July–September 2015
A PUBLICATION OF SINGAPORE BUSINESS FEDERATION
Beyond SG50 Hard truths about Singapore’s future Keen on Khmer Why investors are flocking to Cambodia SBF-DP SME Index A cautious outlook for Q3-Q4 2015
ONE ON ONE
Transforming Singapore’s Landscape Pek Lian Guan CEO of Tiong Seng Holdings 1 Business Quotient
1
Business Quotient
Welcome July – September 2015
SG50 and beyond This August, Singapore marks its 50th year of independence. As a business community, while we celebrate the notable achievements the nation has attained over the decades, it is also a good time for us to think about the challenges ahead. In this issue, we speak to four entrepreneurs on their views on where they think the Singapore economy is headed beyond 2015, as well as the hard truths that local businesses have to prepare for. The views presented are a mix of optimism and caution. While they acknowledge Singapore’s advantages, they are also quick to point out the potential pitfalls. Indeed, this caution is reflected in the SBF-DP SME Index for Q3 and Q4 of 2015, which marks a third consecutive quarter of falling sentiments, the lowest since 2013. This is mainly due to increased difficulties in hiring which are forcing businesses to cut back on capacity, resulting in a muted outlook for the second half of the year. On a positive note, Construction and Business Services are two sectors which indicated they expect better business performance in the next two quarters. However, despite the less optimistic business outlook, the good news is that there are many programmes and assistance provided by the government to help businesses transform and grow. We encourage our SMEs to tap on these programmes to build their capabilities. There are also new international opportunities for local businesses. One such opportunity is the ASEAN Economic Community (AEC), which will see the economies of ASEAN member states forming a single market by end 2015. SBF, together with its partners, organised the ASEAN
As a business community, while we celebrate the notable achievements the nation has attained over the decades, it is also a good time for us to think about the challenges ahead� Conference 2015 in May to look at the opportunities and challenges arising from the realisation of the AEC this year. On the same note, the Federation will be leading missions to several countries over the next few months and we encourage you to join us. From July to September, we will be leading business missions to Nigeria, Northern Vietnam, Mexico and South Korea. In September, SBF will also be leading a business delegation to China for the 12th ChinaASEAN EXPO. In addition, to commemorate 25 years of China-Singapore diplomatic relations, SBF is organising the Singapore Regional Business Forum 2015 on 27 July. The forum will provide insights on the strategic Chinese 21st Century Maritime Silk Road initiative, as well as the investment and business opportunities in sectors such as logistics, shipping, infrastructure development and hospitality, amongst others. As we head into the next 50 years, the business community must quickly transform into productive and innovative enterprises. They should tap opportunities from the region whose economies are now more integrated.
S.S. TEO Chairman, Singapore Business Federation
Contents July – September 2015
FEATURES
10
DOING MORE WITH A LOT LESS
Streamlining roles and adopting new technology are important to overcome manpower woes in the hospitality industry
18
HARD TRUTHS ABOUT SINGAPORE’S FUTURE
Four leading entrepreneurs weigh in on what lies ahead for the country beyond SG50
INSIGHT
IN FOCUS
24
ONE ON ONE
2
TRANSFORMING SINGAPORE’S LANDSCAPE
Mr Pek Lian Guan shares on the role that foresight and passion play in his company’s success, and talks about how to transform the construction industry
Business Quotient
Contents July – September 2015
Business Quotient (BiZQ) is the official publication of the Singapore Business Federation, reaching out to over 21,500 of Singapore’s business elite, chief executives and entrepreneurs. This 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.
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
30 06
TRENDSPOTTING The latest export numbers and SME outlook
CORPORATE COMMUNICATIONS SENIOR DIRECTOR Jinny Claire Sim DIRECTOR (SPECIAL PROJECTS) Gerald De Cotta MANAGER Liew Lixia SENIOR EXECUTIVE Rachelle Lee
14
BIZ TALK Regional business and investment initiatives, industry awards and national policy announcements
28 30
INNOVATE Crowdlending for beginners
14 BiZQ is published exclusively for the Singapore Business Federation by Publicitas Publishing
HAPPENINGS Latest SBF partnerships, collaborations and conferences
MANAGING DIRECTOR Joui Ong GENERAL MANAGER Betty Liswanty RELATIONSHIP MANAGER Serene Lee
36
BEYOND THE RED DOT The truth about investing in Cambodia
38 40
EDITORIAL EXECUTIVE CONTENT DIRECTOR Rod Mackenzie MANAGING EDITOR Ming Rodrigues CONSULTING EDITOR Francis Kan EDITOR Jeffrey Kong DESIGN DIRECTOR Fredrik Dittlau SENIOR ART DIRECTOR Savid Gan WRITERS AJ Leow; Emily Chia
RESOURCES SME events and training BIZ FLAIR Executive retreats offer some R&R
CHAIRMAN Teo Siong Seng CHIEF EXECUTIVE OFFICER Ho Meng Kit CHIEF OPERATING OFFICER Victor Tay ASSISTANT EXECUTIVE DIRECTOR (MEMBER RELATIONS) Cheryl Kong
06
ADVERTISING MEDIA SPECIALIST Peggy Thay +65 6836 2272; peggy.thay@publicitas.com
The views and opinions expressed or implied in BiZQ do not necessarily reflect those of the Singapore Business Federation (Registration No. ROS138/2002TAP) or Publicitas Publishing. No responsibility is accepted for the claims made in advertisements, articles, photographs or illustrations contained in this publication. Unsolicited material will not be returned. No part of this magazine may be reproduced without the written permission of the Singapore Business Federation and Publicitas Publishing. All rights reserved. Copyright © 2015 Singapore Business Federation. All information correct at time of printing. MCI (P) 116/03/2015
Trendspotting
Have exports turned the corner? Overall trade performance still weak despite unexpected growth in key non-oil domestic exports
I
t’s been a bumpy ride for Singapore’s exports, a key driver for the economy. Growth in the key non-oil domestic exports (NODX) surged by a stunning 18.5 per cent year-on-year in March, before slowing to 2.2 per cent in April – although this still beat economists’ expectations of a contraction of around 5 per cent. You might want to hold off on popping the champagne, however, as a deeper dive into the data turns up signs of weakness in our trade performance. BiZQ breaks down the numbers for you.
[CHINA]
[USA]
-8.36%
6
Business Quotient
-5.1%
+2.2%
Growth in NODX despite expectations of a 5% drop
-5.1%
Drop in exports to China reflects slowing momentum in the Chinese economy
THE EXPORT PICTURE THE CHALLENGING NEWS
THE OUTLOOK
EXTERNAL DEMAND STILL WEAK
CHINA AND THE US SLUGGISH
The April NODX numbers have been boosted by large one-off factors. The exports of structures of ships and boats, and non-electric engines and motors grew by a staggering 3,566.7 per cent and 253.2 per cent year-onyear, respectively. The headline number could have been worse if not for “lumpy items” – the big one-off factors mentioned above – that were booked years before and only show up when they are delivered. This means that external demand hasn’t improved much, and analysts expect Singapore’s export performance to be sluggish in the next 12 months, unless there is a strong rebound in the global economy.
