third party sub-contractors in order to
focus our resources on our core competencies, and therefore the autonomous robot scrubbers will not
cannibalise our general cleaning services business. According to the Euromonitor Report, the
autonomous robotic cleaning equipment industry is relatively new in Singapore. This is seen as a
potential solution for the labour squeeze in Singapore’s cleaning force, especially for the commercial
property and F&B cleaning sectors. Since the industry is still in its fast-growing stage in 2020, with a
strong push due to the COVID-19 pandemic which boosted up the demand on unmanned cleaning
solutions for commercial properties and public spaces in Singapore, the overall industry is expected to
grow at a CAGR of 30.5% in 2021 to 2025. With the launch of grants and incentives to companies for
adoption of the technology (for example, the Ministry of Education (MOE) of Singapore has put out a
tender to have these cleaning robots in school), the growth of the industry is supported by the Singapore
Government. It is also expected that there will be further advancement in cloud infrastructure, artificial
intelligence, and 5G that will make the robots more attractive and cost competitive. Accordingly, our
Directors believe that there will be sufficient market demand for the commercial sale of the autonomous
robot floor scrubbers for the public transportation, F&B and other industries.
Accordingly, following the collaboration with our Collaboration Partner, we intend to leverage on
our know-how from the design and development of the autonomous train interior cleaning robot to
acquire the necessary components and parts and engage in R&D efforts in order to further develop,
refine, test and adapt the autonomous robot floor scrubbers of varying sizes and functionalities for
commercial sale and use in other industries using approximately HK$[REDACTED] (equivalent to
approximately S$[REDACTED]) of the net [REDACTED] from the [REDACTED], details of which are
set out below. We intend to utilise the net [REDACTED] from the [REDACTED] to develop, refine, test
and adapt the autonomous robot floor scrubbers of varying sizes and functionalities, including
autonomous robot floor scrubbers for industrial properties, commercial properties and F&B
establishments. Such amount is expected to be sufficient to do so as it is not intended that the net
[REDACTED] from the [REDACTED] will be used for the commercial production and manufacture of
such autonomous robot floor scrubbers.
Expand our product portfolio by further developing, refining, testing and adapting S$’000
our autonomous robot floor scrubbers for commercial sale and use in other
industries:
— Industrial design and mechanical engineering [REDACTED]
— Production tooling cost for plastic enclosure [REDACTED]
— Production cost for mechanical enclosure and structure components [REDACTED]
Total [REDACTED]
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(2) Expand our R&D and engineering team
We believe our engineering know-how is the key to our success and we plan to increase our R&D
efforts in order to support the expansion of our product portfolio and strengthen our competitive edge.
Accordingly, we intend to increase our manpower by hiring at least three engineers for our R&D and
engineering team.
Our R&D and engineering team has limited manpower and while engineers from a research
institute in Singapore had previously been seconded to our Group to help with our R&D and engineering
works, such secondment arrangements have ended as at the Latest Practicable Date. As such, we believe
that recruiting our own engineers will be more effective in building up our in-house capabilities and to
strengthen our R&D capabilities and engineering expertise in the long run.
In this regard, we intend to expand our R&D and engineering team by hiring a software engineer
and two mechanical engineers. The software engineer will develop software programs to be applied in
our cleaning systems. We also intend to hire two mechanical engineers to support our R&D efforts and
projects from time to time, including the development of our autonomous robot floor scrubbers, whose
role will include, amongst others, evaluating the performance of mechanical components and devices,
overseeing the management of customers’ requirements and ensuring that our cleaning systems are safe,
reliable and efficient.
Our Group plans to recruit these three engineers with at least a bachelor’s degree in engineering
and at least two years of relevant experience by end of 2022 in order to build up our R&D and
engineering team. This will enable our Group to take on more R&D projects and expand our product
portfolio, thus improving variability to take on new market opportunities. We intend to finance the
recruitment of the three engineers using internal resources of our Group.
