2014 | BiZQ | Jan - Mar

Jan•Feb•Mar 2014 SUSTAINABLE AWARDS

Kudos to eco-conscious business practices EYEING ASEAN, NIGERIA

BusinessQuotient / Business / People / Opportunities

Identifying growth markets in 2014 WHAT’S NEW FOR 2020

Eight global trends to watch

Launch of SBF Foundation

SBF helping members build a compassionate society

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Chairman’s Message

SBF Provides Stronger Support to Business Community Greetings and Happy New Year!

We had a very eventful last quarter in 2013.

The Singapore Business Federation inaugurated several important initiatives in the past few months that will help shape our future.

One of the most important was the launch of the SBF Foundation by Prime Minister Lee Hsien Loong. The Foundation will promote corporate social responsibility and corporate philanthropy among our 20,000 members and the wider business community.

The Foundation will nurture corporate activism for the welfare of low-wage, elderly and other disadvantaged employees. I would like to record our deepest appreciation to the Founding Donors, in particular to Far East Organization, who also donated 22,000 sq ft of space to the Foundation at the new SBF Center. Going forward, the Foundation will engage the broader business community to partner its programmes and fund-raising.

A recent initiative is the launch of the NTU-SBF Centre for African Studies.

Singapore and Africa are strengthening their bilateral ties. SBF has engaged more than 40 of the 54 countries in Africa over the past six years. This Centre will complement SBF’s existing work by helping businesses develop stronger

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insights into the African markets.

Five SBF members have each generously donated $1 million to help fund the Centre. I thank each of them for their generosity.

Another important development is the setting up of the SBF Business Institute to offer corporate training courses to members. This initiative is a natural and progressive step in the Federation’s strategic direction, to help businesses build capabilities and transform towards productivity-led and quality-driven growth.

All these developments come at a time when the Singapore economy is showing signs of stronger growth in 2014. We hope our members will benefit from this growth and participate actively in the Federation’s activities.

On this promising note, I wish all our members a successful and fruitful 2014.

Tony Chew Leong-Chee hee Chairman Singapore Business Federation

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Contents

Economy Watch

Clearer Skies for 2014 06 Ahead

BiZQ takes a closer look at how the Singapore economy is looking to take off to a higher level of growth in the new year.

BiZ Voice

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ABAC Community Tackles Open-trade Issues

Businesses want governments to work together and support the World Trade Organization to attract long-term investors.

Commentary

A shift in global growth trends towards consumerism and innovation will favour both emerging and advanced economies.

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Eight Business Trends for 2020

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.

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BiZ Feature

Identifying Growth Markets in 2014 BiZQ looks at several buoyant economies, like the Philippines, Myanmar and Nigeria, which are showing positive signs of economic growth and increasing opportunities.

ABOVE: Intra-regional trade is expected to get a boost with the establishment of the ASEAN Economic Community in 2015, when member countries cut their import tariffs.

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In BiZ With

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

Building an Ecoconscious Business Community

Singapore Sustainability Awards 2013 recognises 14 companies with outstanding green practices.

chairman

Tony Chew chief executive officer

Innovations

Ho Meng Kit

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chief operating officer

Victor Tay assistant executive director (member relations)

Cheryl Kong

Managing Business Continuity

Integrating IT systems will help businesses recover quickly from critical service breakdowns.

director, corporate communications

Gerald De Cotta Inside SBF

Publishing Agent SPH Magazines Pte Ltd

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group editor-in-chief

Caroline Ngui

SBF Foundation Promotes Corporate Activism SBF encourages businesses to play their part in building a compassionate society.

group editor

Joanna Lee-Miller editorial & creative senior editor

International Markets

Dora Tay

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contributing editor

Casuarina Peck sub-editor

Annabelle Bok senior art director

Jayson Ong

SMEs Expand into Indonesia

Opportunities in Indonesia will be driven by strong demographicled domestic demand and infrastructure investment.

art director

Winnie Ong senior designer

SME Resources

Mohamed A Rahman

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managing director

Dennis Pua

Hospitality and F&B companies post the biggest leaps in sales, says SBF survey.

general manager

Christopher Chan sales & client management associate account director

Kaz Lim

What It Should Have Been

senior executive, client management

In the Commentary article, Managing Risk For Business (page 5, Oct-Dec 2013 issue of BiZQ), the contributor should have been Dennis Lee, Practice Leader for Risk Management, RSM Ethos Pte Ltd.

Neo Pei Shi publishing services manager

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) 242/04/2013. Printed in Singapore by timesprinters, Singapore (Registration No. 196700328H).

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

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SMEs Looking to Tap into More Government Aid

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Economy Watch

Clearer Skies Ahead Positive outlook for Singapore’s economy in 2014.

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hile the headline macroeconomic data points to stronger growth in the coming months, businesses remain a tad cautious in the midst of rising costs and a mature economic landscape.

In this article, BiZQ takes a closer look at how the Singapore economy is finally readying itself for take-off to a higher level of growth in the coming months.

Looking back at 2013, the Singapore economy grew 5.8% on a year-on-year basis in the third quarter of 2013 – significantly more than what most economists had anticipated. This official data, recently released by the Ministry of Trade and Industry (MTI), points to the economy reaching a full-year forecast growth of 3.5% to 4.5%.

In addition, Singapore’s non-oil domestic exports grew 2.8% in October year-on-year compared to a 1.2% decline the previous month.

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Gathering momentum On top of all this, optimism is also oozing from across the Pacific as the US Congress and Executive Branch have hammered out a budget deal to get the government going.

The US Federal Reserve, despite an upcoming change in leadership,

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continues to be committed to the quantitative easing programme.

Hence, “moving forward, we expect Singapore’s export recovery to broaden and gather momentum on stronger global demand, given that growth in the US is expected to accelerate, and that Europe is likely to continue its move out of recession into recovery,” Credit Suisse’s Singapore-based economist Michael Wan told BiZQ.

Lift from services sector A closer look at MTI’s figures show that Singapore’s services sector generated the strongest growth in the third quarter of 2013, growing 6.3% on a year-on-year basis – similar to the preceding quarter’s 5.8% growth.

Growth was supported by healthy expansion in the finance/ insurance and wholesale/retail trade sectors. On a quarter-onquarter basis, growth slowed to an annualised rate of 2.8%, following its 12.9% expansion in the preceding quarter.

The services sector is a key segment of Singapore’s economy, generating about 70% of its output.

DBS economist Mr Irvin Seah observed that “historically, the performance of the economy is

closely tied to it… If the services sector turns, the economy turns along with it.”

Despite the propulsion generated by the services sector, Mr Seah pointed out that higher business costs, along with the labour market crunch, will continue to cap growth in the sector.

Surprise growth What came as something of a surprise was the performance of the construction sector, according to economists BiZQ spoke with.

The construction sector grew by 5.3% on a year-on-year basis, moderating from its 6.9% growth in the previous quarter.

MTI pointed out that the slowdown was mainly due to weaker public sector construction activities, which partially offset robust construction activities in the private sector.

On a quarter-on-quarter basis, the sector contracted at an annualised rate of 2.5%, in contrast to its 20.3% expansion in the previous quarter.

Unlike the construction sector’s contraction on a quarter-on-quarter basis, the manufacturing sector grew. It expanded marginally at an annualised rate of 0.1%, a reversal

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However, on a year-on-year basis, the manufacturing sector grew by 5.5%, higher than its 1.3% growth in the preceding quarter.

Largest ethylene steam plant In addition to the official data announced by MTI, Singapore’s October export numbers have also been released by trade agency IE Singapore.

Among the many sectors that make up the larger nonelectronic production sector, it was petrochemicals that gave the economy a lift. Output from this sector grew 27% in October on a year-on-year basis. Economists attributed this to ExxonMobil’s new ethylene steam cracker, which came on stream in May 2013. This facility is one of the largest in the world.

Taking a higher-level view of the

KEY ECONOMIC INDICATORS REAL GDP

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TOTAL TR ADE

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Ms Cheng Woei Fen, Executive Chairman, Mun Siong Engineering

economy, the Monetary Authority of Singapore (MAS), the country’s de facto central bank, said that the Singapore economy is projected to grow modestly through the end of 2013 and into 2014 as its external environment continues to improve.

“The group faces a challenge in getting customers to absorb increases in labour costs. This continues to put pressure on the group’s profitability.

To address this, the group is studying the possibility of relocating certain aspects of its operations to Malaysia to achieve lower cost.”

International outlook The outlook for the G3 economies is underpinned by the gradual revival in labour and housing markets in the US, expansionary macroeconomic policies in Japan, and improving business sentiment in the Eurozone.

These developments should support global activity, even as GDP growth in China stabilises at a sustainable level.

Most of the other Asian economies have thus far withstood the recent bouts of financial market volatility and tightening financial conditions, and are taking policy measures to sustain growth.

Meanwhile, the upturn in global GDP growth will buttress the incipient recovery of the global IT industry in 2014, MAS said.

As Credit Suisse’s Mr Wan puts it, the lead indicators tracked by the bank for the region – such as its metal price index and the Credit Suisse Basic Materials Index – point to better industrial production and export activity over the next few months, which should certainly benefit a trade-dependent economy like Singapore’s.

While the top-line macroeconomic numbers have injected optimism into the economy, Singapore companies

are challenged with the need to mitigate rising business costs, with labour as a key factor, and the need to grow their businesses in tandem with both local and regional economies.

Homegrown precision engineering company Mun Siong Engineering, which swung into a loss-incurring position in the third calendar quarter of 2013, said that it continues to see major cost components, such as labour, p.8

INDUSTRIAL PRODUCTION

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Singapore’s key economy indicators REAL GDP +5.8% in 3Q13

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INDUSTRIAL PRODUCTION +8.0% in Oct 2013

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Economy Watch

Bright sparks in petrochemicals Better-than-expected export numbers were driven in part by a surge in petrochemical exports.

Second chance?

While still profitable, homegrown retailer-cum-real estate player Second Chance Properties laments that the Singapore economy remains subdued, and its performance in 2014 will still be very dependent on that of the global economy.

Given the rising competition in a mature market, the group is starting to consolidate its operations by having fewer but bigger outlets.

In other sectors, companies operating in sunrise markets, like traditional Chinese medicine player Eu Yan Sang, are also choosing to err on the side of caution.

The company expects economic growth in the markets in which it operates to grow at a “modest

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pace”, but it remains cautiously optimistic and expects sales to grow incrementally.

Just as for rank-and-file players in the Singapore landscape, rising operating costs, especially retail rents, continue to pose a challenge.

As a result, Eu Yan Sang has taken steps to manage its operating costs.

To take the group to the next level, the company expects its new investments in Australia and China to demonstrate significant improvements and hence contribute to overall profitability.

It also intends to pursue strategic

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escalate in impact due to factors like the tight labour market and the recently introduced labour policies on the employment of foreign workers.

Another manufacturer in a similar space is Creative Technology, which reported a net loss of US$5.55 million for the third calendar quarter of 2013, bigger than the loss of US$4.48 million it reported for the same period in 2012.

“The group expects no major improvement in these difficult and uncertain market conditions, and the overall market for the group’s products remains challenging,” said spokesperson Mr Ng Keh Long.

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opportunities by growing new o lines of business that complement l its it existing core offerings.

Oil and gas players One of 2014’s most promising sectors will be the oil and gas sector, say research analysts from major Singapore brokerages.

Several home-grown exploration and production companies have stepped up their business, including the likes of Loyz Energy, Rex International and RH Petrogas.

One that continues to make headlines is Loyz Energy, which has just clinched a deal with a difference – to drill for oil onshore on the plains of Colorado and North Dakota in the US. It has a lease that covers almost 24,240ha of land in the two US states.

Like most oil and gas players, Loyz Energy is part of Singapore’s growing pool of oil and gas companies whose long term strategy is to build a portfolio of production and exploration concessions, both onshore and offshore. Such forays will help them pursue their strategies and become independent exploration and production companies in Asia.

