2013 | BiZQ | Apr - Jun

Apr•May•Jun 2013 FOCUS ON PRODUCTIVITY

Staying ahead of the game RESOURCE MANAGEMENT

BusinessQuotient / Business / People / Opportunities A P U B L I C AT I O N O F S I N G A P O R E B U S I N E S S F E D E R AT I O N 00 Cover WF.indd 1

Building your talent pool SINGAPORE BUDGET 2013

What does it mean for the economy?

No Fear of the Unknown Mr Kelvin Chia helps businesses break into tough Asian markets

21/3/13 5:53 PM

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Chairman’s Message

Managing a Fine Balance Based on projections by the Ministry of Trade and Industry, the Singapore economy is expected to grow between 1% and 3% this year. The latest outlook comes at a time of increasing stability across many economies in Asia.

The FY2013 Budget announced in late February will put some wind in Singapore’s wings. Despite the further tightening of foreign manpower policies, we believe that the Quality Growth Programme, comprising the threeyear Transition Support Package, and inclusive of the Wage Credit Scheme and new government incentives to boost productivity, will help companies restructure, raise productivity and employ locals. The Government has been generous in providing substantial support for employers who make the effort to hire Singaporeans.

SBF is also embarking on a number of new initiatives this year. For a start, we are extending our International Business Fellowship Executive Programme on Vietnam to cover six other destinations – Indonesia, Russia, Myanmar, India, Turkey and the United Arab Emirates/ Qatar. Separately, missions to Asia, Africa, Central Asia, the Middle East, Europe and the Americas have been planned. I encourage members to take full advantage of these services and activities to build capability and business linkages.

We wish you continued progress in 2013!

While we are concerned that the further tightening of foreign worker policies would impact many businesses, we welcome the Government’s acceptance of a significant number of Budget 2013 recommendations proposed by the SBFled SME Committee to mitigate rising business costs and improve productivity.

The Federation is committed to helping members address the urgent need for change. It will help them understand and tap into the initiatives and assistance schemes, while continuing to engage the Government regarding challenges faced by the business community.

Upon approval 001 ChairmanMsg WF.indd 1

Please sign:

Name and Date:

Tony Chew Leong-Chee hee Chairman Singapore Business Federation

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Apr•May•Jun 2013

Contents

Economy Watch

Budget 2013 an Booster?

06 IsEconomy Analysts examine how Singapore will move to a higher level of productivity.

BiZ Voice

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SBF to Host 2nd ABAC Meeting

Forum to focus on strengthening resilience and integration in the Asia-Pacific for sustainable growth.

Commentary

Companies need to focus on people development, talent retention and progression planning for the future.

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Improve Your Firm’s Capability

16 Business Quotient (BiZQ) is the official publication of the Singapore Business Federation, reaching out to over 21,000 of Singapore’s business elite, chief executives and entrepreneurs. The quarterly, published in collaboration with SPH Magazines, is your eye on Asian and global business trends, bringing you up to date on industry developments, the economy, country profiles, stories about successful companies and the people who lead them.

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BiZ Feature

In Pursuit of Productivity Firms are redesigning processes, upgrading manpower capabilities and developing infrastructural support and expertise.

ABOVE: Companies will be affected by slower workforce growth due to a reduction in foreign manpower supply.

21/3/13 5:34 PM

Apr•May•Jun 2013

4 Publisher Singapore Business Federation

In BiZ With

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10 Hoe Chiang Road, #22-01 Keppel Towers, Singapore 089315, Tel: +65 6827 6828, Fax: +65 6827 6807, E-mail: mr@sbf.org.sg, Website: www.sbf.org.sg

Overcoming the Unknown

Mr Kelvin Chia, founder of Kelvin Chia Partnership, talks about the challenges in pioneering the Indo-China region.

chairman

Tony Chew chief executive officer

Ho Meng Kit

Inside SBF

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chief operating officer

Victor Tay assistant executive director (member relations)

Cheryl Kong

SBF-led Committee Presents Budget Recommendations

The SMEC highlights issues of rising costs, a manpower crunch and falling productivity.

director, corporate communications

Gerald De Cotta Publishing Agent SPH Magazines Pte Ltd

International Markets CHINA

group editor-in-chief

Caroline Ngui group editor

Joanna Lee-Miller

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MALAYSIA

Investing in Asia

Countries such as Myanmar, Indonesia and Malaysia are attracting the largest percentage of Singapore’s foreign ventures.

INDONESIA

editorial & creative senior editor

Low Ching Ling contributing editor

Innovations

Casuarina Peck sub-editor

Winnie Fong creative director

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Alex Goh art director

Winnie Ong

Pushing the Edge of Innovation

The Netherlands and Singapore are actively collaborating in R&D areas such as water and sustainable energy.

senior designer

Mohamed A Rahman managing director

Dennis Pua general manager

Christopher Chan sales & client management associate account director

Kaz Lim

SME Resources

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Top SMEs Deliver Stronger Performance Hospitality and F&B companies post the biggest leap in sales, reveals survey.

assistant manager, business development & client management

Lim Hui Wen publishing services manager

Alice Chee For advertising enquiries, please call +65 6827 6828 or +65 6319 6326

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This news magazine is published by SPH Magazines Pte Ltd (Registration No. 196900476M) for Singapore Business Federation (Registration No. ROS138/2002TAP).

Copyright of the materials contained in this magazine belongs to SPH Magazines Pte Ltd and Singapore Business Federation respectively. Nothing in here shall be reproduced in whole or in part without prior written consent of SPH Magazines Pte Ltd or Singapore Business Federation. Views expressed in this news magazine are not necessarily those of SPH Magazines Pte Ltd nor the Singapore Business Federation and no liabilities shall be attached thereto. All rights reserved. Editorial enquiries should be directed to the editor, BiZQ, SPH Magazines Pte Ltd, Media Centre, 82 Genting Lane, Level 7, Singapore 349567. Tel: +65 6319 6319, Fax: +65 6319 6227, E-mail: bizq@sph.com.sg. Unsolicited material will not be returned unless accompanied by a self-addressed envelope and sufficient return postage. While every reasonable care will be taken by the editor, no responsibility is assumed for the return of unsolicited material. MICA (P) 080/06/2012. Printed in Singapore by timesprinters, Singapore (Registration No. 196700328H).

21/3/13 10:30 AM

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There’s nothing like Austra lia to inspire the world ’s grea te st minds

This year we chose Australia for our global congress. It was an easy choice, as Australia’s proximity to Asia gave us the opportunity to attract many new delegates.

The program was one of the best in years.

New Australian developments in our field attracted a lot of interest and strong international research partnerships were established.

Australia is on everyone’s list to visit, and it lured our highest number of delegates yet.

There’s no doubt they’ll be talking about this convention for years to come.

Dr Louise Wong International Board Member Visit businessevents.australia.com/ associations for everything you need to plan your Australian event.

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Economy Watch

Mr Tham Sai Choy, Managing Partner of KPMG Singapore

Is Budget 2013 an Economy Booster?

BiZQ examines whether Singapore’s Budget will steer growth in the right direction to meet the country’s longer-term goals.

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here were diverse opinions in the run-up to the recently concluded Budget 2013, with many analysts and business leaders adding to the debate on whether the measures announced were sufficient to help boost the Singapore economy.

When the proverbial waters had settled, it was crystal clear that productivity was going to be at the heart of the matter.

For the Singapore Government, the country’s economic machine was tweaked with the aim to achieve an annual goal of 2% to 3% growth in productivity over the next 10 years.

For businesses big and small alike, 2012 was largely a year of treacherous navigation between the hard rock (rising business costs) and the deep blue sea (labour shortages).

Businesses had to bear the brunt regarding the cap on the inflow of foreign talent and labour, cope with the challenges of rising domestic cost pressures and still work towards making decent profit margins.

that the Budget announcements have the “right focus”.

He said: “Improving productivity and innovation is important to increasing the competitiveness of Singapore’s companies.

“As we strengthen these firms, we hope to see a greater focus on innovation and branding,” he elaborated.

“Carefully designed incentives and grants can help to build flourishing Singapore companies with strong brands that fully capitalise on the growth in Asia.

“At the same time, unique brand identities will help these companies endure difficult times.”

Balancing act Singapore’s 2013 Budget comes at a time when challenges continue to persist in many developed countries.

In the US,

“Carefully designed incentives and grants can help to build flourishing Singapore companies with strong brands that fully capitalise on the growth in Asia.” partisan politics continue to grab the spotlight, creating a logjam in economic policy-making, not to mention the stalemate in pushing the national budget forward.

Europe continues to be mired in financial instability, constantly battling with spending cuts while struggling to stimulate growth. Any short-term expectations of strong growth in key Asian economies, such as China and India, will have to wait till these countries balance such goals with other equally significant domestic priorities.

All these undercurrents point to an uncertain picture for global trade and investment, a grid that Singapore is closely plugged into.

The republic is equally

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Competitive playing field Then, there are also many who take a longer-term view of the implications of some of the measures announced during the Budget. Mr Tham Sai Choy, KPMG Singapore’s Managing Partner, told BiZQ

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GDP*

CPI*

USD/SGD**

Macquarie

2.6

3.9

1.20

consensus

2.7

3.6

1.20

4Q13

4.3

3.7

1.20

3Q13

3.6

3.8

1.20

2013

2Q13

1.1

3.9

1.21

1Q13

1.5

4.0

1.21

Macquarie

1.2

4.6

1.22

consensus

1.2

4.5

1.22

4Q12

1.1

4.1

1.22

3Q12

0.3

4.2

1.23

2012

Note: *Quarterly numbers represent a yearon-year percentage change, full year numbers are an average percentage. **Period ending Source: Macquarie Research, January 2013

connected to its ASEAN neighbours, but the consensus is that the Southeast Asian region is expected to regain its strength and grow steadily.

As ANZ Bank’s Head of Economics for Southeast Asia, Mr Aninda Mitra put it, most ASEAN economies have a lot of autonomous domestic demand, which has been and will remain largely unaffected by global headwinds.

“However, what separates Singapore from the rest of the pack is that the republic has been stuck with chronically higher inflation despite moderating growth. But this is due to internal restructuring which is driving labour-market tightness,” said Mr Mitra.

Macquarie Research’s ASEAN economist Ms Aimee Kaye echoed a similar strand of thought when she observed that within ASEAN, Singapore will be most impacted by the moribund global trade outlook.

Domestic demand will be solid in pockets, but the economy will struggle to achieve trend growth of 4% in 2013, she added.

Against this weak growth picture, inflation is set to remain elevated, with pressure on wages starting to build as Singapore’s immigration restrictions continue

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to play out, while unemployment stays low at about 2% (refer to table on Singapore’s Economic Outlook).

Given these predictions, Macquarie is expecting Singapore’s 2013 GDP to come in at 2.6%.

This will be within the 1% to 3% growth forecast for 2013 that was announced by the Ministry of Trade and Industry in late February.

In comparison, the Singapore economy grew 1.3% last year.

Cranking up productivity Business leaders and economists are now trying to grasp how Singapore will make a transition to being an economy working on a higher-level productivity gear.

The Singapore Government has delivered Budget 2013 (see side story on Budget Highlights for Businesses) as a tool to improve productivity in the economy.

Mr Ho Meng Kit, CEO of the Singapore Business Federation, commented: “We did not expect the Government to further tighten the foreign manpower policy so comprehensively only a year after the last Budget. This clearly demonstrates the strong resolve by the Government to wean companies in less productive sectors off their reliance on more foreign manpower.”