Exports to China fell 5.1 per cent in April on-year after a 1.1 per cent expansion in March, reflecting slowing momentum in the world’s second largest economy. Shipments to the United States eased 8.3 per cent, compared to a 19.0 per cent growth in March. The world’s top economy may be struggling to regain momentum after a weak first quarter.
THE GOOD NEWS
EUROPE BRIGHTENS NODX up 2.2 per cent year-on-year versus expectations of a 5 per cent drop. Exports are boosted by shipments to Europe, which were up 11.4 per cent year-on-year.
[EUROPE]
[NODX]
+2.2%
+11.4%
JULY–SEPTEMBER 2015
7
Trendspotting SBF-DP SME INDEX
SMEs MODERATE OUTLOOK FOR SECOND HALF OF 2015 ingapore’s small and medium enterprises (SMEs) continue to moderate their expectations for a third consecutive quarter as hiring pressures and uncertainty about the business environment weigh on their outlook for the second half of the year. This dip in optimism was reflected in the SBFDP SME Index for Q3 and Q4 of 2015, which showed that the level of business confidence among Singapore SMEs fell compared to last quarter. The Overall Index Score slipped from 54.0 in the previous survey to 53.5, its lowest since the start of 2013. A score above 50 indicates a positive sentiment. According to SBF, the survey results, coupled with other economic data, could signal that the economy is reacting to restructuring policies. The Index is a joint initiative of SBF and DP Information Group (DP Info). It is a six-month forward-looking index that measures the sentiments of SMEs.
S
8
Business Quotient
There has been a steady decline in business sentiments of our SMEs over the last three quarters, though this drop in sentiment is not alarming. It reflects the uncertainty in the global economy and the tough business environment locally.” – MR HO MENG KIT, SBF CEO
Highlights of the SBF-DP SME Index for Q3 and Q4 of 2015 • Construction is the only sector where overall business confidence increased during the quarter, from 53.6 to 54.0. The sector is benefiting from infrastructure spending as well as the push to raise skill levels. • Business Services is the only sector that saw an improvement in their outlook for both turnover (from 5.63 to 5.75) and profitability (5.49 to 5.64). The sector is seeing greater opportunities as a result of the Budget, from initiatives such as the SkillsFuture, Smart Nation and the Capability Development Grant. • SMEs’ hiring expectations fell to 5.46 from 5.70 in the previous survey, with the tight labour market continuing to exert hiring pressure to fill open positions. • The outlook for turnover and profitability in the second half also fell. AD_UPS_Generic_Product-13.75x20.5cm_en-us_V1_Editable-crop marks.pdf 1 2015/7/6 上午10:10
The power behind competitiveness
Delta Uninterruptible Power Supplies ensure the continuity of mission critical operations C
M
Y
CM
MY
CY
CMY
K
Delta UPS ─ Amplon Family Up to 11kVA 1-Phase Online UPS
Delta UPS ─ Modulon Family Up to 800kVA On-line
Delta UPS ─ Ultron Family Up to 4000kVA 3-Phase On-line For more information, contact us at +65 6747 5155 or ups.singapore@delta.com.tw www.deltapowersolutions.com.sg
JULY–SEPTEMBER 2015
9
Insight
10
Business Quotient
Doing more with a lot less
Industry players must continue to offer a rich guest experience despite their manpower woes, says Margaret Heng, executive director of the Singapore Hotel Association WORDS FRANCIS KAN
I
n a few years’ time, a typical hotel in Singapore may look very different from the way it does today. Walk into the lobby and you will find only a handful of staff present, and the bellboy who brought in your bags may also be the employee who’s checking you in. At the front desk, he or she will whip out a tablet for quick check-in process. As you make your way to the guest lifts, you will notice the absence of a business centre. In its place is a communal area offering free Wi-Fi and semi-private workspaces. You’ll also be hard-pressed to find more than one restaurant or eatery. That’s the intriguing vision painted by Ms Margaret Heng, an industry veteran and executive director of the Singapore Hotel Association (SHA), an umbrella body comprising 143 hotels that account for more than 90 per cent of the total gazetted rooms in the country. The changes she presented are a result of the persistent labour shortage plaguing Singapore’s hospitality sector. Indeed, Ms Heng noted that when senior hotel managers have to help make up beds during peak periods, as is the case at some establishments now, it is a clear sign that the manpower shortfall has become a very serious problem. “When there’s a big event in town and room occupancy is running high, you only have so much manpower, so what can you do? Everyone has to help out,” she said in an interview with BizQ. Government measures in recent years to tighten the flow of foreign JULY–SEPTEMBER 2015
11
Insight
labour into the country have hit manpower-heavy sectors such as hospitality, retail and F&B. She noted that if the situation is left unchecked, the industry might be headed into a worsening talent spiral – as staff are forced to take on a bigger load, more will leave, exacerbating the sector’s manpower woes. Encouragingly, industry players are tackling the problem head-on by employing a range of innovative solutions – from implementing productivity boosting technology to coaching staff to take on multiple roles. For instance, more hotels are training their concierges to also help out with checking in guests at the front desk. This is being facilitated by the introduction of devices such as tablets to make the check-in process a simpler one. During lull periods, staff from other areas such as a hotel’s food and beverage outlets can be moved to ease congestion at busier sections like the front desk. Yet, there is a limit to what technology and cross-training can do. Ms Heng argued that operators must also review their entire work processes, tweaking and streamlining where possible to enhance its efficiency. “It is important that while hotels are adopting technology to meet manpower shortages, they must also take a step back and look at their overall processes. It is not enough to be productive in one area,” she said. Some hotels may need to rethink the layout of their establishments, which were built at a time when manpower was plentiful. For instance, they may want to do away with the business centre, or outsource their F&B outlets to third-party operators. The SHA has been trying to help industry players by raising awareness of government-backed funding available to help them implement productivity measures. “Many players are aware that there is funding available, but some don’t know how to go about accessing 12
Business Quotient
It is important that while hotels are adopting technology to meet manpower shortages, they must also take a step back and look at their overall processes. It is not enough to be productive in one area.” – MARGARET HENG, EXECUTIVE DIRECTOR, SINGAPORE HOTEL ASSOCIATION
Five tips to survive the labour crunch
Harness technology to automate processes, such as using an iPad to check in guests or order food.
1
Make every staff a multi-tasker. For example, concierge staff should be trained to also check in guests at the front desk, or F&B staff can shift seamlessly to front desk duties during off-peak dining hours.
2
Review overall business processes to tackle manpower shortages. For instance, outsource F&B outlets to third-party operators. Rethink business models that were established at a time when manpower was not an issue.
3
Offer unique selling points that are not labour-intensive. For example, have a communal area offering free Wi-Fi and semi-private workspaces instead of having a business centre. For hotel guests, offer the option of a do-it-yourself laundry room on the premises, which would keep laundry costs low for families or long-term staying guests.