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BiZ Voice

OPEN TRADE

ABAC Community Tackles Open-Trade Issues

free trade, and open trade as a “shared responsibility”

APEC CEO Summit looks to secure inclusive sustainable growth.

the multilateral trading system as a “precondition for global growth and prosperity”

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usiness leaders from the APEC Business Advisory Council (ABAC) recently met with Asia-Pacific Economic Cooperation (APEC) leaders in Bali, and have submitted their list of recommendations on how to improve the business and investment environment in the region.

Despite the volatility of the global market, Singapore Business Federation (SBF) Chief Executive Ho Meng Kit said that companies want governments to work together and inject a greater level of confidence in their economies, such that investors will want to make long-term decisions. Mr Ho was one of the two Singaporean ABAC members who were in Bali for the meeting.

His comments reflected the

sentiments of Indonesia’s ABAC chairman Mr Wishnu Wardhana, who said that the uncertainty and volatility of the global economy has a real impact on financial stability, trade, and investment.

Simplify customs processes On the list of recommendations is a call for APEC economies to continue to support the World Trade Organization (WTO). The WTO remains an important global institution despite its difficulties in rebooting the stalled Doha Round of trade negotiations.

Mr Ho explained that APEC leaders should benefit from what

Enhancing Innovation Among SMEs SME Committee sets up innovation platform.

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he SBF-led SME Committee (SMEC) is looking to help SMEs enhance their business models and product offerings with innovative solutions and ideas. To do so, it has set up a fifth sub-committee to spearhead SME issues related to innovation.

This is in addition to its existing foci: Cost of Doing Business, Manpower & Productivity, Financing, and Internationalisation & Market Access.

The Innovation Sub-committee was set up to help SMEs increase their productivity and

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PRIME MINISTER LEE HSIEN LOONG URGED APEC MEMBER ECONOMIES TO CONTINUE TO SUPPORT:

competitiveness, and will serve as a key platform for SME engagement relating to innovation issues.

The Innovation Sub-committee, chaired by Cyclect Group Managing Director Melvin Tan, comprises members whose areas of expertise relate to venture capital, product design and Intellectual Property (IP) law.

Last August, the Singapore government launched an IP Financing Scheme in which IP would be accepted as collateral for bank loans as part of Singapore’s IP Hub Masterplan.

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has been negotiated so far by the WTO. For example, APEC can work on wrapping up a trade facilitation package that would simplify customs and other procedures for handling goods at national borders.

Such an initiative, if realised, would create about 18 million jobs for emerging economies, three million jobs for developed ones, and increase global economic output by some US$960 billion (S$1,205 billion), Mr Ho added.

So what do Singapore companies want in particular? Mr Ho said the Singapore business community would like APEC leaders to reject protectionism and continue to liberalise and open their borders.

Businesses also want leaders to be committed to “deep-seated reforms” in their economies, such that they will grow in a sustainable way and provide a friendly environment in which investors can park their money for the long term.

Shared responsibilities Echoing similar sentiments, Singapore Prime Minister Lee Hsien Loong urged APEC member economies to continue to support free trade, and pushed for open trade as a “shared responsibility”.

As APEC accounts for 40% of the world’s population and over half of global GDP, Mr Lee said APEC could make an important contribution. He encouraged the 21 APEC member economies to support the multilateral trading system as a “precondition for global growth and prosperity”.

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Singapore-Gulf FTA Bears Stronger Ties Agreement will enhance Singapore’s role as gateway between Asia and Africa.

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“The GSFTA’s coming into force will bring the strong bilateral and economic ties between Singapore and the six GCC economies to a new level.”

Business hub in Oman

THE GULF COOPERATION COUNCIL (GCC) is currently Singapore’s

5th largest trading partner, and accounts for

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fifth largest trading partner, and accounts for 35% of Singapore’s oil imports. Bilateral trade with the GCC reached a record S$68.6 billion in 2012, an increase of 62% since 2007.

Since 2004, Singapore companies have secured over S$20.8 billion worth of projects in the GCC states, some of which are mega projects worth more than S$1 billion each.

Over the years, there has also been an increase in the number of bilateral forums between Singapore and the GCC, facilitating regular visits and exchanges.

The Singapore Business Federation (SBF) and Duqm Special Economic Zone Authority (SEZAD) recently organised a business forum to promote investment opportunities in Oman’s special zone.

The 15-member Omani delegation, led by HE Yahya bin Said bin Abdullah Al-Jabri, Chairman of SEZAD, included businessmen and officials from SEZAD, the Ministry of Agriculture and Fisheries, the Public Authority for Investment Promotion and Export, Oman Drydock Company, Duqm Port Company, Oman Oil Company, and Takamul Investments Company.

Over a hundred SBF members were briefed on the opportunities available in Oman, in various fields such as logistics, tourism projects, fishery industries, and oil and petrochemical industries. The approximate total value of several of these projects in SEZAD is US$4.5 billion (S$5.7 billion).

Singapore companies who intend to invest in SEZAD can benefit from numerous bilateral agreements that have been signed between Oman and Singapore. This includes the Agreement on Avoidance of Double Taxation and Prevention of Tax Evasion, and the Agreement on Mutual Encouragement and Protection of Investments, signed in 2003 and 2008 respectively.

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he Gulf Cooperation Council–Singapore Free Trade Agreement (GSFTA) has come into force, and the agreement will enhance Singapore’s growing economic relations and trade with the Gulf region.

The Gulf Cooperation Council (GCC) consists of six countries in the Middle East – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

Singapore is the first non-Middle East country to have an FTA with the GCC. This FTA is Singapore’s second with the Middle East, after the Singapore-Jordan FTA in 2004.

For the first time, the GCC countries recognise the Singapore MUIS Halal Standards (SMHS) as similar and consistent to their domestic Halal Standards. Four out of the six GCC countries recognise SMHS, and another two countries, Bahrain and Saudi Arabia, have started negotiations. This will open up more opportunities for Singapore to export Halal products to the Gulf region.

Singapore Senior Minister of State for Trade and Industry Lee Yi Shyan said, “The GSFTA’s coming into force will bring the strong bilateral and economic ties between Singapore and the six GCC economies to a new level. Already, there are many Singapore and GCC companies actively pursuing opportunities and partnerships with each other.

“The GSFTA will further enhance Singapore’s role as a Gateway City by connecting the two large regions of Asia and the Middle East & North Africa.”

The GCC is currently Singapore’s

Mr Lee Yi Shyan, Singapore’s Senior Minister of State for Trade and Industry

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BiZ Voice

Russia, Singapore Strengthen Relations

Insights into regional markets at Global Entrepolis @ Singapore.

RSBF 2013 foster greater opportunities between both nations.

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ingapore is fast becoming the gateway through which Russian companies access regional markets, as bilateral flows of trade and people continue to grow on the back of improving relations between the two countries.

Speaking at the recent eighth annual RussiaSingapore Business Forum (RSBF), Mr Michael Tay, Executive Director of RSBF and former ambassador to Russia, said that the forum represents significant progress in the developent of economic ties between Singapore and Russia.

Gracing the forum was Singapore Deputy Prime Minister Tharman Shanmugaratnam, along with some 800 ministerial and business elites from Asia and Russia/CIS, including Sir Suma Chakrabarti, President, European Bank of Reconstruction and Development (EBRD), and President Rustam Minnikhanov of the Republic of Tatarstan.

Bilateral trade has more than tripled since 2007, and the Singapore Business Federation, organiser of the RSBF forum, said the growth in

BILATERAL TRADE VOLUME Ministry of Trade & Industry

Asia is World’s Growth Engine

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increase from 2011-2012 to about

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trade has been seen in oil, metal and electronic products, as well as in vehicles and ships.

Looking ahead, there are more opportunities for collaboration.

One example is the partnership between Russian sports retailer Sportmaster and Nanyang Technological University (NTU) in Singapore, in setting up an innovation centre to develop cutting-edge sportswear and equipment. With a starting budget of S$5 million over the next three years, the centre aims to pioneer breakthrough sports technology for Sportmaster.

In the spirit of seeding new frontiers of collaboration, RSBF 2013 has conceptualised the firstof-its-kind Innovation/Technology Roundtable. The goal is to thrust the smartest start-up technology ideas available to a roundtable of business elites and experts, who are positioned to transform these into successful partnerships and bring the ideas to market.

Among the start-ups are Doc Doc, an online appointmentbooking system that connects patients with doctors, and Rainmaker Labs, a mobile solutions and mobile app developer.

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ingapore hosted the region’s leading business leaders’ forum – Global Entrepolis @ Singapore (GES) – for the 10th year running. The event ran from Oct 28-31, 2013, at Resorts World Sentosa Singapore.

Presented by the Singapore Business Federation (SBF), GES 2013 featured about 80 international speakers and was attended by more than 1,450 delegates.

Heading the list of political leaders who attended the summit were: HE Gregory L. Domingo, Secretary, Department of Trade and Industry, Republic of the Philippines; Mr S. Iswaran, Minister, Prime Minister’s Office, Singapore; Dr Vivian Balakrishnan, Minister for Environment and Water Resources, Second Minister for Home Affairs, and Second Minister for Trade and Industry, Singapore; and Mr Teo Ser Luck, Minister of State for Trade and Industry, Singapore.

Speaking at the GES 2013 Ministerial Address, HE Domingo told delegates that countries in the region should support small and medium enterprises (SMEs) through their economic policies.

He said that Asia is now regarded as the “global economy’s growth engine” both in terms of consumption and investment, while the US and Europe continue to be vital export destinations for Asia.

The four-day summit was complemented by three SBF-led Focused Business Forums: SME Convention 2013, the Supply Chain Leadership Forum, and the Asia-Pacific Sustainability Leadership Forum.

This year, the Market Insights sessions focused on trade and investment opportunities in Japan, Myanmar, China and Indonesia.

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Big landscapes Inspire big thinking

THERE’S NOTHING LIKE AUSTRALIA FOR YOUR NEXT BUSINESS EVENT. This year we chose Australia for our global congress. It was an easy choice, as Australia’s proximity to Asia gave us the opportunity to attract many new delegates. The program was one of the best in years. New Australian developments in our field attracted a lot of interest and strong international research partnerships were established.

Australia is on everyone’s list to visit, and it lured our highest number of delegates yet. There’s no doubt they’ll be talking about this convention for years to come.

Dr Louise Wong, International Board Member

VISIT BUSINESSEVENTS.AUSTRALIA.COM/ASSOCIATIONS FOR EVERYTHING YOU NEED TO PLAN YOUR AUSTRALIAN EVENT.

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BiZ Voice

A Fairer Future for our Workforce SBF supports MOM’s call to look into hiring practices.

The new biometric Long-Term Employment Pass issued by the Ministry of Manpower.

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he Ministry of Manpower (MOM) recently announced new rules that require employers to consider Singaporeans fairly before hiring Employment Pass (EP) holders, and the Singapore Business Federation (SBF) supports the ministry’s call for fairer hiring practices.

MOM stated that firms with discriminatory hiring practices will be subject to additional scrutiny and may have their work pass privileges curtailed.

These changes will reinforce expectations for employers to consider Singaporeans fairly for job opportunities and enhance job market transparency.

The new rules, known as the Fair Consideration Framework (FCF), draws on feedback from Singaporeans who have submitted their views to MOM through MOM’s Our Singapore Conversation (OSC) on Jobs, and from key stakeholders such as the National Trades Union Congress (NTUC) and employer groups.

SBF supports the new framework as the apex chamber believes that it will ensure that firms give fair consideration to Singaporeans in their hiring practices.

While incidences of unfair hiring of foreigners (and Singaporeans) are not prevalent, the FCF is essentially a reminder to companies to do the right thing.

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Singapore Leads ASEAN Business Awards Local companies clinched seven out of 21 awards.

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ingapore companies clinched seven out of 21 ASEAN Business Awards (ABAs) this year in a field of 68 competing companies. The winners included Biomax Technologies, Rigel Technology, DBS Bank and Keppel Land.

