2014 | BiZQ | Jul - Sep by Singapore Business Federation Publications

Jul•Aug•Sep 2014 BUILDING THE FUTURE

Who will take over your business? SINGAPORE ECONOMY

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 Cover BQ Jul-Sep 14.indd 1

Manpower crunch ahead BIG DATA OPPORTUNITIES

Consumer insights a value add for businesses

An Effective Voice for Businesses SBF Chairman Tony Chew reflects on the chamber’s role as a strong advocate

Upon approval Please sign: Name and Date:

11/06/2014 16:49

6-023 OAOS Ad SBF BizQ Mag.ai

Jun/03/2014

12:30 PM

The Asset

Specialist Award for Emerging Corporates in Asia Pacific 2014 Specialist Award for SMEs in Asia Pacific 2014

Asia’s Safest, Asia’s Best Safest Bank, Asia 2009 – 2013, Global Finance Best Managed Bank, Asia Pac 2013, The Asian Banker Best Bank, Asia Pac 2014, Global Finance

*Terms and conditions apply. (1) Only applicable to new corporate customers who open their DBS corporate accounts online. (2) Corporate accounts must be opened between 1 Mar 2014 and 31 Aug 2014 and all other terms and conditions applicable to corporate accounts shall apply. (3) DBS IDEAL fee waivers includes set-up fees and monthly subscription fees. (4) 3 months fee waiver from account opening date for the following transactions conducted using DBS IDEAL – telegraphic transfers, account transfers, MEPS (MAS Electronic Payment System) and GIRO (General Interbank Recurring Order). (5) Prevailing cable charges and agent fees will apply for telegraphic transfers. (6) DBS may vary these terms and conditions or discontinue any promotion at any time without any notice or liability to any party. Deposit Insurance Scheme Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$50,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured. DBS Bank Ltd Co. Reg. No.: 196800306E May 2014 TM

Jul•Aug•Sep 2014

Chairman’s Message

Building a Steady Foundation for an Apex Business Chamber The 12th Annual General Meeting of the Singapore Business Federation is an opportunity to take stock of what has been accomplished, and what is yet to be achieved. Over the last few years, we have achieved major milestones. SBF has seen a steady rise in activities, missions and delegations. It has become a major voice of the business community. We have worked collectively to build the capability of our companies and improve the business operating environment, both at home and abroad. In 2013, we broke new ground with the launch of several important initiatives. We launched the SBF Foundation, established the NTU-SBF Centre for African Studies, and inaugurated the SBF Business Institute. We look forward to another milestone in the opening of SBF’s permanent headquarters in late 2016 at a prime downtown development, named the SBF Center. The formation of the SBF-led SME Committee in 2011 has provided SBF Members, particularly SMEs, with a stronger voice to the Singapore Government. SBF has become an effective advocate of business. The Government has recognised our wide representations, good data and careful deliberations. The SME Committee’s contributions to business policy are appreciated by the Government as well as the business community.

As I wrap up my six-year term as Chairman of SBF, I am leaving the Federation on a high note and in good hands. SBF is still a young organisation. The foundations have been laid for continuous service to Singapore’s business sector and its 21,000 SBF Members. Our services – both at home and abroad – have a strong foundation. SBF must continuously grow and reinvent itself, looking far ahead into the future. Singapore must remain a few steps ahead of rising economic and market challenges. SBF will play a critical role in this process. I would like to take this opportunity to thank the Board of Trustees, my fellow Council Members, the SBF Secretariat, business partners and you, our Members, for your strong commitment, dedication and support. It has been an immense honour and privilege to work with all of you, and to have played a part in building SBF as Singapore’s apex business chamber. Thank you.

Tony Chew Leong-Chee Chairman Singapore Business Federation

001 ChairmanMsg.ab.sbf.ed.ab.indd 1

Upon approval Please sign: Name and Date:

10/06/2014 17:26

BizQ

Jul•Aug•Sep 2014

Contents

Economy Watch

Economy Undergoes Transition 06 Singapore BiZQ takes a closer look at how small and medium enterprises in Singapore are managing the cap on foreign manpower supply.

BiZ Voice

Improving Regional Trade through ABAC Business leaders urge APEC to speed up AsiaPacific FTA process through comprehensive partnerships.

Commentary

BiZQ looks into what the Fair Consideration Framework means to Singapore companies, and what they need to look out for.

Gettyimages

Is Your Business Ready for FAIR?

18 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.

002,004 Contents.ab.indd 2

Upon approval Please sign: Name and Date:

BiZ Feature

SBF: Becoming an Effective Advocate of Business BiZQ looks into how SBF has been recognised for its efforts in championing the needs of the local business community.

Cover photo: Veronica Tay

ABOVE: Outgoing SBF Chairman Mr Tony Chew is heartened that SBF’s activities and members’ participation in them have grown steadily over the years.

11/06/2014 09:58

Jul•Aug•Sep 2014

4 Publisher Singapore Business Federation 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

In BiZ With

Planning for Business Succession Baker Tilly Pitcher Partners’ Dr Richard Shrapnel urges family-run companies to plan ahead for business evolution.

chairman

Tony Chew chief executive officer

Ho Meng Kit Innovations

chief operating officer

Victor Tay assistant executive director (member relations)

Cheryl Kong director, corporate communications

Gerald De Cotta Publishing Agent SPH Magazines Pte Ltd group editor-in-chief

Caroline Ngui group editor

Big Data, Big Opportunity Analysing meaningful information, such as consumer buying patterns, can add value to your business.

Inside SBF

Joanna Lee-Miller editorial & creative senior editor

SBF Leads Mission to Portugal, Switzerland SBF members gain better understanding of EU market dynamics and opportunities.

Dora Tay contributing editor

Casuarina Peck sub-editor

Annabelle Bok associate creative director

Jayson Ong

International Markets

art director

Winnie Ong senior designer

Mohamed A Rahman

Africa Shines with Opportunities BiZQ checks out the recent buzz surrounding investment opportunities in various West African countries.

managing director

Dennis Pua general manager

Christopher Chan sales & client management associate account director

Kaz Lim account manager

Lin Mi’er senior executive, client management

SME Resources

SMEs Eye Enhanced Micro Loan Initiative A recently announced enhancement to the Micro Loan Programme will help SMEs grow their businesses.

Neo Pei Shi publishing services team head

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

002,004 Contents.ab.indd 4

Upon approval Please sign: Name and Date:

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) 119/03/2014. Printed in Singapore by timesprinters, Singapore (Registration No. 196700328H).

11/06/2014 09:58

05_08_BizQ Mag Ad - 255x185mm-02.pdf 1 4/6/2014 2:52:38 PM

CMY

Jul•Aug•Sep 2014

Economy Watch

Singapore Economy Undergoes Major Transition

Mr Leong Wai Ho, Senior Regional Economist, Barclays Singapore

The May Day message is an “apt reminder that global competition is intensifying. As wage costs rise due to labour tightening and the ageing of Challenging issues such as manpower crunch typical of our workforce, along maturing society, says labour chief. comes pressure for workers to be ever s Singapore observed May phase of economic development. more productive.” Day this year, there were Hence, Singapore’s restructuring

SPH – The Straits Times; George Steinmetz; Maximilian Stock Ltd, Corbis

grim reminders that the cap on foreign labour supply will continue for the foreseeable future. At the same time, stronger tailwinds in regional and global economies are seen to be lifting Singapore’s business sentiments and outlook. If businesses operating in Singapore view the current manpower crunch as a mediumterm phenomenon, BiZQ thinks it is time to review such sentiments. According to Singapore’s National Trades Union Congress SecretaryGeneral Lim Swee Say, the manpower crunch will continue to bite and is here to stay. In his May Day 2014 message, Mr Lim said: “Employers have to learn to make better use of every worker, and treat every worker better. The labour market will remain tight till 2020, and even tighter all the way to 2030.” On the back of this message from the labour chief, Singapore’s Minister for Manpower, Mr Tan Chuan-Jin, earlier said that while the labour market remains tight with close to full employment, Singapore will operate in a new

006-009 EconomyWatch.ab.cp.sbf.ab.indd 6

efforts must continue. Underlying the pivotal message that there will be no change in the position of a cap on foreign labour supply, Mr Tan said: “We will continue to strongly encourage businesses to innovate and strive for productivity improvements, and in turn, raise the wages of our workers.”

Intensifying competition This latest assessment of the labour market should come as no surprise. As Barclays Singapore Senior Regional Economist Leong Wai Ho explained, the May Day message is an “apt reminder that global competition is intensifying. As wage costs rise due to labour tightening and the ageing of our

10/6/14 5:53 PM

GDP Growth: A Peek at 2014, 2015 Growth

workforce, along comes pressure for workers to be ever more productive.” Notwithstanding that the screws on the supply of foreign manpower is expected to stay tight, the Singapore economy continues to climb higher on the back of the stronger global economy. Hence, not all the recent news is dismal. Prime Minister Lee Hsien Loong said in his May Day 2014 message that the government remains committed to delivering initiatives that aim to create better workers, better jobs, and most importantly for businesses, better lives.

2011

2012

2013

2014f

2015f

1.8

2.8

1.9

2.2

2.4

-0.5

1.4

1.5

1.4

1.0

EUROZONE

1.6

-0.7

-0.4

0.7

1.0

INDONESIA

6.5

6.2

5.8

6.0

6.1

US JAPAN

MALAYSIA

5.1

5.6

4.7

5.2

4.8

PHILIPPINES

3.6

6.8

7.2

6.6

6.5

SINGAPORE

6.0

1.9

4.1

4.0

3.6

THAILAND

0.1

6.4

2.9

3.1

5.3

VIETNAM

5.9

5.0

5.4

5.7

CHINA

9.3

7.7

7.5

GDP Growth (% YoY)

7.5 Source: DBS Bank

Q1 advanced estimates in biomedical manufacturing output and stronger growth in chemicals output. On a quarter-on-quarter basis, the sector grew at an annualised rate of 4.5%, compared to the growth of 10.4% in the preceding quarter.

Positive uptrend Although the preliminary GDP figures have been released, economists told BiZQ that there is more upside to the economy, especially since the latest industrial production figures have been robust. Economists at DBS Bank pointed out to BiZQ that the 12.1% surge on a year-on-year basis in industrial output in March underpins the

14 1Q

13 4Q

13 3Q

13 2Q

Singapore’s GDP – 1Q 2014 Up 5.1% Percentage change over corresponding period of previous year

Overall GDP Goods Producing Industries (Manufacturing) Construction Service Producing Industries

0.6

4.2

5.8

5.5

4.1

5.1

-6.3

0.8

5.3

7.0

1.7

8.0

5.6 3.2

6.6 5.7

6.6 6.3

4.8 5.9

5.9 5.3

6.5 4.7

Quarter-on-quarter annualised growth rate, seasonally-adjusted

Overall GDP Goods Producing Industries (Manufacturing) Construction Service Producing Industries Source: Ministry of Trade & Industry, Singapore

006-009 EconomyWatch.ab.cp.sbf.ab.indd 7

1.5

14.9

0.3

6.1

4.1

0.1

1.0

17.6

0.0

10.4

1.7

4.5

3.9 2.3

9.7 15.7

5.2 0.2

1.4 6.1

5.9 5.3

10.7 -1.8

* Advance estimates

Mr Lim Swee Say, Secretary-General, National Trades Union Congress

“Employers have to learn to make better use of every worker, and treat every worker better. The labour market will remain tight till 2020, and even tighter all the way to 2030.” strength in the Singapore economy (refer to table: GDP Growth – A Peek at 2014, 2015 Growth). “This is about twice the pace predicted by the market, and implied in the advance GDP estimates (about 6.5% YoY),” said DBS economist Irvin Seah. “Importantly, this will lead to an upward revision in the manufacturing growth figure for the first quarter to 9.8% YoY, from the 8.0% projected previously,” Mr Seah elaborated. “More importantly, a significant upward revision to the first quarter GDP growth figure is in the making. (The manufacturing sector accounts for about 27% of overall GDP). “This upward adjustment in the p.8

SPH Library

Against this backdrop, advanced estimates by the Ministry of Trade and Industry showed that the Singapore economy grew by 5.1% on a year-on-year basis in the first quarter of 2014, lower than the 5.5% growth in the previous quarter (refer to table: Singapore’s GDP – 1Q 2014 Up 5.1%). On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew by 0.1%, moderating from the 6.1% expansion in the preceding quarter. On a year-on-year basis, the manufacturing sector grew by 8.0%, following the 7.0% expansion in the previous quarter. The faster pace of expansion was largely due to a sharp rebound

10/6/14 5:53 PM

Jul•Aug•Sep 2014

Upbeat about manufacturing sector The Singapore Economic Development Board (EDB) recently released the results of a survey of business sentiments on the manufacturing sector for AprilSeptember 2014. This forward-looking survey revealed that more growth is expected ahead, and business sentiments in the manufacturing sector are expected to be positive in the next few months, ending September, on the back of improved economic conditions in the US and Europe. Overall, a weighted 12% of manufacturers expect business conditions to improve while a weighted 5% foresees deterioration. This resulted in a net weighted balance of 7% of manufacturers expecting a favourable business situation for this period as compared to the first quarter of this year.

SPH–The Straits Times; Barry Austin, Corbis

Mr Ho Meng Kit, CEO, Singapore Business Federation

“We urge SMEs to make a concerted effort to pursue growth by tapping into the recent Budget measures which provide support for innovation, financing and internationalisation.”