However, Mr Ho understands that the Singapore Government is committed to support Singaporean workers. He explained that the Budget contains measures to help companies which are prepared to restructure, raise their productivity and employ locals.

In fact, the Government is generous in providing substantial support for employers who make the effort to hire Singaporeans.

He stressed that the Federation is committed to reach out to its members and the wider business community on this urgent need for change and with the assistance provided by the Government.

Echoing similar sentiments, Mr Lawrence Leow, Executive Chairman of Crescendas, and Chairman of the SBF-led SME p.8

BUDGET HIGHLIGHTS FOR BUSINESSES 1 FOREIGN WORKER POLICIES

Foreign Worker Levies for Work Permit and S-Pass holders will be increased for all sectors in 2014 and 2015.

2 WAGE CREDIT SCHEME

The Government will co-fund 40% of wage increases for Singaporean employees over the next three years.

Applies to wage raises for local employees earning up to a gross monthly wage of S$4,000.

3 PRODUCTIVITY AND INNOVATION CREDIT (PIC) BONUS

Businesses that spend a minimum of S$5,000 in PIC activities in a year will receive a dollar-for-dollar matching cash bonus.

4 CORPOR ATE TA X REBATE

A rebate of 30% of tax payable will be capped at S$30,000 a year. Applies for YA2013 to YA2015.

For more information, visit www.singaporebudget.gov.sg. Click on Key Budget Initiatives under the Singapore Budget icon.

SPH Library

Singapore’s economic outlook

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Economy Watch Committee (SMEC), said the current restructuring measures and efforts are going to produce “a lot of pain”.

He said: “I expect to see companies shutting down, or moving overseas because we just do not have the manpower.”

But he added that the measures announced for industries to work together on a cross- and intra-sector basis offer some upside to doing business.

“Moving forward, the SMEC will work with companies, trade associations and chambers to take the first step to transform and restructure by tapping on government incentives,” Mr Leow explained.

Seeds of optimism Giving credit to the Government’s continued focus on raising productivity levels, Macquarie’s Ms Kaye said Singapore is making the most bona fide effort to rebalance its economy away from external trade.

“But, again, while the seeds for medium-term optimism are being sown today, the process will take time to bear fruit. Indeed, Singapore’s Economic Policy Group has called for the transition period of lower growth and higher inflation, driven by wages, to last several years, with the benefits crystallising in the second half of the decade.”

As Mr Arvind Agarwalla, CEO of information technology company Fact Software International,

Mr Aninda Mitra, ANZ Bank’s Head of Economics for Southeast Asia

“Most ASEAN economies have a lot of autonomous domestic demand, which has been and will remain largely unaffected by global headwinds.” explained: “There is no silver bullet that is going to solve every problem. I believe it is a combination of process and product innovation.”

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Impact on construction and maritime sectors companies are not able to increase their productivity, they would face marginal pressure from increased labour costs and competition.

The Singapore Government’s annual budget is far ranging and affects different people to varying extents. Here, Mr Leng Seng Choon, economist of OSK ResearchDeutsche Morgan Grenfell, analyses the various measures of Budget 2013 and explains their implications.

Offshore and marine – sufficient time to cope Budget 2013 will lower the Dependency Ratio Ceiling (DRC) for the maritime sector from 1:5 workers (83.3%) currently to 1:4.5 workers (81.8%) by Jan 1, 2016 and to 1:3.5 workers (77.8%) by Jan 1, 2018. In addition, FWLs will also be raised in July 2014 and July 2015.

Construction – pressure to mount Allowing the use of more manpower-efficient designs and technologies in building projects will be implemented through increases in the minimum build-ability scores.

Other measures include an increase in foreign worker levies (FWL) by S$150 between July 2013 and July 2015 for basic skilled Work Permit holders; rise in levy of S$300 for basic skilled workers hired outside of a company’s Man-Year Entitlement quota; and a corporate income tax rebate of 30% per year of assessment (YA) from YA2013 to YA2015.

Impact: The higher FWLs would result in higher labour costs, which would compress margins, especially for contracts that are in progress,

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but would not be completed by July 2013; and those that have been awarded but have not commenced and would not be completed by July 2013. In 2014 and 2015, margins are likely to be even more compressed.

These latest measures would make the operating environment for the construction sector more challenging. With a healthy pipeline of government infrastructure projects, construction companies are likely to be kept busy. The outlook for the construction sector is good but, if construction

Impact: There will be little nearterm impact as offshore and marine companies have six years to adjust to the new ratio.

Maritime companies are obviously left with little choice but to reduce or slow down the rate of hiring foreign workers.

In sum, OSK Research-Deutsche Morgan Grenfell believes Singapore’s maritime companies have sufficient time to adjust to the tightening of the foreign worker policy, as the new DRCs will be implemented in two stages of three years each.

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APEC’s impact on Singapore companies

BiZ Voice

SBF to Host 2nd ABAC Meeting

Regional partnerships Recent developments in the Trans Pacific Partnership and Regional Comprehensive Economic Partnership allow Singapore firms access to markets which have a value (in terms of GDP) of US$20.8 trillion (S$25.7 trillion) and US$26.1 trillion respectively, or about 26% and 33% of the world’s economic output.

Business leaders in the Asia-Pacific to advocate economic growth and resilience in the region.

Ease of doing business By 2015, APEC set a target to improve the ease of doing business in the region by 25% in areas such as starting a business, dealing with construction permits, getting credit, trading across borders and enforcing contracts. This will translate into substantial cost savings for companies.

Supply-chain connectivity

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ingapore Business Federation, being the national secretariat to the Singapore chapter of APEC Business Advisory Council (ABAC), will host the 2nd ABAC meeting for this year from April 3 to 6. Under the theme – “Partnership, Resilience and Bridges to Growth”, it will be an opportunity for Singapore’s business community to interact with many senior business executives from the Asia Pacific region.

During this ABAC meeting in Singapore, delegates will have the opportunity to meet Deputy Prime Minister Teo Chee Hean and Senior Minister of State for Trade and Industry Lee Yi Shyan and discuss various trade and investment issues.

This second regional meeting is a lead-up to the annual APEC Economic Leaders Meeting to be held later in October in Bali.

Singapore last played host to the ABAC meeting in 2009 – the year it chaired both the APEC and ABAC forums.

Under the chairmanship of

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Indonesia’s Mr Wishnu Wardhana, ABAC 2013 will focus on two important areas: ● Strengthening regional resilience and integration with new areas of growth. These key areas include investments, services and infrastructure development. ● Strengthening economic foundations and financial structures for balanced, inclusive and sustainable growth.

A comprehensive work programme has been developed with five separate working groups.

These groups have been tasked to identify issues faced by businesses and have offered recommendations to policymakers to facilitate trade and investment.

These recommendations are expected to improve the overall business environment in the AsiaPacific.

These working groups cover topics relating to regional economic integration, finance and economics, SMEs and entrepreneurship, as well as sustainable development.

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Initiated under Singapore’s chairmanship in 2009, the Supply Chain Connectivity Framework addresses some issues regarding reducing the time, costs and uncertainty of moving goods and services throughout the region.

Improving these choke points will further strengthen Singapore’s position as a major transport, logistics and services hub for the Asia-Pacific region.

Eye on the region

The APEC Business Advisory Council is a private-sector advisory body to APEC governments, and meetings are held four times a year.

The council provides policy recommendations on a range of business and economic issues that affect companies in the region, and its members are senior business representatives.

Singapore is currently represented

by Mr Gautam Banerjee, Chairman of Blackstone Singapore; Mr Ho Meng Kit, CEO of Singapore Business Federation; and Mr Jackson Yap, Group Managing Director and CEO of United Engineers.

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SMEs Heed Call to Boost Productivity Optimal utilisation of manpower is one benefit, DP survey reveals.

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horter turnaround for customers and the production of more goods and services are some of the gains that companies have enjoyed when they heeded the Government’s call to boost productivity.

While most construction firms are moaning about rising labour costs, Euro Builder and Electrical decided to move away from its traditional heavy manpower process, towards a multi-pronged approach to reduce its dependence on labour and increase its productivity.

Instead of using wheelbarrows to move and dispose of building materials, the company invested in a skid steer loader and builder’s hoist. It also acquired a trailermounted concrete pump to automate the process. This reduced the number of workers required from 25 to nine and significantly improved productivity by 200% for transportation and housekeeping works.

A recent survey by DP

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Information also found that 74% of the 2,603 small and medium enterprises (SMEs) polled had achieved significant gains from adopting measures to boost productivity.

Among the firms that stated they had seen tangible gains from productivity, 44% said they now produce more goods or services faster. Nearly 40% said their customers experienced shorter turnaround time, while 32% said they now make optimal use of their manpower.

The results were revealed at the annual SME Development Conference in January.

Taking a second look At the conference, Ms Kavita Bedi, Standard Chartered’s Regional Head of SME Banking, said enterprises should also consider other ways to boost their productivity levels. She said companies often focus on issues such as rising costs, and need to step back and look at their overall strategy.

She said they should manage their cash flow and working capital cycles and, if cost is a big issue, they should look at hedging and think of better ways to manage their risks, as well as participate in government schemes.

Ms Choy Sauw Kook, Assistant Chief Executive of SPRING Singapore, said the results of the DP survey were an improvement from last year’s poll.

Another company that has benefited from implementing productivity measures within the organisation is Lam Chuan – a laminate-flooring supplier.

Ms Choy Sauw Kook, Assistant Chief Executive of SPRING Singapore

“Of the many companies surveyed, 64% said they would take action to manage costs this year. Among these, a third said they were looking at productivity as a way to improve their margins.”

In the past, a production supervisor would manually track customer orders by jotting down the dimensions and specifics of each piece of plywood. Now, the company’s computerised system does the tracking electronically instead.

The result? Lam Chuan increased its output by 15% in just two months.

In addition, Ms Choy said workers earned about $200 more a month because of the new incentive system of monetary rewards accorded to employees on completion of their jobs.

Manpower shortages and rising rentals continued to be an issue with many companies surveyed, with 64% indicating they will take action to manage costs this year.

Among these, a third said they were looking at productivity as a way to improve their margins.

Design company IDV Concepts’ profit rose 30% last year, after it invested in a new IT system that allowed staff to share and access documents and design templates, whether they were working at home or in the office.

Ms Jen Lee, Business Development Manager of the firm, said: “As a result, we delivered work much faster. We can turn it around within a week, compared with two weeks previously.”

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BiZ Voice

SBF Unveils its Stance on Population The Federation stresses the need to achieve a sustainable pool of high-quality manpower.

THE RECOMMENDATIONS made by the businesses community acknowledged the following: 1 SINGAPORE’S SUCCESS

is a result of its open economy and policies on foreign investment and talent 2 A SHRINKING AND AGEING

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he Singapore Business Federation has shared its views on how important it is for Singapore to achieve a sustainable pool of high-quality manpower to continue driving its economy and competitiveness in the years ahead.

Its Position Paper on Population was in response to an invitation by the National Population and Talent Division to give its views and suggestions from a business perspective on Singapore’s population and related policies.

The Position Paper was put together based on consultations and feedback from members of the SBF-led SME Committee and SBF Council, roundtable discussions, seminars and feedback from the business community.

The recommendations by the businesses community acknowledged that ● Singapore’s success is a result of its open economy and policies on foreign investments and talent. ● A shrinking and ageing population and workforce will affect Singapore’s growth. ● Raising productivity requires resources and time to take effect.

efforts to boost local workforce participation, it should also consider providing more capability and financial assistance for businesses to identify and implement measures needed to boost the local workforce.