Organised by the ASEAN Business Advisory Council (ABAC), the awards were presented at the ASEAN Business & Investment Summit held in Brunei Darussalam last August.

The awards are given out in four areas – growth, employment, innovation, and corporate social responsibility. A Young Entrepreneur field was introduced under the innovation category this time around to promote promising young talent in ASEAN’s integration process.

SBF, the national secretariat for ABAC Singapore, facilitated the applications from the 18 Singapore companies which took part in this year’s awards.

DBS Bank won two awards for Employment and Innovation in the Large Company category, while OKH Global and Serrano Holdings were recipients of the award for

Mr Sean O’Hara, General Manager, Serrano Holdings Pte Ltd, recipient of ABA award for Growth (Large Company)

“This award is a validation of our performance.

As it is a regional award, we are especially proud of winning in the Growth category because we are benchmarked against the best companies across 10 ASEAN countries.”

Growth (Large Company).

On the SME front, homegrown Biomax Technologies clinched an award under the Innovation category, while Rigel Technology received the award for Growth.

This year’s contest will be held in October in Yangon, Myanmar.

•

The Singapore Winners in the ASEAN Business Awards 2013 Singapore company winners Batamindo Shipping and Warehousing Pte Ltd Biomax Technologies Pte Ltd DBS Bank Ltd Keppel Land Limited OKH Global Ltd Rigel Techonology (S) Pte Ltd Serrano Holdings Pte Ltd

Award for the category of ● Growth (SME) ● Innovation (SME) ● Employment (Large Company) ● Innovation (Large Company) ● Corporate Social Responsibility (Large Company) ● Growth (Large Company) ● Innovation (SME) ● Growth (Large Company)

26/12/2013 15:29

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16

Commentary

Eight Mega Trends in Business Find out how these new trends will impact businesses and consumers by 2020.

T

his period of ongoing global turmoil is giving business leaders and investors plenty of reasons to stay hunkered down as they continue to face huge challenges in an ever-changing business landscape.

Yet, behind the dire headlines, China, India and other rapidly emerging economies are flexing their muscles as they adjust to the phenomenal growth that has been the biggest economic story of the past two decades.

As a result, the pursuit of trade and investment growth by companies and governments from these markets has brought about a shift in global growth trends.

Eight trillion-dollar macro trends are at work in the global economy, and these trends will touch many corners of the globe.

According to Karen Harris, Director of Macro Trends at Bain & Company, these eight trends add up to US$27 trillion (S$34 trillion) in global GDP growth, which will swell to US$90 trillion by 2020 at a growth rate that is 40% higher than today’s.

Speaking at the recent Global Entrepolis @ Singapore 2013 Business Leaders’ Summit, she said that half of these trends affect both emerging and advanced economies.

Getty Images

TREND 2

Developing human capital The massive population shift from farms to factories has altered social landscapes in fast-growing emerging economies, but social infrastructures have not kept pace.

Companies that plan to expand in or into China, India, Indonesia and other fast-emerging markets need to hire promising managers early and invest in their training and retention, as finding fully capable managers in-market will be extremely challenging.

Estimated contribution to global GDP by 2020: US$2 trillion.

TREND 3

Militarisation following industrialisation As economic power tilts toward Asia, political and military power will shift as well.

In China, where defence spending has trended upward in recent years both in dollar terms and as a proportion of GDP, military

TREND 1

The next billion consumers The rising wealth of emerging economies such as China, India and other Asian markets will continue to bring broader ranges of goods to growing numbers of

016-017 Commentary AB ed AB.indd 16

new consumers. Many will cross the critical annual household income threshold of US$5,000, joining the ranks of the “global middle class” and enabling more discretionary spending.

Companies will need to target emerging markets with a different cost structure. Businesses can expect price points to remain at a lower level rather than assume upward migration across all products.

Estimated contribution to global GDP by 2020: US$10 trillion.

TREND 4

Growing output of primary inputs Growing international demand for oil and natural gas, grains and proteins, fresh water, and extracted ores such as copper, aluminium and rare earth metals, will result in price volatility and transient shortages of a few of these commodities over the coming decade.

Commodities’ price volatility and inflation will intensify as these key inputs are increasingly linked by new uses and rising demand. For example, corn is now a major source of ethanol for transportation, as well as a food crop.

26/12/2013 15:31

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outlays reached some US$160 billion in 2010 – a 6.7% increase from the previous year, according to the latest available data. This stepped-up spending is prompting China’s neighbours to respond with bigger defence budgets of their own, increasing the risk of conflict over shipping lanes in the Indian Ocean and the South China Sea. Meanwhile, nations and businesses in general are increasing spending on measures to counter the ongoing risk of terrorism by non-state actors, insurgent threats in war zones, and the new challenges of cyber and electronic warfare.

Estimated contribution to global GDP by 2020: US$1 trillion.

BizQ

17 In addition, more water is being diverted for use in the extraction of ores and fuel. Ores are finding their way into the manufacture of wind turbines to generate clean energy.

Yet, more fuel will be consumed in the desalination of new potable water sources.

Investment in conservation and alternative sources and technologies will increase in some areas, though the discovery and tapping of new fossil fuel sources will reduce economic incentives to invest in alternative energy.

Estimated contribution to global GDP by 2020: US$3 trillion.

TREND 5

Keeping the wealthy healthy Aging populations in advanced economies, the availability of more and better medical treatments, and changes in payment systems to make healthcare spending more efficient, will all spur continuous innovation and reform.

The continued expansion of healthcare as a “consumer good” will also create demand for new product and service innovations.

Manufacturers, care providers and consumers will make a major and concerted push towards improving the productivity of healthcare delivery systems.

Increased efficiency, reduced per capita costs, and demonstrated measurable improvements in patient outcomes will continue to earn premium returns.

Estimated contribution to global GDP by 2020: US$4 trillion.

TREND 6

Old infrastructure, new investments In advanced economies, renewed economic vitality will require the refurbishment and expansion of critical infrastructure, much of which was built more than a half century ago. But with public finances under strain, the job will increasingly present opportunities for public-private partnerships.

In emerging economies, continued infrastructural development will be needed to

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accommodate growth and lay the foundations for future expansion.

Estimated contribution to global GDP by 2020: US$1 trillion.

TREND 7

Everything the same, but nicer Innovation will come in increasingly new forms, beyond novel technologies like the iPad and Twitter. Businesses will invest more heavily in “soft innovations”; these will offer affluent customers premium products and services at higher prices, and a greater variety of niche products, as substitutes for common consumer purchases.

Soft innovations will change our basic habits, from the way we drink coffee (think mochaccinos rather than drip brew) to the way we buy clothes (matching outfits being delivered to our doorsteps instead of being shopped for piecemeal in stores). Innovators will create businesses based on these insights.

Estimated contribution to global GDP by 2020: US$5 trillion.

TREND 8

Prepping for the next big thing Innovations tend to cluster in waves, and five potential platform technologies – nanotechnology, genomics, artificial intelligence, robotics and connectivity – show promise of flowering over the coming decade.

Developments currently underway hint at upcoming breakthroughs, but are still at least two steps away from commercialisation.

As technologies move from research concepts and prototypes to finding applications in affordable consumer goods and industrial processes, mainly toward the end of the decade, they will generate stepchange efficiency improvements that will accelerate growth.

Estimated contribution to global GDP by 2020: US$1 trillion.

•

The article is based on the presentation

by Karen Harris, Director of Bain & Company’s Macro Trends Group, at the recent Global Entrepolis @ Singapore 2013.

Protecting Your Biz Health Companies must be proactive in protecting their businesses during a crisis, and ensure that robust measures are in place to deal with a pandemic.

They need to be prepared to mitigate critical impacts such as disruptions to supply chains or manpower shortages during an infectious disease outbreak, said Singapore’s Minister for Health Mr Gan Kim Yong.

Opening address by Minister for Health Mr Gan Kim Yong

Speaking at the ninth National Security Conference last October, Mr Gan introduced the Disease Outbreak Response System Condition framework to an attentive audience. This framework will help companies align their business continuity management plans under various scenarios.

More than 500 business leaders attended the conference, which was organised by the Singapore Business Federation with the theme: Securing Your Business Health – With Pandemic Preparedness.

At the conference, Professor Richard Coker gave a presentation on the economic and social impacts of infectious Keynote diseases, which far presentation

by Professor exceed healthcare Richard Coker impact. He is the head of the Infectious Disease Programme at the Saw Swee Hock School of Public Health (National University of Singapore) and the London School of Hygiene and Tropical Medicine.

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18

BiZ Feature

Identifying

Growth Markets in 2014

BiZQ takes a closer look into buoyant economies in ASEAN, Nigeria.

Getty Images

W

hile uncertainties continue to pervade the global marketplace, buoyant economies like the Philippines, Myanmar and Nigeria are exuding heat in terms of economic growth opportunities.

At the recent Global Entrepolis @ Singapore (GES) Business Leaders Summit 2013 and the NigeriaSingapore Business and Investment Forum 2013, political and business leaders who attended both forums unanimously agreed on the positive feel of these two markets.

Businesses will be spoilt for choice and opportunities in the next 12 months as the Association of Southeast Asian Nations (ASEAN) takes its final road towards a common market, which commences in late 2015. This is based on views provided by various industry experts.

At GES 2013, which was organised by the Singapore Business Federation, a raft of political and business leaders gave their ringing endorsement of the 10-member grouping’s move towards establishing the ASEAN Economic

018-021 BizFeature AB.CP.SBF.ed.AB.indd 18

enabling network, with harmonised policies and regulatory alignment.

Notwithstanding the various information and financial flows that can be enabled via systems, processes, technologies, regulatory policies and legislation, the effective connection of physical flows with enhanced cross-border transport and logistics infrastructure is absolutely vital.

The ASEAN advantage While the ASEAN region does not have the same geographical attributes as the EU region’s intricate land connectivity, seven out of the 10 ASEAN countries can be accessed by land.

More strategically, ASEAN – especially its Indochina subregion – is primly positioned as a conduit, straddling two of the world’s

Community (AEC) by next year.

Former ASEAN Secretary General and current Singapore High Commissioner to Malaysia Mr Ong Keng Yong said boldly: “The AEC is not just a myth; it is not an impossible dream. The common market should not be seen as a perfect regime.

It is a journey.”

The objective of the AEC is to create a “European Unionstyled Economic Community”, and this was well documented when the AEC was adopted by all the member countries in 2007.

As with the European Union (EU) model, a key criterion for a regional economic community is a highly connected and interdependent trade-

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26/12/2013 15:15

19

“Myanmar has embarked irrevocably on a change journey, and there is no doubt that the country will grow and become a productive member of ASEAN.” largest markets: India and China.

This region also offers the fastestgrowing emerging markets in the likes of Vietnam, Myanmar, Laos and Cambodia.

Intra-regional trade has been trending upward, and is expected to get a boost with the establishment of the AEC. Six ASEAN members – namely Brunei, Indonesia, Malaysia, Singapore, Thailand and the Philippines, agreed to lower their import tariffs to between zero and 5% for all ASEAN products by January 2010.

Others, like Myanmar, Cambodia, Laos and Vietnam, which joined the 10-member regional bloc in the mid1990s, have until 2015 to cut their import tariffs to help boost intraregional trade.

Philippine Department of Trade and Industry Secretary Gregory Domingo said that “ASEAN’s free trade agreements (FTAs) have definitely contributed to its strong growth and resiliency.”

He explained: “As we took down investment and trade barriers, and as we brought in more FTA partners, we saw significant increases in economic activity.”

Myanmar on the rise Mr Simon Tay, Chairman of the Singapore Institute of International Affairs, told delegates at the business summit that Myanmar, the 2014 ASEAN chair, is expected to provide the regional grouping with an added boost.

He revealed that Myanmar is

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keen to contribute to the region, and has engaged his organisation for advice on matters related to the regional grouping.