4
them,” she noted. The SHA has also urged the government agencies to streamline the process of applying for funding in order to encourage greater participation. However, as the industry undergoes its transformation, some guests – especially those staying at more upmarket establishments – may baulk at having to order their meals via an iPad, or not have staff greet them upon arrival. The goal then, said Ms Heng, is for hotels here to offer their guests an experience that is equally rich
despite the lack of manpower. The good news is that as a younger, more digitally savvy generation of travellers starts to traverse the globe – a group that prizes a fast Internet connection over a uniformed doorman – Ms Heng’s future vision of the Singapore hotel may be arriving just at the right time. In the meantime, industry players have to soldier on, regardless of the obstacles in their way. “Business must still continue, which means we have to bite the bullet and see how we can manage in this tight labour situation.”
Make use of government funding to help boost productivity.
5
JULY–SEPTEMBER 2015
13
Biz Talk
Maritime champion Mr Y.C. Chang was honoured at this April’s IMA; his son Mr S.S. Teo received the award on his behalf from Transport Minister Mr Lui Tuck Yew (opposite page)
14
Business Quotient
Outstanding maritime player recognised PIL Chairman Y.C. Chang honoured at Singapore International Maritime Awards
O
ne of the pioneers of Singapore’s maritime sector, Mr Y.C. Chang, who is the founder and chairman of Pacific International Lines (PIL), has been honoured with the prestigious International Maritime Centre (Individual) Award at the Singapore International Maritime Awards (IMA) held in April. The award was received on Mr Chang’s behalf by his son Mr S.S. Teo, who is the managing director of PIL and chairman of the Singapore Business Federation. Mr Chang was recognised for championing the promotion of Singapore’s shipping industry since its early years. Mr Chang was joined by 10 other industry award recipients at IMA 2015. Under the strong leadership of Mr Chang, PIL has grown from a company owning four coastal vessels in 1967 to the 18th largest containership operator in the world today. PIL currently has a fleet of 200 vessels and a network of offices and agencies across 100 countries. Organised by Maritime and Port Authority of Singapore (MPA), the biennial Singapore IMA recognises individuals and companies for their outstanding contributions
ROLL OF HONOUR
International Maritime Awards Bunker Award
BP Singapore Pte. Limited
SRS Green Ship of the Year Award
Asiatic Lloyd Maritime for the vessel UASC UMM QASR
SRS Ship Owner of the Year Award
Swire Pacific Offshore Operations (Pte) Ltd
Maritime Service Jardine Shipping Provider Award Services Singapore
This year’s Awards attracted a bumper crop of over 150 nominations, reflecting the richness, diversity and quality of our maritime sector to Singapore’s advancement as a premier global hub port and an international maritime centre. This year’s Awards attracted a bumper crop of over 150 nominations, reflecting the richness, diversity and quality of our maritime sector, said the MPA.
Outstanding Maritime R&D and Technology Award
Keppel Offshore & Marine Technology Centre
Offshore and Marine Engineering Award
Sembcorp Marine Ltd
Excellence in Manpower Training and Development Award
Oldendorff Carriers (Singapore) Pte. Ltd.
Special Mention Award
Institute of Technical Education
Special Mention Award
Pacific Radiance Ltd.
International Maritime Centre (Individual) Award
Mr Y.C. Chang, Chairman, Pacific International Lines
International Maritime Centre (Corporate) Award
Mitsui O.S.K. Bulk Shipping (Asia Oceania) Pte Ltd
JULY–SEPTEMBER 2015
15
Biz Talk
BUSINESS OUTLOOK
SINGAPORE SUMMIT 2015 The fourth Singapore Summit will be held from 18–19 September, coinciding with the Formula 1 Singapore Grand Prix. Asia and the rest of the world are becoming increasingly connected in what is often referred to as GlobalAsia, and Singapore is well placed to contribute to the increase in the flow of ideas, technology, goods, capital, talent and business. The Singapore Summit is organised to bring together business
and thought leaders from around the world to discourse over future-oriented topics in finance, business and economics with a Global-Asia focus. In particular, the coming summit will cover tensions in global economics and finance, implications of the sharp drop in energy prices, challenges of sustainability and the need for new business models in a Global-Asia business landscape. For more information, visit singaporesummit.sg
TECHNOLOGY
PROGRAMME TO BOOST PRODUCTIVITY Government agency A*STAR and Singapore Productivity Centre (SPC) have launched a twoyear programme to help businesses in the food, hotel and retail sectors improve efficiency through the adoption of technology. SPC will identify industrywide productivity gaps that can be addressed with technology, while A*STAR will match companies with suitable solutions. Among areas that can be improved with technology: management, customer service and human resource development. For more information, visit sgpc.sg 16
Business Quotient
DIGITAL
THE SMARTER WORLD SUMMIT 2015 Social media, mobile platforms, data analytics and online content have drastically changed the “How” in business operations, consumer patterns and people’s lifestyles. The Smarter World Summit 2015 on 8 October will gather 250 innovation-focused CEOs and senior decisionmakers from all sectors, including technology firms, consumer package goods firms, service companies as well as universities and research institutes, for an assessment of the
business challenges and opportunities in the next 15 years as a result of the digital revolution. A key area of focus of the event will be how the Internet of Things, robotics, virtual reality and other emerging
concepts create value through the interface of technology, business and consumers, as well as the ethical and societal implications of these powerful technologies. For more information, visit asia-business-summit.com
ENERGY
SINGAPORE INTERNATIONAL ENERGY WEEK Now in its eighth year, Singapore International Energy Week (SIEW) is a platform for top policymakers, energy practitioners and commentators to discuss energy issues, strategies and solutions. Held from 26–30 October, this year’s lineup of conferences, exhibitions and networking events provide insights on the emerging trends and innovations across the energy spectrum of oil and gas, clean and renewable energy, and
energy infrastructure financing. Themed “Global Energy Transitions”, SIEW 2015 will explore the recent volatility in oil prices, growing energy demand in Asia, and increasing market interconnectivity. The event will look at how these factors are reshaping the global energy landscape and address how best to navigate them. For more information, visit siew.sg
JULY–SEPTEMBER 2015
17
In Focus
Hard truths about Singapore’s future As the nation celebrates its 50th birthday, some of the country’s leading entrepreneurs share their thoughts and visions in a roundtable discussion
18
Business Quotient
BiZQ: What are your thoughts about Singapore’s success over the last 50 years? David Leong: I am a product of Singapore’s experiment in education. I was born in 1970 and we were the cohort who underwent major educational re-structuring, including streaming. The economic impact of the restructuring is evident from generations of cohorts and we can see that Singapore’s success essentially hinges on our good educational output and focus. As a whole, Singapore is doing very well. I rejoice in our SG50 celebration and hope that Singapore can continue with our “can-do” spirit – a small country with big aspirations. GS Sareen: History judges success, and it is now judging what has happened to Singapore in the last 50 years. We need to continuously reinvent ourselves to keep us relevant with the times; we need to be contemporary in our thoughts because that is moving with the times. The world is very volatile now, and there are new disruptive
JULY–SEPTEMBER 2015
19
In Focus
technologies emerging every day. The world going forward will be very different from what it is, and we have to stay current.