Singapore must remain open to foreign labour, and the foreign manpower policy should be calibrated in a targeted approach. In addition, concerted efforts should be made to leverage on foreign labour to help locals move up the economic value chain.

Focus on productivity Developed economies usually experience slower productivity growth averaging 1-2%. The 2-3% productivity growth that Singapore is aiming for appears to be a stretched target.

The paper calls for a review of the

POPULATION

and workforce will affect Singapore’s growth 3 R AISING PRODUCTIVITY

needs resources and time to take effect

Economic Strategies Committee’s recommendations to ● Set a more realistic target in consideration of current constraints of an older workforce and the lower rate of workforce growth. ● Map out how the economy can be restructured for the best utilisation of resources to achieve sustained inclusive growth.

SBF will work with trade associations and chambers to encourage the take-up of the Government’s various productivity initiatives,

The business community asserts that continuous access to local and foreign labour is key to their survival.

While businesses are supportive of the Government’s

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SPH Library

Access to local and foreign labour

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Marriage and parenthood initiatives

including its role in the National Productivity and Continuing Education Council.

Businesses are encouraged to make use of technology, automation as well as redesigning processes to sustain their productivity momentum.

The Government is also urged to consider driving productivity improvement through cluster and supply chain development, by leveraging on big organisations to help transfer knowledge and raise the productivity of their suppliers across different sectors.

The paper calls for the Government to introduce incentives for employers to adopt flexible work arrangements, as well as tax breaks for companies when their female employees go on maternity leave. The tax savings can then be used to cover expenses for hiring replacements.

The Government needs to support businesses’ efforts to promote a work-life balance through flexible work schedules, career breaks and time off.

In addition, better childcare support needs to be provided at conveniently located, good-quality and affordable childcare centres for infants and young children.

The SBF-led SME Committee submitted its Budget 2013 recommendations to the Government with emphasis on more specific measures for manpower and productivity, costs of doing business, financing, internalisation and market access.

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SBF’s Position Paper on Population The apex chamber believes in ● Affirming local and foreign labour as integral to Singapore’s workforce. ● The need to achieve a sustainable pool of high-quality manpower to continue driving Singapore’s economy and competitiveness.

Businesses call for Review of economic strategies in light of possible lower productivity growth, constraints of an older workforce and the lower rate of workforce growth. ● Greater partnership with the unions and Government to drive maximum local workforce participation and holistic productivity-improvement initiatives. ● More flexible and phased labour policies as businesses need more time to raise productivity in the short term. ●

Six companies named BCM ambassadors Preparing staff for crisis

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usiness Continuity Management (BCM) plans allow companies to respond to and recover from disruptions, such as supply-chain risks, that can affect their operations.

Many SMEs are taking steps to promote BCM systems within their organisations.

Six companies were recognised at this year’s Business Continuity Awards. They are the first batch of BCM ambassadors who will share their experiences and support other enterprises which are taking similar steps. Selected for their role in promoting BCM leadership within their industries, the ambassadors include: ● Aik Moh Paints & Chemicals

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Cathay Organisation ● Han’s (F&B) ● Langdon & Seah Singapore ● Singex Venues ● Symrise Asia Pacific In addition, BCM awards were given out to 20 other companies for their work in instilling consumer confidence and contributing towards Singapore’s reputation as a trusted hub for reliable and quality service.

These firms were selected from a pool of 154 companies that are undergoing certification, and which have successfully adopted BCM standards in their organisations.

More companies are also encouraged to adopt the new standard ISO 22301, which offers ●

As ambassador, Cathay Organisation took the lead in showcasing BCM by conducting its first joint BCM exercise recently with the Singapore Civil Defence Force at its budget hotel arm, Hangout @ Mt. Emily.

The aim of the exercise was to prepare hotel employees to respond effectively to contain emergency situations, without disruptions to operations. a framework to plan, establish, maintain and improve on a business continuity system.

Firms keen to get certified can approach SBF (e-mail bcm@sbf. org.sg or call 6827-6867) to seek funding or updates on BCM.

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Commentary

Ms Kimberly Rath, President and Managing Director of Talent Plus Inc

Improve Your Firm’s Capability How to build knowledge, skills and talent for the future.

I

n today’s competitive market, the development and retention of talented staff within an organisation pose serious challenges for CEOs and senior executives. A company’s intellectual capital is its people and talent management is important for the long-term success of companies.

Retaining talent means keeping a company’s top performers and preventing its best employees from looking for opportunities with one’s competitors. Ultimately, this approach is much more costeffective than constantly recruiting and training new employees.

Why they leave

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While there are many reasons why talented employees quit, the fact is that our workforce and pool of highly skilled and highly trained talent are shrinking.

In essence, there are two main reasons why employees leave an organisation: ● When they feel they are not rewarded well for their work, do not have adequate advancement opportunities, or are not maximising the use of their skills. ● When harsh company policies, incompatible work hours or heavy workloads lower staff motivation and morale.

Retaining talent Ms Kimberly Rath, President and Managing Director of Talent Plus Inc, believes that succession

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planning will help senior executives retain talented employees and develop the next level of leadership within an organisation.

She said: “Growth is so dynamic, especially in Asia. We need to focus on people development, talent retention and progression planning, so there will be relevant skills, knowledge and capability for the future of a company.”

Ms Rath was speaking recently at the Global Entrepolis @ Singapore 2012 during the session that touched on human capital.

So how do you keep your most talented executives and managers committed, loyal and motivated?

Here are some of the strategies and tools needed to grow and retain highly talented employees: ● Publicise good performance Reward employees who do well, so others are aware of their individual achievements. This will help

“Growth is so dynamic, especially in Asia. We need to focus on people development, talent retention and progression planning, so there will be relevant skills, knowledge and capability for the future of a company.” motivate top-performing staff and give poor performers an incentive to work more effectively. ● Promote internal career progression Managers need to coach and develop their people. Ultimately, everyone needs to know the areas that they need to work on. For those who are highly motivated, develop career tracks that give them a sense of where they can go within the organisation. ● Reinforce shared values Employees should be able to link their everyday tasks and responsibilities to the values in their organisation. People need to understand why what they do is important.

Selecting talent is only the beginning. Employees want to feel valued and that they are making a difference to the company. We need to recognise each employee’s value and his role in the overall strategy of an organisation.

It takes an integrated talentmanagement strategy – with commitment from the CEO to middle management – for an organisation to achieve sustained excellence.

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20/03/2013 17:48

Dubai

Moscow

Indonesia

International Business Fellowship (IBF) Executive Programme A ❘ PROGRAMME BACKGROUND The International Business Fellowship (iBF) Executive Programme is jointly organised by International Enterprise (IE) Singapore and Singapore Business Federation (SBF).

The iBF Programme supports Singaporebased companies in the training of company executives to acquire business knowledge and build networks in selected supported markets.

B ❘ PROGRAMME OBJECTIVES ■ Provide a comprehensive introduction and overview of the political, economic, social and cultural dimensions in the target markets; ■ Provide analysis of how regulatory and economic liberalisation policies can be translated into new opportunities for Singapore-based business; ■ Provide opportunities for participants to interact and learn from senior level corporate management, academics and government officials; ■ Equip the participants with an awareness of business practices and emerging business opportunities in the target markets; and ■ Provide immersion opportunities for the participants in the target markets.

top university or recognised training or educational institution.

■ Topics to be covered extensively in this programme include: • Overview & analysis of the country’s economic performance in the past, present and the immediate future • Current investment and taxation issues • Legal pitfalls of doing business faced by foreign firms • Current issues in human resource management & labour relations • Challenges in business/ project financing ■ Site/ Factory Visits to selected industrial parks and companies.

The programme is specially organised for: ■ Senior and middle management from Singapore-based companies who have existing businesses and/ or are keen to explore business opportunities in the target market ■ Senior officers from public sector organisations who support business initiatives that add value to Singapore and the target market C ❘ PROGRAMME ACTIVITIES ■ Programme Lessons will be conducted in English by prominent academics from local institutions as well as senior government officials and business experts.

■ A Certificate of Attendance will be awarded by the training partner, which will be a

000 ad-SBF(1).indd 3

Upon approval Please sign: Name and Date:

■ Networking Sessions with local businesses and Singaporean business executives working and living in the country

D ❘ PROGRAMME FUNDING SUPPORT ■ IE Singapore will fund up to 70% of the course fee for eligible participants.

■ The Indonesia, Myanmar and Vietnam programmes are covered by the Double Tax Deduction.

■ IE Singapore is providing funding support up to 50% for approved airfare and accommodation expenses for participants in the Latin America, Russia, India, Central Asia, the Middle East and Turkey programmes.

Programme Schedule in 2013 EXECUTIVE PROGRAMME (INTERNATIONAL BUSINESS FELLOWSHIP)

CITIES

TENTATIVE DATES

1

Executive Programme on Vietnam

Da Nang, Ho Chi Minh City

2–9 March

2

2nd Executive Programme on Indonesia

Jakarta

28–31 May

3

Executive Programme on Russia

Moscow & St Petersburg

24–29 June

4

1st Executive Programme on Myanmar

Nay Pyi Taw, Yangon

June/July

5

Executive Programme on India

Pune, Chennai

October

6

Executive Programme on Turkey

Istanbul

November

7

Executive Programme on UAE/Qatar

Dubai, Abu Dhabi, Doha

December

For enquiries, please contact: Indonesia, India, Myanmar and Vietnam Mr. Alan Tan TEL 6827 6894 EMAIL alan.tan@sbf.org.sg

Russia, Latin America, the Middle East, Turkey Mr. George Chan TEL 6827 6842 EMAIL george.chan@sbf.org.sg

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BiZ Feature

In

Pursuit of Productivity Singapore businesses take steps to embed productivity into their DNA.

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W

ith the recent release of the Population White Paper, the debate on the acceptable level of Singapore’s foreign manpower supply rages on. When the Singapore Government announced that it was tightening the foreign labour market, grievances from the biggest of enterprises to the smallest operators were loud and clear.

In February, nine national

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chambers of commerce – including the Australian Chamber of Commerce, British Chamber of Commerce and Japanese Chamber of Commerce and Industry – wrote to Mr Tan Chuan-Jin, Singapore’s Acting Minister for Manpower, to voice their concerns over the new plans to calibrate the entry of foreign employees into Singapore.

The chambers drew reference from Singapore Business Federation’s (SBF) Position Paper on Population released earlier.

A reduction in the inflow of

foreign manpower supply will hurt Singapore’s economic position in the long run, notwithstanding the fact that the national goal is to raise productivity by 2% to 3% a year over the next 10 years (see chart on Singapore’s Labour Productivity).

SBF released a statement earlier saying that businesses would be impacted by this slower workforce growth. This is half of the average growth rate compared to the last three decades.

From 2020 to 2030, workforce growth is projected to decrease even further. This will constrain businesses, limit growth and have devastating consequences for many companies.

Mr Ho Meng Kit, CEO of SBF, said: “If businesses go under, jobs will be lost and Singaporeans will

21/03/2013 09:15

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“More SMEs have responded by embarking on productivity improvements and innovation.

Moving forward, the domestic environment will be even more challenging, with a tighter labour situation and rising business costs.” be affected. If businesses cannot raise productivity and sustain profits, they cannot afford to pay Singaporeans higher salaries.”

Implementing changes The key issue here is that businesses still need to navigate themselves through the labour shortage, rising business costs and other challenges.