006-009 EconomyWatch.ab.cp.sbf.ab.indd 8

-3Q 14 2Q

-2Q 14 1Q

13 4Q

f 14

14 -1Q

13 3Q

-4Q

13 -3Q 13

OVERALL INDEX (OUT OF 100)

manufacturing sector growth alone will add about 0.5%-point to the headline GDP growth figure for the first quarter. “Moreover, chance is high for the services sector growth to be revised upward as well,” Mr Seah said.

SBF-DP SME Index: Outlook for 2Q14-3Q14 f

Economy Watch

Commerce/Trading

54.6

53.7

55.1

56.1

55.2

Construction/Engineering

55.4

56.1

57.4

55.3

54.4

Manufacturing

54.1

54.0

54.6

54.8

54.9

Business Services

55.3

54.6

55.1

55.3

54.9

Transport/Storage

54.7

54.0

53.3

54.2

54.3

Overall

54.8

54.1

54.7

55.0

54.4

▲ 6.2

▼ 1.4

▲ 1.1

▲ 0.5

▼ 1.1

Percentage change QoQ (%)

More orders ahead Within the manufacturing sector, the survey also revealed the precision engineering cluster as the most optimistic. A net weighted balance of 24% of firms expect better business prospects in the six months ending September 2014, compared to a quarter ago. The machinery segment projected higher orders for semiconductor-related equipment, on account of better demand in the global semiconductor market and improved economic conditions in the US and Europe. The precision modules and components segment also foresees more orders from both local and overseas markets in the next few months, according to the EDB survey results.

Better business prospects The general manufacturing industries are the next most optimistic cluster, with a net weighted balance of 7% of firms

anticipating better business prospects in the next few months (ending September). Within the cluster, the printing segment expects business to pick up, following the seasonally less active first quarter of the year. In the miscellaneous industry segment, positive sentiments are supported by firms engaging in construction materials and battery production. For the electronics cluster, a net weighted balance of 4% of firms expect business conditions to pick up for the period of April to September 2014. This is a turnaround from the net weighted 5% of electronic firms which expected deterioration in the preceding quarter. This optimistic outlook is mainly led by the semiconductor segment, which expects increased orders – especially for chips used in smartphones and tablet computers.

SBF-DP SME Index These upbeat sentiments were similarly reflected in the SBF-DP SME Index, a joint initiative of the Singapore Business Federation (SBF) and DP Information Group (DP Info). It is a six-month forwardlooking Index which measures the sentiments of small and medium enterprises (SMEs) (refer to table: SBF-DP SME Index Outlook for 2Q14-3Q14.) The Index, which tracks SME sentiments for April to September 2014 based on 3,000 interviews with SME owners and managers,

10/6/14 5:53 PM

GDP GREW BY

12.1% ON A YEAR-ON-YEAR BASIS THE M ANUFACTURING SECTOR ACCOUNTS FOR

27% OF OVER ALL GDP

indicated that the manufacturing group (at 54.9) and the transport/ storage group (at 54.3) were the two SME clusters most optimistic about their overall performance for the next six months. Ms Chen Yew Nah, Managing Director of DP Info, said: “SMEs have mixed sentiments about their prospects for the next two quarters. SMEs linked to the global marketplace are becoming more optimistic.” She further elaborated: “Singapore is one of the most open economies in the world, so our SMEs will benefit as trade growth picks up this year and in 2015. Many SMEs have been focused on internal challenges such as improving their productivity. That’s why we have seen capital expenditure of SMEs trending up during the last two years.” “It is now a good time for SMEs to pursue international expansion as it presents the best prospects for longterm growth. Companies linked to the global economy should do well in the coming quarters,” she said. Echoing an optimistic feel from the ground, Singapore’s flagship manufacturing company Venture Manufacturing said that “business sentiment of most customers has generally been positive”, as the company announced a 9.8% increase in net profit to S$30.8 million for

006-009 EconomyWatch.ab.cp.sbf.ab.indd 9

Restructuring Will Help Deliver More Competitive Economy In his annual May Day message, National Trades Union Congress Secretary-General Lim Swee Say said that Singapore’s economic growth continues to be healthy, but stressed that the labour market continues to be “tight.” “The tightening of the labour market will spur a faster pace of economic restructuring. We must do our best to minimise the downside and maximise the upside for our workers and businesses. If not, the outcome of a failed restructuring will be painful for all,” he said. “Imagine a future where rankand-file workers are replaced by robots; professionals, managers and executives are underemployed; mature workers cannot fit into workplaces that are not agefriendly; working parents, especially working mothers, face worsening work-life balance due to inflexible work arrangements; and low-wage workers are stuck in a world of cheap sourcing,” Mr Lim said. “If we allow these to happen, we will face higher unemployment not just because of job shortage, but also because of job and worker mismatches. Nobody wants to end up with such a future. “This is why we are determined to keep upgrading skills, creating good jobs and keep growing our economic pie – so that there will be more for all to share,” Mr Lim elaborated. “To succeed, all of us have to adjust our mindsets, and change our

economy, our workforce and our society for the better,” he said. Mr Lim underlined three thrusts of what is needed from a labour perspective. First, employers have to learn to make better use of every worker, and treat every worker better. The labour market will remain tight till 2020, and even tighter all the way to 2030. Competition for good people will not ease. Only better employers can attract and retain better people and grow more profitably. Second, in a world of job shortages, global unemployment may not improve as businesses embrace new technologies and new methods to stay ahead. The increasingly widespread use of cheaper, better and faster robots and cyber-based services is a case in point. The best way to attract more good jobs, create more good careers, and sustain good wage growth for our workers is for us to value our jobs more and take greater pride in what we do. Last but not least, as customers and consumers, Singaporeans can change for the better too. The globalised world thrives on mutual dependency, mutual support and mutual acceptance. Good services beget good customers, and good customers beget good services. As Singaporeans strive to become a more advanced economy, the country must also strive to be a nation of better customers.

the quarter ended Mar 31, 2014. “The group also expects growing revenue contribution from customers won in recent years, as well as from new programmes with a number of existing customers,” the company said in a statement, adding that “it remains too early to project a broad-based sustainable recovery.”

Mr Ho Meng Kit, CEO of SBF, pointed out that not all SMEs are reaping the benefits of the improving global outlook. “We urge SMEs to make a concerted effort to pursue growth by tapping into the recent Budget measures which provide support for innovation, financing and internationalisation,” he said.

•

SPH – The Straits Times

UPWARD TREND

10/6/14 5:53 PM

Jul•Aug•Sep 2014

BiZ Voice

Mr Ning Gaoning, ABAC Chairman for 2014

ABAC: Improving Regional Trade Business leaders urge APEC to speed up FTA process in Asia Pacific.

Michael Wells, Corbis

he Asia-Pacific Economic Cooperation (APEC) recently convened its Second Senior Officials’ Meeting of 2014 in the Chinese city of Qingdao, Shandong Province. Over 300 delegates representing 21 APEC member economies, the APEC Secretariat, the APEC Business Advisory Council (ABAC) and APEC observers participated in the meeting held in May. At the meeting, ABAC business leaders urged the APEC Ministers Responsible for Trade to accelerate the process towards making this region a Free Trade Area of the AsiaPacific (FTAAP). The meeting was held to review the current progress and facilitate future APEC cooperation initiatives in preparation for the 22nd APEC Economic Leaders’ Meeting in Beijing in November. APEC held in-depth discussions on issues in three priority areas: ● advancing regional economic integration, ● promoting innovative development, economic reform and growth, and ● strengthening comprehensive connectivity and infrastructure development.

Strategic global blueprint The ministers and business leaders held consultations on launching and advancing the FTAAP process, and exchanged views on key initiatives including the APEC strategic

Upon approval 010-013 BizVoice.cp2.ab.sbf.indd 10

Please sign:

Name and Date:

“ABAC now sees the need for APEC to provide more ‘topdown’ direction in the FTAAP process. We would welcome concrete steps by APEC to the realisation of an FTAAP, such as developing a feasibility study, road map and timeline.” successfully completed.” “Quality, ambition and comprehensiveness need to be the goals driving such negotiations if they are to meet business needs.”

blueprint for promoting global value chain development and cooperation, and the APEC strategic plan on capacity building to promote trade and investment. Over the last 10 years APEC has taken incremental steps to realise an FTAAP, notably with the endorsement of possible pathways to such an FTAAP – these include the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) and the Pacific Alliance. ABAC efforts have thus been largely directed at ensuring that there is eventual convergence of these pathways into an FTAAP. Mr Tony Nowell, Chairman of ABAC Regional Integration Working Group, summed up ABAC´s expectations as such: “In order to achieve regional economic integration, we need the Bogor Goals to be achieved by 2020. To achieve the Bogor Goals, we need FTAAP, and to achieve FTAAP, we need one or more of the negotiating pathways to be

Regional comprehensive partnership The free flow of trade and investment in goods and services, good infrastructure, and strong financial market mechanisms are among the key elements that determine the extent to which economies participate in the global value chain. Hence, much of ABAC´s efforts this year were focused on developing recommendations to help economies fulfil these elements, in the process laying the foundation for a comprehensive, high quality FTAAP. ABAC has also undertaken initiatives in: ● identifying the service sector’s role in the global value chain, ● mapping business organisations engaged in services liberalisation, ● promoting the efficient movement of temporary workers around the region, and ● engaging APEC officials on service issues.

•

11/06/2014 16:55

Singapore Companies Want Fair Tenancy Legislation Local businesses lack confidence and mindset to expand, reveals SME Development survey.

010-013 BizVoice.cp2.ab.sbf.indd 11

A 3-PRONGED APPROACH 1

promote transparency in rental costs and practices 2

improve SMEs’ understanding of tenancy terms 3

work with stakeholders to develop and adopt standardised rental lease terms

Addressing lease, rental issues Moving forward, Ms Chua said the SMEC will explore the following three-pronged approach to address lease and rental issues. SMEC will work with the Government to promote transparency in rental costs and practices, such as publication of rental data to reduce information asymmetry. It will reach out and help improve SMEs’ understanding of tenancy terms, such as developing a “How to” guide on tenancy terms. In addition, SMEC will work with stakeholders to explore the development and adoption of standardised rental lease terms, and Government landlords could be early adopters.

SME financing schemes

To overcome restructuring pains, some 52% of the respondants are looking at business model innovation and developing new businesses, and about 53% are looking at growing their reach of international markets. Among the companies polled, 73% are affected by rental rates and lease terms negotiation. When asked what measures would best promote the development of SMEs and reduce rental pressures,

Other findings from the poll revealed that companies are keen to see more financing channels made available to SMEs – 29% polling to the notion of an SME bank, 26% for the provision of SME specific banking loans, and 18% agreeing that access to new financing options can be a viable option. Regarding internationalisation, 31% of the respondants would like to collaborate with larger enterprises in overseas projects while 25% indicated that support for mergers and acquisitions should be broadened for international acquisitions.

•

SPH – The Straits Times & The Business Times

ingapore companies are calling for fair tenancy legislation to be introduced to help small and medium enterprises (SMEs) cope with rising industrial and commercial rents, the Singapore Business Federation (SBF) said. Increasingly challenged by escalating business costs such as rents and manpower costs, many businesses are in the midst of restructuring in order to remain competitive. SBF Chief Operating Officer Mr Victor Tay said: “Economies such as Korea, Belgium and Australia have legislated tenancy acts to protect tenants and small retailers, while the UK has both legislation and a voluntary code which consists of checklist and model lease templates to help tenants in lease negotiation and renewal.” Echoing similar sentiments, Ms Cynthia Phua, a member of the SBF-led SME Committee (SMEC), noted that tenants, especially those in retail and the food and beverage (F&B) business, are more sensitive to rental increase due to its higher impact on business cost. “There are many small entrepreneurs and retailers, and I strongly believe that they should come together to negotiate for a fair consideration framework,” she said. Many SMEs who participated in a recent SBF poll indicated that their top three concerns were manpower, land/rent, and financing.

some 37% opted for Fair Tenancy Legislation while 35% would like to see a Fair Consideration Lease Framework. Businesses also said that lease terms for premises are onerous and unfair, and mainly protect the interests of landlords. Examples include: ● rental based on a percentage of gross turnover; ● landlords have the right to preterminate, move, and alter the boundaries of the tenants’ premises; ● landlords insisting that tenants use their selected point-of-sale (POS) systems – but tenants have to bear the expenses of doing so.

11/6/14 10:07 AM

Jul•Aug•Sep 2014

BiZ Voice

Singapore Takes Lead in Integrated Urban Solutions Integrated approach key to managing sustainability issues in Asia.

SPH – The Straits Times

he need for innovative and integrated urban solutions has always been imperative for Singapore. Given its small size and limited resources, Singapore has always adopted a forwardlooking and integrated approach to urban planning and sustainable development. With urban sustainability being the focus of many cities around the world, government and business leaders are keen to adopt more holistic approaches to achieve sustainable growth. Mr Khoo Teng Chye, Executive Director of the Centre for Liveable Cities, highlighted the need for an integrated approach to urban planning. He explained: “The interconnected nature of sustainable development calls for going beyond borders, both geographical and disciplinary, to coordinate strategies and make good decisions that benefit citizens.” “Problems are rarely contained within predefined jurisdictions such as one Government agency or a single neighbourhood,” Mr Khoo added. “This is a lesson that Singapore has learnt on its journey to urban sustainability.”