Strengthen our production capability for cleaning systems and other equipment
According to the Euromonitor Report, there is expected growth at a CAGR of approximately
10.7% from 2021 and 2025 in respect of the manufacture of precision cleaning equipment in Singapore.
The growth will largely be driven by the expansion in the electronics sector in Singapore. We strive to
leverage on this upward trend so as to strengthen our market presence in the cleaning equipment
manufacturing industry by taking on more projects. Our ability to strengthen our production capabilities
and expand our product portfolio, as well as take on more projects concurrently is dependent on,
amongst others, us having sufficient and quality machinery and equipment. We intend to achieve this by
purchasing upgraded or new production machinery and equipment for our JCS Facility.
Accordingly, we intend to utilise part of the net [REDACTED] from the [REDACTED] to acquire
the following machinery and equipment to replace the existing ones used at our JCS Facility:
(a) a new vertical machining centre to replace the existing one used at our JCS Facility which
has fully depreciated and is past its useful life. Such new vertical machining centre will be
equipped with an automatic workpiece measurement system and higher spindle speed, and
thus will have better accuracy and a higher cutting rate of up to 20 metres per minute, which
will improve the machining process with 40% higher efficiency, hence increasing the
production capacity by about 40%; and
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(b) a new CNC lathe machine to replace the existing one used at our JCS Facility which has fully
depreciated and is past its useful life, which will improve the turning process with higher
efficiency and productivity. The new CNC lathe machine will be equipped with higher
spindle motor power to machine tougher materials and achieve a cutting speed 30% faster
than our existing machine, hence increasing the production capacity by about 30%;
As at the Latest Practicable Date, we do not have a laser welding machine or a wire cutting
machine at our JCS Facility. Accordingly, we intend to utilise part of the net [REDACTED] from the
[REDACTED] to acquire the following machinery which have better features and functions to strengthen
our production capabilities:
(a) a laser welding machine, which will enhance quality finishing and high precision welding
application as the laser beam permits accurate micro-welding of a wide range of metals and
miniature components such that the parts have minimal deformity or distortion, hence
increasing the production capacity by 100%; and
(b) a wire cutting machine, which will increase our engineering capability as such wire cutting
machine is able to cut workpieces of up to 100 mm thickness and is able to produce 16 times
higher output compared to laser cutting technology, with higher precision accuracy of within
0.005 mm. A wire cutting machine is also able to achieve better surface finishing and will
improve productivity as less secondary processes are required to finish the workpieces and
reduce our dependency on sub-contractors, hence increasing the production capacity by
100%.
In addition, we intend to utilise part of the net [REDACTED] from the [REDACTED] to purchase
an additional laser cutting machine with an updated software system, which will reduce our dependency
on sub-contractors for the cutting of workpieces and increase our productivity by 100%, reducing the
outsourcing lead time and sub-contracting costs.
In particular, as we typically outsource the cutting of thicker steel plates to our subcontractors, the
new wire cutting machine and the additional laser cutting machine we intend to acquire will enable us to
undertake a larger quantity of workpieces in-house and will allow us to reduce the sub-contracting lead
time and costs. The aggregate sub-contracting fees paid by us for the cutting of steel plates amounted to
approximately S$0.3 million, S$0.4 million and S$0.8 million for the years ended 31 December 2018,
2019 and 2020, respectively. Our Directors believe that being able to undertake the cutting of a larger
quantity of steel plate in-house and reducing the sub-contracting lead time will improve our production
efficiency and allow us to have better quality control during the production process.
Furthermore, our Directors further believe that the above machinery and equipment with new
technologies will enhance our production capabilities and enable our Group to venture into potential
industries such as medical equipment, aerospace and life sciences industries, which generally require
higher level of precision cleaning standard. Ownership of such machinery and equipment will also
enable us to have greater control over the upkeep and maintenance, as compared to outsourcing which is
usually subject to the availability of the required machinery or equipment from suppliers or sub-
contractors and/or quality or maintenance issues. Possesing such machinery and equipment will also
reduce our sub-contracting costs, the lead time for our production and manufacturing process, as well as
mitigate potential increases in such expenses.