Confirming his country’s commitment to ASEAN was Mr Wai Phyo, Vice President of the Union of Myanmar Federation of Commerce & Industry, who spoke at the GES 2013 Market Insights session on Myanmar. Mr Phyo is also the President of the Myanmar Young Entrepreneurs Association, and Vice President of the Myanmar Food Processors & Exporters Association.

He told BiZQ that “Myanmar has embarked irrevocably on a change journey, and there is no doubt that the country will grow and become a productive member of ASEAN.” Still, there is more work that needs to be done, and more synergies are needed before the the AEC becomes a reality.

Mr Parag Khanna, Director of Hybrid Reality Institute and a panel participant at the event, reminded decision makers that “ASEAN as a common market is a process.

ASEANisation is not an end state.”

LOWER TO ZERO TARIFFS Intra-regional trade to be boosted by establishment of the AEC BRUNEI INDONESIA M ALAYSIA SINGAPORE THAILAND PHILIPPINES

have lowered their import tariffs to between zero and 5% for all ASEAN products as of Jan 2010 MYANM AR CA MBODIA LAOS VIETNA M

to cut their import tariffs by 2015 to help boost trade

Spotlight on tariffs Import tariffs and the ASEAN Free Trade Agreement grabbed the spotlight during many of the discussions at GES 2013.

While it is “difficult to make an assessment on the global economy for 2014,” it is necessary for ASEAN to push on, said Mr Domingo. He explained that while tariffs on 95% of goods in several key ASEAN markets are now down to zero, there is still room to work on nontariff barriers.

He said that the Philippines is working on making it easier, from an administrative standpoint, for its small and medium enterprises to conduct business. (See side story on Philippines: More Tangible Benefits Through ASEAN on p.21.)

Mr Domingo also said that businesses in the Philippines, especially in the electronics manufacturing and automobile industries, have benefitted from the reduction in tariffs. As the

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electronics manufacturing sector is a key part of the Philippine economy, the removal of tariffs has made it easier for many components to be made in the country and shipped to Singapore for valueadded production.

Similarly, businesses in the Philippines have been able to gain competitive advantage in producing automobile parts and transporting them to Thailand for final assembly work, among other tasks, Mr Domingo elaborated. p.20

Getty SPH - The Images Straits Times

Mr Wai Phyo, Vice President of the Union of Myanmar Federation of Commerce & Industry

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BiZ Feature

SNAPSHOT OF ASEAN OVER THE LAST 10 YEARS

Philippine Department of Trade and Industry Secretary Gregory Domingo

SPH – The Straits Times

“It is necessary for ASEAN to push on… while tariffs on 95% of goods in several key ASEAN markets are now down to zero, there is still room to work on non-tariff barriers.”

Echoing one of the best notes on tax reduction in ASEAN, Mr Ong said: “One of the great phenomena in our region over the past two decades is that the tariffs are (now) at zero. The reduction of tariffs has brought about a great transformation in our region.”

In a paper presented earlier, GES panel moderator Dr Sanchita Basu Das, Lead Researcher for Economic Affairs at the Institute of Southeast Asian Studies, Singapore, pointed out that tariffs across member states currently differ.

ASEAN FTAs are not uniform.

On trade in goods, for example, ASEAN and its six FTA partners not only use different tariff classifications for their tariff concessions, but they also use different schedules for their FTAs with different countries.

In addition, tariff concessions from the same country differ depending on the FTA, and tariff elimination rates are different across ASEAN+1 (China) FTAs, she said.

Hence, for the ASEAN common market to take off, all member states must implement the measures in an effective and timely manner, she asserted.

New common market Looking ahead, Mr Tay said that the inauguration of the common market will allow new

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ASEAN has emerged from a severe global economic crisis with decent GDP growth rates of 6.75%, 4.37% and 5.45% in 2010, 2011 and 2012 respectively, in stark contrast to the weakness that gripped other major economies.

GDP (in US$ billions) 2003

2012

World

37,589

ASIA

9,645

ASEAN

718

Real GDP % growth 2003

2010

2011

2012

71,918

2.73

4.02

2.82

2.20

24,271

4.87

6.47

6.30

5.23

2,255

6.59

6.75

4.37

5.45

Non-ASEAN

China

1,641

8,358

10.00

10.40

9.30

7.80

India

618

1,842

7.94

10.55

6.33

3.24

Japan

4,303

5,960

1.69

4.65

-0.57

1.94

Korea

644

1,130

2.80

6.32

3.68

2.04

USA

11,089

15,685

2.55

2.38

1.80

2.21

EU

11,451

16,634

1.46

2.12

1.59

-0.32

Source of data: World Bank

ASEAN TRADE WITH: Total trade (in US$ billions) 2003

% of Total % Growth

2012

2003

2012

World

868

2,507

188.82

100.00

100.00

ASIA

567

1,560

175.13

65.00

62.00

ASEAN

212

545

157.08

24.00

22.00

Non-ASEAN

China

65

333

412.31

7.00

13.00

India

13

72

453.85

2.00

3.00

Japan

120

266

121.67

14.00

11.00

Korea

37

133

259.46

4.00

5.00

USA

126

204

61.90

15.00

8.00

EU

109

211

93.58

13.00

8.00

opportunities to emerge.

“Beyond 2015, infrastructure and the power sector are up for grabs,” he said, highlighting his wish for the development of a speed rail network to connect Singapore through Kuala Lumpur and then onwards to Bangkok.

As he explained emphatically, such a project is not inconceivable, given that Malaysia is located on a narrow peninsula.

Several speakers also spoke about the immense opportunities for many companies in the region. One homegrown player who is eyeing the Indonesian market is Fish & Co Singapore’s Deputy Managing

Director Mr Ho Hoe Keat.

He cited how the company made its first foray into Indonesia a decade ago, with the opening of an outlet by a franchisee in Jakarta.

“In the early days, we had to source for food supplies through the local supply chain and it was very difficult to get them. Over time, we realised that we had to export some of the key items from Singapore,” he explained.

“In the early days, we had to explain to the customs people what we were bringing into the country,” Mr Ho said. With the lowering of tariff barriers, this is no longer an issue.

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Several political and business leaders from Nigeria look set to unlock opportunities in Africa’s largest market. They were recently in Singapore to attend the inaugural Nigeria-Singapore Business and Investment Forum 2013.

According to Nigeria’s High Commissioner to Singapore, Ms Nonye Benedicta Rajis-Okpara, the country is partnering with Singapore to raise the interests of the Singapore business community in the S$3 billion Lekki Free Trade Zone in Lagos.

As a result of the forum, both countries are looking to explore a bilateral air services agreement to enact positive changes, such as providing direct flights for passengers (there are currently only cargo flights).

All these developments are aimed at igniting cross-national trade and investment interests between Nigeria and Singapore.

The forum, which attracted close to 1,000 delegates, focused on bilateral opportunities between Nigeria and Singapore. The sectors discussed included maritime and ports management; education/ technical and vocational training in information technology; housing and urban development; agriculture and agro-allied industries; manufacturing and services sectors, power/energy; tourism and hospitality; as well as water treatment and management.

Sahara Energy Managing Director Mr Francois Ostinelli said that the upstream oil and gas exploration and production company believes that there are tremendous opportunities in both Nigeria and Singapore.

In Nigeria, the company wants to strengthen and entrench its position by its ability to uplift onetenth of the country’s energy output.

In Singapore, Sahara Energy “wants

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to invest in Asia’s power sector as it is a huge opportunity,” said Mr Ostinelli.

Slok Group’s Chairman Dr Orji Uzor Kalu described Nigeria as a country of opportunity despite its accompanying challenges.

“Nigeria suffers from an infrastructure deficit that can deter the most ambitious of investors. Poor transportation facilities, logistics deficiencies, constant power shortages and inadequate broadband activity can make the cost of doing business quite challenging in the country,” he said.

•

SBF-NTU to launch African Studies Centre Nanyang University of Technology (NTU) and the Singapore Business Federation are setting up a new NTU-SBF Centre for African Studies in June.

The first of its kind in Southeast Asia, the Centre will be located at NTU and will provide in-depth insights on African markets through research, workshops and programmes. It aims to build knowledge of business, politics and social economics.

Philippines: More tangible benefits through ASEAN The road to the Asean Economic Community 2015 (AEC 2015) is a journey and more members will benefit from the common market in the future, Philippine Department of Trade and Industry Secretary Gregory Domingo told BiZQ in an exclusive interview.

Taking his place as a keynote speaker at the Global Entrepolis @ Singapore 2013 Business Leaders Summit, Mr Domingo said that while the Philippine business community remains sceptical about being part of a regional common market next year, he believes that “the journey to (AEC) 2015 is one step of many steps”.

He explained that the Philippine government is currently undertaking discussions with its business community to help them appreciate the benefits that the ASEAN Free Trade Agreements will bring. Since 2011, the government has had an average of about 100 discussions a year to update its business community, he added.

In response to a question on whether the needle had shifted in the business community, in its attitudes in favour of the common market, Mr Domingo was positive.

“The Philippine government has taken pains to explain the tangible benefits of the common market.

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We have focused more on the small and medium enterprises and we are guiding them towards exploring other markets in ASEAN,” he said.

He pointed out that one such Philippine company which has expanded abroad is fast food player Jollibee Foods Corporation. The retailer opened its first outlet in Singapore in March 2013, and it is now the chain’s top performer among its 884 stores across the globe in terms of sales.

Mr Domingo added that the current government is committed to make it easier for local companies to conduct business. Soon, sole proprietorships will find it easier to go online and manage key areas of administration, including tax identification, business registration (for social service purposes), as well as health and safety-related matters.

SPH – The Straits Times

NIGERIA, SINGAPORE AIM TO PROPEL BILATERAL TIES

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Jan•Feb•Mar 2014

22

In BiZ With

SSA 2013:

Honouring Best Green Practices Singapore Sustainability Awards 2013 recognises 14 eco-friendly companies.

Getty KelvinImages; Cuff SPH Library

S

ustainability has become a key concern for a growing number of organisational stakeholders, including customers, suppliers and investors. There are few other issues that have as much impact as sustainability, in terms of the way companies operate, and relating to the products and solutions that they provide.

Recognising this trend, the Singapore Business Federation (SBF) recently honoured 14 organisations from various industries for their outstanding sustainability processes and initiatives.

The 4th Singapore Sustainability Awards (SSA), an SBF initiative, attracted quality submissions from 36 participants from various industries. These include chemicals, paints, logistics, construction, marine and property.

SSA 2013 comprised the Sustainable Business Awards (SBA) and the Green Technology Awards (GTA).

The winners were lauded for sustainable business practices, pro-environment operations and performance management systems, corporate responsibility, innovation, and green technology implementation.

SBF CEO Mr Ho Meng Kit said: “The award categories have been structured to emphasise social and innovation aspects, to encourage companies to demonstrate strengths in these areas.”

“This is in line with the Government’s call for businesses to pay greater attention to inclusive growth while pursuing productivity

022-025 InBizWith AB.CP.AB.ed.AB.indd 22

and innovation improvements, to underpin the competitiveness of their industries,” he added.

The Awards were held on Oct 31, 2013 at Resorts World Sentosa, and were graced by Mr S. Iswaran, Minister, Prime Minister’s Office, Second Minister for Home Affairs and Second Minister for Trade and Industry.

Judging criteria Reinforcing Singapore’s position as a clean technology hub, SSA 2013 saw winning enterprises coming from diverse countries – they had regional headquarters in Singapore, United Kingdom, United States, Netherlands, Japan and Hong Kong.

SBF believes that the increased awareness of clean technology reflects Singapore’s increasing importance as a regional and international business hub.

Judging is based on specific criteria, and involves 27 judges from 11 organisations – eight SBF Strategic Partners, two SBF Knowledge Partners, and the GTA sponsor.

The SBF Strategic Partners are the Economic Development Board, IE Singapore, the Institute of Technical Education, the National Environment Agency, the National University of Singapore, SIMTech, Singapore Compact for CSR, and SPRING Singapore.

The SBF Knowledge Partners are KPMG and Frost & Sullivan, and the GTA sponsor is Autodesk.