Many businesses support the pursuit of productivity-driven

growth. However, implementing such changes takes time and investment, and is more difficult in some industries than others, claimed some firms that were interviewed.

Hence, companies believe national policy objectives can be met as long as they take place in stages with the flexibility to ensure that an effective transition does not sacrifice business results.

SPRING Singapore, the lead government agency to support the development of small and medium enterprises (SMEs), readily acknowledged this. The agency posted its report card just as this issue of BiZQ was going to print.

Mr Philip Yeo, Chairman of SPRING Singapore, commented: “While 2012 was a challenging year, I am encouraged that more SMEs have responded by embarking on productivity improvements and innovation.

“Moving forward, the domestic environment will be even more challenging, with a tighter labour situation and rising business costs,” he explained.

The agency observed that a tight labour situation, rising business costs and a volatile and uncertain global economic climate had affected the growth plans of many SMEs, while other larger companies p.18

Singapore’s labour productivity declined over the year for the third consecutive quarter Changes in labour productivity (over corresponding period of previous year) 20% 15% 10% 5% 0% -5% -10% -15% -20% Labour productivity

Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 -6.5 -9.3 -11.4 -14.1 -5.0

0.8

4.5 14.3 16.0 6.4

8.2

5.2 -2.3 2.0 -0.5 -2.3 -1.9

Source: Singapore Department of Statistics and Ministry of Trade and Industry

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New initiatives 1 COLLABOR ATIVE INDUSTRY PROJECTS

to help solve productivity challenges will be adopted in these sectors: Food manufacturing Retail Textiles and apparel Furniture manufacturing 2 LAND PRODUCTIVITY GR ANT

supports companies that maximise their use of land in Singapore

Productivity and Innovation Credit The Government is encouraging more businesses to boost their productivity. It is enhancing the existing Productivity and Innovation Credit (PIC) scheme by introducing a new cash bonus for participating companies.

Businesses that spend a minimum of S$5,000 in PIC activities a year will receive a cash bonus equivalent to the amount spent. The bonus will be capped at S$15,000 per year for the next three years of assessment, up to Year of Assessment 2015.

A new Collaborative Industry Projects initiative is available to companies that collaborate to help solve productivity challenges in their sectors.

This initiative will be adopted in seven priority industries, including food manufacturing, retail, textiles and apparel as well as furniture manufacturing, and will cost the Government an estimated S$100 million over three years.

Small and medium enterprises will also receive more help in working with large MNCs to develop world-class capabilities.

The Government will extend the Partnerships for Capability Transformation scheme to include other sectors beyond manufacturing.

SPH Library

Mr Philip Yeo, Chairman of SPRING Singapore

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BiZ Feature THE GOVERNMENT ’S PRODUCTIVITY & INNOVATION CREDIT SCHEME

Take-up rate has gone up to more than

25% AT CITY FOODS

production has doubled from the use of an automated machine

40%

of the machine’s cost was covered by a government grant

found it challenging to sustain their operations.

SPH Library

Productivity initiative On a more upbeat note, Mr Yeo added that there remains signs of better growth prospects in Asia.

His agency will step up its efforts to help SMEs upgrade their productivity, create new value through innovation and restructure their businesses, so they can remain competitive and be better positioned to tap into opportunities in global markets.

The Government’s Productivity and Innovation Credit (PIC) scheme – now in its third year – which helps local companies upgrade, has seen encouraging take-up rates.

The take-up rate across small and medium enterprises (SMEs) has gone up from a low single digit in the first year to more than 25% now. About half of the SMEs with a turnover of between S$1 million and S$10 million have claimed benefits from the scheme.

One company which has benefited is City Foods. Its production capacity was given a huge boost after it bought a

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p.20

Delivering good soup through workforce management Living and concocting soups is what The Soup Spoon does best.

It is about constantly creating that perfect blend of flavour, colour, aroma and texture in broths that results in a growing following of customers.

Now, it is adding a strong dose of productivity through the pursuit of process innovation and technology upgrading.

Mr Andrew Chan, Managing Director of The Soup Spoon, said the group “has been continuously innovating and leveraging on technology as part of our productivity efforts to mitigate the uncertain economic conditions and overcome rising business costs.”

For example, the company was among the first to test a government-led scheme that uses a computer system to efficiently and optimally allocate manpower staffing according to demand.

The Optimised Workforce Management System, which was launched in January, is expected to save the group about S$100,000 to $150,000 a year in terms of manpower costs.

The system also generates a cost-effective roster that takes into account employees’ skill sets and other factors, and is able to better deploy part-time workers.

As a result, customers’ waiting time has been effectively reduced by 33% as a result of this new workflow. The kitchen at each retail store has been reduced by 66% in size, providing more space for the company’s other revenue-generating activities.

Manpower savings have also risen by 3% on a weekly basis.

Leveraging on the Government’s Part-time Pool programme for better flexibility in work arrangements, the company’s proportion of parttimers has doubled from 30% in 2010 to 60% in the first quarter of 2013. This has helped the company cope with manpower shortages.

Mr Andrew Chan, Managing Director of The Soup Spoon

“Embarking on this productivity journey has not only helped us achieve operational excellence and workforce optimisation, it has also enabled us to create a differentiated customer experience.”

The 10-year-old company, which has now seen revenues topping $25 million, is looking into all areas to improve productivity to grow in this rapidly changing environment.

“Embarking on this productivity journey has not only helped us achieve operational excellence and workforce optimisation, it has also enabled us to create a differentiated customer experience,” said Mr Chan.

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BiZ Feature

Making an IMPACT on quality

MOVING TOWARDS THE FUTURE Businesses redesigned their processes by means of productivity measures: 1 UPGR ADING M ANPOWER & HUM AN RESOURCE CAPABILITIES 2 PROMOTING TECHNOLOGY IMPLEMENTATION AND INNOVATION 3 INFR ASTRUCTUR AL SUPPORT AND EXPERTISE DEVELOPMENT 4 CREATING A SENSE OF AWARENESS & CULTURE A MONG STAFF

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S$17,000 automated machine last year. The company is now able to produce 200 satay sticks an hour, up from 100 sticks an hour previously.

Forty per cent of the machine’s cost was covered by a government grant for productivity improvement projects.

In addition, the Government has been trying to boost productivity by increasing the supply chain efficiency of certain sectors, such as the food and beverage industry.

For example, a pilot project to create an online procurement system has cut down on administrative procurement tasks and automated the sourcing processes within the food services industry. More than 30 restaurateurs and food manufacturers have benefited by way of cost savings.

Stepping up to reality Businesses have to step up to the reality that it is not business as usual. The faster they learn to

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accept this, the better they will cope with such challenges.

There are many companies which are embracing a healthy dose of productivity measures to steer their businesses for the future.

These include companies that have redesigned their processes, upgraded manpower and human resource capabilities, promoted technology implementation and innovation, developed infrastructural support and expertise, as well as created a sense of awareness and culture among their staff to increase productivity levels.

Changing demographics Taking stock of this phenomenon, Standard Chartered researcher Mr Edward Lee shared with BiZQ that the changing local demographic structure and the slowing influx of foreign labour are likely to alter Singapore’s economic structure in the medium term.

After making a cross-country comparison with Australia, Mr Lee asserted that this economic phenomenon will have an impact on Singapore’s key sectors. The manufacturing industry – a key contributor to the country’s economy – is likely to be one of them.

He explained that, given the manufacturing industry’s general requirement for a younger workforce, it is likely that

Precision-machining company Jovan Tech sees productivity as a journey.

“Productivity is always important to us, as it helps us find better ways to do things and grow our business,” Jovan Tech Managing Director Jerome Lee told BiZQ. Back in 2008, during the height of the global financial crisis, the company saw its sales forecast plunge by 40%. As a result, the company implemented an assessment tool called IMPACT, or Integrated Management of Productivity Activities, to track its productivity.

This tool enabled Jovan Tech to compute its labour productivity.

“It is essentially the value added, or wealth generated, per worker,” Mr Lee explained.

“We now know how to calculate this using data in our financial statements.”

Mr Lee said the company studied various methods to produce precision components and then created the required tooling from a team of over 60 specialists.

As a result of this attention to detail, its tools have operated around very close tolerances during the machining process, so as to attain the highest quality of products for customer delivery.

Besides a quantitative assessment of productivity levels, Mr Lee explained that the tools allowed Jovan Tech to view all its improvement initiatives systematically and provided a road map for further improvements.

As the firm continues to look ahead, it plans to raise productivity by increasing its sales, moving on to deliver higher-value-added products, streamlining work processes as well as investing in systems which cut down on floor space, cycle time and input.

The company has also embarked on an internal campaign to ensure that employees are mindful of the need to constantly raise productivity, while also helping them to achieve the desired targets.

22/3/13 3:24 PM

21 Mr Jerome Lee, Managing Director of Jovan Tech

“Productivity is always important to us, as it helps us find better ways to do things and grow our business. The assessment showed us that productivity improvement was the result of the whole company’s efforts.”

Singapore’s economic structure may shift to more service-oriented industries, which are likely to be education and business services, he added.

This is in line with the growing trend in professional services highlighted in the White Paper, which noted that there is increasing demand for legal, accounting and consulting services.

In this context, it does not come as a surprise that the service sector, such as the food and beverage (F&B) industry, finds itself having to manage challenges such as labour shortage and rising food prices.

Many home-grown F&B firms readily acknowledged this challenge and have started to immerse themselves in and execute productivity strategies with a view to grow themselves.

Within the F&B space, there are numerous flag bearers which carry the productivity flag.

One which recently made significant progress is The Soup Spoon. The home-grown company managed to critically evaluate all aspects of its operations and implement several changes (see story on Delivering Good Soup through Workforce Management).

•

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Injecting productivity into building construction

M

any people view the building and construction industry as one of the most reliant on manpower and would understandably fail to see how technology and productivity can improve this sector.

Just ask home-grown Samwoh Corporation and the answer is likely to be not too far from the S$350 million in revenues it generates annually. In addition, this civil engineering company is setting the Singapore benchmark in introducing initiatives that push the boundaries of productivity.

The company tells BiZQ that its Samwoh Research and Development Centre has become one of the most advanced laboratories in the field of civil engineering in Singapore.

Leveraging on the expertise of highly qualified and experienced engineers with doctorate and master degrees, the laboratory tests all kinds of materials used in building technology – asphalt concrete, portland cement concrete, bitumen, aggregate and soil.

With five years of intensive research on its shoulders, the company leveraged on these insights to construct the Eco-Green Building. Using emerging and advanced technologies, as well as fibre-optic technology within the

columns of a building, the company gained insights into how much material compression affects the weight of a building, a Samwoh spokesperson said.

Based on this research, Samwoh was able to enhance productivity in its building operations, as it was much easier to ascertain the structural soundness of its projects.

Another key strategy that enabled Samwoh to increase its productivity was to seek alliances which contributed to this overall result.

The company was actively involved in research studies together with various tertiary institutions and government agencies. It received several R&D grants from government agencies to carry out research on green technologies.

In fact, the construction of Eco-Green Building was done with a research grant from the Ministry of National Development, which certainly helped in boosting productivity in what is considered a traditionally labour-intensive sector.

The successful completion of the Eco-Green Building showcases a breakthrough in construction technology, which will pave the way towards greater sustainability and environmental consciousness in construction projects.

•

21/03/2013 09:15

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22

In BiZ With

E

ver thought about what it would take to set up a manufacturing operation in Vietnam amid bureaucratic red tape?