Fang Koh Look Chief Executive Officer of workplace safety training company Absolute Kinetics Consultancy
Derek Goh: An amazing feat – and I say this not because I am Singaporean too. We have had three generations of leaders and the fourth is rising. The vision 50 years ago was to be a “First World Oasis in a Third World Region” – today we are closer to this than ever before. From a small country with no natural resources and an insufficient water supply amongst other woes, we have grown to be a globally known metropolis. Going forward, we need to continue to build on the strong foundation that has been laid and not be complacent. Fang Koh Look: Exemplifying itself as a meritocratic country and society, Singapore achieved many milestones over the last 50 years, and continues to do so and lead by example. Many had the impression that Singapore as a small and land-scarce country would fail to succeed. This has been proven otherwise. Today, Singapore is a modernised first-world country standing tall and proud. BiZQ: Are you optimistic about the direction of the Singapore economy over the next 50 years? Leong: Fifty years is a blip in nation building. Our 50-year growth in Singapore was phenomenal, extraordinary and miraculous. I am absolutely, in no uncertain terms, optimistic and bullish about Singapore and whether we remain at the top of our game will depend on our nation’s resilience, adaptability and fighting spirit. I hope that we can be steadfast in our focus and keep our Singapore story going. Sareen: The whole business scene is shifting towards Asia, and Singapore 20
Business Quotient
Singapore’s skilled workforce and focus on R&D will help compete with emerging economies in the region” – FANG KOH LOOK
markets, but they are still building on their transportation networks, healthcare systems or efficient legal systems that are essential for building a more favourable business environment. This positions Singapore perfectly to participate in these markets.
is perfectly positioned to capitalise on this. The leadership has figured out that they don’t have the mass, but they have the geography to attract talent to come here, which can then leverage the population mass around us. China and India are huge
Goh: Yes, I am definitely optimistic. Presently, we have strong economic fundamentals built upon political stability to drive economic growth, coupled with the government’s foresight in building a First World infrastructure. Going forward, we can also expect bigger plans to propel
Singapore further. For example, we have the Smart Nation Programme as well as the Changi Airport’s Jewel project. This will attract more visitors and travellers, helping to fuel economic growth. Fang: I am cautiously optimistic of the Singapore economy over the next 50 years. We may see the emergence of more competitive economies, especially within Southeast Asia. Emerging neighbouring countries with natural resources and a sizeable and knowledgeable workforce may open up new challenges to the Singapore economy. Singapore’s existing focus on R&D, alongside a trained and skilled workforce will ensure that we are well prepared for these challenges to come.
BiZQ: What do you think will
be the key drivers of growth going forward?
Leong: For us to continue with this pace of growth we need to be plugged in with individual ASEAN countries and the ASEAN Economic Community to remain relevant. We can arbitrage on economic opportunities across borders by helping with originating, arbitraging, financing, syndicating, building infrastructure projects, trade and deal flows and data flows. Singapore can be positioned as the convenient one-stop location with stable infrastructure and a transparent and recognised legal framework. Sareen: Growth will fundamentally still come from the MNCs. The
way the economy is structured the best talent go into politics, then the professions. Business is still not top choice. Of course there are exceptions of world-class entrepreneurs like Ron Sim. With that set up we are best positioned to provide an attractive platform for large corporations to operate from. Goh: Looking ahead, we may anticipate a shift in growth drivers. While manufacturing continues to account for a big part of our economy, we can expect the rising trend of the Internet of Things (IOT) and Big Data Analytics to be important growth drivers going forward. Singapore as a financial and service hub must constantly evolve and find ways to stay ahead of the game, especially in Southeast Asia. In
David Leong Managing Director of human resource company PeopleWorldwide Consulting
Singapore needs to figure out how to leverage the growth of rising giants such as Indonesia and India” – DAVID LEONG
JULY–SEPTEMBER 2015
21
In Focus GS Sareen Chief Executive Officer of tyre manufacturer Omni United
fact, the increasing use of robotics and factory automation will improve the efficiency and productivity and thus could attract more high-end production into Singapore. Fang: I foresee innovation as the main key driver to drive the economy forward. Economies become highly competitive. In land- resource- and manpower-scarce Singapore, having a leading edge, for example in technology and automation, will give the country a major boost in economic growth. Other key drivers include policies that Singapore adopts so that businesses, especially SMEs, can thrive and remain competitive both locally and regionally. Singapore must not only rely on MNCs to spur growth. Our country needs more favourable 22
Business Quotient
Growth will fundamentally still come from MNCs – Singapore needs to be able to attract talent from abroad” – GS SAREEN ecosystems for SMEs to thrive and eventually to become significant drivers of our economy. BiZQ: What are the key challenges and risks facing local businesses in the longer-term? Leong: Our big neighbours are developing fast and Singapore must
find its own momentum to run ahead. Indonesia and India are emerging faster with their new leaders and new ideas. We cannot stand still but constantly find new ways where we can leverage these big countries’ growth. How can we provide the wind beneath their wings? Sareen: The big challenge is not having enough talent. The structure of society needs to change for things to pick up for Singapore to become a major player in its own right. Why can’t a Singapore company be doing something big? We need to dream big. Goh: There is a need to recognise the changing landscape on which local businesses play on. In terms of economies of scale and availability
Now there is only one way to go – forward – aggressively. We as a nation need to, in all sincerity, put in our bit towards nation building, contribute where we can with labour, intellect, resources or even thoughts and ideas. We cannot take anything for granted. Goh: There are many of these, but first and foremost we have to Fang: As a local entrepreneur, tackling recognise that Singapore is a small rising business costs remains the country and therefore every citizen utmost priority for SMEs. Inflation becomes all the more important. will also add heavily to operating costs. Each citizen has his or her role to play While being risk aversive may derail and one should put national interests future business expansion plans, before self in order for local businesses must strike a Singapore to remain balance between productivity competitive Derek Goh and profitability, and learn to and resilient. properly utilise the limited Executive Chairman resources SMEs have for of semiconductor distributor Serial business growth without System affecting their bottom line. of the talent pool, local businesses will tend to lose out as compared to companies operating in larger countries. Recognising this, local businesses must move beyond Singapore, attract good foreign business partners and grow brands that are accepted and respected globally.
At the same time, Singaporeans should also recognise that the world does not owe us a living, and embrace meritocracy – the bedrock upon which Singapore has been built on. Our history has also taught us the importance of exceptional leadership and safeguards. Looking ahead, this cannot change. Fang: I think Singaporeans will need to understand that our society is becoming heterogeneous. Rather than segregating racially, Singaporeans can be forthcoming in promoting cultural assimilation and social integration. There are certainly advantages in a multilingual, multicultural society.
BiZQ: The late Mr Lee Kuan Yew wrote about the hard truths to keep Singapore going. What do you think are some of the hard truths that Singaporeans need to understand and deal with before the country can progress? Leong: Our lack of critical natural resources, water and a contracting population still plague us persistently. Though we mitigated water scarcity with technology, our problems still persist. We cannot take this scarcity of resources as natural and that we can perpetually balance ourselves without the strong hand of our able government. We are a nation that is always a work-in-progress. Hence, that accommodative mentality is very important to carry us through. In neighbouring countries, they can withstand coups, governments toppling or a gridlocked parliament. Personally, I do not think Singapore could withstand such thuds as we may not recover so well. The fall may be fatal. Sareen: Singapore has created an identity of its own, and that’s great.