010-013 BizVoice.cp2.ab.sbf.indd 12

Urban planning Such challenges are why international leaders recently converged in Singapore to share ideas and solutions on tackling urban issues effectively, such as urban planning, water planning and waste management. More than 100 speakers attended the fourth World Cities Summit to share their expertise and insights, including China’s Minister for Water Resources Mr Chen Lei, the Suez Environnement Co’s CEO Mr Jean-Louis Chaussade, Gehl Architects’ founder, Mr Jan Gehl, and the World Bank’s Group CFO and Managing Director, Mr Bertrand Badre.

NEED FOR A CLEAN AND LIVEABLE ENVIRONMENT The World Bank anticipates that

4.3 billion urban residents will be generating about

1.42kg per capita per day of municipal solid waste by 2025

Singapore’s National Environmental Agency CEO Mr Ronnie Tay, observed that business activities and consumption patterns drive up waste volumes as cities grow larger. He said: “The World Bank has anticipated that by 2025, 4.3 billion urban residents will be generating about 1.42 kg per capita per day of municipal solid waste, making up an estimated total of 2.2 billion tonnes per year.” “Hence, many cities face the challenge of building a clean and liveable environment, and acquiring sustainable environmental solutions.” The delegates were in Singapore to attend the World Cities Summit, Singapore International Water Week and CleanEnviro Summit Singapore that was held in June.

•

11/6/14 10:07 AM

SBF Foundation’s Inaugural Charity Golf Tournament S$375,000 raised to help disadvantaged youths.

he SBF Foundation (SBFF) organised its inaugural Charity Golf Tournament in May to raise funds for disadvantaged students and other beneficiaries. A total of 138 golfers, including guest of honour Emeritus Senior Minister Goh Chok Tong, teed off at the Sentosa Golf Club. About S$375,000 in donations was raised from 29 corporate sponsors and 23 in-kind sponsors. SBFF supports two programmes – the Institute of Technical Education’s (ITE) Overseas Industrial Attachment Programme (OIAP) and the Equestrian Federation of Singapore’s (EFS) EQUAL-ARK Programme (EquineAssisted Learning for At-Risk Kids). Over the next two years, SBFF will support 300 ITE students in their OIAPs, and will also seek to involve more local companies with overseas operations in offering internship opportunities to these students. EFS’ EQUAL-ARK Programme aims to provide 200 at-risk children each year with an opportunity to undergo and complete a unique and innovative equine-related programme. “Business is about making profits. But the profits come from the community of people, workers, fellow businessmen, non-business organisations and government. “So from its profits, it must give back to the community, and especially to the people,” said Mr Goh at the event.

Social responsibility Launched on Nov 12, 2013, the

010-013 BizVoice.cp2.ab.sbf.indd 13

SBFF was set up in response to a growing sentiment that the business community should be more involved in creating a fair, equitable and inclusive society. The SBFF aims to be a collective foundation of the business community and hopes that more businesses will come forward to support its programmes. The Foundation’s threefold objectives are: ● to promote corporate social responsibility (CSR) and corporate philanthropy to uplift the less privileged and improve our

environment; to promote the welfare of the low-wage, elderly and other disadvantaged employees through partnerships with the business community; and ● to promote education and enhance the employability of needy and disadvantaged youths through collaboration with the business community. Since the Foundation’s launch, a total of S$19 million in donations and pledges has been raised from 25 Founding Donors. At the charity golf tournament in May, SBFF recognised the kind donation of S$1 million from Mini Environment Service, its 25th Founding Donor. ●

•

SBF Connects with Members SBF Holdings (SBFH) recently acquired its joint venture firm SBF-PICO Events from its partner Pico Venture. Renamed SBF Connect Pte Ltd, the events management firm is now a wholly-owned subsidiary of SBFH. The name signifies SBF’s continuous endeavour to serve its members and the business community by connecting them to new markets, people, technology and innovative ideas. SBF Connect will continue to organise large scale events, as well as leverage SBF business insights and thought leadership to generate value for its members. “SBF-Pico Events has successfully organised a number of signature events that have benefited our members and the wider business

community,” said Mr Ho Meng Kit, Chairman, SBF-PICO Events Pte Ltd. “The events have spawned international networking opportunities and contributed to stronger Asian insights on global issues that impact business. I would like to thank Pico for the guidance and events management expertise it has imparted to the entity.” SBF-Pico was incorporated in 2009 as a joint venture between SBFH and Pico Venture. Since its inception, SBF-Pico has managed high-profile conferences such as Global Entrepolis @ Singapore (GES), the Russia-Singapore Business Forum, the APEC CEO Summit 2009, the fourth ABAC Meeting in 2009, and APEC SME Summit 2009. After five runs from 2009 to 2013, Global Entrepolis @ Singapore will return in 2015.

11/6/14 10:07 AM

Jul•Aug•Sep 2014

Commentary

Is Your Business Ready for FAIR? Looking into what the Fair Consideration Framework means to Singapore.

he implications of the Fair Consideration Framework (FCF), introduced by the Ministry of Manpower in 2013, have just dawned upon the Singapore business community. One of the biggest policy changes in Singapore’s manpower landscape will go into effect as you read this edition of BiZQ. Organisations and businesses operating in Singapore will have to comply with the new regulations which take effect on Aug 1, 2014. In light of this new national policy, businesses will have to comply with the changes in hiring practices in Singapore. Here, we recap the rationale of this policy and what businesses need to do.

Singaporeans run against our fundamental values of fairness and meritocracy.” As this national policy will cut across all strata of Singapore’s business landscape, Ms Mak Pooi Mun, HR Lead for Logistics South Asia at homegrown Neptune Orient Lines Ltd, told BiZQ that several opportunities will emerge for Singaporeans. She summed it up thus: “Greater job variety for Singaporeans

Mr Tan Chuan-Jin, Minister for Manpower

“Providing better jobs and diverse opportunities to meet Singaporeans’ aspirations are the ultimate objectives of economic growth...‘Hiringown-kind’ and other discriminatory practices that unfairly exclude Singaporeans run against our fundamental values of fairness and meritocracy.”

Digital Art, Corbis; SPH – Shin Min Daily News

Meeting diverse opportunities The impending implementation of the FCF is one of the most significant regulatory changes in Singapore’s manpower policy. In explaining this key policy initiative some months ago, then-Acting Minister for Manpower Tan Chuan-Jin said that “providing better jobs and diverse opportunities to meet Singaporeans’ aspirations are the ultimate objectives of economic growth. “Even as we remain open to foreign manpower to complement our local workforce, all firms must make an effort to consider Singaporeans fairly. ‘Hiring-ownkind’ and other discriminatory practices that unfairly exclude

Upon approval 014-016 Commentary.ab.cp.ed.sbf.indd 14

Please sign:

Name and Date:

10/06/2014 17:43

NEED HELP TO COPE WITH FAIR?

will enable Singaporeans to look around and stay within the industries they are familiar with, and they may no longer need to go outside of Singapore to seek managerial roles.”

BiZQ captured four other government schemes that help businesses increase productivity:

Different impact Amid rapid modernisation, Singapore has already developed a good and diverse mix of multinational corporations that are working alongside Singapore’s own homegrown enterprises. The FCF will impact different organisations in different ways. As this important legislation is about to come into effect, BiZQ takes stock of two developments that will most clearly affect companies in Singapore.

First check: Advertise on the Jobs Bank From this August, businesses submitting Employment Pass (EP) applications – these include applications for EP holders who are changing employers – are required to advertise their job vacancies on the Jobs Bank (wda.gov.sg/content/ wdawebsite/jobsbank.html). The Jobs Bank is administered by the Singapore Workforce Development Agency (WDA). Each advertisement must be open to Singaporeans, comply with the Tripartite Guidelines on Fair Employment Practices, and run for at least 14 calendar days. These requirements must be met before an EP application can be submitted to the Ministry of Manpower (MOM). Advertising on the Jobs Bank will benefit both employers and Singaporean jobseekers, as it facilitates better matching of vacancies with jobseekers. Employers will have access to a larger pool of potential candidates and Singaporeans will have better visibility of job openings. As the Singapore Government has said several times since the policy announcement, the purpose of the FCF is to encourage a level playing field for Singaporeans and highlight the importance of p.16

Upon approval 014-016 Commentary.ab.cp.ed.sbf.indd 15

Please sign:

Name and Date:

● Productivity and Innovation Credit Known as the PIC scheme in short, this credit scheme provides enhanced tax deductions/allowances and/or cash payouts to businesses investing in productivity and innovation. The PIC scheme provides significant tax deductions for investments in a broad range of activities along the innovation value chain. This includes qualifying expenditure incurred on PIC automation equipment, training of employees, acquisition of intellectual property (IP) rights, registration of certain IP rights, research and development, and approved design projects. iras.gov.sg/irashome/picredit.aspx

Innovation & Capability Voucher The Innovation & Capability Voucher (ICV) scheme provides up to S$5,000 worth of funding to support upgrading of business capabilities. Each voucher can be used to engage a participating service provider under the ICV, who will assist the company with a supportable service in any of the following capability areas: ● Innovation, ● Productivity, ● Human Resources, and ● Financial Management. www.spring.gov.sg/Enterprise/ICV/ Pages/innovation-capability-voucher. aspx ●

Advertising on the Jobs Bank will benefit both employers and Singaporean jobseekers, as it facilitates better matching of vacancies with jobseekers. Employers will have access to a larger pool of potential candidates and Singaporeans will have better visibility of job openings. For more information on the Jobs Bank, visit wda.gov.sg/content/ wdawebsite/JobsBank.html.

Increase SME Productivity With Infocomm Adoption and Transformation This is a one-stop integrated assistance scheme for infocomm implementation by small and medium enterprises (SMEs). The scheme, iSPRINT, was launched in March 2010 to enable productivity and innovation for SMEs across all sectors, and to provide a one-stop integrated assistance scheme for infocomm implementation. The scheme supports first-time adoption of new infocomm capabilities and facilitates the adoption of “quickto-implement” packaged solutions and subscription to Software-as-aService, the development of complex and integrated business solutions, and the implementation of sectorwide transformational projects. www.ida.gov.sg ●

Inclusive Growth Programme The Inclusive Growth Programme supports businesses on productivity improvement projects that share gains with workers. It is applicable to all businesses registered and operating in Singapore. The programme supports companies that embark on productivity improvement projects and share productivity gains with workers. It is also targeted at employers that employ lower wage workers that constitute the bottom 30% of the workforce, with monthly salaries of S$1,700 or less. e2i.com.sg/employers/inclusivegrowth-programme-igp/ ●

Source: Ministry of Manpower

10/06/2014 17:43

Jul•Aug•Sep 2014

Commentary

Walter Zerla, Corbis; SPH – The Straits Times

considering Singaporeans fairly for job opportunities. The Government has also taken pains to explain that exemptions from the advertising requirements will be given to selected groups. However, this does not preclude employers from the need to consider Singaporeans fairly for employment opportunities. Exempted companies found to have nationality-based or other discriminatory human resource practices will face additional scrutiny from the MOM and have their work pass privileges curtailed. Principally, those given leeway are businesses with 25 or fewer employees, or job positions that pay a fixed monthly salary of S$12,000 and above. The ministry has painstakingly emphasised that the wording of job advertisements must comply with the Tripartite Guidelines on Fair Employment Practices. As a general principle, employers should avoid stating any preferences for age, race, language, gender, marital status and religion. It said that it views employers’ noncompliance with the Tripartite Guidelines seriously, and strongly urges companies and employment agencies acting on their behalf to familiarise themselves with the Tripartite Guidelines before posting job advertisements. Employers that post discriminatory job advertisements will have their work pass privileges curtailed.

Purpose of the Fair Consideration Framework TO ENCOUR AGE A LEVEL PLAYING FIELD FOR SINGAPOREANS AND HIGHLIGHT THE IMPORTANCE OF CONSIDERING SINGAPOREANS FAIRLY FOR JOB OPPORTUNITIES.

Upon approval 014-016 Commentary.ab.cp.ed.sbf.indd 16

Please sign:

Name and Date:

Mr Stephen Lee, President, Singapore National Employers Federation

“With the Jobs Bank as the new central information point, there is room for data mining, where you can see what sort of jobs are emerging or if there is a future trend of new skills required. So there are some positives – and there are no costs for employers to do this.” As this issue of BiZQ reaches our readers, they would be well advised to take note that the new Jobs Bank will be launched mid-2014. The WDA would have almost completed the process of engaging groups of employers and potential jobseekers, as well as testing the beta version of the Jobs Bank online platform. In announcing this update recently, Minister for Manpower Mr Tan Chuan-Jin said: “I don’t think that it (the Jobs Bank) will be perfect from the word ‘Go’, and users will take some time to become familiar with it. We will refine and improve the Jobs Bank, as we gain more experience and feedback from Singaporeans and employers.” One advocate of the the Jobs Bank is Singapore National Employers Federation’s (SNEF) President, Mr Stephen Lee.

According to Mr Lee, there are benefits where organisations can concentrate all the jobs available while bringing together the jobseekers and the employers on one platform. As a result of this new central information point being set up, “there is room for data mining, where you can see what sort of jobs are emerging or if there is a future trend of new skills required. So there are some positives – and there are no costs for employers to do this,” he explained.