Wonder what it takes to start a new business in Pyongyang, North Korea? Want to set up a teak joint venture in the remote, forested areas of Myanmar? Looking to secure a telecom licence in Mongolia?

These challenging markets are definitely not for the faint-hearted.

Yet, home-grown Kelvin Chia Partnership has been there – long before some of these markets were even talked about. The commercial law firm has found a winning formula that has not only helped clients operate successfully in these frontier markets, it has also done well for itself.

The firm has eight offices across the region, in countries such as Vietnam, Myanmar, Thailand, Indonesia, Cambodia and North Korea. With its strong regional network, businesses can look towards Kelvin Chia Partnership to help them springboard into these emerging markets.

BiZQ caught up with Singaporean founder Mr Kelvin Chia recently and captured some of his thoughts.

Veronica Tay

Overcoming the Unknown 022-023 InBizWith WF.indd 22

Mr Kelvin Chia was one of the early pioneers who set up operations in the Indo-China region. He tells BiZQ how he tackled these challenging markets.

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What advice can you give to Singapore companies who want to explore overseas?

One of our key strategies has always been to look for good local (in-country) talent. When we find someone capable and skilful, we will immediately hire the person.

This is important because the firm brings with it international professional expertise and services to the new market, while the local person understands how to work the ground.

In this regard, it is critical to choose a good partner, like our firm which has the tools, expertise and local knowledge necessary to navigate the complex cross-border investment landscapes, to help set up operations. For example, there are many legal, accounting and consulting firms that can help

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foreign investors set up a business in Vietnam and do the necessary documentation. However, when things get stuck, you will find it challenging to get the right partner to find solutions.

Our forte has always been focused on getting the job done for our clients. There is a high degree of bureaucracy in these new markets.

When our customers work with us, we will use our breadth and depth of local knowledge, experience and understanding, as well as extensive network of relationships to get the necessary licences and approvals required.

“Today, we can confidently say that we help our clients with finding the right business partners and securing licences and office premises, and point them in the right direction.”

Some years ago, we acted for a Swiss-owned flour-mill company that was looking to start a business in Vietnam. There were a lot of uncertainties because, initially, the government officials could not decide whether Vietnam should have a single huge flour mill in Da Nang to supply the entire country, or to have mills in the north, central and south of Vietnam.

There were worries about the negative impact on the sole stateowned flour-miller caused by the entry of a foreign player. The trade union and the local communist party were worried about people losing their jobs and the industrial users were concerned about having to pay more for their flour.

Hence, we started working with the state’s planning agency on the flour master plan of the country to

align it with our client’s investment plan. Then, through an influential local partner, we explained to the various stakeholders that by working with a multinational corporation, new technologies would be introduced and modern equipment and machinery would be installed, so there would be greater productivity, better product quality, as well as more job opportunities, higher wages and better training for the locals.

It took us almost a year to close the deal. Over this period, we had many discussions and working with the right people was critical.

Our firm has been able to do this because we have operated in these (various) countries for years and we understand their culture, etiquette and business practices, as well as how people work and approach things.

Did you have to take political sides when operating in these frontier markets?

Our firm is apolitical. We are ready to use our strengths to serve clients who need our services and, at the same time, make positive contributions to the local communities where we operate.

We are a guest in these countries and taking a political stand may not necessarily advance our clients’ causes or interests, which are what we built our practice on. Over time, we have come to understand the diverse operating climates, and are able to navigate and provide legal and downstream services. We have enough experience to achieve what our clients want from us.

Looking ahead, how do you see your firm progressing from here?

Today, we have about 200 people in the group, working across eight offices in the region. About five years ago, we had about 130 people.

As a result of our expansion, we generate 70% of our revenue in Singapore and the rest overseas.

We are growing very rapidly and expect our offices abroad to make up a bigger portion of the company’s operations in the future.

•

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What have been some of the challenges in exploring these frontier markets?

At the time when we went into places like Myanmar and Vietnam (almost 20 years ago), we just took the plunge and went along on the back of our clients’ needs.

Some of our early experiences were a nightmare. In some countries, we did not even have a place to operate from. In Hanoi and Yangon, we ended up operating out of hotel rooms. It was very tough to work in these countries and, in those days, it was incredibly hard just to find people who could converse in English with sufficient fluency.

Over time, we were slowly able to find local talent whom we hired immediately. With such in-country expertise, we were able to work our way around the individual markets.

Today, we can confidently say that we can hold our clients’ hands and walk them through everything of relevance that they need to know in these markets, from start to end.

It is not just about the legal aspects, but we can also help our clients find the right business partners and investment projects, secure licences and land, and liaise with local authorities. We will generally point them in the right direction.

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Inside SBF

SBF-led Committee Presents Budget Recommendations Issues of rising business costs, a manpower crunch and declining productivity are raised.

The SBF-led SME Committee (SMEC) has unveiled its 33 recommendations for Budget 2013 as a response to pressing issues faced

by SMEs, such as an inflationary business environment and a tight labour market.

Some of the key recommendations were presented to address concerns over tightening resource constraints, rising costs of doing business, productivity and the impact of the Government’s policy on foreign manpower.

In addition, there were calls for the Government to adopt a more involved and developmental role towards SMEs. This is in recognition that SMEs contribute over 50% towards Singapore’s GDP and employ 70% of its workforce.

As current macroeconomic conditions and high costs of doing business have a significant impact on SMEs and, hence, the country’s labour force, the SMEC urged the Government to give special consideration to this sector in Budget 2013#.

SMEs EMPLOY

70% of Singapore’s workforce and contribute over

50% towards the country’s GDP

Mr Lawrence Leow, Chairman of SMEC, explained: “These recommendations are the result of many discussions and outreach sessions with the SME business community, policy consultations with government agencies and research.

“Apart from reflecting business needs and concerns, our work also showcases the SMEC’s breadth and depth of analysis of the issues and challenges facing SMEs.”

Slowdown of the economy

Alvinn Lim

In 2012, many businesses faced major challenges that threatened their survival and trade figures were not assuring. As an export-led economy with a small domestic market, Singapore’s total trade declined 2.8% in the third quarter of 2012, and the economy is estimated to have grown by 1.2% for the whole of last year.

The DP Information Group’s SME Development Survey 2012 indicated that 15% of SMEs reported losses in FY2011, up from 11% in FY2010. Of these, 72% generated less than S$5 million in turnover

Upon approval 24 024-027 InsideSBF V4 WF.indd Please sign:

Name and Date:

BiZQ magazine goes bimonthly It’s hard to believe that BiZQ magazine is turning nine this year. We will be going bimonthly from the next quarter, with the first issue spanning July to August 2013.

In light of this, we would like to invite our readers and SBF members to write in and tell us what you would like to read about in our upcoming issues.

Please send your suggestions to corpcomm@sbf.org.sg. and high business costs eroded their profits.

The SMEC also urged the Government to be more flexible in its economic-restructuring policy for Singapore, so the nation can continue to groom domesticoriented industries and tap into emerging opportunities in the region.

SMEC recommendations After extensive deliberation, engagements with government agencies and consultations with businesses, the SMEC formulated recommendations around five key areas. Some of the suggestions include: 1 Costs of doing business The SMEC recommended that the Government delay further increases in foreign worker levies and provide a one-off SME cash grant of S$10,000 to help SMEs cope with

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•

# In Budget 2013, the Government will be giving a one-off cash grant of S$5,000 to SMEs to help them restructure. ## It further tightened the foreign manpower policy.

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Name and Date:

Africa missions

Singapore showcases at SAITEX/AB7 in South Africa June 30 - July 2

The Singapore Business Federation (SBF) is organising a Singapore pavilion for Africa’s Big Seven (AB7) and the 20th Southern African International Trade Exhibition (SAITEX) in South Africa.

SAITEX is the largest multi-sectoral export/ import showcase in Sub-Saharan Africa that facilitates trade throughout the region and internationally. Exhibitors include manufacturers and exporters representing a range of consumer goods, retail sectors and industrial supplies.

AB7 is a major foodand-beverage trade event focusing on retail products and merchandise, manufacturing and processing, packaging, retail solutions and technology, hospitality and food services.

SBF is organising a pavilion to showcase Singaporean products and services at the show.

This event, which SBF is taking part for the second time, enables Singapore companies to meet with trade visitors, including importers, agents, distributors, wholesalers and retailers from the southern African region.

Last year, visitors to the show numbered more than 15,000 from 53 countries, of which 26 were from Africa. The continent is a consumer market of 900 million, with a growing middle class and rising purchasing power.

For companies who are interested to exhibit at SAITEX/AB7, contact Alvyn Lim at alvyn.lim@sbf.org.sg.

Lagos International Trade Fair in Nigeria Nov 1-10

SBF is also setting up a Singapore pavilion for the upcoming Lagos International Trade Fair to be held from Nov 1-10 in Nigeria. The fair will take place at the Tafawa Balewa Square in Lagos, with a total exhibition space of over 50,000 sq m.

In addition, the event

Exploring Nigeria The nation is among the fastest-growing economies in the world and an upcoming economic powerhouse in Africa.

Nigeria has the largest market size in the continent, with a domestic population of 162 million consumers, a large Englishspeaking audience as well as a consumption pattern of a developing economy.

This is a chance to reach out to the ECOWAS community (comprising 15 countries), which has a population of 300 million.

will provide a good platform for Singapore companies that are interested in investment and trade-promotion opportunities in industries such as agriculture, apparel, automobiles and parts, computer hardware and software, consumer electronics, electrical equipment and supplies, fashion accessories, food and beverage, general industrial equipment, and office and school supplies.

The Singapore pavilion would allow local companies the opportunity to market their goods and services to Nigeria and the whole Economic Community of Western Africa States (ECOWAS), which comprises 15 member states.

For firms that are interested in exhibiting their products, contact George Chan at george. chan@sbf.org.sg.

•

SPH Library

rising business costs#.

2 Manpower and productivity It also recommended further delays in tightening manpower policies, such as levy increases, a further decrease in Dependency Ratio Ceiling quota for various work passes and an increase in minimum salary requirements for foreign workers. The SMEC also suggested that incentive schemes be introduced to help firms actively employ locals and rely less heavily on a foreign workforce##.

3 Financing It suggested introducing a Working Capital Loan Scheme, with a loan quantum of up to S$5 million with loan tenure subject to a cap of five years.

4 Internationalisation and market access The committee recommended that the Government review some of its procurement requirements to allow more SMEs to participate in its tenders.

5 Innovation It suggested that more effort be spent on translating technologies for commercial assimilation by local businesses, as well as on exploring the establishment of a local intellectual property bank.

Singapore is situated strategically in the emerging Asian region that shows the greatest promise of growth in the coming years. As Asia develops, the nation will likely see increased competition for investments and human capital.

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Inside SBF

SBF Supports International Programme Business fellowship provides immersion opportunities for participants in target markets.

iBF PROGRAMME DETAILS

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Topics that will be covered extensively in sessions include:

The Singapore Business Federation’s National Business Survey 2012/13 highlighted competition, unclear rules and regulations, manpower issues and the lack of overseas business knowledge, information and contacts as challenges faced when attempting foreign ventures. As a result, the Federation, in partnership with IE Singapore, will be extending its existing International Business Fellowship (iBF) Executive Programme to cover new markets, including Indonesia, India, Turkey, Russia, Myanmar and United Arab Emirates/Qatar.

SBF has been conducting the iBF Vietnam Programme since May 2010. Its recent run from March 2 to 9 this year

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in Da Nang and Ho Chi Minh City was the sixth edition in the series.