SBF will also be organising a series of sustainability diagnostic workshops. These are aimed at

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EXCELLENCE IN SUSTAINABILITY The Singapore Sustainability Awards (SSA) recognises the Singapore business community for their outstanding sustainable business practices and innovative green technology solutions.

The award serves as a yardstick for enterprises to benchmark against leading companies’ sustainable business practices, and encourages companies to strive for sustainability excellence as the ultimate winning edge.

The 14 winners for 2013 are: SUSTAINABLE BUSINESS AWARD WINNERS Small & Medium Enterprises

Special Waste Management • ECO (Top Honour) Large Enterprises

Land (Top Honour) • Keppel • Gammon Keppel Telecommunications & • Transportation • Swire Pacific Offshore Operations GREEN TECHNOLOGY AWARD WINNERS Small & Medium Enterprises

(Top Honour) • Greenpac Technologies • Biomax Leasing • Sunseap • Third Wave Power Large Enterprises Asia Pacific (Top Honour) • Panasonic Akzo Nobel Paints • Carrier Singapore • Eltek Power • Ricoh Asia Pacific • enabling companies to benchmark their sustainability efforts vis-a-vis other Singapore companies and industry best practices.

This knowledge will help businesses to improve their environmental impact, and assist industries in moving forward as a whole, in terms of sustainability.

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23

SUSTAINABLE BUSINESS AWARD

(BCA) Green Mark and LEED, an international green building certification system.

The company will continue to pursue innovation and develop more sustainable designs, methods and materials for building.

Keppel Telecommunications & Transportation Ltd

ECO Special Waste Management Top Honour (SMEs) ECO Special Waste Management has been helping its customers find value in their waste products, by converting trash into energy.

The company has been in the business of recycling industrial waste since 1997. It started its chemical recovery efforts with its first solvent recovery plant in 1999.

ECO aims to provide a one-stop “total waste management” service to the commercial and industry sector. This includes containment,

collection and transportation, treatment, recovery, disposal, and laboratory testing.

Using its advanced distillation systems, the company said that it can recover customers’ waste solvents to more than 99% purity.

ECO Special Waste Management sits on a 6.8ha site and has four solvent recovery plants, an oil recovery plant, and three waste-to-energy plants. A wood-fired cogeneration plant was set up in 2004 to convert waste to steam energy and electricity.

Keppel Land Ltd

Gammon Pte Ltd

Top Honour (Large Enterprises) With environmental issues dominating global agendas, Keppel Land believes that businesses must consciously play a part in ensuring a sustainable future by integrating sustainability into work practices.

For the property developer, environment design guidelines span environmental certification, energy, water, landscaping and materials use.

Since 1997, the company has been reporting its environmental efforts in its annual report.

In 2005, Keppel Land became a founding member of Singapore Compact, which promotes corporate social responsibility (CSR) practices among companies in Singapore.

Achievement of Excellence (Large Enterprises) Sustainability is an integral part of construction company Gammon’s operations. Through innovation and the development of new methods and technologies, the company has transformed many traditional construction work methods into greener and safer ones.

Since 2009, almost all of its temporary site offices have achieved the Singapore Environmental Council’s Project: Eco-Office certification. Gammon has also built up its expertise in delivering green buildings that meet standards such as the Building and Construction Authority

022-025 InBizWith AB.CP.AB.ed.AB.indd 23

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Swire Pacific Offshore Operations Pte Ltd Achievement of Excellence (Large Enterprises) Maritime player Swire Pacific Offshore Operations is setting high standards in making its operations environmentally friendly, and is continually striving to reduce its carbon footprint. All its vessels’ engines run on low-sulphur or ultra-low sulphur marine gas oil that meets international green standards.

Swire Pacific also uses a green zone fuel efficiency management system that aims to reduce fuel consumption on its vessels. This gives real-time fuel consumption data to officers on the bridge.

“The company took a big step towards being carbon-neutral and having net zero environmental impact by starting a 20-year forest conservation project in Paraguay in 2008. It is also sponsoring the Biosphere Foundation to undertake a three-year study of the impact of ship strikes on whales and other marine mammals off Sri Lanka.” p.24

SBF

Recipients of the 2013 Sustainable Business Awards (SBA) with the guest of honour and SBF’s CEO and COO. From left: Mr Victor Tay, COO, SBF; Mr Simon Bennett, Swire Pacific Offshore Operations; Mr Richard C. Reidinger, ECO Special Waste Management; Mr Ang Wee Gee, Keppel Land; Mr S. Iswaran, Minister, Prime Minister’s Office, Second Minister for Home Affairs and Second Minister for Trade and Industry; Mr Ho Meng Kit, CEO, SBF; Mr Pang Hee Hon, Keppel Telecommunications & Transportation; and Mr Tan Hee Wee, Gammon.

Achievement of Excellence (Large Enterprises) Keppel Telecommunications & Transportation has pioneered sustainability efforts across all its businesses for close to two decades.

Its wholly owned subsidiary, Keppel Logistics, has met the ISO14001 environmental management standard since 2002.

Consumables used in its operations, such as wooden pallets and stretch wraps, are often reused and recycled. Green technologies, such as energy efficient lighting and transport optimisation tools, are implemented to save energy and maximise resources.

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In BiZ With

GREEN TECHNOLOGY AWARDS

Biomax Technologies Pte Ltd Achievement of Excellence (SMEs) Biomax Technologies is focused on the R&D and commercialisation of enzyme-based green technologies.

It invested five years of R&D in the turning of organic waste into plant fertiliser – this saves time and space, and promotes organic farming.

Known as the Rapid Thermophilic Digestion System, Biomax’s breakthrough technology converts organic waste into 100% premium grade organic fertiliser at a high temperature within 24 hours.

According to the company, this is the fastest process in the organic waste treatment industry to date.

Sunseap Leasing Pte Ltd Achievement of Excellence (SMEs) Solar leasing is a new, convenient and affordable way to appreciate solar energy. It encourages the adoption of solar energy and allows companies to reduce their reliance on fossil fuels.

Previously, high costs and long payback periods deterred businesses from adopting green energy, and the total size of Singapore’s solar power system was less than 5MW. With the leasing model, Sunseap has been able to increase this total capacity by threefold, to 15MW. Sunseap designs, installs, operates and maintains solar power systems.

Customers pay a small upfront fee to cover the cost of installation, which is complete with the latest built-in individual solar module monitoring technology.

A monthly leasing fee is then charged, based on the actual electricity output produced and used by the solar system.

Third Wave Power Pte Ltd Achievement of Excellence (SMEs) Third Wave Power develops affordable and innovative renewable power solutions, that serve portable energy needs in both urban and rural areas.

The company designs and develops innovative products that rely on renewable energy. One

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Recipients of the 2013 Green Technology Awards (GTA) with the guest of honour and SBF’s CEO, and the GTA Sponsor. From left: Mr Jake Layes, Autodesk Asia (GTA Sponsor); Mr Jonathan Young, Akzo Nobel Paints (Singapore); Mr Oon Wee Chin, Carrier Singapore; Mr Sim Eng Tong, Biomax Technologies; Mr Tatsuyuki Nonaka, Panasonic Asia Pacific; Ms Susan Chong, Greenpac (S); Mr S. Iswaran, Minister in the Prime Minister’s Office, Second Minister for Home Affairs and Second Minister for Trade and Industry; Mr Ho Meng Kit, CEO, SBF; Mr Kenneth Bodahl, Eltek Power; Mr Nobuaki Majima, Ricoh Asia Pacific; Mr Frank Phuan, Sunseap Leasing; and Mr V.S. Hariharan, Third Wave Power.

Greenpac (S) Pte Ltd Top Honour (SMEs) Greenpac has been providing innovative and sustainable solutions with efficient and low-cost green packaging since 2002. The company currently offers kit packing, programme management, warehousing, professional packing, rigging, and contract packing services.

Greenpac works with strategic suppliers to customise environmentally-friendly packaging

materials for each customer. Its sustainability success is in its use of packing solutions that are made of sustainable packaging materials that are designed to be returnable, reusable and recyclable.

The company recently opened its own industrial building, Greenhub, to serve as an R&D hub to help it keep up with the latest packaging technology, the newest materials in the market, and new green packaging solutions.

example is its mPowerpad which was launched in 2011.

The mPowerpad is a multifunction, portable solar device that can power digital devices. It is also equipped with essential functions like an AM/FM/SW radio, reading light, flashlight and ultrasonic insect repellent, for users operating away from the power grid.

The mPowerpad’s functionality encourages urban users to tap on renewable energy sources, and brings affordable power to rural users living off-grid.

The company’s next generation solar charger, mPowerpad 2, started shipping in September 2013.

Top Honour (Large Enterprises) Panasonic manufactures energyefficient appliances, and promotes energy solutions for residential and commercial buildings, which efficiently create, store, save and manage energy.

The Punggol Eco Town test bed project sees Panasonic’s energy solutions being integrated in public residential housing. Photovoltaic systems and lithium ion storage batteries were installed to achieve zero energy for common areas, and 10 households were retrofitted with energy efficient Econavi air conditioners.

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Panasonic Asia Pacific Pte Ltd

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25 Panasonic’s proprietary Home Energy Management System also enables real-time energy visualisation and management.

This project now sees total household energy consumption in Punggol Eco Town being reduced by an average of 20%. The company aims to replicate similar integrated urban solutions throughout Southeast Asia in the future.

In the last two years, the Panasonic Energy Solutions Development Centre and Regional Energy Solutions Business Incubation and Development Group were successfully established in Singapore, to strengthen R&D and the implementation of viable green technologies for local and regional markets.

Akzo Nobel Paints (Singapore) Pte Ltd Achievement of Excellence (Large Enterprises) Akzo Nobel is a global paints and coatings company as well as a major producer of speciality chemicals. Its portfolio includes brands such as Dulux, Sikkens, International and Eka. As a sign of its commitment to being green and sustainable, the company prohibits the use of lead-

Mr Rick Reidinger, CEO, ECO Special Waste Management Pte Ltd

“The Singapore Sustainability Awards is an important recognition of our hard work over the years, to reduce our environmental footprint, maximise resource recovery, and in other ways achieve the ultimate goal of sustainability.”

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based compounds in its processes and in decorative products used by the general public, and fully eliminated lead-based pigments and driers from its industrial coatings in 2011.

These processes are aligned with international standards such as Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), which was put in place by the European Union.

Akzo Nobel was ranked number one on the Dow Jones Sustainability Indices heading in the materials industry group in 2013 – the eighth consecutive year that it has been ranked among the top three.

Mr Tatsuyuki Nonaka, Director, Environment and External Affairs Group, Panasonic Asia Pacific Pte Ltd

“Panasonic is honoured to be recognised for our efforts in sustainability. This is an area of focus that is crucial for us, as a global manufacturer, to be active in.”

Carrier Singapore Pte Ltd Achievement of Excellence (Large Enterprises) Air-conditioning in Singapore’s tropical climate can account for up to 60% of energy consumption. A lot of energy can also be wasted due to the use of old technology, wrong application, lack of proper maintenance, and lack of awareness.

Carrier’s efforts in promoting sustainability spans both product innovation and research. It has assumed a role in championing the green movement, by using new compression and control technologies to greatly improve the efficiency of its products.

One way it does this is by adopting “factory energy reduction goals” that extend to product design, materials and suppliers.

Recycling materials, minimising carbon emissions and water and energy consumption are all part of Carrier’s manufacturing processes.

Eltek Power Pte Ltd Achievement of Excellence (Large Enterprises) Eltek develops and markets energy systems for telecoms, renewable energy, electric vehicles and industrial applications.

The company is focused on combining business development with environmentally friendly technologies such as the Flatpack2 High Efficiency rectifier, which operates at 96.5% efficiency. This

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reduces energy losses by more than 50%, compared to the industry standard.

Since the launch of its HE (High Efficiency) product line, 850,000 units have been put into operation. These represent annual savings of 730GWh, and customers have had their collective carbon footprint reduced by 520,000 tons of carbon dioxide.