Second check: Be prepared to be scrutinised As part of the implementation of the FCF policy with the intention of achieving its desired goals, the government and the MOM will identify and engage firms that may have the scope to improve their hiring and career development practices. These firms may include those that have a disproportionately low concentration of Singaporeans at the professional, managerial and executive (PME) level compared to others in their industry, or have had repeated complaints of nationalitybased or other discriminatory human resource practices. Such firms will be asked to provide additional information to MOM, such as: ● Organisation charts with nationality information; ● Recruitment processes; ● Staff grievance handling procedures; ● Standing framework for staff progression; and ● Plans to either develop local internal staff to take on higher roles, or to reduce reliance on EP holders. The Ministry has reminded firms to implement an action plan to address shortcomings in their human resources practices. Unresponsive firms can expect greater scrutiny and a longer review period for their EP applications, and may even have their work privileges curtailed. ●

10/06/2014 17:43

Jul•Aug•Sep 2014

BiZ Feature

SBF: A More

Effective Advocate of Business

Recognised by its members and the Government for its efforts in championing the needs and aspirations of Singapore businesses.

018-021 BizFeature-Mr Chew.ab.wo.ab.indd 18

Upon approval Please sign: Name and Date:

he Singapore Business Federation (SBF) has achieved many international and local milestones since its formation in 2002. During the tenures of its two chairmen, Mr Stephen Lee (20022008) and Mr Tony Chew (20082014), SBF has made made steady progress in delivering value to its members and the wider business community. Outgoing chairman Mr Tony Chew, who has been closely involved with the apex chamber since its founding 12 years ago, is heartened that the level of its activities and member participation has grown steadily over the years. He spoke warmly about how SBF has “worked collectively to build the capability of our companies and improve the business operating environment, both at home and abroad”. “Businesses are spurred to build resilience and competitiveness through our programmes, while we contribute to shaping policies for a more business-friendly environment,” Mr Chew added. He reminisced about how he was first invited to join the 12-member

10/06/2014 21:06

BizQ

Pro-tem Committee, which was set up to help conceive the Federation, in 2001. “It was a huge task and I applaud the many persons who played a role in it,” he said, paying special tribute to Mr Stephen Lee for laying the foundation of the Federation during its formative years. Reflecting on the Federation’s growth, Mr Chew said the apex chamber has made steady progress since its inauguration. Its membership has grown from 15,000 to 21,000 today. “Over the last few years, we have achieved major milestones. SBF has become a major voice of the business community,” Mr Chew said. “The Federation broke new ground in 2013 with the launch of several important initiatives. We launched the SBF Foundation, established the NTU-SBF Centre for African Studies and inaugurated the SBF Business Institute. A significant proportion of the 33 recommendations to the Minister for Finance by the SBF-led SME Committee (SMEC) were included in Singapore’s Budget 2013. Another milestone would be the opening of SBF’s permanent headquarters in late 2016 at a prime downtown

018-021 BizFeature-Mr Chew.ab.wo.ab.indd 19

Upon approval Please sign: Name and Date:

development, named the SBF Center,” he added. Over the years, SBF has seen a steady rise in members’ activities, missions and visiting delegations. In 2013, the Federation engaged some 74,500 participants in the 550 events and activities it organised and supported. It is receiving more positive feedback from its members of the benefits they have received, and is playing a more important role for Singapore businesses.

Voice of the business community The Federation works closely with the Singapore Government, trade associations, chambers and businesses to foster a pro-business environment. In December 2008, at the height of the global financial crisis, SBF initiated an important dialogue between leaders of the business community and the Ministry of Finance and the Ministry of Trade and Industry to discuss the impact of the crisis on businesses and their concerns over cash flow and business costs. The $20.5 billion Resilience Package

unveiled in Budget 2009 helped to alleviate some of the concerns. The formation of the SMEC in 2011 has provided members, particularly SMEs, with a stronger voice to the Government. SBF has become an effective advocate of business. The Government has recognised SBF’s wide representations, good data and careful deliberations. The SMEC’s contributions to business policy have been appreciated by the Government as well as the business community. With ASEAN and the AsiaPacific Economic Cooperation (APEC), SBF continued to advocate greater regional integration, to allow its members better access to a larger and more efficient market.

Helping businesses network and internationalise Since its inception, SBF has been proactively supporting its members in internationalising their businesses. In 2013, SBF led 39 overseas business missions to Asia, Africa and Central and Eastern Europe in response to members’ interests in these markets. It also received 102 incoming p.20

10/06/2014 21:10

BizQ

Jul•Aug•Sep 2014

BiZ Feature delegations from some 40 countries. These enabled its members to make valuable contacts, access information and help forge strong links with their overseas partners. Over the years, SBF has inked 155 Memoranda of Understanding (MOUs) with business chambers and government agencies across 63 countries. The International Relations Committee, which was set up in 2002 to help members network and venture overseas, has spawned five business groups covering ASEAN, North and South Asia, the Middle East and Africa, as well as a Sustainable Development Business Group.

Fostering capacity building As part of its efforts to help members build capability, the SBF Mentorship Programme facilitated dialogue sessions between SME bosses and experienced captains of industries allowing the sharing of valuable experience and tips for success. The Federation also worked closely with Government agencies such as the Workforce Development Agency and SPRING Singapore to help companies build capabilities through productivity and business continuity management programmes. SBF also collaborated with industry partners to launch the Young Business Leaders Alliance to support young entrepreneurs and business leaders.

Business voice, value creator SBF has made steady progress since its founding in 2002. The chamber has a firm footing from which to serve the varied needs and aspirations of its 21,000 members. Its services at home and abroad have a strong foundation. It is receiving more positive feedback from its members of the benefits they have received, and is playing a more important role for Singapore businesses. SBF will continue to work with members and government to build a vibrant and resilient business community.

•

018-021 BizFeature-Mr Chew.ab.wo.ab.indd 20

Upon approval Please sign: Name and Date:

Launch of SBF Foundation Prime Minister Lee Hsien Loong launched the SBF Foundation (SBFF) on Nov 12, 2013. Mooted by Singapore Business Federation (SBF) Chairman Mr Tony Chew, the Foundation aims to encourage businesses to become more actively involved in community development. SBFF works with the business community to promote corporate social responsibility and corporate philanthropy to uplift the less privileged and improve our environment. It promotes the welfare of low-wage, elderly and other disadvantaged employees, as well as education to enhance the employability of needy and disadvantaged youths through partnerships with the business community. The SBF Foundation is governed by an independent Board of Directors chaired by Mrs Theresa Foo-Yo Mie Yoen, who is a member of the SBF Board of Trustees and Chairman of The Esplanade Co Ltd and Gardens by the Bay. At the launch, SBF gratefully acknowledged the generous gifting by Far East Organization of 22,000 square feet of space, under the Community and Sports Facilities Scheme, at SBF Center for use by the Foundation. It also thanked the 24 founding donors for their generous donations.

Inauguration of NTU-SBF Centre for African Studies SBF and Nanyang Technology University (NTU) signed a Memorandum of Understanding last year to establish the NTU-SBF Centre for African Studies. The first of its kind in South-east Asia, it will provide in-depth insights on the diverse African market through research, workshops and

programmes. To be hosted at NTU’s Nanyang Business School, the Centre aspires to build knowledge on business, politics and social economics to strengthen the capabilities of policymakers and businesses for engagement with Africa. The Centre, a private sectorfunded project, is targeted for launch by the middle of this year. Five of Singapore’s leading investors in Africa were recognised for their contributions to the Centre’s funding: Indorama Group, Olam International, Pacific International Lines, Tolaram Group and Wilmar International, have each donated S$1 million to the Centre’s endowment fund and will be the Founding Donors on the Centre’s Governing Board.

Recommendations for Budget 2013 The SME Committee’s (SMEC) recommendations were put together in response to certain pressing issues faced by small and medium enterprises (SMEs): tightening resource constraints, rising costs of doing business, declining productivity and the impact of the Government’s policy on foreign manpower. The suggestions were assembled from numerous discussions and outreach sessions with the SME business community, policy consultations with Government agencies and research. Besides reiterating the issues and challenges facing SMEs, SMEC called for more flexibility in the economic restructuring policy to enable the grooming of domesticoriented industries to sustain the local economy and facilitate tapping into emerging regional opportunities.

10/06/2014 21:13

BizQ

SBF MILESTONES 2002-2013 2012 2009

2002 Officially launched by then Prime Minister Goh Chok Tong on April 11, 2002 Mr Stephen Lee assumes the Singapore Business Federation (SBF) chairmanship Organised more than 50 events and activities, which catered to some 10,000 members

2003 Focused on promoting business and investment opportunities both in Singapore and abroad Doubled its offerings of activities and events for members

2005 2007

2004 Launch of inaugural BiZQ issue to update members on business and industry insights Formation of the MalaysiaSingapore Business Council (MSBC) to forge closer economic ties between both countries Jointly presented Global Entrepolis @ Singapore (GES) with the Economic Development Board (EDB), attracting participants from over 40 countries

Supported the World Economic Forum in partnership with the EDB

Launched the Middle East Business Group

Participation in the Federation’s events reached 22,000, double that of 2004

Hosted and co-organised the ASEAN Business and Investment Summit, and the inaugural ASEAN Business Awards

2006 Introduced the Mentoring Programme

Hosted the Asia-Pacific Economic Cooperation (APEC) CEO Summit and APEC Business Advisory Council meetings, held in conjunction with the APEC Leaders’ Summit Reached out to 48,300 participants through its activities Inaugurated five dedicated geographic business groups to further help members gain valuable insights and tap into regional opportunities

2008 Mr Stephen Lee hands over the SBF chairmanship to Mr Tony Chew

Recognised both locally and overseas as an apex chamber of the Singapore business community

Strengthened its three-pronged focus of representing the voice of the business community, helping members build resilience, and facilitating business opportunities Received ownership of GES from the EDB

018-021 BizFeature-Mr Chew.ab.wo.ab.indd 21

Upon approval Please sign: Name and Date:

2010 Launched a series of initiatives in support of the Economic Strategies Committee’s recommendations Organised the Singapore Sustainability Awards to recognise companies for their eco-friendly practices

Commemorated SBF’s 10th anniversary New direction: to be a more issue-centric organisation representing the concerns and needs of its members (stronger voice representation)

2013 2011 Reviewed and finalised SBF’s strategic plan for 2012–2016 Increased engagement of emerging markets Established the SME Committee (SMEC) to better represent members and small and medium enterprises

Launch of SBF Foundation Launch of SBF-NTU Centre for African Studies Deeper engagement of emerging markets, particularly Africa Better advocacy for businesses through the SMEC

10/06/2014 21:13

BizQ

Jul•Aug•Sep 2014

In InBiZ BiZWith With

Planning for Business Succession SMEs need to think about the long-term value of family-run businesses.

Kelvin Cuff

ropelled by an economic recovery in most developed economies and continued growth opportunities within the Asia-Pacific region, small and medium enterprises (SMEs) have never had it so good. However, with opportunities, there are also challenges. In particular, one challenge that affects many SMEs relates to the whole concept of business succession planning. A new global study by international accounting and business advisory firm Baker Tilly International shows that SMEs in Asia are inadequately prepared to conduct business succession planning. A failure to address this fundamental challenge in SMEs will only lead to a dilution in the long term value of family-run businesses in Asia, says chief investigator Dr Richard Shrapnel, Business Succession Planning Leader at the network. He is also a Partner at Baker Tilly Pitcher Partners. Dr Shrapnel adds that the inherent challenge in family-run SMEs will be compounded as a result of a chemistry difference between the higher and better educated younger generation of executives and managers, and their older founding predecessors. This will bring with it attitudinal and cultural differences while both generational groups manage the

022-023 InBizWith.ab.indd 22

Upon approval Please sign: Name and Date:

business together. In addition, today’s familyowned Asian businesses operate their companies in an environment which is far more competitive and matured than ever before. This escalates the urgency of executing some elements of business

Dr Richard Shrapnel, Practice Leader for Business Succession Planning, Baker Tilly Pitcher Partners

“A failure to address this fundamental challenge in SMEs will only lead to a dilution in the long term value of family-run businesses in Asia.” succession planning into their family-oriented organisations, he observes. The Baker Tilly International study, which commenced in early 2010, concluded in June 2014. As of end-May, the survey had garnered some 2,500 responses with a third of the respondents based in Asia. Dr Shrapnel culled the following insights from the global survey for BiZQ. What is business succession planning and why has it been slow to gain traction in this region? Business succession planning is a relatively new concept in Asia as most of the Asian companies that are around now are relatively young compared with family-owned businesses in Europe and the US. Typically, when a family sets up a company, business succession should be given concurrent thought to ensure that the future value of the entity is kept intact. This appears to be more of the case in Europe and the US. For business succession planning to take place, the founders have to give material thought to the whole process. From this perspective, the approach of business succession planning connects and links all aspects of the business, including

10/06/2014 17:50

23 the business strategy, capital value, ownership of equity, governance, tax planning, family wealth management and estate planning. One of the fundamental reasons why this occurrence has yet to be fully understood lies in the fact that business succession in Asia is occurring at later ages of the founders. The founders of Asian businesses tend to stay on longer, giving rise to the prospect that succession may skip a generation. And at the point of succession, there is the prospect of disruption and discontinuity. Another key point is that the next generation of leaders in Asian family businesses tends to be more Western educated, therefore injecting a different set of cultural values and organisational principles. This may likely not resonate with the founders of the business, and is likely to give rise to conflicts during succession. Having a methodical succession plan overcomes these challenges. What are some of the findings of this global survey? The survey shows that family harmony is a key consideration across all stages of the business succession process with 68% of the respondents stating that it is important before starting the planning process; 75% of the respondants say it is important after the process is completed. Spouses appear to show greater concern for harmony where there are only sons in the family. They are also conscious of the need to ensure that the next generation does not feel pressured to take over. Family members and other people involved in business succession also need certainty about the process and their future. They need to feel able to contribute and that there will be positive outcomes where there are opportunities for individual growth. There is a need to actively invite contributions and provide active progress updates. Otherwise, one will see some sorts of family conflict emerge.