Participants attended lectures that covered Vietnamese culture in business administration, political and government structure, labour laws, regulations and relations in the country. These sessions were helmed by distinguished locals in their field, including members of academia, government officials and

Overview and analysis of the country’s economic performance in the past, present and the immediate future Current investment and taxation issues Legal pitfalls of doing business faced by foreign firms Current issues in human resource management and labour relations Challenges in business and project financing

private-sector individuals.

Over 10 attendees also participated in business-networking sessions and made site visits to the AscendasProtrade Singapore Tech Park and the Vietnam Singapore Industrial Park to have a better understanding of business in the context of Vietnam.

FUNDING FROM IE SINGAPORE

70% of course fees for participants

Comprehensive overview The iBF programme provides a comprehensive introduction and overview of the political, economic, social and cultural dimensions in these markets. It also helps participants understand how regulatory and economic liberalisation policies can be translated into new opportunities for Singapore-based firms.

In addition, the fellowship provides opportunities for participants to interact and learn from senior-level corporate management, academics and government officials.

They will also have market-immersion opportunities, which include networking activities with local businesses and Singaporeans based in the market.

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Engaging the business community SBF endeavours to enable its members and the wider Singapore business community to keep up with the latest industry news and trade opportunities in the country and around the world.

Briefing on enhanced Marriage and Parenthood Package Feb 7, 2013

9th Joint Meeting of Malaysia-Singapore Business Council (MSBC) Jan 14, 2013

This meeting was chaired by Mr Cheng Wai Keung, Singapore Co-Chairman of MSBC and Managing Director of Wing Tai Holdings Ltd. Key focuses for 2013 include the SME Business Forum, an SBF-led collaboration with Ascendas for the development of an industrial park, the exploration of services cooperation and a joint task force to work on facilitating cross-border congestion at checkpoints.

2013 Global Outlook: What’s in it for Singapore Business?

Feb 4, 2013 Over 200 participants attended the session, during which opportunities, challenges and implications for Singapore firms amid the existing business and economic landscape were discussed.

Netherlands CEO Economic Roundtable Jan 24, 2013 The event was attended by some 30 representatives from Dutch and Singapore companies that came together to discuss developments and challenges, policies and opportunities for Dutch companies, as well as views on international and regional developments.

Organised in partnership with the Singapore National Employers Federation, the event saw government representatives from MOM, NPTD and MSF sharing about the schemes and taking questions from an audience of close to 1,600.

Post-Budget briefing for trade associations and chambers (TACs) Feb 27, 2013

This session was conducted to better assist TACs in responding to members’ concerns over Budget 2013, and was attended by some 126 representatives. Most queries to the government representatives present focused on the Wage Credit Scheme, enhanced Productivity and Innovation Scheme, as well as expanded PACT and manpower policies.

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28

International Markets

Investing in Asia Singapore investors eye emerging markets in the region.

CHINA

MALAYSIA

INDONESIA

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A

sian countries such as Myanmar, Vietnam and Indonesia are attracting the largest percentage of Singapore’s investments abroad, according to a recent survey by the Singapore Business Federation.

In its National Business Survey 2012/2013, 24% of respondents polled said they were keen to look for opportunities in Myanmar, followed by Vietnam (21%) and Indonesia with (17%) (refer to Chart 1).

About 94% of companies said they are looking to Asia for better investment opportunities and to expand their businesses (refer to Table 1). Some 40% of firms also said they generated 70% of their revenues from overseas, although 33% of respondents said they are still focused on the local domestic market.

Among those firms who said that a large percentage of their turnover was generated overseas, many were in the trading,

028-30,32 InternationalMkts(e) WF.indd 28

manufacturing and logistics and transport industries.

Echoing similar sentiments, the latest data from IE Singapore also reveals that more than half of the Singapore companies that have invested overseas in 2011 chose Asian countries as their preferred investment destinations.

Asia received S$240 billion or 57.7% of Singapore’s direct investments abroad – a 6.5% rise from 2010. Total direct investments in all destinations combined, however, increased by only 1.7% or S$416.4 billion in 2011.

China was the top recipient with $76.6 billion, Malaysia with $34 billion, while Indonesia was third with $32.3 billion.

Increased trade relations In terms of 2012’s total trade, Malaysia, China and Indonesia were again the

Mr Teo Eng Cheong, Chief Executive of IE Singapore

“Emerging markets are not insulated from the global slowdown, but they continue to be the engines of growth for investment and trade.”

RISE IN SINGAPORE’S TRADE VOLUME

In 2011 THE REPUBLIC’S TR ADE WITH ITS PARTNERS 1 M ALAYSIA

Rose 1.3% to

S$113.4 billion 2 CHINA

Rose 2.4% to main drivers of Singapore’s growth, with the republic’s trade volume rising 1.1% in 2011 to S$984.9 billion.

Singapore’s trade with its largest trading partner, Malaysia, rose 1.3% in 2011 to S$113.4 billion.

In the same year,

S$103.8 billion 3 INDONESIA

Rose 1.8% to

S$79.4 billion

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29

CHART 1

Businesses looking to venture into Asia Level of interest in the top 10 investment destinations

21% 21%

VIETNAM

17% 18%

INDONESIA 14% 12%

THAILAND

2012 2011

13%

US

8%

CHINA (incl Hong Kong)

12% 22% 11%

CAMBODIA

11%

INDIA

18% 11% 12%

MALAYSIA

9%

PHILIPPINES 0%

5%

10%

15%

20%

Source: SBF National Business Survey 2012/2013

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25%

30%

Overseas presence by region

2012

2011

2010

Asia

94%

92%

97%

Europe

22%

21%

24%

Middle East

21%

21%

21%

America

21%

18%

21%

Oceania

14%

12%

17%

Africa

10%

11%

10%

Source: SBF National Business Survey 2012/2013

Hospitality invested S$37 million into its 108-unit Fraser Residence Sudirman, marking its first major foray into Jakarta’s market for serviced residences.

Mr Marcel Tjia, CEO of oil-and-gas player Interra Resources, said the company has expanded its exploratory and production activities in southern Sumatra, with four oil fields in Tanjung Miring Timur.

Truly Malaysia

24%

MYANMAR

TABLE 1

Singapore companies continue to expand in these markets

Singapore and Malaysia have recently announced that they are looking to build a high-speed-rail link in 2020 that will slash travel time between Kuala Lumpur and Singapore to just 90 minutes.

The journey between the two cities today takes, on average, eight hours by train, five hours by bus, four hours by car or 40 minutes by air.

This agreement is set to be the biggest infrastructure project by the two nations, and was unveiled by the prime ministers of both countries in February.

Several infrastructure companies are already

looking forward to bid for the project.

Malaysian conglomerate YTL has been lobbying for such a project for years, while Japanese and European rail providers are also expected to be eyeing the project.

In addition, a deal to develop a S$3.2 billion waterfront township in Johor was recently sealed in yet another major SingaporeMalaysia investment in the Iskandar region.

The joint venture along Johor’s southern coast is between CapitaLand, Temasek Holdings and Malaysia’s Iskandar Waterfront Holdings.

To be built on a manmade island on Danga Bay, the residential community will occupy 28.9ha and will be built in phases over 10 to 12 years. This development will feature high-rise and landed homes, as well as a marina, shopping mall, restaurants, serviced residences, offices and recreational facilities.

The project is CapitaLand’s first direct large-scale township investment and p.30

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the engines of growth for investment and trade.”

Some projects driving the growth of investment include Hyflux’s S$39 million investment to develop a wastewater treatment plant for Zunyi city in China’s Guizhou province.

Surface-treatment company Applied Total Control Treatment – with certifications to support the aerospace industry – ventured overseas for the first time. It invested S$6 million by opening a plant in Penang, Malaysia.

In addition, several consumer-lifestyle companies, such as fashion retailer Lalu Singapore and Pu Tien Restaurant, also expanded their presence in Kuala Lumpur in 2011.

In Indonesia, Frasers

Singapore’s trade with China increased 2.4% to reach S$103.8 billion, while trade with Indonesia rose 1.8% to S$79.4 billion.

China and Indonesia are the republic’s third- and fourth-largest trading partners respectively.

Mr Teo Eng Cheong, Chief Executive of IE Singapore, said local companies will continue to focus on developing markets because of their demographics – the middle class, a young population and urbanised markets. He explained that increasing consumer demand from such markets offers opportunities that will continue to fuel growth.

Mr Teo said: “Emerging markets are not insulated from the global slowdown, but they continue to be

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International Markets

Upcoming projects in Malaysia HIGH-SPEED R AIL LINK WATERFRONT TOWNSHIP

SPH Library

WELLNESS HUB

development in Malaysia.

“Given the close proximity and strong bilateral ties between Malaysia and Singapore, and increasing investor confidence in Iskandar Malaysia, CapitaLand finds this a compelling investment opportunity in a new upcoming development region,” Mr Lim Ming Yan, President and CEO of CapitaLand Group, told reporters at the signing ceremony in February.

Also in Medini Iskandar in Johor, more than 2,600 homes will be developed on two wellness centres named Afiniti and Avira.

The two projects have a combined gross development value of S$1.2 billion and will offer other amenities such as serviced apartments and shops.

With a strong focus on wellness – incorporating nature elements and services such as spas and medical facilities – they are designed to meet the increasing demand for a well-balanced lifestyle, said developer Pulau Indah Ventures.

Malaysia is also looking to diversify its economy for sustainable growth

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and to create new jobs.

It has announced the liberalisation of service sectors and human-capital initiatives to support new growth industries.

New initiatives such as human-capital development and the liberalisation of service sectors will open up opportunities for Singapore companies, especially in the healthcare and education sectors.

In addition, Singapore companies in the food and retail industry will benefit from a population with increasing disposable income.

From a geographical perspective, oil-andgas developments will be a key highlight for southern Johor, relevant to companies such as downstream service providers in maritime and logistics services.

Companies who seek greenfield opportunities, such as in eco-tourism and agri-commodities, can also look towards the East Coast and East Malaysia. Kuala Lumpur will remain the urbanised centre, where urban solutions such

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as green-building, water-treatment and renewableenergy solutions may be sought.

Since 2011, it has identified a series of projects under the 12 National Key Economic Areas through government entity Pemandu. Iskandar Malaysia, a key project that helped boost the southern region significantly, was seen as a tipping point last year.

INDONESIA’S STEADY GROWTH It has posted annual GDP growth of above

6%

since 2007, except for 2009, when the economy grew by 4.5% GDP per capita has risen to

S$4,550

Wonderful Indonesia The country has demonstrated its economic resilience by posting an impressive track record over the past few years, despite less than ideal global market conditions.

For the past five years since 2007, the economy has posted GDP growth rates above 6%, except for 2009, when it grew at a respectable 4.5%.

The rise of GDP per capita to S$4,550 is a strong boost for its middleincome segment and discretionary spending is estimated to have risen to above 50% of household

income, from a mere 30% just 10 years ago.

The consumer sector is buoyant and mega malls are sprouting up in Jakarta and Surabaya. Roads are also filled with lifestyle car models such as the Honda Jazz, the brand’s top-selling model in Indonesia.

Themed restaurants, including wine bars, are mushrooming and luxury labels such as Aigner, Jimmy Choo, Louis Vuitton and Valentino are available in second-tier cities such as Surabaya.

More significantly, producers are in an expansionary mode. They reported double-digit growth for 2011 and have continued to expand their production and logistics capacities in 2012.