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Due to the specialised nature of such machinery and equipment which are specially designed and
fabricated for use in our manufacturing process, there is no ready market for the rental of such
machinery and equipment. The below table sets out the comparison of the approximate hire purchase
costs for the lease of such machinery and equipment (if we were to enter into arrangements with hire
purchase lenders for up to 80% of the purchase price of the machinery and equipment for a five-year
period and acquisition of such machinery and equipment (if available)), taking into account the sum of
the approximate monthly depreciation (based on the straight-line method of the estimated useful life of
the machinery and equipment) and approximate interest and payments, is set out in the table below:
Type of machinery Approximate Approximate Total Costs
and equipment Units to be purchase hire purchase Savings
S/N to be purchased Function purchased price (A) (S$) costs (B) (S$) (B–A) (S$)
1. Vertical machining centre Employs the use of an automatic 1 155,000 166,160 11,160
workpiece measurement system and
higher spindle speed for higher
cutting rate and surface quality
2. CNC lathe machine Employs higher spindle motor power 1 92,000 98,600 6,600
and technology for faster and better
turning performance
3. Laser welding machine Employs the use of laser technology to 1 300,000 321,600 21,600
weld metal pieces whilst
maintaining quality and reducing
deformity
4. Wire cutting machine Employs the use of technology to cut 1 120,000 128,600 8,600
thicker workpieces with enhanced
finishing quality
5. Laser cutting machine Employs the use of technology to cut 1 210,000 225,100 15,100
workpieces
Based on the above comparison, the approximate hire purchase costs is greater than the estimated
purchase price of the machinery and equipment we intend to acquire. Our Directors believe that it is
more economical for our Group to purchase rather than enter into hire purchase arrangements for the
lease and acquisition of the relevant machinery and equipment. We intend to utilise approximately
HK$[REDACTED] (equivalent to approximately S$[REDACTED]) of the net [REDACTED] from the
[REDACTED] to acquire such additional machinery and equipment to strengthen our production
capabilities.
Improve the production efficiency of our centralised dishware washing services business
According to the Euromonitor Report, we are one of the leading players in the centralised dishware
washing services market in Singapore, with a market share of approximately 15.0% in 2020. There is
also an expected growth at a CAGR of approximately 19.7% from 2021 to 2025 in respect of the
dishware washing market in Singapore due to factors such as sustained increase in F&B services
consumption, the Singapore Government’s drive to develop the centralised dishware washing market and
persistent manpower shortages. Further, manufacturing companies in Singapore have also been
encouraged to integrate Industry 4.0 initiatives and created demand for digitalised machinery which
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would have an impact on the centralised dishware washing industry. Accordingly, we intend to leverage
on the upward trend as well as to benefit from the ongoing Industry 4.0 initiatives so as to maintain our
competitiveness.
We currently provide centralised dishware washing services whereby we or a third party logistics
services provider would collect the soiled dishware from our customers’ premises, which would then be
transported to our Hygieia Facility and washed using our semi-automated washing lines. In this regard,
based on our current operational flow, we would still require manpower to assist in the unpacking and
loading of soiled dishware, crockery and utensils from the respective tubs and trolleys onto the washing
lines. As such, we intend to further improve and enhance the dishware washing process so that we can
reduce our reliance on manpower.
We intend to upgrade our centralised dishware washing operations in order to improve the
dishware washing process and enhance our efficiency by acquiring a new fully-automated washing tray
stacker to upgrade one of the existing washing lines at our Hygieia Facility, which will enable us to
automate the unloading process by automatically stacking up tubs and will reduce the manpower
required to unload, stack and transfer the tubs and also the likelihood of any work-related injuries.