Local businesses must move beyond Singapore, attract good foreign business partners and grow their brand”– DEREK GOH JULY–SEPTEMBER 2015
23
To stay ahead in this industry, you have to be good at what you do. We have a lot of passion for this industry. We want to be a role model. We want to be the leader in transforming this industry.�
24
Business Quotient
© 2015 SPH Magazines Pte Ltd. Reproduced with permission
One on One
Transforming Singapore’s landscape
Mr Pek Lian Guan, Chief Executive of Tiong Seng Holdings, believes that passion is what makes his company successful
A
s one of Singapore’s leading building construction and civil engineering contractors, Tiong Seng Holdings Ltd has been involved in the building of major infrastructural projects such as the Pan Island Expressway as well as iconic projects like the Marina Bay Financial Centre. In addition, the company has completed projects in the Middle East, Papua New Guinea, Laos, India and China. In a recent interview with BiZQ, Chief Executive Officer Pek Lian Guan, who is also a Council Member of the Singapore Business Federation and a Member of the Building Construction Authority Board, explained how Singapore’s construction landscape will continue to build on its strong foundation of public sector infrastructure and property development projects. “Singapore is the best market for the construction business, at least for the next five to 10 years. There will be quite a few infrastructure projects that will come on stream in the next few years,” he said, adding that his company, already a pole player in the industry, is looking to be part of this growth story. “To stay ahead in this industry, you have to be good at what you do. We have a lot of passion for this industry.
We want to be a role model. We want to be the leader in transforming this industry,” Mr Pek told BiZQ. During the interview, Mr Pek spoke about Tiong Seng’s strategic focus on developing its construction technology in order to broaden company’s capabilities throughout a spectrum of construction segments as well as its expertise in productivity management. As a result, the company successfully penetrated the growing public infrastructure and civil engineering space to secure S$424 million worth of public civil engineering contracts last year. Mr Pek added, “We had the foresight to anticipate the growing demand for infrastructure projects and aligned our capability and technology development so as to capture market share within this segment. With the increase in competition within the construction industry, it is imperative to remain adaptable to industry trends in order to stay ahead.” In explaining the two key aspects of productivity which would help transform this sector, he described the first aspect – which relates to output by workers as more microeconomic in nature – and the second – which refers to the value added that is computed for the construction industry on a national level. On worker output and productivity, JULY–SEPTEMBER 2015
25
One on One
he said that the latter has clearly grown since 2008, especially given that there has been no change to the size of foreign labour pool in the construction sector in recent years. “There has been a growth in output per man day in the construction sector and we need to tell this story to everyone,” he pointed out emphatically. “The truth is that this (aspect) of productivity has gone up, especially with all the government funding programmes and the push toward driving productivity higher in this sector,” he said. In this regard, he explained that Tiong Seng has made tremendous strides in implementing initiatives like Building Information Modeling and driving green technology such as Cobiax – which reduces the carbon footprint of buildings by reducing the concrete needed for the building structure. The company was also able to transform building concepts like Design for Manufacturing Assembly into reality. The implementation involves transforming the construction site into an assembly of prefabricated and precast materials which have been built off-site. In describing the value-added elements in the construction industry at large, he said that indicators in this area continue to paint a gloomy picture. This bearish state of affairs is largely due to excessive competition in the Singapore construction sector, resulting in companies bidding for projects even at levels which are not sustainable for the industry in the longer term. This is a difficult issue and there are no clear solutions today, he said – adding that the day when strategies and solutions become clearer, the whole construction industry will start transforming itself into a more productive sector. “We need to have healthy competition and companies need to invest in technology to raise productivity. If companies in the construction sector are more profitable, then everyone in the industry will benefit,” he said. He said that Tiong Seng is still firmly footed in Singapore in so far as its construction business is concerned. 26
Business Quotient
Tiong Seng is big on improving productivity and developing its capabilities in anticipation of future growth areas
Founding Partnerships The company’s history dates back to 1959, when Mr Pek Ah Tuan and Mr Pay Seng Koon from Peck Tiong Choon joined Mr Lee Tuan Chay and Mr Khng Kwi Cher from Song Hup Seng to set up a business partnership. The four aimed to provide a complete supply chain of excavation, earth moving and trucking services. The partnership was named Tiong Seng, adopting a word from each of their original company names, to signify their collaboration. Together, the founders worked on a series of civil and engineering projects in Singapore and Malaysia. In 1964, they decided to convert the partnership into a private limited company, under the name Tiong Seng Contractors. Tiong Seng Holdings’ current chief executive, Mr Pek Lian Guan, started his career at Tiong Seng Contractors after graduating with a Bachelor’s degree in Civil Engineering from the UK’s Loughborough University of Technology in 1989. In 1993, he was appointed Director of Tiong Seng Contractors and soon became Deputy Managing Director in 1997. Mr Pek has more than 20 years of experience in project management for civil engineering and building works in Singapore and entrepreneurial activities in China, Vietnam, Laos and India.
JULY–SEPTEMBER 2015
27
Innovate
Borrowing from a crowd Peer-to-peer lending is emerging as an alternative channel of financing for cashstrapped SMEs in Singapore WORDS FRANCIS KAN
hen the founder of boutique education centre Smaths Consulting needed money to start a new business unit, he didn’t pick up the phone to call his banker. Instead, Mr Ian Gan approached MoolahSense, a crowdlending platform that connects businesses hungry for capital to borrow directly from cash-rich individuals or institutional investors by paying a fixed rate. Interestingly, it was not just access to funds that attracted him to MoolahSense, but also the platform’s ability to generate publicity for the company. “Our customers got to know a little more about us and our plans for the future. It gives them faith that our business is a sustaining one,” said Mr Gan, who is also Smaths’ CEO. The company sought to borrow S$100,000 through MoolahSense in November 2014. It reached its target in 20 days, and eventually received S$207,000 in offers from 44 investors, of which 19 were allocated. Details of Smaths’ business model, the funding they received as well as their repayment history are available on MoolahSense’s website. It even features a video of Mr Gan explaining the company’s competitive advantages and future plans.
W
28
Business Quotient
S$1,000
Minimum investment sum to be a crowd lender
2
Growing in popularity
The SME loan rejection rate by banks in Singapore is estimated at 80%–90%, so there is potentially a huge market for peer-topeer lending” –PAWEL KUZNICKI, DIRECTOR
AT CAPITAL MATCH
Peer-to-peer lending is emerging as an alternative channel of financing for many SMEs here as they struggle to get traditional funding. Bank loans are usually out of reach of new enterprises without a track record or a history of profitability, while venture capital is largely reserved for high-growth technology companies. Outside of the US, UK and China, the model is still in its infancy. Apart from MoolahSense, there is one other player in Singapore, Capital Match. Both are less than a year old. “We do not see any particular barriers for adoption of crowdlending in Singapore. In fact, the SME loan rejection rate by banks in Singapore is estimated at 80 to 90 per cent, so there is potentially a huge market for peer-to-peer lending,” said Pawel Kuznicki, Director at Capital Match. The company caters to SMEs with revenues ranging from S$200,000 to S$15 million and looking for short-term or working capital debt financing. It has so far successfully funded three campaigns of between S$20,000 to S$50,000 each, and is currently working on its fourth and fifth deals. Each loan typically features anywhere from five to 30 investors each. While MoolahSense and Capital Match operate on a similar model, they differ markedly in the way they set their interest rates. Rates on MoolahSense are based on the highest rate proposed by investors at the end of the campaign, but those on Capital Match are set and made known before the campaign’s launch. MoolahSense CEO Mr Lawrence Yong believes that crowdlending brings a sense of community to those involved. “For some SMEs, there is a feel-good element of source funding from a friendly network. For some investors, there is a feel-good element of being able to support the growth of local SMEs and making an attractive return at the same time.”