Correspondingly, industrial-park developers have indicated that demand for industrial land, especially the larger contiguous plots, has been on the rise. p.32

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International Markets Singapore companies would do well to focus on selected sectors and partner with Indonesian private-sector enterprises.

China like never before Since early 2012, China has been encouraging more domestic and foreign private investments into energy-saving and environmentally friendly technologies, biotechnology, high-end equipment manufacturing, alternative energy and alternative-fuel cars.

Because of China’s ageing population, healthcare reform is a major theme.

Some Singapore players that have already made headway include Healthway Medical, China Healthcare and Q&M

INVESTMENTS IN CHINA The country has been encouraging more domestic and foreign private ventures in the following sectors: ENERGY-SAVING & ENVIRONMENTALLY FRIENDLY TECHNOLOGIES BIOTECHNOLOGY HIGH-END EQUIPMENT M ANUFACTURING ALTERNATIVE ENERGY ALTERNATIVE-FUEL VEHICLES

Dental Group. Having already gained some mindshare among Chinese consumers, they are likely to be on firmer ground to

Internationalisation and market access Push-pull factors for internationalisation As businesses contend with slower growth prospects, coupled with severe resource constraints and rising business costs in Singapore, many SMEs are taking a serious look at opportunities overseas.

More firms are viewing the growth markets in Asia, particularly the ASEAN region and China, as attractive locations to expand their businesses.

The DP Information Group’s SME Development Survey 2012

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found that 54% of SMEs have reported overseas revenues in 2012 – a 10% increase from a year ago. There was a drastic drop in companies that did not have overseas market presence as a main business strategy (from 45% in 2011 to 16% last year).

Smaller SMEs head overseas The survey also revealed that more SMEs with a turnover of between S$500,000 and S$10 million have overseas revenues in 2012 (see

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Seawater desalination Singapore is strong in the services sector and trade agencies such as IE Singapore and Singapore Business Federation will continue to assist Singapore firms in the healthcare, education, finance, media as well as aviation segments to acquire the right technologies, know-how and market access.

For more information on business missions, visit www.sbf.org.sg, or e-mail SBF’s ASEAN Business Group (market.asean@ sbf.org.sg) and China Business Group (market. china@sbf.org.sg) on the markets of China, Indonesia and Malaysia. ●

tap into new opportunities that will come about with further liberalisation of the healthcare sector.

Other services-led industries which may interest Singapore companies include: ● High-end healthcare, wellness and tourism hubs targeting the ageing affluent ● Education and training sectors that offer a holistic suite of customised services

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Presence of overseas revenue in turnover for 2011 & 2012

2012

2011

70% 60% 50% 40% 30% 20% 10% 0% Up to S$500,000 >S$1m to S$500,00 to S$1m S$5m

S$5m to >S$10m to S$10m S$100m

Overall

Source: Singapore Business Federation-DP Information Group

chart above).

Companies are looking for opportunities abroad even before establishing themselves locally. This new segment of SMEs focuses on and

initiates growth strategies in foreign markets, rather than growing in the domestic market first.

Overall, businesses remain cautious when expanding abroad.

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EUSFTA

Innovations

Pushing the Edge of Innovation The Netherlands-Singapore partnership has resulted in innovative ideas for emerging industries.

(European Union-Singapore Free Trade Agreement) 1

Offers companies from the Netherlands and Singapore better access to each other’s markets 2

Potentially boosts the technology and an electronics sectors 3

Elimin Eliminates tariffs on all imports from Singapore over five years BENE BENEFITING FROM THE FTA A ARE EXPORTERS OF

Electronics Pharmaceuticals Chemicals Processed food products

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S

ingapore pore and the Netherlands are fairly rly similar: Both countriess are small compared to their neighbours and value l efficiency and meritocracy in their respective economic systems, with their governments very much focused on trade and investment.

Singapore and the Netherlands are also seen as global hubs to Asia and Europe respectively. The former is one of the most prominent trade centres in Asia, while the latter is often seen as a gateway to the rest of Europe for both services and goods.

The stronger the relations between both global hubs, the stronger the position of these hubs in their respective regions, said Mrs Lilianne Ploumen, Minister

034-037 Innovations(e) WF.indd 34

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for Foreign Trade and Development Cooperation of the Netherlands. Speaking to BiZQ recently during her first ministerial trip to Singapore since her appointment last November, she emphasised that both Dutch and Singaporean companies are known to be very innovative.

“The Netherlands is a relatively small country but, like Singapore, it has much to offer investors and business partners,” said Mrs Ploumen.

“Collaboration and exchange of knowledge would create good opportunities for both countries and create an open economy for

Singapore and the Netherlands,” Singap she explained. expl “It is important for us to connect with Singapore; and connect conn to what is going on in emerging markets such as Vietnam.

Our strategy strat is to function as a global hub hu and share innovations by looking lookin out for more business partners.” partners Mrs Ploumen P was in Singapore o the delegation for the as part of visi of Her Majesty Queen state visit Beatrix o of the Netherlands in January accompanied a

by His Royal Highnesses, The Prince of Orange, and Princess Maxima of the Netherlands. Mr Frans Timmermans, the Dutch Minister for Foreign Affairs, was also present.

Free trade agreement During her visit, Mrs Ploumen met with Mr Lim Hng Kiang, Singapore’s Minister for Trade and Industry. The two ministers discussed the benefits of the European Union-Singapore Free Trade Agreement (EUSFTA). Both agreed that the EUSFTA would further enhance the EU’s economic

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35 from the removal of the EU’s tariffs.

The agreement will be signed after all domestic processes, including translations and verifications, are completed.

“Singapore is a global hub for doing business across the Asian region,” said Mrs Ploumen. “This agreement will open the gateway between Asia and Europe, and provide opportunities for both Dutch and Singapore companies.”

Mrs Ploumen’s visit fits into the scope of the internationalisation strategy of key sectors in the Netherlands.

Some of the industries in which the Netherlands and Singapore can further expand their collaboration include water and p.36

Linking local firms to potential partners Singapore and the Netherlands have rapidly growing trade and investment relations, and foreign trade is an important driving force for both countries.

“The Netherlands Foreign Investment Agency (NFIA) is a facilitator that will help Singapore companies internationalise and expand into Europe,” said Mrs Lilianne Ploumen, the Netherlands’ Minister for Foreign Trade. “Our investment agency will help local firms understand the Netherlands and Europe, and link them with potential partners and networks to expand their businesses.”

NFIA works closely with partners like the Singapore Business Federation, IE Singapore and the Singapore International Chamber of Commerce.

The Netherlands is an important economic partner to Singapore. In 2012, the country was Singapore’s third largest trading partner in the EU, with total bilateral trade at S$18.68 billion. Thus, many business oppportunities in the Netherlands exist for Singapore firms.

There are currently more than 70 Singapore companies in the Netherlands involved in a wide

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SingaporeNetherlands SME partnerships

spectrum of industries, including retail, life sciences, maritime, electronics, logistics and information technology. CWT Commodities and Keppel Offshore and Marine are just two of them.

A large number of Dutch companies, including strong players such as Shell and Philips Electronics, also conduct a scope of activities along the value chain, from manufacturing to research and development, in Singapore.

The Netherlands continues to be very attractive to foreign enterprises.

In 2012, NFIA supported 170 foreign investment projects, with a total value of more than 930 million euros (S$1.5 billion).

These projects will result in 5,166 jobs created, of which 1,795 are related to job retention. The rate of job retention last year nearly doubled in comparison to 2011, according to latest annual results from NFIA. As a Dutch government agency, NFIA offers its services on a complimentary and confidential basis.

For more information on NFIA, visit www.nfia-singapore.com.

Pan Asian Holdings and Duvalco B.V. One successful example is the collaboration between Singapore piping-system supply company, Pan Asian Holdings, and a Dutch valve manufacturer for maritime and water sectors, Duvalco B.V. The Singapore company acquired Duvalco as a marketing base to spearhead its sales in Europe and the Middle East, leveraging on the established Duvalco brand in Europe. A local team was appointed for business development and for tapping on Duvalco’s design and manufacturing expertise and network in Europe.

Mooreast Asia Pte Ltd and Vryhof Anchors Founded in 1993, Singapore company Mooreast Asia specialises in the fabrication and distribution of offshore anchors and mooring equipment in the marine and offshore sector.

Mooreast Asia is the only company in the East to be given the licence to manufacture offshore anchors, based on the design owned

by Vryhof Anchors. Its key customers are mainly oil majors such as Chevron and offshore-supportvessel builders such as Swiber.

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linkages with Singapore and the wider ASEAN region.

The EUSFTA, which was successfully concluded last December, will offer companies from both countries better access to each other’s markets and potentially boost the technology and electronics sectors.

Singapore is the first country in Southeast Asia to clinch an FTA with the EU and the agreement will see the EU eliminating tariffs on all imports from Singapore over five years. A total of 80% of tariff lines will be covered once the agreement comes into force.

Singapore exporters of electronics, pharmaceuticals, chemicals and processed food products, in particular, will benefit

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Innovations

THE COLLABORATIONS PUB & PWN TECHNOLOGIES

are in the search for innovative solutions to meet Singapore’s growing demand for water in a more efficient manner and boost its status as a global hydro-hub A*STAR’S INSTITUTE OF MICROELECTRONICS & NXP SEMICONDUCTORS

are looking to develop energyefficient technology for computing, communications, aerospace and automotive applications A*STAR’S INSTITUTE OF MEDICAL BIOLOGY & UMC UTRECHT

worked together on cardiovascology research in 2009 A*STAR’S INSTITUTE OF BIOENGINEERING AND NANOTECHNOLOGY & UNILEVER

are collaborating to design novel food, hair and skincare products maritime, technology, life sciences and health, as well as food and nutrition.

Water, water everywhere The strong ties between Singapore and the Netherlands are evident in their active collaboration in commercially relevant research and development areas such as water.

Singapore’s national water agency PUB will work with Dutch watersupply firm PWN Technologies in the search for innovative water solutions to meet Singapore’s growing demand for water in a more efficient manner and boost its status as a global hydro-hub.

PUB and PWN Technologies will collaborate on advanced water treatment, such as ceramic membrane filtration. The two sides will work together to reap scientific

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and technological benefits by developing knowledge-intensive programmes and projects. The new joint development is funded

by Singapore’s Environment and Water Industry Programme Office’s TechPioneer scheme.

They will also collaborate to coorganise the Global Water Utilities Innovation Forum in Amsterdam on how the water industry can address the future challenges of dwindling water supply, energy and sustainability.

“The Netherlands and Singapore share one common issue: water management,” said Mrs Ploumen.

“We are very keen to find the most energy-efficient way of managing water and hope that this will be the first step of many to follow.”

Sustainable energy solutions While the Netherlands aims to advance its wind and solar energy sectors at home, the government is also looking to push sustainable energy and energy-saving projects off the ground. It promotes such efforts through its Green Deal approach.

One such initiative is the collaboration between NXP Semiconductors and A*STAR’s Institute of Microelectronics (IME).

Both are looking to develop energyefficient technology for computing, communications, aerospace and automotive applications.

Last year, both NXP and IME entered into a collaboration to develop a 200mm gallium nitrideon-silicon (GaN-on-Si) process, as well as technology for high-voltage power devices to deliver highly efficient energy solutions.

Biomedical research In 2009, the Netherlands’ UMC Utrecht and A*STAR’s Institute of Medical Biology (IMB) collaborated on cardiovascology research.