Due to the specialised nature of the automated washing tray stacker, this will be specially designed
and fabricated for our centralised dishware washing operations, and there is no ready market for the
rental of such automated washing tray stacker. In light of the above, a comparison of the approximate
hire purchase costs for the lease of the automated washing tray stacker (if we were to enter into an
arrangement with a hire purchase lender for up to 80% of the purchase price of the automated washing
tray stacker for a five-year period and acquisition of such automated washing tray stacker (if available)),
taking into account the sum of the approximate monthly depreciation (based on the straight-line method
of the estimated useful life of the machinery and equipment) and approximate interest and payments, is
set out in the table below:
Approximate Approximate
Type of machinery purchase Approximate hire Total Costs
and equipment to Unit to be price purchase purchase Savings
be purchased or purchased or per unit price (A) costs (B) (B–A)
upgraded Function upgraded (S$) (S$) (S$) (S$)
Fully-automated Employs the 1 99,500 99,500 106,660 7,160
unloading application of an
washing tray auto-stack
stacker mechanism to stack
tubs
Based on the above comparisons, the approximate hire purchase cost is greater than the estimated
purchase price of the automated washing tray stacker we intend to acquire. Our Directors believe that it
is more economical for our Group to purchase rather than enter into the hire purchase arrangement for
the automated washing tray stacker.
In addition to the purchase of such new automated washing tray stacker, we also intend to further
improve our productivity by purchasing RFID tags to be installed on some of the tubs for our centralised
dishware washing operations. We intend to install the RFID readers and the smart management tracking
software system on one of the washing lines at our Hygieia Facility, which will enable us to identify and
track the tubs when they are transported to and from our Hygieia Facility and the time taken to wash
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each tub. The smart management tracking system comprises a gantry that can monitor and read RFID
tags attached on the tubs to identify and track the tubs, which will reduce the manpower to do so and to
improve productivity.
Upgrading the existing washing line will enable us to enhance our efficiency by automating the
tray unloading process, which will reduce the manpower required and re-assign one staff from tray
unloading to other tasks, thereby resulting in cost savings of approximately S$18,800 per year, as well
as improve our productivity by identifying and tracking the tubs.
We intend to utilise approximately HK$[REDACTED] (equivalent to approximately
S$[REDACTED]) of the net [REDACTED] from the [REDACTED] to acquire such new machinery and
equipment to upgrade one of the existing washing lines at our Hygieia Facility, details of which are set
out below.
Acquire new machinery and equipment to upgrade the washing line at our Hygieia S$’000
Facility:
— Automated washing tray stacker [REDACTED]
— RFID tags and software system [REDACTED]
Total [REDACTED]
Our Directors believe that the proposed enhancement of the production efficiency of our Hygieia
Facility by upgrading one of the existing washing lines will strengthen our market position in the
centralised dishware washing services industry, which will be beneficial to our Group for the following
reasons:
(a) Offering generally stable revenue and cash inflow
Notwithstanding that the provision of centralised dishware washing and ancillary services
business has low gross profit margin of approximately 2.2%, 4.4% and 0.4% for the years ended 31
December 2018, 2019 and 2020, respectively, our Directors consider it is still beneficial to our
Group as a whole to enhance the efficiency of the operation of such segment because this segment
offers stable revenue and cash inflow for our Group. In addition, the exceptionally low gross profit
margin for the year ended 31 December 2020 was mainly due to the impact of the COVID-19
outbreak, which is expected to be temporary. We typically enter into service contracts for a period
of one to two years with the F&B establishment operators for the provision of centralised dishware
washing and general cleaning services. Pursuant to such contracts, we generally charge a fixed
monthly fee for our services regardless of the actual volume of dishware being washed. Such
contracts allow our Group to receive generally stable revenue and cash inflow throughout the term
of the contracts. Although our sale of cleaning systems and other equipment business generates
higher gross profit margin of approximately 38.4%, 35.6% and 32.7% for the years ended 31
December 2018, 2019 and 2020, respectively, such sales are on an order-by-order basis and such
orders are non-recurring in nature. Therefore, the revenue and cash inflow of such segment may
fluctuate significantly from time to time. Consequently, the two business segments of our Group
complement each other, allowing our Group to achieve satisfactory gross profit margin on one
hand, while maintaining generally stable cash inflow on the other hand. In view of the aforesaid,
our Directors consider it beneficial to our Group as a whole to develop both business segments.