Eltek’s solutions also incorporate the use of renewable energy in remote telecom installations, innovative cooling, and smart management of generators.

Ricoh Asia Pacific Pte Ltd Achievement of Excellence (Large Enterprises) A total green office solution is a business tool that helps support the visualising, analysing and minimising of businesses’ environmental impacts.

Ricoh Asia Pacific promotes green procurement, which emphasises partnerships with suppliers who use raw materials and parts that have lower environmental impact.

Ricoh is the only organisation in the office and printing solution industry to have been awarded for its Quick Start-up (QSU) energy saving technology, which enables printers and copiers to start up quickly from sleep mode.

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Innovations

Managing Business Continuity Business survival is about resilience, reliability and recoverability.

G

iven recent developments in Singapore, it is becoming somewhat alarming that critical telecommunications and banking services can still fail.

In more developed economies, large businesses are able to implement solutions that avert such occurrences. The ability to do this lies in adopting integrated software solutions that document, track, analyse a company’s entire information technology (IT) network, and aid in quick recovery.

Imagine being unable to communicate because of mobile, television and phone outages across the island. Or being unable to withdraw cash at automated teller machines (ATMs) because of IT glitches. Imagine aircraft being stranded at an airport because the IT network is down.

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Critical consumer services These are fundamental services that the general public – the majority of service consumers – in an advanced economy should not have to grapple with on an ordinary day.

Despite vast IT investments made by big businesses, such occurrences are still common. Over the past three years, most customers here have been affected by one or more of the above situations.

The fact remains that in an increasingly complex and

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sophisticated world, failures of systems, processes, nuts and bolts are a reality. Given the myriad technologies and solutions being put together in large corporations today, one component or another can reasonably be expected to fail.

In light of this, companies’ overriding concern should be how long it would take to execute a recovery should their organisation’s critical systems fail.

Will it take three days before customers are able to access the Internet? Will it take 24 hours before a customer is able to withdraw cash from an ATM?

Optimising the data centre The answer lies in whether the business in question has implemented its IT set-up in a strategic manner; in other words, does it have the necessary information with which to overcome the crisis and restore public services quickly?

Optimising data centre processes and making IT infrastructure changes are impossible without reliable information. This is because all data centre components, and the way in which they operate, are interlinked.

And that’s not all – in the future, data centre infrastructure

management must place greater emphasis on facilitating the provision of IT services.

Most businesses are intensely focused on the concept of business data centres – how an organisation can pull together information from the far corners of its ecosystem to deliver a meaningful analysis of its customers.

In such undertakings, businesses often fail to take sufficient account of business services, thereby preventing a comprehensive view of the data centre.

The cost of providing an IT service via a specific physical or virtual server in terms of power, air-conditioning and provision costs and the like remains unclear.

In order to remedy such deficiencies, a data centre infrastructure management (DCIM) software application must cover the following layers: ● Facility management;

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In order to remedy this deficiency, a DCIM software application must cover the following layers: 1 FACILITY M ANAGEMENT 2 IT AND DATA CENTRE M ANAGEMENT 3 BUSINESS SERVICES M ANAGEMENT

Each layer requires specific information from a DCIM system.

Most businesses are intensely focused on the concept of business data centres – how an organisation can pull together information from the far corners of its ecosystem to deliver a meaningful analysis of its customers. In such undertakings, businesses often fail to take sufficient account of business services, thereby preventing a comprehensive view of the data centre.

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IT and data centre management; Business services management.

Facility managers need data relating to management systems, including the access control system, power supply and air-conditioning systems, and the physical network (hardware and equipment).

IT administrators require information about the use of IT resources and available space in the data centre. They should also have access to threedimensional representations of the components in the data centre, including temperature and power consumption data. This information is essential for optimising rack and component layout.

At the business services layer, DCIM solutions should provide data about the existing physical and virtual servers, and the applications running on them.

Functions that help to provide and bill IT services are also useful.

The logical network and system layers should also be taken into account. In addition to details about network connections (local and wide area networks), a DCIM solution also provides information about servers and their operating systems, wireless LANs, storage systems, and storage volumes. It is also important to take virtualised systems into account. ● ●

Monitoring an integrated system Monitoring server systems and measuring power consumption and CPU temperature in real time is an essential function. This information makes it possible to draw conclusions about overall power consumption, and possible ways to save energy.

In this regard, FNT Command brings together relevant monitoring aspects of server infrastructure in the data centre, including future utilisation and power demand forecasts.

The highest level of DCIM coverage should encompass applications, services, and business services. FNT Command makes it possible to manage databases,

business applications, software licenses, and software versions.

The DCIM platform can even be used to create orders for internal and external service providers, and to provide IT services.

This has a number of benefits.

For example, it allows IT services, both internal and external, to be billed correctly and precisely.

This is possible because this data management system has access to all relevant data – such as the loads under which particular physical and virtual servers and storage systems are operated in order to provide a specific service – and any secondary applications (eg. power consumption, cooling) involved.

FNT Command is an example of what a next-generation DCIM solution might look like. It is based on a comprehensive data model that brings together information from all areas – from building management systems and the logical and IT system layers, through to the business services layer.

With regard to the facility layer, this data management system provides true-to-scale plans of data centre buildings, power outlets, climate control zones, air-conditioning systems, and monitoring systems.

At the physical layer, DCIM software provides data about power and data cabling, patch fields, switches, and server and storage hardware. This information forms the basis for managing components throughout their entire service lives.

Optimising data centre processes and reducing energy requirements is impossible without reliable information about all data centre components and the ways in which they are interlinked.

•

The writer of this article is Fred W. Schellert, Vice President and Head of FNT Solutions Singapore. The company is a member of the Singaporean-German Chamber of Industry and Commerce, an affiliate member of the Singapore Business Federation.

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DATA CENTRE INFRASTRUCTURE MANAGEMENT (DCIM)

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Inside SBF

Alvinn Lim

Prime Minister Lee Hsien Loong and SBF Chairman Mr Tony Chew hope that the SBF Foundation will encourage businesses to become more actively involved in community development.

A new avenue has been created for Singaporebased companies to give back to society.

The Singapore Business Federation Foundation (SBFF) was launched by Prime Minister Lee Hsien Loong on Nov 12, 2013 to promote corporate activism and encourage businesses to play their part in building an inclusive Singapore.

Driven by the ideal of a compassionate and proactive business community, the SBFF will be working with partners to promote corporate social responsibility (CSR) and corporate giving among Singapore-based companies, especially the small and medium enterprises (SMEs).

Already, S$18 million in donations and pledges have poured in from some of corporate Singapore’s “who’s who” to get the new foundation going.

The goal is S$30 million.

The launch of the SBFF

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Launch of the SBF Foundation Chamber to promote corporate activism through the SBF Foundation for a more inclusive Singapore.

was witnessed by some 120 representatives from the Government and the business community.

SBF’s contributing role SBF believes it has a role to play in encouraging businesses to become more involved in contributing to the wellbeing of society, said Mr Ho Meng Kit, CEO of SBF. “We have started a pilot programme with about 40 companies, to get together corporate people and teach them about corporate giving and networking with nonprofit organisations. And then, if this programme is successful, we’ll roll it out to larger groups of companies,” Mr Ho said.

The Foundation, which was mooted by SBF Chairman Mr Tony Chew, seeks to give the community sector a boost by rallying the support of locally-based companies and getting them to be more actively involved in community development.

“The Government’s message that businesses can and should give back to society resonates strongly with SBF,” said Mr Chew.

“Increasingly, businesses are not just focused on doing well; many are now looking to do well by doing good.

It is no longer just the economic bottom line that companies are chasing, but the triple bottom line – economic,

social and environmental.”

He added: “Through the SBF Foundation, we hope to spur corporate philanthropy among our members and the wider business community.”

Founding donor Dr Stephen Riady from the Stephen Riady Foundation said: “The SBF Foundation is an important and timely initiative for the business sector to contribute towards building a strong and inclusive society in Singapore.

“I am pleased to contribute towards the formation of the SBF Foundation, and hope to encourage others to also donate and raise awareness of corporate social responsibility”.

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Mr Tony Chew, SBF Chairman

The SBFF’s threefold objectives are: ● To promote CSR and corporate philanthropy, to uplift the less privileged and improve Singapore’s environment; ● To promote the welfare of low-wage, elderly and other disadvantaged employees through partnerships with the business community; ● To promote education and enhance the employability of needy and disadvantaged youths through collaboration with the business community.

The SBF Foundation’s new Chairman, Mrs Theresa Foo, said she would like to see more SMEs come on board the CSR and corporate philanthropy bandwagon.

Mrs Foo said: “The vision of the SBFF is that of a compassionate and proactive business community, that plays its part in building an inclusive Singapore. Our mission is to encourage, enable and enhance the contributions of the

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business community to the social, vocational and educational upliftment of all in Singapore.”

She said that the Foundation would partner the National Volunteer and Philanthropy Centre (NVPC) to raise awareness of the importance of corporate giving, as well as of the avenues for companies to do so.

“We hope that once companies, especially the smaller SMEs, become equipped with the knowledge and skills to do so, they will be able to reach out to a larger group of non-profit organisations and their beneficiaries,” she added.

Mrs Foo said that education is one area where the SBFF can

make its mark. But beyond just funding scholarships or bursaries, the plan is to send students on internships and attachments, both locally and abroad.

For instance, the Institute of Technical Education (ITE) has already made known its need for funding for its Overseas Industrial Attachment Programme, where students undertake work and training related to their course of study in a foreign country for about three to four weeks.

Some 150 ITE students will be given such opportunities to travel under this programme over the next two years, using SBFF funds.

Far East Organization’s gift

SBF staff also chipped in with donations to the SBF Foundation.

Property developer Far East Organization has donated 22,000 sq ft of Community and Sports Facilities Scheme space at the upcoming SBF Center to the Foundation.

The SBF Center is a 31-storey project located at 160 Robinson Road which is expected to be ready in late 2016.

Mr Philip Ng, CEO of Far East Organization, said: “We can contribute to our nation by developing functional space for non-profit or not-forprofit usage. The space donated also becomes an asset of enduring value for the receiving charity.”

Far East’s gift of space was facilitated by the Government’s Community and Sports Facilities Scheme which the Urban Redevelopment Authority introduced in 2003. This was to promote the integration of community facilities into commercial developments. p.30

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Foundation’s objectives

“The Government’s message that businesses can and should give back to society resonates strongly with SBF… It is no longer just the economic bottom line that companies are chasing, but the triple bottom line – economic, social and environmental.”

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Inside SBF

SBFF FOUNDING DONORS Far East Organization Stephen Riady Foundation Asia Resource Corporation

Under this scheme, developers are granted additional Gross Floor Area for premises to be used by non-profit organisations with strong outreach, enabling them to

serve their social mission better without worrying about costly rentals.

•

For more information on the SBF Foundation, log on to sbffoundation.org.sg.

SBFF PROGRAMMES

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1. Encouraging CSR & Corporate Philanthropy: In response to findings that local companies lack awareness and depth of knowledge in CSR and corporate giving, this programme will focus on: 1) Raising the awareness and importance of CSR and corporate giving, and 2) helping companies to develop effective and sustainable CSR and corporate giving programmes.

For a start, the Foundation will work with partners such as the National Volunteer and Philanthropy Centre to do so. It will also be exploring collaborations with Singapore Compact and the Sustainable Development Business Group.

2. Extending a Helping Hand to Less Privileged Workers: In partnership with

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companies, SBFF aims to better the lives of less privileged workers, such as those with disabilities, those who are from low-income and singleparent households, or those who are from lowincome households with special needs children.

3. Advancing Education and Enhancing Youth Employability: SBFF believes in the power of a good education, and strives to make such opportunities available to the less privileged.

Programmes will include scholarships and bursaries to students from tertiary institutions in Singapore.