022-023 InBizWith.ab.indd 23

Upon approval Please sign: Name and Date:

PLANNING THE NEXT STAGE Succession Is Not Retirement Succession is about evolution – business evolution. It is about growth, opportunity and building the future while you are here today. It is about taking responsibility for future-proofing the capital value of the business by ensuring that the next team is capable, competent, and experienced, and will be able to take the business to the next level. Succession is the legacy you leave. Start With Readiness Establish a process, formalise it, timetable it, monitor it and commit the necessary resources. Keep communication open and discuss the process openly, and identify possible limitations and barriers before commencement. Set Your Goals Before The Journey Write down the goals you want to achieve from the succession process. They must be clear and measurable, but more importantly, they must be compelling. Price Is Not First The focus of the succession process is on “continuity of the business” and “ongoing jobs for employees”. No matter what your intent is, whether to sell, retain or transfer the business, these goals do not change. Harmony Is A Must Harmony is about integrity and keeping the focus on the outcomes already set.

What should family businesses – big or small – do to embark on the journey of business succession planning? Given the variety and the strength of the inputs into this one-of-akind global survey, Baker Tilly International developed an eightprincipled methodical approach in order to guide Asian family-owned businesses through the process of business succession planning.

In engaging with family and other persons involved in succession, you must recognise that they are seeking certainty about the process and their future. Plan An Early Start You cannot start succession planning too early, bearing in mind that succession is about business continuity, ongoing jobs and building the capital value of a business. These are outcomes you want to achieve the moment you begin to think about starting a business and will continue for as long as that business exists. Equality Is Not Equal If you have family, one of the key challenges you will face is finding the right balance of participation, ownership and distribution of wealth in your succession process. You must seek to be fair based on the historical and future contribution that family members have made and will be expected to make. Ask Before You Get Lost Seek advice from your succession advisor early and allow them to work with existing taxation and legal advisors to achieve the best blend of succession expertise and knowledge of both your business and family. For more information about Baker Tilly International Singapore’s survey report, refer to http://goo.gl/j2QHiZ

The eight principles that they should consider are: Succession is about business evolution; Begin with a process; Set clear goals; Harmony and integrity are important; Focus on business continuity; Start the planning early; Find the right balance; Seek the right expertise.

• • • • • • • •

•

11/06/2014 16:58

Jul•Aug•Sep 2014

Innovations

Big Data, Big Opportunity Use information to add value to your business.

“B

ig Data” is a popular term used to describe the exponential growth and availability of data. And in today’s knowledge economy, such information may be as important to businesses – in relation to consumers, products and services – as the Internet has become. According to research firm International Data Corp, the worldwide big data technology and services market mar is expected to ggrow at a 27% 7 co compounded annual rate, and exc exceed ceed d US$32 billion ((S$40 (S $40 billion billion) n) byy 2017. So how ca can an businesses b optimise tthe th he benefits of b big data? increasingly digital I an in In ncreaa world, there w orl r d, th heree iis a widening gap between b be t eeen the tw th h companies that eeffectively ef fecttively manage data and fe tth hosse th h don’t. those that Co on Consumer-product cco om mp companies and retail o or rgg organisations are m monitoring socialm media platforms su such u as Facebook and an d Twitter to obtain insights in nsiggh into customer behaviour, beh be havvio preferences and product perception. prod pr ductt p Insurance Ins uraan companies using big-data analysis are usin ar ng b bi to see which wh hich h home h insurance application ap ns ca a be immediately applications can processed, an pr nd w and which ones need in-person visit from a validating in-p p aan agent. BiZQ spe aks with w Professor speaks Malshe, an expert in social Ashwin A h Malshe l m media and digital marketing at the E ESSEC Business School, on how big d data can help companies add value tto their businesses. Prof Malshe’s rresearch is focused on marketing sstrategy, marketing-finance iinterface, consumer behaviour and b behavioural decision theory.

Getty Images

S Should companies embrace big data? W What type of companies do you tthink would benefit the most from ssuch information? IIt depends on many factors. Although big data applications are A predominantly for the marketing domain, other organisational

Upon 24 approval 024-027 Innovations LL.ed.sbf.ab.indd

Please sign:

Name and Date:

11/06/2014 09:07

“Many types of companies will benefit from big data. However, the benefits will vary widely, based on how data-centric an organisation is...Willingness to embrace this...at all management levels is the key determinant of how beneficial big data can be as a tool for businesses.” functions are increasingly moving into big-data deployment. For example, human resources, production, supply chain, finance and so forth all benefit from bigdata insights. Companies first need to assess whether they really have a requirement for big data analysis. If most of their current problems can be solved by using easily available small datasets, taking the big data route might be overkill. Big data can be generated within the company or procured from external sources. Take for example social media data, which can be used to perform sentiment analysis for companies to determine how their corporate image is perceived by the general public.

Upon 25 approval 024-027 Innovations LL.ed.sbf.ab.indd

Please sign:

Name and Date:

What are the five industries that would benefit most from big data? In no particular order, retail including e-commerce, telecommunications, financial

5 INDUSTRIES THAT WOULD BENEFIT MOST FROM BIG DATA 1 E-COMMERCE 2 TELECOMMUNICATIONS 3 FINANCIAL INSTITUTIONS 4 SOCIAL-NETWORKING PLATFORMS 5 HEALTH CARE

But there is no reason to limit this list to just these five.

institutions, social networking platforms and health care. Currently, these five industries have massive amounts of data on users, transactions and many other aspects, which makes exploring that data more likely. But there is no reason to limit the list to just these five industries. For example, logistics companies such as UPS and Fedex in the US rely heavily on big data to plan delivery routes most efficiently. Mobile app developers can merge their user data with location data and deliver highly contextual location-based advertisements. The film industry also benefits from mining social media data in order to better plan marketing spending before and after a movie release. Advertising and media agencies are benefitting from big data because they can use the statistics derived from each campaign to provide a detailed anaylsis and report for their clients, which in turn help these customers understand their audiences better. It’s now well-accepted that most of the trading of more liquid stocks happens using algorithmic trading. “Algo traders”, as these traders p.26

SPH Library

Professor Ashwin Malshe, ESSEC Business School

With the large volume of social media chatter occurring online, mining such data is a relatively easy and low-cost process because several social networks, such as Twitter, allow anyone to tap into their “fire hose” for free or at a low cost. On the other hand, more complex marketing data can be painstakingly assembled by merging data from multiple sources such as various websites, government data sources, the company’s own supplier databases, global positioning system data, and so forth. This kind of enterprise is timeconsuming and costly, and needs long-term focus. However, if a company has the bandwidth to undertake more complicated bigdata analysis, this process should be seriously considered. Personally, I believe that many types of companies will benefit from big data. However, the benefits will vary widely, based on how datacentric an organisation is. Take for example, a start-up with a mobile app as their main product, which generates large amounts of user data every day. Assuming this company has a data-centric culture, they are likely to leverage on the insights generated by data analysis to improve customer satisfaction and garner a positive word of mouth. On the contrary, a large company with a massive database, powerful computers, and competent analytics personnel may not necessarily benefit from big data if its top management refuses to include big data insights into their decision making. Willingness to embrace this technology at all management levels is the key determinant of how beneficial big data can be as a tool for businesses. The willingness to embrace this technology at all management levels is the key determinant of how beneficial big data can be as a tool for businesses.

11/06/2014 09:09

Jul•Aug•Sep 2014

Innovations are called, calibrate their stocktrading models based on vast amounts of financial data. In automobile manufacturing, big data is revolutionising production from concept design through marketing and aftermarket services. Thus, the applications of big data are possible in any industry. However, currently, the five mentioned industries have data on users, transactions and many other aspects, which makes exploring that information much more likely. What would you suggest as the first step that companies interested in big data should consider? It is always to make sure that the organisation is willing to embrace a data-centric culture. No amount of data analysis can help a company that is unwilling to use the insights derived in its business decisionmaking process. There are many reasons why big data adoption may fail in a company. One of the most important is the lack of adoption of big-data analytics insights.

What are the most common problems and challenges encountered in big data projects? Organising the gathered data into a form that can be easily interpreted remains the biggest challenge in any data analysis, big or small. This task is more complicated in big data because much of the information is unstructured and is being generated at a phenomenal speed. Even companies like IBM spend on average 80% of their time on preparing data, and only 20% in insight generation and discovery. Another hurdle in big data projects is translating the insights into actionable managerial decisions. In my opinion, this poses a severe challenge because data scientists or analysts are usually not trained to be business-domain experts. On the other hand, managers are not trained in technical knowhow that analysts possess. Thus, the success of a big data project also rests on the ability of data scientists and analysts to convey critical insights to managers, and the ability of these managers to decipher

and incorporate them into their decision-making process. Can you give some examples of successful big data projects in Singapore and other countries? SingTel, StarHub and M1 use big data to get insights on consumers. I am not sure to what extent they incorporate these insights into their business practices, however. Negative reviews and comments are pervasive on their social media channels. American companies have been at the forefront of big data analytics deployment. Retailers such as Wal-Mart and Target have used big data to great advantage. In particular, Wal-Mart has been one of the most innovative companies when it comes to using technology to cut costs and deliver better value to its customers. Online retailer, Amazon, also follows a similar philosophy, benefiting from the digital nature of its store as it can track consumer behaviour more precisely. They can also perform real-time experiments on minor changes in website layout, pricing and so forth.

•

THE FIVE FACTORS COMPANIES NEED TO KNOW 1. How companies create value In today’s economy, data – and the knowledge derived from it – is the new driver of value. Datadriven companies are consistently outperforming their non-datadriven peers. Plus, they are better equipped to make decisions on the fly. This is important because, in the knowledge economy, agility matters more than stability. 2. How they interact with their customers Suffice it to say that firms know more than ever about

Upon 26 approval 024-027 Innovations LL.ed.sbf.ab.indd

Please sign:

Name and Date:

their customers. Even before products go to the market, data gives companies vital clues as to the motivations and intentions of their prospective buyers. 3. The kind of talent they recruit Big data is quickly becoming a critically important driver of business success across sectors. But many executives say they don’t think their companies are equipped to make the most of it. This is changing the way they recruit and train talent.

4. How they perceive privacy As the National Security Agency scandal helped reveal, privacy is a big issue in the knowledge economy. That said, users also understand the limitations of privacy in the digital world. 5. What they think about globalisation An effective solution to the privacy conundrum will need to be global laws that apply not only to citizens but also to corporations.

11/06/2014 09:12

Managing Data Centre Recovery Between big data and business continuity.

Most companies in Singapore are becoming more data-driven, applying insights or analytics to everything from key business processes to customer-centric decisions. The rapid growth of data around the corporate world has led to the fact that data centres have to be better prepared to manage this fast information growth. To do this, managers of data centres need to have a solid understanding and insight into their existing and planned infrastructure, as this will form the basis of a flexible framework to manage longer-term data trends. Big data centres process vast amounts of valuable information accessed in real time, so having a fast and stable connection is very important. Data centres that are able to provide flexible access to fast and reliable storage will find themselves best placed to capitalise on the big data opportunity, said Joseph Lim, Vice President of Asia Pacific, FNT Solutions Pte Ltd, a unit of Germanheadquartered FNT Software. Only when businesses are able to get their data centre infrastructure management strategy in order will they be able to benefit by pulling together information from their data centres, so as to deliver a meaningful analysis of their customer patterns, he said. In the recent past, there have

Upon 27 approval 024-027 Innovations LL.ed.sbf.ab.indd

Please sign:

Name and Date:

been alarming incidents, such as M1’s mobile-network outage, the fire at SingTel’s Bukit Panjang Internet Exchange, and technical glitches at DBS and POSB ATMs. This is somewhat disturbing as it affects the continuity of services to the public. In the case of M1’s outage, industry regulator Infocomm Development Authority of Singapore issued this statement: “Under the Telecommunication Service Resiliency Code, operators are required to ensure that the design of their networks and services are resilient to service outages, and when outages do occur, to ensure that they restore services quickly.” Managing business recovery Big data is increasingly used to optimise business processes. The analysis of vast amounts of data has huge potential for commerce, public administration and other areas. For example, manufacturers monitor minute vibration data from their equipment, which changes slightly as it wears down. This is to predict the optimal time to replace or maintain the equipment. Replacing it too soon wastes money; replacing it too late triggers an expensive disruption. This begs the need to have optimal insights into the data centre and planned infrastructure, said Mr Lim. An enterprise solution like FNT

Mr Joseph Lim, Vice President of Asia Pacific, FNT Solutions

“The ability to do this lies in adopting an integrated software solution that documents, tracks and analyses entire IT networks that will aid in business recovery. This is one of the main concerns for business continuity management.” Command product is able to provide all the necessary information and capabilities for capacity planning regarding compute, storage and network infrastructure requirements, software and business services provided, and include space, cooling and power in a data centre to run them efficiently. The challenge for managers operating large computer networks is that they need to efficiently deploy all data centre assets to handle growing loads. The solution lies in optimal planning, process automation, predictive analysis and prognosis of network, and cooling capacities. To deliver on this solution requires detailed information on the current and planned states of all devices, said Mr Lim. Therefore, it is essential to have scenario capabilities and planning processes that can serve as a basis for accurate prognosis, he added. Other concerns requiring constant attention from data centre managers include the development of new facilities, the consolidation or replacement of existing data centres, and the emergence of new technologies or architectural changes, he added.