The project involves research on the secretion of mesenchymal stem cells and demonstrated that this secretion was effective in reducing tissue injury in animal models of ischaemic heart disease.

IMB and UMC researchers

Mrs Lilianne Ploumen, the Netherlands’ Minister for Foreign Trade and Development Cooperation

“Collaboration and exchange of knowledge would create good opportunities for both countries and create an open economy for Singapore and the Netherlands.”

About Mrs Lilianne Ploumen She was appointed Minister for Foreign Trade and Development Cooperation on Nov 5, 2012.

Mrs Ploumen was previously working for development organisation Cordaid as director of international programmes from 2001 to 2007. She also worked as a fundraising coordinator for Mama Cash, an international fund supporting women’s initiatives, going on to become the organisation’s director from 1996 to 2001.

She started her career in 1995 when she founded Ploumen Projecten – an organisation specialising in market research and innovation for commercial and non-profit clients.

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37 were the first group in the world to demonstrate the potential of exosomes in treating diseases and more than 10 papers were jointly published on the subject.

This collaboration has since expanded to include the development of an exosomebased biomarker discovery platform to identify biomarkers for the diagnosis and prognosis of cardiovascular diseases.

Food and nutrition Moving towards commercially relevant research, the A*Star Institute of Bioengineering and Nanotechnology and one of the world’s leading suppliers of fast-moving goods, Unilever, are working together to design novel food, hair and skincare products, especially for diverse Asian markets.

“People in various parts of Asia have diverse constitutions and innovation has huge potential in the food and nutrition industry,” observed Mrs Ploumen. Unilever is established in producing nutritional, hygiene and personal-care products, and owns some of the world’s best-known brands such as Lipton, Wall’s and Dove.

Putting SMEs on the map In terms of internationalisation, what will this mean for small and medium enteprises (SMEs)?

Just as in Singapore, the Dutch government has plans to focus on what it calls the triple helix – partnerships among the private sector, public sector and advocacy, said Mrs Ploumen.

Tax credit schemes will provide some two billion euros (S$3.2 billion) in tax incentives to encourage investment in innovation and 30% of this amount will benefit SMEs. To connect SMEs from both countries, some 150 Singapore and Dutch firms attended the Netherlands-Singapore SME Seminar in January. The theme of the event was Innovation to Enhance Productivity.

Together with government officials from both countries, the SME representatives discussed

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best practices in developing the SME sector and how to harness innovation for productivity growth.

More Singapore and Dutch SMEs are also working together to drive business growth in Europe and Asia. For example, Mooreast Asia, a Singapore company specialising in the fabrication and distribution of offshore anchors and mooring equipment in the offshore and marine sector, is the only company in the east to be given the licence to manufacture offshore anchors.

The design is based on that of Vryhof Anchors, which provides drag anchors and related mooring equipment for larger floating structures and offshore energy industries.

Another successful example is Pan Asian Water Holdings’ collaboration with Duvalco B.V. on business, design and manufacturing development in the European and Middle Eastern markets.

The Singapore firm provides piping-system solutions for water purification and wastewater treatment in the Asia-Pacific.

Thirty Dutch and Singapore representatives also attended the CEO Roundtable, organised by the Embassy of the Kingdom of the Netherlands and supported by Singapore’s Ministry of Trade and Industry and the Singapore Business Federation (SBF). The event was moderated by Mr Ho Meng Kit, CEO of SBF.

•

Singapore-Netherlands R&D collaborations Monitoring life sciences Maastricht Instruments BV and the National University of Singapore are working to integrate a respiratory monitoring system in Singapore to further R&D activities.

Interactive technology: Smart TV A*STAR’s Singapore Institute of Manufacturing Technology collaborated with Philips Electronics Singapore to study antistatic sol-gel coatings for their irons. The Institute for Infocomm Research (I2R) and

Philips Electronics also worked on the Enhancing Personalisation for Smart TV project between 2009 and 2010. I2R developed a software to show that interactive TV could be personalised based on analysis of the audience in factors such as gender, number of viewers and facial pose.

Research attachment for students A*STAR has been engaging students from the Netherlands to explore R&D opportunities in Singapore.

To date, 10 undergraduate and masters degree students from the Netherlands have completed short research attachment stints at its research institutes under the Singapore International Pre-Graduate Award programme.

Source: Ministry of Trade and Industry

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SME Resources

Top SMEs Deliver Stronger Performance

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Survey of leading 1,000 companies reveals better sales and profits.

Small and medium enterprises (SMEs) in Singapore have shown resilience in the face of a volatile and uncertain macroeconomic environment, despite an overall bearish sentiment.

In a recent DP Information Group survey – the Small and Medium Enterprise 1000 (SME1000), which ranks the most successful 1,000 SMEs in Singapore – the research group revealed that the top 1,000 companies generated S$29.4 billion in combined sales in 2012.

This is an 11.8% increase from 2011. In addition, their combined profits were S$3.4 billion, 28.6% more than 2011.

038, 040 SME Resources(e) WF.indd 38

Top-performing sectors Hospitality and food-andbeverage (F&B) companies delivered the biggest leap in combined sales last year, just as in 2011.

The sector’s revenue jumped by 22.3% to S$652.5 million in 2011 while, last year, it added another 46.7% in revenue, taking its total revenue to S$957 million.

This has resulted in an 83.1% increase in combined profits. Much of this increase came from the leap in the number of F&B companies making the list – from 27 to 34 this year.

SME manufacturers are also doing well, with their combined sales jumping by 31.4%.

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SMEs in two manufacturing sectors – Chemical Products (156.3%) and Fabrics/ Personal Effects (118%) – saw sales in 2012 more than double from 2011.

The SME1000 survey was conducted together with the Singapore 1000 (S1000) – which ranks the largest and most successful 1,000 companies – and the Singapore International 100 (SI100), which recognises the top 100 firms that generate the most global revenue.

Pacific Ocean Engineering & Trading won the inaugural Crossing $100 million Turnover SME Award 2013.

The combined sales of Singapore’s corporate leaders increased by an impressive 21.7%, from S$1.98 trillion in 2011 to S$2.42 trillion in 2012.

Ms Chen Yew Nah, Managing Director of DP Information Group, said the S$2 trillion mark is a significant milestone.

“Cracking the S$2 trillion mark is remarkable, given that S$1 trillion in sales was only achieved in 2007. And, during the last six years, the world suffered a major economic crisis,” she explained.

“S$2.4 trillion is more than the GDP of every country in the world, except the 10 largest economies.”

The rankings are the most comprehensive audit of the performance of Singapore’s corporate sector. The financial results of more than 40,000 companies were analysed before arriving at the final list.

•

STRONGER SALES SMEs in these two manufacturing sectors saw sales in 2012 more than double from 2011.

Percentage growth in sales as follows: CHEMICAL PRODUCTS

156.3% FABRICS/ PERSONAL EFFECTS

118% COMBINED SALES of Singapore’s corporate leaders increased from

S$1.98 trillion in 2011 to S$2.42 trillion in 2012 Research partners The S1000, SME1000 and SI100 are conducted and published by DP Information Group, with Ernst and Young as the coproducer. The surveys are supported by ACRA, IDA Singapore, IE Singapore, SPRING Singapore and Singapore Business Federation. The financial results of more than 40,000 firms were analysed to arrive at the final list.

20/03/2013 17:41

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BiZQ is the official publication of the Singapore Business Federation, the nation’s apex business chamber with more than 19,000 members.

Distributed to some 21,000 readers – many of whom are decision-makers such as CEOs, managing directors and entrepreneurs – BiZQ keeps them informed and updated of the latest economic trends, industry news and trade and investment opportunities in Singapore and overseas. The multiple-awardwinning publication also provides an analytical approach to, and in-depth coverage of, issues that matter.

To find out more about advertising in BiZQ, please fill in this form with your contact details and fax this page to the Singapore Business Federation at 6827-6807 or SPH Magazines Custom Publishing at 6319-3095, or contact the Singapore Business Federation at 6827-6828.

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SME Resources SME Workshops Enterprise Risk Champions Training Course May 6-9 SBF Seminar Room, Keppel Towers

The Singapore Business Federation (SBF) and the Asia Risk Management Institute developed the Enterprise Risk Champions programme to drive strategic business projects from design to integration.

The aim of this course is to improve sustainability and differentiate risk capability for profitable growth.

Some of the key learning objectives include achieving an in-depth understanding of the business, social and regulatory context of key risk management issues, which justify the business case for strategic risk management for any organisation. www.sbf.org.sg

Risk Management Course (bizSAFE Level 2) May 22-23 SBF Seminar Room,

SPH Library

Keppel Towers

This is a two-day certification course organised by SBF, in collaboration with a bizSAFE training provider, and approved by the Ministry of Manpower to help SBF members embark on the bizSAFE journey.

The bizSAFE programme consists of five steps to help enterprises build up their Workplace Safety and Health (WSH) capabilities, in order to achieve quantum improvements in safety and health standards

038, 040 SME Resources(e) WF.indd 40

at the workplace.

Companies will be guided through a journey, starting from the top management demonstrating their commitment towards WSH, to acquiring riskmanagement capabilities and implementing a WSH Management System.

Upon completion of the workshop, participants will be awarded the bizSAFE Level 2 certification that is recognised by the Workplace Safety and Health Council. www.sbf.org.sg

Understanding Occupational Health and Safety Management System June 20-21 SBF Seminar Room, Keppel Towers

This two-day workshop will help participants implement the Occupational Health and Safety Management System at their workplaces.

They will also learn auditing skills and knowledge in order to assess and improve their respective health and safety management systems.

Some of the topics that will be covered include key changes between OHSAS 18001:1999 and 18001:2007, and different approaches on how to address these changes.

Participants will be updated on the latest regulatory requirements.

They will also be guided on how to develop a measuring and monitoring system to control potential hazards. www.sbf.org.sg

Upon approval Please sign: Name and Date:

Upcoming Events MTA 2013/ Metrology Asia 2013 April 9-12 Singapore Expo

MTA 2013 and Metrology Asia 2013 are two events aimed to serve highly complex sectors such as aerospace, electronics, energy, media, as well as oil and gas.

This event aims to gather innovative technologies and cost-effective solutions for both international and regional machine tool brands.

With Singapore as the key manufacturing hub in Asia, MTA is an effective platform for machinetool brands to launch their latest products and services in Asia.

In addition to being a hotbed for product launches that cater to the demands of the high-end manufacturing verticals, MTA 2013 will also see market leaders presenting their newest and most updated solutions.

and media communications events are set to return this year to showcase the latest technologies and trends.

The events will feature a special emphasis on content, as they bring together experts and exhibitors from around the world to showcase and share the latest technological developments and insights across the entire value chain of the ICT, broadcasting, pro-audio, film and TV industries.

Three specialised tech zones at CommunicAsia2013 will showcase cuttingedge innovations and services that will bring value to businesses: ● Fibre for NextGen Services ● APPSmart ● NextGen Connected Services www.communicasia.com

LETTERS FROM OUR READERS If you have any views, comments or suggestions about BiZQ or other SBF events, we want to hear from you. Please send your contributions to:

Marina Bay Sands

The Editor BiZQ Magazine Singapore Business Federation 10 Hoe Chiang Road #22-01 Keppel Towers Singapore 089315.

Asia’s largest information and communications technology (ICT),

Or e-mail us at corpcomm@sbf.org.sg.

www.mta-asia.com

CommunicAsia 2013/ EnterpriseIT 2013/ BroadcastAsia 2013 June 18-21

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