The Foundation will also fund experiences that serve to prepare students for the working world. These will include, but are not limited to: ● Industrial attachments ● Apprenticeships ● Internships

Founding donor Dr Stephen Riady from the Stephen Riady

RSP Architects Planners and Engineers (Pte) Ltd Tanoto Foundation

Group of Foundations

“The SBF Foundation is an important and timely initiative for the business sector to contribute towards building a strong and inclusive society in Singapore. I am pleased to contribute towards the formation of the SBF Foundation and raise awareness of corporate social responsibility.”

Wilmar International Limited Boustead Singapore Ltd Pontiac Land Group Crescendas Group Goodrich Global Pacific International Lines (Pte) Ltd DBS Bank Dymon Asia Capital Keppel Corporation Ltd Sembcorp Industries Ltd Shangri-La Hotel Ltd Singapore Singapore Hotel Association Ascendas GIVES Foundation Poh Tiong Choon Logistics Pte Ltd United Overseas Bank Limited Jurong Engineering Limited Hyflux Ltd Mr Ho Meng Kit Mr Shabbir H. Hassanbhai

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TANOTO FOUNDATION:

Poverty Alleviation through Education, Empowerment and Enhancement Building schools in rural areas in China and Indonesia

The Tanoto Foundation, established by the family of Mr and Mrs Sukanto Tanoto, is a center of excellence in poverty alleviation through education, empowerment, and enhancement programs. The Foundation’s mission is to work with communities and partners to address root causes of poverty in countries where the Tanoto family has significant presence.

At the heart of the Foundation’s work is Mr and Mrs Tanoto’s conviction that breaking intergenerational poverty requires improving access to the 3Es: quality Education, Empowerment opportunities, and the social capital that support the Enhancement of people’s lives. These have become the theme for its CSR programs.

As the Tanoto family expanded its business interests beyond Indonesia, the Tanoto Foundation also moved into the international arena.

Today, the Foundation is involved in China, Brazil, Indonesia, Singapore and the USA, with all programs being driven by the same vision and guiding principles.

Education The Foundation funds scholarships, school improvement programs, and research and partnership programs with universities in the USA, Singapore, Indonesia and China.

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In Indonesia, the school improvement program empowers teachers, and improves the intellectual and physical environments of over 200 schools in rural areas. In China, assistance is provided to schools in impoverished areas. Scholarships are also provided for undergraduate and graduate students in public and private universities in Indonesia, Singapore, China and the USA.

Establishing SMEs to empower local communities in Brazil

Empowerment These programs include facilitating the development of small businesses in rural areas, vocational training, and promotion of microfinance.

Working with corporate partners, the Foundation promotes sustainable business practices where communities and businesses embrace interdependence and work together to create shared value.

Enhancement The Foundation also supports the development and improvement of facilities. Over 30 projects that improve access to clean water and healthcare facilities have been undertaken. In addition, the Foundation distributes financial and material assistance to people affected by disasters, including the recent Sichuan earthquake and Mt Sinabung volcanic eruption.

Integrated farming programs in Indonesia help local communities generate income

Over 20,000 scholarships are provided in Indonesia, China and Singapore

Free medical treatment and education programs enhance healthcare in rural areas Tanoto Foundation is a Founding Donor of the SBF Foundation. tanotofoundation.org

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Inside SBF

Business Mission to France and Poland Oct 27, 2013

Engaging the Business Community

SBF led a 35-member business delegation to France and Poland in conjunction with the official visit by Prime Minister Lee Hsien Loong. Delegates gained firsthand understanding of the overall dynamics and opportunities in the two markets, ahead of the EU-Singapore Free Trade Agreement coming into force in 2015.

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

Asia Pacific Sustainability Leadership Forum Oct 31, 2013 Senior members of Singapore’s sustainable development sector congregated for the Asia Pacific Sustainability Leadership Forum, held in conjunction with SBF’s annual flagship event, Global Entrepolis @ Singapore Summit. It addressed sustainability challenges facing the region and emerging cleantech solutions. Minister for the Environment and Water Resources Dr Vivian Balakrishnan was part of a panel discussion on business outlook for a sustainable future.

Supply Chain Leadership Forum Oct 31, 2013 The forum focused on the latest outlook of the global supply chain – its challenges and risks, as well as new approaches to sustainable, resilient and innovative growth. Speakers at the forum stressed the importance of businesses developing capabilities to safeguard the interests of key stakeholders, and uphold corporate reputation.

Business Mission to Hungary, Czech Republic and Slovak Republic Nov 11, 2013

Africa-Asia Oil & Gas Summit Nov 27, 2013 Themed “Fostering Africa-Asia Partnership in the Continent’s Oil & Gas Eco-system”, the summit gathered African and Asian governments and leading oil and gas stakeholders to discuss the opportunities and challenges facing Africa’s oil and gas sector, and promoted Singapore companies as leading partners for Africa. SBF and NTU announced a new partnership to establish the NTU-SBF Centre for African Studies at the Summit – the first of its kind in Southeast Asia.

This was the second business mission that SBF led to Europe in two weeks, and it coincided with President Tony Tan Keng Yam’s state visit. The 22-member delegation established useful business and official contacts from the briefings, businessmatching sessions and forums that SBF organised to open doors for collaboration between Singapore businesses and their Central and Eastern European counterparts.

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International Markets

Taking a Bite Out of the Indonesian Pie Many local companies are making forays into the vast opportunities that the Indonesian archipelago has to offer.

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A

fter several years of significant foreign capital inflows, Indonesia was recently plagued by a massive capital outflow from the country’s stock exchange (IDX), as well as from government securities, for several months.

Indeed, inflation in Indonesia has doubled in the past 12 months and oil production is trending down. Recent riots and protests threaten domestic stability as well as the future of businesses operating in the country. Perhaps there is a tad of uncertainty on the political front, on account of the upcoming national elections which will result in a new head of state in 2014.

On top of this, current forecasts point to Indonesia’s gross

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domestic product (GDP) growing less than 6% in 2013 – the slowest annual growth rate of the last four consecutive years.

Indonesia’s GDP grew an average of 6.3% annually between 2010 and 2012.

The list of negatives goes on.

Huge opportunity for growth While speakers at the recent Global Entrepolis @ Singapore Business Leaders Summit acknowledged the presence of these current negative factors in Indonesia, many gave a ringing endorsement of the country.

DBS Bank economist Mr Gundy Cahyadi told BiZQ that “despite the recent market sell-off… there are still huge opportunities for Indonesia to grow.

Anything that revolves

around consumption will continue to do well in the next 10 years.”

Similarly, Morgan Stanley’s Hozefa Topiwalla had this to say: “Indonesia still has the best structural growth story within ASEAN+3 (ASEAN, China, Japan and South Korea). Its structural story will continue to be driven by strong demographic-led domestic demand, combined with infrastructure- and capacity expansion-led investment cycles.”

The Singapore-based analyst also said he is mindful of the negative factors clouding the Indonesian landscape.

Acknowledging such challenges, YCH Group Chairman and CEO Dr Robert Yap told delegates at the summit that while “Indonesia is a market

DBS Bank Economist Mr Gundy Cahyadi

“There are still huge opportunities for Indonesia to grow.

Anything that revolves around consumption will continue to do well in the next 10 years.” full of opportunities, we know that where there are opportunities, there are also challenges.”

The home-grown regional supply chain company has just opened a cutting-edge warehouse facility in Surabaya, entrenching its existing presence in Java. This location complements its presence across four other islands, namely Sumatra, Sulawesi, Kalimantan and Bali.

Another home-grown player, Fish & Co, started out in Indonesia just over 10 years ago. Today, the company has 16 outlets operating through a franchised model, and there is still plenty of room to grow, says Deputy Managing Director Mr Hoo Hoe Keat.

The company reached out to many of its Indonesian customers, who frequented its Orchard Road outlet in Singapore,

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Political and economic realities Analysts and economists have reached a consensus that Indonesia has failed to boost its manufacturing sector and that the country’s infrastructural development has lagged behind that of most ASEAN countries.

There are also concerns that the country’s current account deficit is expanding, with no signs from the administration on how this deficit will be funded. This was one of the principal reasons

Wilford, from political and economic risk consultancy Control Risks, observed: “Essentially, the election cycle has already begun.”

While there will be several interim milestones taking place in the rundown to the final election this year, many experts expect to see the current president’s reform-oriented agenda continue in the long term.

for the sell-off of the country’s rupiah in mid to late 2013, igniting fears that an Asian Financial Crisis reminiscent of the 1997 crash might occur.

In a move that added fuel to the fire – from the perspective of the country’s inflationary environment – the government also cut its fuel subsidies, resulting in a hike in pump prices.

Note also that in June 2013, the government announced that the price of subsidised gasoline would rise by 44% to 6,500 rupiah (S$0.65) a litre, while the price of diesel would rise by 22% to 5,500 rupiah a litre.

On top of these economic challenges, Indonesians are readying to go to the polls in 2014 to elect a replacement for President Susilo Bambang Yudhoyono.

Under Indonesia’s latest constitution, a President can only be in office for two terms.

Expert analyst Steve

Long term opportunities Given these varied challenges, there are several conflicting opinions on Indonesia among experts. On a hedged but positive note, some economists are taking the view that Indonesia continues to offer some of the best long term opportunities in ASEAN. One such economist is DBS Bank’s Mr Cahyadi.

Even if Indonesia registers 6% growth in inflation in 2014, he feels that it will still be able to manage it and find workarounds.

Indonesia: Moderate Pace of GDP Growth Ahead 10.0

YoY, %-pt contri

8.0

DBSf

6.0 4.0 2.0 0.0 -2.0

2Q14f

1Q14f

4Q13f

3Q13f

2Q13

1Q13

4Q12

PCE

3Q12

2Q12

GFCF

1Q12

4Q11

3Q11

1Q11

Net Exports

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3Q10

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HIKE IN PUMP PRICES In June 2013, the government announced price increases PRICE OF SUBSIDISED GASOLINE

+44% to 6,500 rupiah (S$0.65) a litre PRICE OF DIESEL

+22% to 5,500 rupiah a litre

“It is important to remember that the inflation spike was caused by the fuel price rise. We will see it (the effect of the fuel price rise on inflation) taper off over the next three to four months,” he told BiZQ. Pointing to the market sell-off last June, Mr Cahyadi said: “I feel that the panic (selloff) was excessive.”

Summing up his take on the Indonesian economy, ASEAN strategist Mr Lim Jit Soon of Nomura said that “significant portions of the Indonesian market may have already priced in the concerns about currency weakness and its impact on economic growth and corporate profitability.”

Given this, he sees opportunities for Indonesian companies to grow in p.36

Source: DBS Bank

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for their feedback, and passed this feedback on to its franchisees in Indonesia.

“We adapted the ingredients, including the sambal belachan (chilli sauce) that is served in Indonesia. The market took it very well,” he said.

Mr Hoo told BiZQ that Fish & Co will continue to ride on increasing consumer demand from Indonesia’s growing affluent middle class.

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International Markets the financial systems, infrastructure, utilities and plantation sectors.

Free trade framework One of the biggest reasons businesses are willing to look beyond the current challenges is the impending inauguration of the ASEAN Economic Community in late 2015.

Indonesia belongs to a core sub-group within ASEAN that has taken its tariffs on 99.6% of its goods down to zero.

Over time, due to other core ASEAN members’ commitments to lower their tariffs and implement a free trade concept, it became easier for companies like Fish & Co to expand their franchise networks across Indonesia.

Fish & Co’s Mr Hoo said that the company faced tremendous challenges in sourcing for ingredients for its franchisee outlets from the Indonesian supply chain when it started there 10 years ago.

He said: “Singapore is a free trade port and we can import anything from anywhere in the world.

However, this was not so in Indonesia. We had to look at the supply chain issues and sort them out slowly.”

SPH - The Straits Times

Growing middle class A growing consumer class also presents many opportunities. After the Philippines, Indonesia has ASEAN’s second highest proportion – 63% – of its population below by the age of 35.

Given rising longevity and growing economic opportunity, this relatively young group

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INDONESIA’S MIDDLE CLASS The consumer class is set to expand exponentially.