•

11/06/2014 09:10

Jul•Aug•Sep 2014

Inside SBF

Inaugural SBF-led Mission to Portugal, Switzerland

SPH–The Straits Times

EU-Singapore Free Trade Agreement helps attract investments, say SBF CEO.

Singapore Business Federation (SBF) members recently gained a better understanding of the market dynamics and opportunities that Portugal and Switzerland have to offer the Singapore business community. The Federation , supported by IE Singapore, organised a business mission to these two European countries in conjunction with President Tony Tan’s visit in May. SBF CEO Mr Ho Meng Kit led the 16-member business delegation, which included business leaders and senior

028-033 InsideSBF.ab.cp.indd 28

representatives from diverse industries such as business consultancy and financial services, general trading, information and communications technology (ICT), logistics, pharmaceuticals, port management, real estate and venture capital. The trip included briefings by ministries and government agencies from both countries, as well as business-matching sessions.

SingaporeSwitzerland Forum SBF also organised bilateral business forums in both countries. In Portugal

Upon approval Please sign: Name and Date:

where Singapore’s Mr S. Iswaran, Minister, Prime Minister’s Office, Second Minister for Trade and Industry and Second Minister for Home Affairs was the guest of honour, he spoke about Singapore’s business competency and possible collaborations between the Singapore and Portuguese communities. Attendees at the Singapore-Switzerland Business Forum witnessed the signing of a contract between Singapore-based Mekong International and Trivarga AG. Mekong International will be appointed as the

Mr Ho Meng Kit, SBF CEO

“We are part of the ASEAN community and have several FTAs with our Asian counterparts, including South Korea, India and China. The ongoing discussions... position Singapore as a natural gateway to an increasingly integrated and exciting region.” exclusive distributor of the entire product line of Trivarga’s ok.-Energy Drinks in Singapore and Malaysia, reflecting European companies’ growing interest in Asia. Mr Ho said that Swiss companies will benefit from using Singapore as their gateway into the growing ASEAN region. “We are part of the ASEAN community and have several Free Trade Agreemens (FTAs) with our Asian counterparts, including South Korea, India and China,” he

11/06/2014 09:30

BizQ

said. “The ongoing discussions to strengthen these ties through the ASEAN Economic Community 2015 and the Regional Comprehensive Economic Partnership position Singapore as a natural gateway to an increasingly integrated and exciting region.” President Tan was joined by Mr Iswaran and Dr Mohamad Maliki bin Osman, Minister

of State for National Development and Minister of State for Defence.

will soon have opportunities to explore investments in assets, as well as gain access to over 700 million end-consumers. As Singapore’s apex business chamber, SBF has been proactively assisting local companies in seeking opportunities as the European economy stabilises. Last year, SBF organised two high-level business missions for

over 30 Singapore-based companies to France, Poland, Hungary, the Czech Republic and the Slovak Republic. This was the first mission that SBF has organised to Portugal and Switzerland. More business-to-business exchanges are slated for 2014 to drive further collaboration between business communities in Singapore and Europe.

SBF Leads Delegation to China

CONNECT SINGAPORE

Singapore in the spotlight at 11th China-ASEAN Expo

– YOUR WINDOW TO ASEAN & THE WORLD

FTAs in the region With the European Free Trade Association agreement and the EUSwitzerland FTA in place, and the pending conclusion of the EU-Singapore Free Trade Agreement (EUSFTA), Asia is attractive as a trade and investment destination. Singapore companies

The International Monetary Fund said that China has seen the most significant increase in expansion by small and medium enterprises (SMEs), according to its World Economic Outlook 2012 report. Almost half the SMEs surveyed were engaged in China, up from onethird the previous year. Singapore companies in China are also confident of the Chinese economy – it has remained a top investment destination for them in recent years. Reflecting this trend, the Singapore Business Federation (SBF) is leading a large business delegation to the 11th China-ASEAN Exposition (CAEXPO) in Nanning this September. The apex chamber has

028-033 InsideSBF.ab.cp.indd 29

•

The National Pavilion will profile Singapore’s capabilities in the areas of 1 URBAN SOLUTIONS SERVICES 2 EDUCATION SERVICES 3 PROFESSIONAL SERVICES 4 LOGISTICS

been appointed by the Ministry of Trade and Industry (MTI) to organise Singapore’s participation for nine consecutive years.

Singapore in the spotlight This year, the exposition is significant to Singapore as the republic will be the Country of Honour at CAEXPO. In addition, the theme of the Singapore National Pavilion is “Connect

Upon approval Please sign: Name and Date:

Singapore – Your Window to ASEAN & the World”. The National Pavilion will profile Singapore’s capabilities in the areas of urban solutions, education, professional, logistics and other services. It will also feature SingaporeChina economic and business cooperation. CAEXPO offers Singapore companies numerous opportunities to leverage their

5 TOURISM 6 HOSPITALITY SECTORS

strengths in urban solutions, professional services, manufacturing and trade with China. Government-togovernment, businessp.30

11/06/2014 09:30

BizQ

Jul•Aug•Sep 2014

Inside SBF to-government and business-to-business flagship platform projects in China will be highlighted this year. While CAEXPO provides an effective platform to promote and bolster economic and trading cooperation between China and Singapore, the Singapore business community continues to deepen ties with China across the urban solutions, education, professional services, tourism and hospitality sectors. Singapore companies will benefit from the

dynamic development and profitable outcomes of CAEXPO as it highlights industrial sectors, commodities and other areas of cooperation that both China and the ASEAN region are keen to develop. Companies interested in participating can register by completing the registration form, available at www.sbf.org.sg under “Events & Services > Business Missions”.

•

For more information on CAEXPO, contact Ms Cheng Qin at (65) 6827 6883 or qin.cheng@sbf.org.sg.

SBF, CIECA held Talks on Economic Cooperation The 12th Joint Meeting between the Singapore Business Federation (SBF) and the Chinese International Economic Cooperation Association (CIECA), held in Singapore, was co-chaired by Mr Peter Seah, Chairman of DBS Bank and SBF’s former Honorary Treasurer, and Mr Douglas Tong Hsu, Chairman of CIECA’s Singapore Committee and Chairman/ CEO of Taiwan’s Far Eastern Group. The meeting featured several industry leaders from both countries’ financial, shipping, real estate, retail, logistics and renewable energy sectors. Key topics discussed included business outlook and financing

028-033 InsideSBF.ab.cp.indd 30

Upon approval Please sign: Name and Date:

in Taiwan and Singapore, cooperation in third markets, opportunities in renewable energy, and an overview of both countries’ shipping and logistics industries. Attended by 46 Taiwanese and 100 Singapore C-suite delegates, the meeting was aimed at fostering closer economic ties between the two business communities. It provided a platform for Singaporean and Taiwanese business leaders to network and learn more about opportunities in each others’ markets. Delegates exchanged views on business strategies and explored joint collaborations in thirdmarket opportunities.

Singapore Forges Ties with the Philippines SBF explores opportunities due to renewed interests from members. Relations between the Philippines and Singapore are set to warm up as the Singapore Business Federation (SBF) and the PhilippinesSingapore Business Council (PSBC) forge stronger ties between the s. two business communities. SBF and IE Singapore brought a 14-member delegation to Manila in April, led by PSBC Singapore Co-Chairman Mr Loh Chin Hua, who is also the CEO of Keppel Corp. The delegation included business leaders from the infrastructure, transport and logistics, and consumer services sectors. Interests in this mission reflected the Philippines’ strong economic performance in recent years, which has led many Singapore companies to explore this market. Mr Loh observed that many Singapore firms have already made inroads into the Philippine market. “With the forging of robust mutual friendships, Singapore brand names, which span a wide range of sectors such as aviation, marine, logistics, telecommunications, real estate and hospitality, utilities, food and retail services, have flourished in the Philippines,” he said.

Strengthening chambers’ role The recent business mission is part of SBF’s partnership with its Philippine counterpart, the Makati Business Club (MBC). SBF, the Singapore secretariat for the PSBC, aims to raise awareness among Singapore companies about the Philippine market through outreach efforts such as missions and industry roundtables. “As more and more Singapore companies seek trade and investment opportunities in the fast-growing Philippine market, I am certain that our chamber-to-chamber relations will strengthen and become a key success factor for our Singapore companies,” said SBF Chairman Mr Tony Chew. “SBF looks forward to organising more activities to increase Singapore’s engagement with the Philippines, given the expanded resources in SBF.”

11/06/2014 17:01

Fostering collaboration

strong infrastructural spending and structural economic reforms.” Such demands have led to renewed investor interests. Mr Tan added: “It is timely for Singapore companies looking to diversify their presence in the region to look at this market anew for opportunities that commensurate with market needs including infrastructural and urban solution demands that it is complemented by a sizable consumer base.” More Singapore companies are now looking at the Philippines with a

To help Singapore companies tap into various opportunities in the Philippines, IE Singapore set up an Overseas Centre in Manila earlier this year. The centre focuses on promoting SingaporePhilippines business collaboration in areas such as infrastructure development and consumerism. Mr Tan Soon Kim, Assistant Chief Executive Officer of IE Singapore, said: “The Philippines’ economic resurgence is driven by robust growth in domestic demand,

new perspective – as an upcoming growth market. SMRT Corporation and MSI Global, a unit of Singapore’s Land Transport Authority, recently won a bid to establish a farecollection system for Metro Manila’s rail system. Local F&B player Brotzeit also established its first outlet in Manila last year. One Singapore company with a longstanding presence in the Philippines is Keppel Corp. Keppel Philippines Marine Inc, a wholly owned subsidiary of Keppel Offshore & Marine, manages two shipyards in the Philippines.

•

Increasing Trade with Central Asia Business forum in Kazakhstan aimed at revisiting opportunities.

Rising star in Asia seeks trade, investments The Philippines was one of Asia’s best performing economies last year, with GDP growth of 7.2%. The country’s credit rating has also been upgraded to investment grade by top credit rating agencies such as Moody’s, Fitch Ratings, and Standard & Poor’s Ratings Services. HSBC has projected that the Philippines will become the world’s 16th largest economy by 2050, up from its current position in 44th place.

and communications technology, construction machinery and equipment, retail products and corporate gifts, solar energy and welding machinery and equipment.

Increase in bilateral trade

With the local business community garnering renewed interest in the emerging region of Central Asia, the Singapore Business Federation (SBF) led a delegation to Almaty, Tashkent

028-033 InsideSBF.ab.cp.indd 31

and Samarkand earlier this year to understand current market dynamics and revisit opportunities in Kazakhstan and Uzbekistan. The 13-member business delegation

Upon approval Please sign: Name and Date:

included business leaders and senior representatives from diverse industries including business consultancy and financial services, commodities trading and trade financing, information

Central Asia and Singapore have enjoyed warm bilateral ties at official and business levels. Kazakh President Nursultan Nazarbayev and Uzbek President Islam Karimov have both made state visits to Singapore – in 2009 and 2007 respectively. In 2013, the percentage increase in total bilateral trade values between Singapore and Kazakhstan, and Singapore and Uzbekistan grew by 153% and 158% respectively, according to IE Singapore. “This is indicative p.32

11/06/2014 09:38

BizQ

Jul•Aug•Sep 2014

Inside SBF of the growing interest between the business communities and I believe that the partnerships and collaborations forged during the trip will bring about more robust exchanges and growth for our countries,” said Mr Chan, who is seeking partners for his Singaporemanufactured corporate gifts and leather products. SBF has been proactively assisting Singapore companies in venturing overseas to seek opportunities in Central Asian markets. This was the second mission that SBF has led to Kazakhstan, and the third to Uzbekistan.

Kazakhstan-Singapore business forum The Kazakhstan-Singapore Business Forum, attended by more than 100 business representatives, presented business opportunities in Singapore and successful international business stories in Kazakhstan. At the plenary session, Mr Serikbai Bisekeev, President of Arman Holding, shared his Singapore experience and success story. Individual business meetings between Singaporean and Kazakh entrepreneurs were also arranged as part of the forum. The forum provided an effective platform for the Kazakh business community to better understand Singapore’s economic climate and potential, and presented an opportunity for companies from both countries to discuss partnerships and collaborations.

•

028-033 InsideSBF.ab.cp.indd 32

Building Myanmar’s Future BuildTech Yangon showcases construction opportunities in Myanmar’s emerging market. Singapore companies are setting their sights on Myanmar as the country currently undergoes a period of accelerated development, spurred by the government’s unprecedented and sweeping reforms. The Myanmar government has started many public work programmes since the country’s economic liberalisation. One of the last unconquered frontiers of Asia, Myanmar boasts abundant natural resources and a population of more than 60 million. Inadequate infrastructure – roads, bridges, canals, railways, ports, communication facilities, public buildings, commercial and residential real estate – is currently impeding economic growth. There is much demand for infrastructure development here – renovation of existing infrastructure as well as new projects. The McKinsey Global Institute estimates that between 2010 and 2030,

Upon approval Please sign: Name and Date:

Myanmar will need to invest US$320 billion in its infrastructure to achieve 8% economic growth per annum, the majority (60%) of this in residential and commercial real estate. Key construction and infrastructure projects include a new international airport in Yangon, the upgrading of 30 of its 69 domestic airports, and the development of special economic zones Kyaukphyu, Thilawa and Dawei.