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(b) Capture the increasing market demand and untapped market potential for centralised
dishware washing services
Based on the Euromonitor Report, the dishware washing services market in Singapore is
expected to grow at a CAGR of approximately 19.7% from 2021 to 2025, driven by the rising F&B
services consumption due to reasons such as rising incomes, changing lifestyle habits and lack of
dishwashing manpower. There is also an expected growth due to the remaining market potential to
be tapped, the Singapore Government’s drive to develop the centralised cleaning services sector
and persistent manpower shortages in the cleaning industry. In addition, the Euromonitor Report
also highlighted that there remains untapped market potential from new revenue sources due to
approximately 80% of the potential dishware washing services market in Singapore remaining
untapped, with hotels and venues such as convention centres as new target market segments, and
education and civil and defence organisation potentially providing long-term opportunities. In light
of this increasing market demand and untapped market potential, as well as the high utilisation rate
of the existing non-Halal washing lines of our Group, our Directors consider it commercially
justifiable for us to strengthen our presence in the centralised dishware washing services market in
Singapore by enhancing the efficiency of our Hygieia Facility so that our Group is able to
maximise our exposure to potential business opportunities and new customers associated with the
forecasted industry growth and remain competitive against other market players. Our Group has
also expanded outside of the F&B market, and has established our presence in other sectors with
customers such as cookhouses, health and eldercare service providers and in-flight catering
services providers over the years. Our Directors believe that we are well-placed to capture the
increasing market demand as our Group is one of the leading players in the centralised dishware
washing services market in Singapore and there is strong customer demand for our centralised
dishware washing services, given that the average utilisation rates of the existing washing lines at
our Hygieia Facility had reached their full capacity of 100% during peak hours for the years ended
31 December 2018 and 2019.
(c) Leverage on our existing customer base to expand our business
Our Directors believe that our Group is able to procure more contracts for general cleaning
services, which comprise off-site centralised dishware washing services and on-site cleaning
services, by leveraging on our existing customer base. As we specialise in centralised dishware
washing services, our customers have appointed our Group as the main contractor for general
cleaning services as we are able to provide integrated cleaning solutions and services for their food
courts or hawker centres. In particular, two of our major customers during the Track Record Period
are food court operators in Singapore, with Customer Group C operating 66 food courts, 11 coffee
shops and 10 hawker centres and Customer Group D operating 13 food courts in Singapore as at
the Latest Practicable Date. As at 31 December 2020, we provided general cleaning services to
three and three F&B establishments of Customer Group C and Customer Group D, respectively,
and have already established business relationships with them from 2015 and 2017, respectively.
Our Directors believe that such existing customers are likely to engage our Group as the main
contractor for general cleaning services for more of their food courts, coffee shops or hawker
centres, if we are able to undertake more contracts for the provision of centralised dishware
washing services, given that we have already established stable business relationships with such
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customers and built up our market reputation. Thus, our Directors consider it commercially
justifiable to expand the capabilities of our Hygieia Facility in order to expand our provision of
centralised dishware washing and ancillary services business.