Number of crowdlending platforms based in Singapore
Crowdlending For Beginners How does crowdlending differ from crowdfunding? Crowdlending platforms allow individuals to lend directly to businesses in exchange for a fixed return, while crowdfunding gives individuals a chance to invest in companies in return for shares. What is the minimum investment sum to be a crowdlender? S$1,000 How is a loan usually structured? All facilities offered to lenders are structured as unsecured loans with monthly principal and interest repayments. MoohlahSense issues notes with one-year maturity on a 12-month amortising structure. Repayment amount is fixed with 12 equal installments of principal and interest. Who can borrow on crowdlending platforms in Singapore? Only ACRA-registered Private Limited Entities or LLPs that are able to furnish at least one year of financials. Borrowers must also pass background checks with credit bureaus. Is there any form of protection for lenders in the case of a default? Directors of the borrower have to provide personal guarantees so the debt can be collected both from the company and its directors. A debt collection agency may also be employed to attempt to collect the debt from the borrower if necessary.
JULY–SEPTEMBER 2015
29
Happenings
RESEARCH
PARTNERSHIPS
INAUGURAL COLLABORATION WITH SINGAPORE UNIVERSITY OF TECHNOLOGY AND DESIGN
30
Business Quotient
MOU focuses on funding and mentorship opportunities for students, and a talent pool for SBF members
T
ies between the business community and the educational sector recently received a boost, thanks to a Memorandum of Understanding (MOU) between the Singapore University of Technology and Design (SUTD), Singapore Business Federation (SBF) and the SBF Foundation (SBFF) signed on 29 April 2015. This partnership with Singapore’s fourth public university will benefit not only the school’s curriculum, but also the need of the business community for talent in the areas of technology, engineering and
design. The collaboration will include SBFF scholarships for SUTD students who need financial assistance; a mentorship programme; access to faculty and research centres; and the Capstone Programme.
SBF Foundation Scholarships In this partnership with SUTD, SBFF will offer 12 scholarships to high-achieving undergraduate Singaporean students from families in financial need – a realisation of the foundation’s objective to promote education and enhance the employability of disadvantaged youth.
12
students from SUTD will receive scholarships from the SBF Foundation
Left photo, from left: Professor Thomas Magnanti (SUTD President), Philip Ng (SUTD Chairman of the Board of Trustees), Theresa Foo (SBF Foundation Chairman), S.S. Teo (SBF Chairman) and Ho Meng Kit (SBF CEO)
The scholars will be offered internships and opportunities to pursue their Capstone projects with SBF member companies. This holistic approach will allow the scholars to develop their potential and capabilities, grooming them into future leaders, particularly in the fields of technology and engineering. SBF will provide students with the opportunity to deepen their interaction with member companies through various events and activities, including CEO roundtables, dialogues with key business leaders, and networking events.
Mentorship Programme SBF will also identify suitable mentors from its member companies and its panel of business mentors to work with SUTD. The mentors will share their knowledge and experience, offer advice to students on their business plans and operations, and provide assistance to affiliated SUTD start-ups on an adhoc basis. In addition, SBF member companies will contribute career opportunities to the university’s recruitment programme for students.
SUTD’s goal to understand and address the challenges of the world is strengthened with this partnership between SBF and SBF Foundation” Access to faculty and research centres SBF member companies will also have access to SUTD’s faculty and research centres. There, they will have the opportunity to work with the very best of faculty and students in SUTD, which has a number of research centres such as the SUTDMIT International Design Centre, iTrust, Temasek Lab, GREaT Lab and the Lee Kuan Yew Centre for Innovative Cities, each performing cutting-edge research in their respective areas.
Capstone Programme To better equip students to meet the needs of the industry, SUTD’s students working with SBF member companies in their final year Capstone Programme will learn to apply the principles, concepts and techniques they have acquired
to solve real-world technical and business challenges. Likewise, SUTD students will also have the opportunity to learn on the job during their internship with SBF member companies. Professor Thomas Magnanti, SUTD President, perfectly sums it up when he said: “SUTD’s goal to understand and address the challenges of the world is strengthened today with this partnership between SBF and SBF Foundation. The generous scholarship funding and mentorship opportunities will enhance SUTD’s efforts to develop technologygrounded leaders. “Giving students the valuable opportunity to be guided by business leaders from a wide range of industries is well aligned with SUTD’s ‘outside-in’ approach to our curriculum.” JULY–SEPTEMBER 2015
31
Happenings
ECONOMY
MOVING TOGETHER AS AN INTEGRATED ASEAN ASEAN Conference 2015 highlights the importance of economic integration to ride the region’s bullish growth ith ASEAN economic integration in mind, the Singapore Business Federation (SBF), together with founding partners United Overseas Bank (UOB), Rajah & Tann, RSM Chio Lim, strategic partners International Enterprise (IE) Singapore, SPRING Singapore and KADIN Indonesia, organised the ASEAN Conference 2015. Held on 20 May 2015, the event provided a chance for businesses to look at the opportunities and challenges arising from the realisation of the ASEAN Economic Community (AEC) this year. Themed “Growth Opportunities in an Integrated ASEAN”, the
W
32
Business Quotient
conference was graced by guest of honour, Mr Lim Hng Kiang, Minister for Trade and Industry, Singapore, and attended by decision makers from both private and public sectors. It presented a macroeconomic outlook of ASEAN, as well as policy updates pertaining to AEC. Panel discussions also highlighted business insights into operating an effective hub in ASEAN and opportunities in the Greater Mekong Sub-region. The goal of the AEC is regional economic integration by this year. It envisages a highly competitive ASEAN region – which is currently considered the second fastest growing economy in Asia after China – with a single market and
production base, and a region that is fully integrated with the global economy. Mr Ho Meng Kit, Chief Executive Officer of SBF, said: “According to SBF’s National Business Survey 2014/15, eight out of top 10 markets of interest are in ASEAN. As Asia’s second fastest growing economy, ASEAN has huge growth potential, and we urge businesses to tap into the diverse growth and investment opportunities that are shaping up in the region. Through this conference, we also hope to reach out to more Singapore companies that are keen to gain access to new or growing markets in ASEAN.”