This means an additional annual spending of

S$1 trillion Dr Robert Yap, Chairman and CEO of YCH Group

“This also presents an increasing logistical challenge for enterprises in Indonesia, in meeting the demands of sophisticated consumers and delivering goods to them on time.” will contribute to the economy in terms of its labour force, and will also drive consumer spending over the next two to three decades, say economists.

YCH’s Dr Yap explained: “The Indonesian consumer class is set to expand exponentially, and some 90 million of the population will enter this group by 2030. This means an additional annual

spending of S$1 trillion. This also presents an increasing logistical challenge for enterprises in Indonesia, in meeting the demands of sophisticated consumers and delivering goods to them on time.”

He said: “I believe this is where YCH Indonesia can strike up a strategic partnership with our customers. Continual innovations in technology and domestic facilities, coupled with our extensive supply chain reach in the archipelago, mean that YCH will be able to serve both international and domestic enterprises to meet client expectations and ensure that their products are delivered safely and on time.”

His comments come on the back of YCH marking a milestone in Indonesia with the opening of its Surabaya DistriCentre.

The 120,000 sq ft facility leverages on its proprietary Warehouse Management Solution, seamlessly integrating with customers’ back-end systems to power their end-to-end supply chain flows – from

manufacturing to finished goods distribution.

The new DistriCentre will service YCH’s global customers, like LG Electronics and Royal FrieslandCampina.

Cross-Archipelago Transportation One of Indonesia’s most promising sectors is its energy, minerals and infrastructure industry, and the services that support and complement it.

Given the robust demand for offshore support vessels and the gradual and consistent rise in daily charter rates experienced over the past few months, players like Singapore-listed Seroja Investments and Marco Polo Marine that continue to navigate the archipelago’s main transportation routes.

Marco Polo Marine recently purchased a midsized vessel through its 49.6%-owned subsidiary, PT Pelayaran Nasional Buana Bina Raya (PT BBR TbK). The Singapore company bought the p.38

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International Markets Anchor Handling Tug Supply (AHTS) vessel from a third-party shipbuilder.

Chief Executive Officer Sean Lee Yun Feng said that “with the offshore oil and gas exploration sector in Indonesia being at a nascent stage of its development, demand for chartering services is expected to take off strongly – in view of the promising growth in the sector, coupled with the limited supply of Indonesian-flagged

offshore support vessels – as a result of the strict enforcement of the cabotage principle in Indonesia.”

The acquisition is consistent with Marco Polo Marine’s growth plans to expand into the offshore oil and gas sector while utilising PT BBR TbK as the platform to entrench itself in the Indonesian market.

Taking stock of advice Experienced operators in

SPH - The Straits Times

Haze Free ASEAN

SBF recently hosted the annual Asia Pacific Sustainability Leadership Forum to discuss prevalent issues on regional haze, and the challenges of adopting sustainable agriculture.

Minister for the Environment and Water Resources Dr Vivian Balakrishnan, the guest of honour, joined several speakers in discussing challenges, strategies and solutions for a sustainable future.

In the session on Envisioning A Haze Free

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ASEAN, moderated by SBF CEO Mr Ho Meng Kit, representatives from NGOs and the private sector discussed and gave recommendations on how to tackle the haze.

Incentive and penalty recommendations aimed at oil palm companies, farmers and consumers were also discussed.

During the session, some of the speakers welcomed the recent efforts by governments in the region to adopt the ASEAN Sub-Regional Haze Monitoring System

Indonesia like YCH and Fish & Co are ready to share their experiences, and they have some advice for companies looking to expand into Indonesia.

Mr Hoo noted the opportunity that Indonesia presents to Singapore companies with its growing middle class – it is expected to reach 130 million in the coming years. This was why Fish & Co established 16 outlets in Indonesia – to tap into

the country’s growing middle income story.

Mr Hoo then added that it is also important to understand local consumer preferences, and their ways of structuring businesses.

Agreeing with him, Dr Yap added that “patience is key (when getting into) a market.”

Perhaps, this explains why the likes of the YCH and Fish & Co have survived the spills and spoils of Indonesia over the years.

to address haze, but felt that sustained public interest in the haze – to ensure the problem stayed at the top of the public’s agenda – was lacking.

The S$100,000 monitoring system, developed by Singapore, was adopted for use by the three haze-hit countries as well as Brunei and Thailand last month at the ASEAN Summit.

It will feature satellite images of hot spots overlaid with concession and land use maps.

The system combines hot-spot data, highresolution satellite images and concession maps, to pinpoint areas that firms may have responsibility for. The software will be used by the governments of Indonesia, Malaysia, Singapore, Brunei and Thailand.

Singapore had pushed for official land use and concession maps – showing where each company is allowed to conduct economic activities – to be made

publicly available.

However, Indonesia and Malaysia resisted the idea, citing legal concerns.

Recently, SBF also called on its Indonesian counterpart, the Indonesian Chamber of Commerce & Industry (KADIN Indonesia), to find new and innovative solutions to the annual haze problem.

SBF and KADIN Indonesia will jointly spearhead corporate social responsibility initiatives to promote healthy and sustainable environmental practices.

This will involve public sector agencies, plantation companies, farmers and their cooperatives, and commodity buying houses in Indonesia, Malaysia and Singapore.

Fires in Indonesia saw pollution levels hit unprecedented levels in June 2013, many of which were believed to have been caused by companies and farmers clearing land to make way for plantations.

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SME Resources

SMEs Now Eyeing More Govt Help Local firms worried about escalating business costs, reports SBF survey.

Business leaders have called on the Singapore Government to do more for small and medium enterprises (SMEs) by controlling rises in rental rates and helping exporters, among other things.

The suggestions were discussed during the Singapore Business Federation-organised SBF SME Convention 2013, and attended by more than 300 C-level executives and entrepreneurs. Convention participants explored issues that SMEs face, and sought solutions that businesses can put in place to tackle various challenges.

Minister of State for Trade and Industry Mr Teo Ser Luck, the guest of honour, stressed the importance of moving Singapore’s economy up the value chain in order to create the jobs that Singaporeans desire.

He explained: “With rising global and regional competition, it is even more important for us to pursue growth that is

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driven by productivity improvements and innovation, so that our SMEs are well placed to compete and thrive in the new global economy, and create good jobs for Singaporeans.”

Mr Teo also dwelt on the need to manage workforce growth, and the careful use of Singapore’s scarce land bank.

Challenging issues ahead SBF recently conducted a survey among its members which revealed that, while SMEs welcome some of the Singapore Budget 2013 measures, more than 60% of the respondents were either not sure about them or found them ineffective in helping to reduce costs.

Respondents were also unsure of the measures’ efficacy, or felt that the Budget did not effectively address issues such as improving productivity, business restructuring, or reducing manpower use.

Mr Lawrence Leow,

Chairman of the SBF-led SME Committee (SMEC), told BiZQ that many SMEs are at a loss at how to grow their top line in the face of a tightening labour market and escalating business costs.

During the convention, one of the discussions highlighted the call for a dedicated agency to handle issues relating to smaller companies.

Currently, there are different agencies managing different SME assistance programmes. For example, the Productivity and Innovation Credit scheme is administered by the Inland Revenue Authority of Singapore, while those that help SMEs expand overseas are run

by IE Singapore. There are different agencies, such as JTC Corp, IE Singapore and Spring Singapore, working closely together to support SMEs.

Rising business costs One of the big issues raised during the convention was this: Local companies want more done to stop exorbitant rent rises.

Mr Manu Bhaskaran, Director of policy advisory firm Centennial Group, observed that the Singapore government may need to intervene in matters such as exorbitant rental hikes as they are anti-competitive.

BiZQ understands that JTC is releasing a lot more industrial property over the next five years and that the Government is studying what can be done in the commercial sector.

In addition, many local firms that BiZQ spoke

KEY BUSINESS ISSUES Improving SME access to public procurement. ● Helping SMEs build track records to venture overseas with. ● Increasing provision of basic space for commercial and industrial activities. ● Review of the Wage Credit Scheme. ● Facilitating alternative financing channels. ● Accelerating technology transfer from research institutions to the private sector. ●

to said they want to see more encouragement for big firms to collaborate with SMEs and help them expand abroad.

Mr Leow suggested incentives, such as tax reliefs for governmentlinked companies when they enable a local SME to partner them on an overseas project.

He said that the SMEC’s new strategic thrust “will be to help SMEs find solutions and new strategies, not just for survival but also for future growth and competitiveness.”

For example, the SMEC formed a fifth sub-committee to spearhead discussions on SME innovation this year.

This sub-committee will play an important role in seeing how SMEs can adopt innovative practices and technology to restructure their business models and enhance their product offerings.

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SME Resources Upcoming Events

For more information on this business mission, contact Candy Chio at 6827-6876 or candy.chio@sbf.org.sg.

International Business Fellowship: 3rd Executive Programme on Indonesia (3rd iBF Indonesia)

Conferences AirXperience Asia 2014

Business Mission to Semarang and Surabaya, Indonesia Second half of 2014

SBF is organising a business mission to Semarang and Surabaya in the second half of 2014. Participants

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March 10-13 Suntec Convention Centre

March 2014

The third iBF Indonesia is being jointly organised

by IE Singapore and the Singapore Business Federation (SBF). The programme supports Singapore-based companies in training their executives to acquire business knowledge and build networks in Indonesia. Thirty participants will be enrolled for this programme, which is aimed at: ● Senior Management from Singapore-based companies with existing businesses in, and/or are keen to explore business opportunities in Indonesia; ● Senior Officers from public sector organisations who support business initiatives that add value to Singapore and Indonesia.

SBF received an overwhelming response at the 2nd iBF Indonesia, with 30 participants from 24 Singapore companies and three public sector organisations. Participants gained in-depth understanding of key aspects of doing business in Indonesia.

7th BioPharma Asia Convention 2014

Feb 18-19 Suntec Convention Centre

will be able to explore business and investment opportunities there. As Indonesia’s second largest city and consumer market, Surabaya is also a commercial trading centre and one of two core manufacturing hubs. Its connections to major sea ports in Asia provide opportunities for transport logistics and manufacturing firms to start operations there and develop their businesses.

Mission participants will: ● Gain first-hand understanding of the fast-growing business environments and investment opportunities in Semarang and Surabaya; ● Network with key government agencies, developers and local companies; ● Interact with Indonesian businessmen and hear about their business experiences; ● Visit Kendal Industrial Park, a joint development

by Singapore’s and Indonesia’s leading industrial park developers, Sembcorp Development Ltd and PT Jababeka Tbk; ● Learn about the economic outlook, investment policies and financial incentives for foreign investments in Indonesia.

The AirXperience Asia convention explores how airlines and airports can improve the travel experience for their customers. This conference is part of the 11th annual World Low Cost Airlines Asia Pacific forum, which attracts more than 600 attendees in Asia’s aviation industry.

AirXperience focuses on innovations to improve the passenger experience at each point of contact (eg point of purchase, airport, post-ancillary, and in-flight).

4th Annual OTC Pharma Asia 2014 Feb 25-28

The annual BioPharma Asia Convention is one of Asia’s leading industry platforms for the pharmaceutical, biotech and R&D industries, as well as CROs, CMOs, investors, and other industry stakeholders.

7th Smart Electricity World Asia 2014 April 22-25 Resorts World Convention Centre

This event is one of the region’s most authoritative platforms for high-level executives from the utilities industry to share best practices and implementation strategies for achieving energy efficiency, integration of off-grid sources, enhancing customer engagement, and profiting from new energy sources.

Grand Copthorne Waterfront Hotel

The fourth annual OTC Pharma Asia will feature the latest market trends, growth opportunities, regulatory updates and strategic advice relating to the over-the-counter (OTC) and health supplement markets.

In addition to featuring real-life case studies and best practices from seasoned consumer health marketing professionals, the 2014 conference will also provide insights into marketing opportunities and consumer trends in Indonesia’s OTC market as well as China’s consumer health market.

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.

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