(d) Bolster the revenue streams for other business segments
In addition, our Directors believe that improving the efficiency of our Hygieia Facility will
enable us to undertake a larger number of general cleaning services contracts with both new and
existing customers and sub-contractors will also bolster the revenue streams for our sale of
cleaning systems and other equipment and leasing of dishware washing equipment business
segments as our Group will be able to offer our other products and services to a larger pool of
customers and sub-contractors. This is because both our customers and sub-contractors for our
general cleaning services contracts also require dishware washing equipment for their respective
operations and may potentially purchase and/or lease cleaning systems and dishware washing
equipment from our Group. For instance, two, three and three of our major suppliers who are sub-
contractors for on-site cleaning services have also leased dishware washing equipment and
purchased detergent from us, making them our customers as well, and the total revenue generated
from these major suppliers amounted to approximately S$51,000, S$86,000 and S$72,000,
representing approximately 0.3%, 0.5% and 0.3% of our total revenue for the years ended 31
December 2018, 2019 and 2020, respectively.
Acquire additional software systems and hardware
We intend to acquire three new SolidWorks software licences and to increase our server capacity
in order to support our expanded R&D and engineering team. The SolidWorks software is a solid
modelling computer-aided design (CAD) and computer-aided engineering (CAE) software which has
technologically-advanced features, including 3D product design tools and simulation solutions to enable
our R&D and engineering team to create high quality product designs for our customers and conduct
simulations of such product designs, which will also reduce time and costs needed to develop physical
prototypes and conduct physical testing.
The increased usage of software systems will require the support of faster central processing units
and highly specialised certified graphic cards to utilise such software systems effectively and to process
the software designs. Accordingly, in addition to increasing our server capacity, we also intend to
upgrade our hardware by acquiring work stations and laptops, which will be able to support the use of
the SolidWorks software. We believe that acquisition of additional software systems and hardware will
enhance our R&D and engineering capabilities, thus increasing our competitiveness. These additional
software systems and hardware are expected to cost approximately S$341,000 and will be financed by
our Group’s internal resources.
Build up our business development team and increase our marketing efforts
We intend to build up our business development team which will enable our Group to engage in
more marketing activities such as revamping our corporate website, increasing our presence on social
media platforms and participating in local and overseas tradeshows, exhibitions, seminars and workshops
organised by government agencies such as Enterprise Singapore and the Economic Development Board,
and other industry players, such as the Singapore Precision Engineering & Technology Association. The
new business development team will oversee the revamp of our corporate website to improve our
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customer service, to provide a platform to engage in more online marketing activities and to make
available information on our products and services to a wider audience. We expect that increasing our
marketing efforts will allow us to reach out to a larger customer base for our products and services and
garner greater market share. We believe forming a business development team to focus on sales and
marketing efforts will also enhance our brand awareness and ensure that we are kept up-to-date with
market developments. To this end, we intend to recruit three business development staff, comprising two
business development managers, each with at least five years of relevant marketing and public relations
experience, and one business development executive, with at least two years of relevant marketing and
public relations experience before 31 December 2021 to supplement our existing sales and marketing
efforts and to carry out business development activities for our Group.
We also intend to participate in industry events and engage in online marketing activities as we
believe that participation in such industry events and enhancement of our online presence will give us
the opportunity to meet with our existing and potential customers, as well as to promote our products
and services.
Our Group and our Chairwoman, Ms. Hong, have participated in overseas exhibitions, trade shows
and industry forums to promote our Group’s products and services. During the Track Record Period, we
had sold our products to customers in Singapore, Malaysia and other cities/countries such as Hong
Kong, Australia, the U.S., Thailand, Belgium, Philippines, India, South Korea, Indonesia, Taiwan, South
Africa, Argentina and Colombia, and we intend to continue to strengthen our market position in the
cleaning solutions industry in Singapore and Malaysia, while expanding our sales globally. Our
Directors consider that participating and attending such industry events is a convenient way to introduce
our Group’s products and services in countries where we currently do not have a presence, as we will be
able to understand the local business environment, demographics and relevant regulatory environment
through networking at such industry events while sharing business insights with other participants.
Having a focused and dedicated business development team, in addition to our Chairwoman, Ms. Hong,
to attend such overseas exhibitions, trade shows and industry forums will boost our Group’s regional and
overseas presence and enhance our effectiveness in securing new customers and contracts, as well as
potential business partners.