SME
PROMOTING ENTERPRISE RESILIENCE SBF to drive adoption of enterprise resilience standards among SMEs he Singapore Business Foundation (SBF) has been appointed by SPRING Singapore (SPRING) to promote and drive the adoption of enterprise resilience standards among SMEs, which have a critical role in supporting larger companies in the region, as well as fulfilling their customers’ requirements. Being certified in enterprise resilience standards enables companies to elevate their capabilities and reputations to a higher level, and allows them to compete more effectively against international companies. SBF will be a partner to administer financial incentives for standards adoption projects under SPRING’s Capability Development Grant Scheme from 1 April 2015 to 31 March 2018. SMEs can apply for SPRING Singapore’s financial support, which can defray up to 70% of their qualifying cost for standard adoption. Previously, SBF was appointed by SPRING to support the National Business Management (BCM) Programme from December 2008 to November 2013. It also created awareness among companies in being BCM-ready under its prior appointment as the National BCM Focal Point. Moving forward, it will be driving adoption for the following standards: • ISO 22301 Societal Security – Business Continuity Management Systems
T
• ISO 27001 Information Security Management Systems • ISO 28000 Certification on Security Management Systems for Supply Chain • SS 584 Specification for MultiTiered Cloud Computing Security Sector-specific outreach and hands-on tools will also be implemented to enable SMEs to better manage their operations and achieve sustainable outcomes. SBF will be collaborating with BCM Ambassadors to encourage businesses to strengthen their enterprise resilience, and these are: 1-Net Singapore, Academies Australia College, AETOS Holdings Pte Ltd, ERS Industries Pte Ltd, Han’s (F&B) Pte Ltd, Langdon & Seah Singapore
Pte Ltd, Safeguard Systems & Services Pte Ltd, ST Aerospace, and SingEx Venues Pte Ltd. “When faced with unanticipated disruptions, resilient enterprises will be in a better position to fulfil their orders. These companies will also be in a stronger position to compete and tap on emerging opportunities, said SBF Chief Executive Officer Mr Ho Meng Kit. “As more Singapore SMEs venture into the region, BCM will enable them to be better equipped to concurrently manage their local and overseas operations. As part of the Government’s continual efforts to enhance enterprise resilience in Singapore, SBF will be working closely with SPRING Singapore, the TACs and industry experts to achieve sustainable outcomes.” JULY–SEPTEMBER 2015
33
Happenings
CPAM at a glance Target audience: Association professionals with less than five years of association management experience who want to apply a more systematic and practical approach to their work and improve the success of their associations. Modules presented: Module 1 - Essential Practices in Association Management Module 2 - Effectively Managing Volunteer Committees Module 3 - Membership Development Module 4 - Communication and Public Relations Module 5 - Developing Your Leadership Potential Time: 9am to 5pm Fees: S$588 per module for SBF member; S$788 per module for non-members Registration and enquiries: institute@sbf.org.sg
Manage effective associations through CPAM Reinforce your commitment to a career in association management with this five-module programme o assist associations in building competencies to manage their companies effectively, the Singapore Business Federation (SBF) and American Society of Association Executives (ASAE) developed and localised the Certificate Programme in Association Management (CPAM). CPAM is a five-module programme designed according to the high standards of ASAE University and will be delivered only by ASAE
T
34
Business Quotient
University-certified trainers, with support from SBF, SPRING Singapore and IE Singapore. ASAE represents more than 21,000 association executives and industry partners representing 10,000 organisations. These members include leaders of trade associations, individual membership societies and voluntary organisations across the United States and 50 countries. The programme aims to educate participants on how to acquire
effective association governance tools to provide a framework for them and their organisations. It illustrates the various roles in an organisation and the relationship of the participant’s role vis-à -vis the association’s governance structure. It will examine core issues and trends within association management, and provide practical and essential leadership skills in conflict management. Full certificates are given upon completion of all five modules.
Join SBF’s Business Missions Gain insights on venturing to overseas markets and exploring growth opportunities there with SBF’s Business Missions. These are organised throughout the year, bringing participants to the Americas, Africa, ASEAN, Asia, China, Europe, Middle East and Oceania. Express your interest or register online (www.sbf.org.sg) for these missions or fellowships happening from September 2015: • Tanzania, Ethiopia and Rwanda (28 September–2 October) • Algeria, Tunisia and Morocco (8–15 November) • Turkey (6–12 September) • Nanning, China (18–21 September) • Australia (30 November–6 December)
EVENTS Here are some of SBF’s upcoming workshops. Registration required at www.sbf.org.sg
PRODUCTIVITY & INNOVATION CREDIT (PIC)
PDPA COMPLIANCE AND DATA PROTECTION OFFICER
COMPREHENSIVE STUDY AND PRACTICE ON MALAYSIA GST
Date: 8 September 2015 Venue: SBF, Keppel Towers Overview: Learn about the PIC Scheme, first introduced in the Singapore Budget 2010, in this half-day workshop, which will provide an insight into the fundamental PIC concepts and help companies to make strategic decisions for business success. There will also be an overview of the PIC scheme and the cash payout under the scheme.
Date: 11 September 2015 Venue: SBF, Keppel Towers Overview: This one-day workshop is for senior management members who are responsible for the implementation and management of the data compliance programme for their company. Find out how the Personal Data Protection Act (PDPA) affects business owners and senior management, and learn how to perform a data protection gap analysis.
Date: 18 September 2015 Venue: SBF, Keppel Towers Overview: Malaysia has implemented the flat rate Goods and Services Tax (GST) from April 2015 to much controversy. Understand how this is considered a game-changer, and find out more about the key difference between Malaysia and Singapore GST, as well as the basic concepts involved in this GST implementation.