Bringing expertise to the market With such opportunities in the pipeline, the Singapore Business Federation (SBF) and Sphere Exhibits are keen to bring much-needed building and construction

Increasing Myanmar’s Infrastructure Needs The McKinsey Global Institute estimates that between 2010 and 2030, Myanmar will need to invest US$320 billion in its infrastructure to achieve 8% economic growth per annum, the majority (60%) of this in residential and commercial real estate. Key construction and infrastructure projects include a new international airport in Yangon, the upgrading of 30 of its 69 domestic airports, and the development of special economic zones Kyaukphyu, Thilawa and Dawei.

expertise to Myanmar. BuildTech Yangon 2014 (BTY2014), an offshoot of the BuildTech Asia forum, held its inaugural exhibition and conference event this May at the Myanmar Convention Centre in Yangon. This event has the support of the Myanmar Construction Entrepreneurs Association (MCEA) and the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). The event focused on building and construction machinery and equipment, building and construction materials, building- and construction-specific

11/06/2014 09:44

BizQ

MYANMAR GOVERNMENT PUBLIC WORKS PROGRAMMES 1 ROADS 2 BRIDGES 3 CANALS 4 R AILWAYS 5 PORTS 6 COMMUNICATION FACILITIES 7 PUBLIC BUILDINGS 8 COMMERCIAL AND RESIDENTIAL REAL ESTATE

Inadequate infrastructure is impeding economic growth

electrical and mechanical engineering, and facilities management. Highlights at the event also included precast, prefabrication, formworks and scaffolding, which ideally will help speed up affordable housing as well as commercial high-rise building construction. Singapore organised a country pavilion at the event with the support of IE Singapore. Speaking at BTY2014, SBF Global Business

028-033 InsideSBF.ab.cp.indd 33

Division’s Director for ASEAN and South Asia, Mr Alan Tan, noted: “The growth of Myanmar’s construction industry is expected to continue being driven by the government’s increasing expenditure on improving Myanmar’s public infrastructure, and the rising interest from domestic and foreign real estate developers in constructing residential units to meet the population’s housing demands. “In view of the growing interest in this sector, SBF is partnering Sphere Exhibits in coorganising the BuildTech Yangon trade show in Yangon to help our Singapore businessmen gain a foothold in this fast-growing sector in Myanmar,” he explained. About 3,000 trade visitors attended BTY2014, which featured over 120 exhibiting brands from China, Italy, Japan, Korea, Malaysia, Singapore and Taiwan.

“We can facilitate progress in infrastructure development by embracing efficient building and construction technologies and expertise. In particular, precast and prefabrication will speed up housing and commercial building construction and keep costs economical.” According to UMFCCI President Mr U Win Aung, the Myanmar government is actively implementing reform processes and vital plans and programmes to achieve its aim of developing a modern, industrialised and prosperous nation in the shortest time possible. He said: “In order to achieve this goal, the state is developing the industrial sector and the high-priority agricultural sector simultaneously. Needless to say, Myanmar’s infrastructure in almost all sectors is weak. “Infrastructure development is gaining

Rising demand for urban services

Singapore investors keen on Myanmar

Last December, MCEA advisor and former ambassador Hla Maung projected that the number of urban dwellers in Myanmar will rise by 35% by 2015. As it is, the number of urban residents has doubled since 1980, from 8 million to 16 million. Mr U Tha Htay, MCEA Chairman, observed: “The building and construction industry in Myanmar can play a part and contribute to the growth and development of our economy.

The Directorate of Investment and Company Administration of Myanmar reported that as of January 2014, 103 of 655 foreign investments by permitted enterprises in Myanmar are from Singapore – the largest share mong the 33 countries with a foreign investment presence in the country...63 of 394 foreign investments by existing enterprises are from Singapore companies, second to The Republic of Korea’s 73.

Upon approval Please sign: Name and Date:

increasing priority to contribute toward the country’s economic growth, and there are vast opportunities for public-private partnerships in this sector.”

Encouraging foreign investors Myanmar presents immense opportunities for Singapore companies across various sectors, including infrastructure and urban solutions. Recent revisions to Myanmar’s Foreign Investment Laws have also provided greater encouragement for foreign investors. According to the Directorate of Investment and Company Administration (DICA) of Myanmar, as of January 2014, 103 of 655 foreign investments by permitted enterprises in Myanmar are from Singapore – the largest share among the 33 countries with a foreign investment presence in the country. In addition, 63 of 394 foreign investments by existing enterprises are from Singapore companies, second to South Korea’s 73. IE Singapore’s Mr Ng Cheong Yew, Centre Director for Overseas Centre Yangon, offered a cautious note: “While Singapore companies venturing into this market need to be mindful of its fluid business environment, they should also strive to pursue mutually beneficial investments that create value for local communities; for example, job creation and skills transfer.”

•

11/06/2014 09:44

BizQ

International Markets

Shining on Africa

Spotlight Nigeria BURKINA FASO

BiZQ checks out the recent buzz surrounding investment opportunities in Africa.

recent flurry of state visits to Singapore by several African heads of state this year is creating explosive interest around the emerging continent. The upcoming Africa Singapore Business Forum (ASBF) 2014 is also gearing up with additional buzz this August. In January this year, President Issoufou Mahamadou of the Republic of Niger made his first state visit to Singapore, reaching out to the local business community through its apex chamber, the Singapore Business Federation (SBF). In April, President Blaise Compaore of the Republic of Burkina Faso and Mr Robert Dussey, the Republic of Togo’s Minister of Foreign Affairs and Communication,

SPH – The Straits Times

•

Jul•Aug•Sep 2014

Upon approval34 034-037 InternationalMkts.ab.ed.sbf.ab.indd Please sign:

Name and Date:

also made their way to our sunny shores. On Singapore’s side, SBF’s Africa Business Group (AfBG) led several recent missions to Ethiopia, Sudan, Tanzania and Kenya.

SUDAN ETHIOPIA

KENYA

TANZANIA

SBF will also be organising a business mission to Nigeria this August. The Federation will be visiting Lagos, the most populous city in Nigeria with an estimated 12 million residents. The country was ranked the world’s third fastest growing megacity by Forbes. The visit will be SBF’s inaugural visit to Bayelsa, one of the newest states in Nigeria which is also the source of 30–40% of Nigeria’s oil and gas production.

Travelling to Sudan, Ethiopia, Nigeria The AfBG organised a business mission to Sudan and Ethiopia in March – its inaugural visit to Sudan, one of the world’s fastest growing economies which experienced sustained growth, and SBF’s second visit to Ethiopia. In Sudan, the delegation visited the capital city of Khartoum and Port Sudan. There is interest from Singapore companies in Sudan’s industries, particularly in fast moving consumer goods (FMCG), logistics, information

and communications technology (ICT) and water desalination. Sudan is expected to provide long-term opportunities for the Singapore business community through the country’s young and highly educated population, its access to landlocked countries, its role as the Arab world’s breadbasket, and ongoing economic diversification. In Ethiopia, an 11-member delegation led by Mr Peter Wu, Group Senior Managing Director of Hyflux Ltd, visited Addis Ababa. A Singapore roadshow was organised with IE Singapore and Ethiopian Airlines, which was graced by Ethiopia’s State Minister of Industry Sisay Gemechu, and attended by 160 members of the Ethiopian business community.

Niger’s economic progress During his January visit to Singapore, Niger’s President Mahamadou told BiZQ in an exclusive interview that “Niger is ambitious to move forward and progess economically.” He said he was “impressed” with the economic achievements of Singapore and that it was “exceptional”. “I hope Singapore can contribute to the economic progress of Niger and we want to strengthen our cooperation with Singapore,” he said. As one of the world’s newest oil producing nations and a beneficiary of a resource boom, Niger’s GDP growth in 2012 was estimated at more than 13%. Given that Niger is still in an infant stage of development, the

13/06/2014 16:31

Ranked by Forbes as the world’s

3rd fastest growing megacity NIGER THE WORLD’S NEWEST OIL PRODUCING NATION

GDP growth in 2012 was estimated at more than

13% country remains heavily dependent on imports and industrialisation capacity remains low. Similarly, Bukina Faso’s President Compaore told BiZQ in an exclusive interview that his “government and the Burkinabe people follow the outstanding achievements of your country (Singapore) at the economic and social levels with great admiration.” It is no wonder that the Burkina Faso Chamber of Commerce and Industry, which was also part of the presidential delegation, signed a Memorandum of Understanding (MoU) with SBF in conjunction with the trip (see side story: Burkina Faso Rolls Out Strategic Plans).

034-037 InternationalMkts.ab.ed.sbf.ab.indd 35

Togo’s regulatory framework In his maiden speech to the Singapore business community, Togo Foreign Minister Dussey’s observed that his visit recognised development efforts underway in Togo through cooperation between the two countries. In this regard, the Republic of Togo “now intends to stand with the private sector and provide a formal regulatory framework and to allow economic activities to take place under appropriate conditions to boost growth and job creation,” he said, adding that Singapore would be part of this “dynamic partnership.” Mr Dussey also announced the lifting of entry visa requirements for Singapore passport holders to Togo. State visits like these have provided ample opportunities for Singapore companies, and there is more to come. Hosted in Singapore since 2010, the ASBF returns for its third edition from Aug 27 to 28, 2014. The forum has brought together close to 1,000 business and government leaders from 30 countries to develop opportunities and partnerships between these two dynamic regions. The guest of honour will be Mr Tharman Shanmugaratnam, Singapore’s Deputy Prime Minister & Minister of Finance.

•

For more information on the Africa Singapore Business Forum, log on to www.iesingapore.com/asbf.

AfBG: Leading the Way for Singapore The Africa Business Group (AfBG), a Sub-Saharan Africa-centric business community group under the Singapore Business Federation’s (SBF’s) auspices, recently welcomed three prominent members of the Singapore business community with extensive experience in Africa to serve on its Executive Committee (ExCo). Mr Kuok Khoon Hong, Chairman and CEO of Wilmar International, Mr Yao Xingliang, Executive Director and CEO of GMG Global, and Mr Darius Lim, Head of Corporate Affairs at Pavilion Energy, will join nine other ExCo members in providing strategic advice on AfBG initiatives that will help to strengthen and promote the development of the Singapore-Africa partnership at a businessto-business level. SBF formed the AfBG in July 2010 to facilitate exchanges between the Singapore business community and their counterparts from the African region.

Mr Shabbir Hassanbhai, SBF Vice-Chairman and AfBG Chairman

“Investors with an established business are able to see the opportunities for growth and they are overwhelmingly positive.” SBF Vice-Chairman and AfBG Chairman Shabbir Hassanbhai said that the AfBG has come a long way in terms of encouraging investor perceptions, and businesses are now more positive about the progress made by those who are already doing business in Africa. Investors with established businesses are able to see the opportunities for growth and they are overwhelmingly positive, he told BiZQ. He added that several industry leaders believe that Africa’s attractiveness as a place to do business will continue to improve. To date, the AfBG has undertaken 16 business missions to Africa. These have given Singapore companies many opportunities to connect first-hand with Africa.

SPH – The Business Times

NIGERIA

16/6/14 2:17 PM

Jul•Aug•Sep 2014

International Markets

Burkina Faso Rolls Out Strategic Plans BiZQ’s writer Greg Ting checks out investment opportunities in the west Africa state.

Zaphs Zhang

ccording to the 2014 Index of Economic Freedom, Burkina Faso is ranked 13th out of 46 countries in the Sub-Saharan Africa region with a score of 58.9, which is above the 54.6 regional average (the world average is 60.3). The Index recorded notable improvements in seven of its 10 economic freedom categories, including freedom from corruption, business freedom, and monetary freedom. In addition, this west African state has also seen a 30-fold increase in average annual flow in foreign direct investments (FDI) between 2006 and 2012, and the country achieved 7.5% economic growth between 2010 and 2012. Burkina Faso is now aiming for an average actual GDP growth rate of at least 10%. To this end, President Blaise Compaore of Burkina Faso made a fourday visit to Singapore in April this year to promote investment opportunities in the country. During the visit, he met Prime Minister Lee Hsien Loong and President Tony

Upon approval36 034-037 InternationalMkts.ab.ed.sbf.ab.indd Please sign:

Name and Date:

as agriculture, mining, handicraft, cultural and tourism industries, and small and medium enterprises and industries. The government also pushed for the promotion of economic integration and foreign trade, development of support infrastructures, and the development of education such as technical and vocational training. Speakers at the forum also presented various opportunities on sectors such as healthcare, water and sanitation, and energy services.

Infrastructure projects

Tan Keng Yam, as well as a number of homegrown industry giants such as Changi Airport International, Hotel Properties, Hyflux and Surbana. He also attended the inaugural Burkina Faso Singapore Business Forum organised by the Singapore Business Federation, and witnessed the signing of the Memorandum of Understanding between SBF and the Burkina Faso Chamber of Commerce and Industry.