The business development team will be primarily responsible for arranging, coordinating and
preparing all matters in connection with such industry events, as well as following up and serving as the
key point of contact with prospective customers and business partners. We intend to participate and
attend eight such overseas exhibitions, trade shows and industry forums from 1 July 2021 to 30 June
2023, including medical technology and equipment exhibitions in the PRC and Germany, as well as
electronic and precision engineering services exhibitions in Thailand and Indonesia. Taking into account
the volume of work involved to review and analyse the various industry events globally, review the local
markets for assessing and considering the suitability of the industry events for our Group, prepare and
organise the events, and arrange staff to attend such events and subsequent follow up liaisons, our
Directors consider a designated business development team, who is able to increase our sales and
marketing efforts as well as engage in such work which requires frequent travelling on a full-time basis,
necessary for the development and expansion of our business both locally and overseas.
We also intend to set up a showroom of approximately 10.0 sq.m. at our JCS Facility which will
feature certain cleaning systems and other equipment manufactured by us, as well as display our Group’s
achievements and awards. Our Directors believe that setting up a showroom to showcase our products
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and achievements will help to boost our corporate image with our existing and potential customers, and
will also enable us to market our products to our customers during the tender and quotation phase as
well as facilitate discussions on the proposed design and function of the cleaning systems during the
design and development phase for our sale of cleaning systems and other equipment business.
We intend to utilise approximately HK$[REDACTED] (equivalent to approximately
S$[REDACTED]) of the net [REDACTED] from the [REDACTED] to build up our business
development team and increase our marketing efforts, details of which are set out below.
Build up our business development team and increase our marketing efforts: S$’000
— Revamp our corporate website [REDACTED]
— Attend trade shows, exhibitions and industry forums [REDACTED]
— Set up a new business development team [REDACTED]
— Set up showroom at our JCS Facility [REDACTED]
Total [REDACTED]
Set up a new office in Malaysia
As sales to our customers located in Malaysia amounted to approximately 32.5%, 39.0% and
72.5% of our revenue generated from the sale of cleaning systems and other equipment for the years
ended 31 December 2018, 2019 and 2020, respectively, we intend to expand our business in the sale of
cleaning systems and other equipment in Malaysia by setting up a new sales office in Penang, Malaysia
of approximately 100 sq.m. in order to capture more business opportunities in Malaysia. From January
2021 and up to the Latest Practicable Date, we have received and/or delivered a total of 12 orders in
respect of our cleaning systems from customers located in Malaysia, with an estimated total contract
sum of approximately S$4.4 million.
We believe that setting up a sales office in Malaysia will enable us to capture the market
opportunities in Malaysia and strengthen our positioning in Malaysia. According to the Euromonitor
Report, we ranked the first in precision cleaning manufacturing based on revenue in Malaysia in 2019.
Having an office in Malaysia will enable us to provide better sales and technical support to our
customers, in terms of customer orders, sales and marketing, as well as repair and maintenance services.
According to the Euromonitor Report, the rising global demand for consumer electronics and the growth
within the HDD and electronics industry in Malaysia, as well as Malaysia’s booming medical and
pharmaceutical industry, has driven demand for precision cleaning equipment. The Euromonitor Report
highlighted that constraints in the precision cleaning equipment industry in Malaysia include brand
loyalty among end-users, lack of highly-skilled labour and high start-up and operating costs. However,
as we have established our business presence in Malaysia and our Group has a market share of
approximately 27.0% in terms of revenue in 2020 in the precision cleaning equipment industry in
Malaysia according to the Euromonitor Report, and we are well-equipped with our strong R&D and
engineering team, our Directors believe that we are well-positioned to expand our business in the sale of
cleaning systems and other equipment in Malaysia.
We intend to recruit a team of experienced personnel for the set up and to oversee the operations
and management of the new office in Malaysia, which will comprise a sales manager, an administrative
staff, a mechanical engineer and an electrical engineer. We intend to recruit one sales manager and one
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