JULY–SEPTEMBER 2015
35
Beyond the Red Dot
Cambodia: not a frontier economy Pro-business policies are drawing foreign investors, but lack of skilled labour remains a concern hile Myanmar is fast becoming the ‘new darling’ of new investors piling into Indo-China, Cambodia is the ‘dark horse,’ according to Kohe Hasan, a lawyer who has been representing Singapore firms – including property developers and listed companies – setting up businesses in Cambodia. She noted that in contrast to Myanmar, which is just opening up after years of economic isolation, Cambodia has always been an open and outward-looking economy with a
W
36
Business Quotient
strong emphasis on attracting foreign investment, and hence the probusiness stance of its government. On the ground, that translates into no restrictions on currency (most business transactions are done in US dollars, which is practically legal tender) or foreign ownership of companies, which can be 100 per cent in almost all industries. “The government is well aware of the need for reforms to meet the challenges and to take advantage of the opportunities brought about by
the ASEAN Economic Community. It has been working to improve productivity, competitiveness and inclusiveness for Cambodia’s economic and social development,” said Teoh Oon Kiat, director of Goodhill Enterprise Cambodia, one of the earliest Singapore firms to venture into the country back in 1989. It has since evolved into an exclusive distributor of many international consumer brands, from food and photocopiers to lighting and stationery products. “The macroeconomic indicators are generally positive. The country’s economic growth had in fact been rather impressive, averaging 7.7 per cent over the past two decades, and is expected to grow at 7 per cent in the medium term, which I think is a decent growth especially in view of the current global economic conditions,” Mr Teoh added. “In fact, the industry sector is forecasted to
7.7%
Cambodia’s economic growth over the past two decades
24
Singaporeans have the operational know-how and should be able to get into areas such as property development and management, logistics and warehousing, and even hospitals or healthcare” grow at a faster pace of 9.7 per cent, 6.6 per cent for the service sector and 4.3 per cent for the agriculture sector.” Other draws for investors – in addition to its demographic profile with an average age of 24 years old and a growing middle class that fuels consumption – would be its low inflation and stable exchange rates. Johnny Ong, the CEO of the Singapore-listed HLH Group that is into residential, industrial and commercial properties as well as the agricultural businesses, pointed out that the country is ideal for entrepreneurial set-ups due to the low set-up costs from rentals to labour. “If you are running food outlets, you are talking about rentals that are at 10 per cent of what it is in Singapore,” said Mr Ong. “Labour costs are low though unemployment in Phnom Penh is zero. Food supplies are easy to source now that the transport networks are mostly in place, which is why some Singapore companies (such as Ya Kun Kaya Toast and BreadTalk) are getting into F&B, which has low entry barriers. Language is also not a problem as the locals are able to communicate in English, Chinese and Teochew.” He added, “Singaporeans have the operational know-how and should be able to get into areas such as property development and management, logistics and warehousing, and even hospitals or healthcare.” Andrew Tay, the director of Himawari Group, which operates a 115-room hotel of serviced apartments in Phnom Penh, noted that there is room for companies in the education business – not just schools for expatriate children but also those offering courses in tourism
and hospitality as Cambodia still lags behind its neighbour Thailand in these areas. The flip side of being a Third World economy, observed Mr Tay, is that technical skills and professional expertise are constantly in short supply, which is why foreign companies often have to employ staff at higher levels of management. “The severe shortage of qualified and experienced managers means we often have to station expatriate managers in Cambodia to bridge the gap while efforts in building the talent pipeline have to be an ongoing process, as it is not uncommon for staff to be poached by competitors or new foreign entrants. Be prepared for staff attrition,” Mr Teoh advised. “Cambodians in general are not aggressive. We should not be arrogant and put the country or people down by comparing with how things work in Singapore,” he said. “If we are seen as trying to help and offer our ideas with humility, that will bring us further. Do sufficient due diligence, follow your common sense, and chances are good that the foreign investor will be able to ride on the country’s growth.”
Average age of the population in Cambodia
KEEN ON KHMER
What’s in it for foreign investors in Cambodia
Pros • No restrictions on currency or foreign ownership of companies • A growing middle class that fuels consumption • Low inflation and stable exchange rates
Cons
• Shortage of qualified managers and professionals, leading to poaching of talent by competitors or new foreign entrants • A weak judicial system, which has led to enterprises operating in Cambodia locating their holding companies in Singapore so that disputes can be settled in arbitration courts here
JULY–SEPTEMBER 2015
37
Resources
COLLABORATION
NEW INITIATIVES TO HELP SMEs BUILD CAPABILITIES
38
Business Quotient
F
ive new collaborative industry projects (CIPs) from SPRING Singapore will benefit more than 400 local SMEs from different industries with better access to technological innovations and new digital marketing channels. Three of the five projects are a result of the collaboration between SPRING and A*STAR, and will help businesses adopt solutions such as radio frequency and identification (RFID) and
image recognition technologies. The other two projects, launched by SPRING and two private-sector industry partners, will help SMEs boost their sales, marketing and customer engagement capabilities. SMEs participating in these projects can be supported by SPRING for up to 70 per cent of the qualifying adoption costs. For more information, visit spring.gov.sg/cip
RESEARCH
MASTER CLASSES ON ENTREPRENEURSHIP The Action Community for Entrepreneurship (ACE) is partnering the National University of Singapore (NUS) Business School to conduct research on issues facing start-ups and facilitate apprenticeship opportunities for students. The partners will also jointly host a range of master classes on entrepreneurship, and hold conferences between industry leaders and members of academia. ACE is a privately-led entity run by entrepreneurs and investors. For more information, visit ace.sg
NETWORKING
DISRUPTING BUSINESS DBS Bank has launched a series of industryfocused events aimed at bringing together traditional business owners with innovators and disruptive start–ups so that they can learn from each other and encourage the adoption of innovation in business models, processes and operations. Held in June, the first in the series focused on the food and beverage (F&B) sector and explored the latest technologies and innovations – from drone waiters to 3D food printing. Disrupt @ the Bay featured panel discussions on a range of topics that included alternative F&B business models, digital pointof-sales systems and central kitchens. This Disrupt series is organised by DBS Business Class – a programme connecting SMEs and start–ups to business experts in Asia and the rest of the world. Business Class features a mobile app with articles, insights and advice from experienced entrepreneurs. Events in the Disrupt series are free for members of the platform. For more information, visit www.dbs.com.sg JULY–SEPTEMBER 2015
39
Biz Flair
3 retreats to check out
Thanyapura Sports Hotel
Retreat to advance Rewind and relax with these executive retreats re you feeling burnt out with your business? If you are a CEO with plenty to worry about, you are definitely not alone. According to a survey of more than 900 business leaders by The Conference Board CEO Challenge® 2015, issues such as changing customer behaviour, the macroeconomic environment, cyber security and a shortage of top quality talent to fill key positions are issues keeping Asian CEOs up at nights. To face these challenges, more and more CEOs are making time to attend executive retreats that are designed to help them recharge as they take a well-deserved break from work. Some attendees are looking for direction. Others are seeking peace and tranquillity. There are also those looking for business support. Whatever time that is spent away from work, the CEOs gain in terms
A
40
Business Quotient
of opportunities to connect with fellow leaders that they can relate to, network with and exchange ideas in a casual and relaxed environment. Participants at such retreats can sign up for programmes such as meditation, Pilates, yoga and alternative healing. One example is the Asian Bliss programme at Thailand’s Kamalaya Wellness Sanctuary and Spa Koh Samui, which features the holistic healing traditions of the region. It combines Ayurveda, traditional Chinese medicine and traditional Thai therapies with exercises and practices from different Asian traditions. It introduces participants to vital energy practices that can support a more balanced approach to life. At The Farm at San Benito, outside Manila, Philippines, participants of its The Art of Breathing programme
Work it out the fun way with a Technogym fitness centre and group activities such as martial arts, Zumba, yoga and Thai boxing. If you prefer outdoor sports, choose from their 50m and 25m swimming pools, six plexi-cushioned tennis courts, football, rugby, beach volleyball and cushioned running tracks. thanyapura.com
Kamalaya Wellness Sanctuary and Spa Koh Samui
Kamalaya offers a holistic experience that is a blend of therapies from East and West, a beautiful natural environment, inspired healthy cuisine, holistic fitness practices, group retreats and individual wellness programmes. kamalaya.com
The Farm at San Benito This integrated medical wellness resort offers “living” gourmet cuisine picked fresh from their organic gardens. thefarmatsanbenito.com
learn to incorporate specific natural rhythms of breathing to release stress and purify the system. CEOs return from these experiences recharged with new friends, joint ventures and partnership ideas and, more importantly, with renewed energy.
JANUARY/MARCH 2015
41
IT’S WHO YOU KNOW
Advertise in BizQ for unprecedented access to over 21,500 business decision-makers in Singapore
For a customised media proposal, contact Publicitas Publishing today. Email bizq@publicitas.com