Industrial sectors At the forum, the Burkina Faso government shared details of its accelerated growth plan which included the development of priority sectors such

A number of key development projects were also showcased at the forum, including a US$155 million (S$194 million) multimodal dry port in Ouagadougou, a US$78 million hydroelectric power plant in Folonzo, and a US$42 million ICT science and technology park just off the Ouagadougou city centre with a US$28 million main data centre. Mr Compaore also welcomed Singapore investors to value add to its cotton industry; Burkina Faso is a top cotton-producing African country, yet only 1% of its yield is being processed in the country. He also hoped to attract companies in infrastructure development, energy production, urban sanitation, and publicprivate sector partnerships. The private sector is tipped to play a leading role in the success of this accelerated growth plan,

President Blaise Compaore, Republic of Burkina Faso

“The government and the Burkinabe people follow the outstanding achievements of your country (Singapore) at the economic and social levels with great admiration.” but there are business and investment opportunities in varying scales and in almost every industry. To reassure foreign companies of a sound investment environment, Mr Compaore said: “Burkina Faso has created a number of legal frameworks to promote and protect investors coming to our country. The labour code is also attractive, and will protect people working in Burkina Faso.” He added: “It is also easy for investors to repatriate the income that they gain in Burkina Faso. We also have a very good currency, which is connected to the Euro, so convertibility is not an issue in Burkina Faso. All these aspects mean that Burkina Faso is a very attractive option for investments.”

•

13/06/2014 16:31

FACTS ABOUT ETHIOPIA ● Population of 91.7

million; median age 17.5 ● Second largest market

in Sub-Saharan Africa ● Africa’s fourth largest

economy, with access to 23 African countries through membership in the Common Market for Eastern and Southern Africa (COMESA), Africa’s largest economic bloc with 406 million consumers ● GDP growth over the past decade averaged 10.7% annually; projected at 6.5% in 2014

secession of South Sudan ● Strategic location

along the Red Sea coast, providing access to surrounding landlocked countries ● Member of COMESA ● Economic link between the Arab and African countries – is a member of the League of Arab States ● High proportion of workforce represented in vocational labour, with highly skilled graduates and a 70.2% total population literacy rate

FACTS ABOUT TANZANIA ● Population of 48.2

million; median age 17.3 ● 5th among the world’s

10 fastest growing economies, according to the International Monetary Fund (IMF) ● GDP growth over the past decade averaged 6.8% annually; projected at 7% in 2014 ● Dar es Salaam as the largest port of entry serving landlocked neighbouring countries ● Entry point to a growing market of 527 million consumers in East and Southern Africa, with membership of the South African Development Community (SADC) and the East African Community (EAC)

FACTS ABOUT SUDAN ● Population of 37.2

million; median age 18.9 ● GDP growth projected

at 2.5% in 2014, due to

034-037 InternationalMkts.ab.ed.sbf.ab.indd 37

FACTS ABOUT KENYA ● Population of 41.6

million; median age 18.9 ● GDP of US$37.2 billion

(S$46.6 billion) with growth projected at 5.8% in 2014 ● Nairobi is the regional economic and commercial hub of East and Central Africa and the headquarters for several multinationals, with a vibrant stock exchange ● The Port of Mombasa is the region’s most important deep-water port and its main entry point for goods ● A well-educated and multilingual workforce; literacy levels of about 85% are among the highest in Africa ● Strongest and most sophisticated industrial base in the Eastern and Central Africa region

Upon approval Please sign: Name and Date:

Eyeing Africa’s Oil and Gas Sector Among the numerous recent exchanges between Africa and Singapore, one salient highlights was the inaugural Africa Asia Oil and Gas Summit 2013 held last November. Famfa Oil founder Folorunsho Alakija told BiZQ that while there are a lot of opportunities in Africa, “it is not for the faint-hearted or the impatient.” In reaching out to the Singapore business community, she said one of the big strengths of Singapore companies is that they have a strong track record in infrastructure development, something that is very “inadequate” in Africa. In his opening address at the summit, Mr Lee Yi Shyan, Singapore’s Minister of Trade and Industry, said that Africa’s oil and gas industry is a promising one. Recent oil finds in West African countries such as Ghana and gas discoveries in countries along the continent’s south-eastern coast – Tanzania and Mozambique – have led to optimism about the sector’s growth. “Africa presents opportunities for exploration, offshore marine and downstream activities,” he noted. The presence of many Asian companies in the continent today clearly showed the region’s strong interest in Africa.

Asian national oil companies – such as Petronas and PetroChina – have already begun making inroads into Africa while companies such as Keppel Offshore & Marine, Sembcorp Marine and Swiber Holdings will find that their capabilities complement the demands there.

Thriving economies African countries are continuing to firm up their investment policies and develop the supporting infrastructure needed for a thriving oil and gas industry. Asia’s experience over the past century can serve as a possible model. Mr Lee said that Indonesia, Malaysia and Vietnam have developed competitive oil and gas industries while Myanmar is just opening up to foreign investment. Regardless of their varying stages of development, governments face similar challenges in striking a balance between creating an attractive investment climate and safeguarding domestic interests.

•

11/06/2014 09:40

Jul•Aug•Sep 2014

SME Resources

Enhanced Micro Loan Initiative for SMEs

SPH - The Straits Times

Government announces that it will take on more risk to spur lending to young SMEs. Small and medium enterprises (SMEs) will now find it easier to obtain loans for their businesses. The Singapore Government recently announced an enhancement to the Micro Loan Programme (MLP) for SMEs, who often find it difficult to obtain loans to grow their businesses. Young SMEs usually lack track records and are seen by the banking community as riskier investments, so it is often difficult for them to get loans. The MLP was launched in 2001 to encourage banks to provide loans to young businesses, and under this scheme, the Government takes on some of the risk for small loans below S$100,000. In Budget 2014, the Government announced that it will take on more risk (from 50% to 70%) in order to encourage lending to young SMEs. To qualify, SMEs must not have more than 10 employees, or have annual sales not exceeding S$1 million. The Government is also studying the potential of equity crowdfunding as an alternative source of finance for start-ups

Upon approval 038,040 SME Resources(2).ab.ed.sbf.indd 38

Please sign:

Name and Date:

and small companies. Deputy Prime Minister Tharman Shanmugaratnam said that the Monetary Authority of Singapore and SPRING Singapore are looking into creating an appropriate regulatory framework for such new business models.

Crowdfunding platform for SMEs Meanwhile, StarHub has unveiled a crowdfunding site for Singapore entrepreneurs.

The Singapore telco firm’s Crowdtivate website provides a platform for entrepreneurs to campaign for funds and other related support to kick-start their ideas. The site is jointly managed by StarHub’s i3 business unit and Crowdonomic, a Singaporebased advisory firm.

•

BUDGET 2014 Measures for Businesses Mico Loan Programme: Raise Government’s risk-share for loans to young SMEs ● Co-Investment Programme: S$150 million more to catalyse promising enterprises’ growth capital ● Internationalisation Finance Scheme: Double the maximum loan quantum to S$30 million per firm ● Global Company Partnership Programme: More support offered ● Lifelong Learning Endowment Fund: S$500 million top-up in line with ●

commitment to Continuing Education and Training (now at S$4.6 billion)

Tax Incentives for Innovation Qualifying R&D expenditure: 10-year extension of the 50% additional tax deduction till YA2025 ● EDB-approved R&D projects: Fiveyear extension of the further tax deduction scheme till Mar 2020 ● Acquisition of Intellectual Property Rights: Five-year extension of writing-down allowances till YA2020 ●

ACCESS TO SME CENTRES Small and medium enterprises (SMEs) can look forward to greater and more convenient access to free business and productivity advice at 15 SME Centres by end-2014. The Government is setting aside S$30 million to run the SME Centres over three years till 2016. During this period, over 60,000 SMEs are expected to receive assistance from the SME Centres. Today, there is a total of 12 SME Centres, consisting of five main SME Centres housed at major trade associations and chambers, and seven satellite SME Centres set up across Singapore to reach out to smaller heartland businesses. In view of the good response to these outreach efforts, three new satellite SME Centres will be established this year, bringing the total number of SME Centres up to 15.

10/06/2014 17:56

Jul•Aug•Sep 2014

SME Resources SME Workshops Employment Act (With Latest Changes) July 16 Singapore Business Federation

The Ministry of Manpower recently introduced the Employment Act Amendment Bill, which came into effect in April. It is important for HR practitioners to have an in-depth understanding of its interpretation and application. SBF is organising this one-day workshop to help members understand the new changes to the employment act.

fraud investigations. The objective of this course is to help participants understand when an internal investigation is called for and how it should be conducted. Participants can also learn how to avoid mistakes that can end up subjecting their company to legal liabilities and possibly cost it more than the source of the problem for which the investigation was initiated. For more information, get in touch with joanne.wong@sbf.org.sg. www.sbf.org.sg

www.sbf.org.sg

Workshop on Complexities in Simple Practical Corporate Tax Aug 14 Singapore Business Federation

As corporate tax compliance gets more complex, it is important for companies to comply with their tax obligations and file their corporate returns on time. SBF is organising this one-day workshop to help companies understand Singapore’s corporate tax system and keep companies updated on the recent tax changes. www.sbf.org.sg

How To Conduct Internal Fraud Investigations Sept 2 Singapore Business Federation

The Singapore Business Federation Business Institute is organising a one-day training course on conducting internal

Upon approval 038,040 SME Resources(2).ab.ed.sbf.indd 40

Please sign:

Name and Date:

Vietnam Labour Law Sept 24 Singapore Business Federation

Singapore-based companies have cited Vietnam as the most popular investment destination within the ASEAN region. This workshop will be useful for companies intending to venture into Vietnam, or who have operations in Vietnam. Members are encouraged to attend this workshop to acquire a good understanding of the various provisions of Vietnam Labour Law. www.sbf.org.sg

Upcoming Events 2nd International Business Fellowship Executive Programme on Myanmar: Yangon July 6-11 Yangon, Myanmar

This iBF Executive Programme is jointly organised by IE Singapore and SBF. The iBF Programme supports Singaporebased companies in the training of company executives to acquire business knowledge and build networks in selected supported markets like Myanmar. This programme will be conducted in English by business professionals from the Yangon business community as well as senior government officials and business experts. A Certificate of Attendance will be awarded by the Union of Myanmar Federation of Chamber of Commerce & Industry – Training Institute (UMFCCI – TI). Topics to be covered extensively in this programme include: ● Overview and analysis of Myanmar’s economic performance in the past, present and immediate future ● Current investment and taxation issues in Myanmar ● Legal pitfalls of doing business in Myanmar faced by foreign firms ● Current issues in human resource management and labour relations ● Challenges in business/ project financing

in Myanmar ● Site visits to Thilawa Industrial and Asia World Ports in Yangon, and selected Myanmar companies ● Networking sessions with Myanmar businesses and Singaporean business executives working and living in Myanmar. Only a maximum of 30 participants will be accepted for this programme. For more information, contact: • Teo Chi Howe at 65-6827 6855 or chihowe.teo@sbf.org.sg • Loi Min Qian at 65-6827 6848 or minqian.loi@sbf.org.sg.

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: The Editor, BiZQ Magazine Singapore Business Federation 10 Hoe Chiang Road #22-01 Keppel Towers Singapore 089315. Or email us at corpcomm@sbf.org.sg.

10/06/2014 17:57

2014 ay•Jun Apr• M

ET 2014 BUDG

stock Taking pore’s a g in of S conomy e CE ELLEN G EXC WERIN EMPO

g out Thinkinhe box of t

E FOR TH TING SHOO

S STAR

usi ient / B ssQuot Busine

ation’s g the n ry Fundinspace indust

Link Up with

nities Opportu eople / ness / P B A PU

G EYEININA H THE CRKET MALogistics’

BiZQ!

LICA

PTC an Poh Chairmnn believes A e Choon toring futur n s e in m ess leader busin

TION ING OF S APO US RE B INES D S FE

2014

03/04/

ERA TION .indd

r-Jun14

r BQ Ap

val appro Upon sign: Please te: and Da Name

FULL COLOUR R.O.B. FULL PAGE DOUBLE PAGE SPREAD ½ PAGE VERTICAL ½ PAGE HORIZONTAL

$4,200 $7,300 $2,900 $2,800

PREMIUM POSITIONS OUTSIDE BACK COVER INSIDE FRONT COVER INSIDE BACK COVER

$7,500 $6,500 $5,300

16:21

BiZQ is the official publication of the Singapore Business Federation, the nation’s apex business chamber with 21,000 members. Distributed to some 23,000 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-award-winning 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. Name ................................................................................................................. Company ............................................................................................................................................. Designation ........................................................................................................... Membership No. ........................................................................ Office Address .......................................................................................................................................................................................................................................................................................... E-mail ........................................................................................................................................................................................................................................ Tel No. (O) ....................................................................... (HP) ....................................................................... Please send me more information on BiZQ’s advertising rates.

*IBC BizQ 2014 housead.indd 1

Upon approval Please sign: Name and Date:

10/06/2014 17:18

BizQ

40,000 Keppelites in over 30 countries are contributing towards shaping a sustainable future through our businesses in Offshore & Marine, Infrastructure and Property. Passion and discipline drive us to deliver solid results year on year, and emerge stronger through every challenge. We will fortify our strengths and competencies, harnessing human, knowledge and financial capital to shape Keppelâ&#x20AC;&#x2122;s future.

Keppel Corporation Limited 1 HarbourFront Avenue #18-01 Keppel Bay Tower Singapore 098632 www.kepcorp.com