Oct•Nov•Dec 2013 CUTTING POWER COSTS
Boosting Singapore’s energy efficiency TAPPING INTO TECHNOLOGY
BusinessQuotient / Business / People / Opportunities
Helping SMEs raise productivity MANAGING MANPOWER
Bridging foreign labour needs
A P U B L I C AT I O N O F S I N G A P O R E B U S I N E S S F E D E R AT I O N
Mentoring the Next Generation Boustead Singapore’s Wong Fong Fui on sustaining an unbroken lineage
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Oct•Nov•Dec 2013
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Chairman’s Message
A Stronger Voice in a Challenging Economy Prime Minister Lee Hsien Loong’s 2013 National Day Rally speech has instilled further confidence in Singapore’s future among the business community. Focusing on the Government’s longterm development strategies, PM Lee outlined key policy changes in housing, education and healthcare. These measures are aimed at creating the social infrastructure for a vibrant economy, skilled workforce, healthy living conditions, safety nets, and social harmony. In a separate speech at an event hosted by the Academy of Medicine in late August, Deputy Prime Minister Tharman Shanmugaratnam reiterated those important shifts in the Government’s role in upholding a fair and just society. One such shift has to do with preserving and building on a progressive system of taxes and benefits that will help support important social needs. DPM Tharman assured the audience that the Government will ensure this policy can be sustained over time. It is also comforting that the Government is sparing no effort to help businesses cope with challenges. In this regard, the Federation welcomes the formation of the government-led SME Workgroup, which will lead and coordinate efforts to help SMEs
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overcome the challenges they face in restructuring and raising productivity. Support from government agencies which are part of the SME Workgroup means that policymakers will be able to address such challenges from a wholeof-government approach. The Federation will continue to play a leading role in the SME Committee, which it leads, to bring up issues and challenges faced by our small and medium enterprises to the SME Workgroup, to achieve synergy between both platforms. I urge members to give their full support to the Federation’s initiatives so that we can serve you better.
Tony Chew Leong-Chee Chairman Singapore Business Federation
25/09/2013 09:51
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Oct•Nov•Dec 2013
Contents
Commentary
Managing Risk 05 Business
Actively managing potential problems and opportunities can help provide companies with a competitive advantage.
Economy Watch
06
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Brighter Shine to 2Q GDP
Analysts credit rise in Singapore’s second quarter GDP growth to manufacturing and services sectors.
BiZ Voice
Emerging markets such as Ghana, are opening up vast opportunities for Singapore businesses.
16 Business Quotient (BiZQ) is the official publication of the Singapore Business Federation, reaching out to over 21,000 of Singapore’s business elite, chief executives and entrepreneurs. The quarterly, published in collaboration with SPH Magazines, is your eye on Asian and global business trends, bringing you up to date on industry developments, the economy, country profiles, stories about successful companies and the people who lead them.
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BiZ Feature
Plugging Singapore’s Manpower Gap BiZQ looks at some new, innovative solutions that businesses are implementing to meet their labour needs.
ABOVE: Businesses are using automation, innovation and improved productivity to address manpower shortages.
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SMEs Eye Trade with Africa
25/09/2013 09:54
Oct•Nov•Dec 2013
4 Publisher Singapore Business Federation
In BiZ With
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10 Hoe Chiang Road, #22-01 Keppel Towers, Singapore 089315, Tel: +65 6827 6828, Fax: +65 6827 6807, E-mail: mr@sbf.org.sg, Website: www.sbf.org.sg
Mentoring the Next Generation
Boustead’s Chairman and Group CEO Wong Fong Fui speaks about the importance of inspiring SMEs and leading by example.
chairman
Tony Chew chief executive officer
Ho Meng Kit
Innovations
24
chief operating officer
Victor Tay assistant executive director (member relations)
Cheryl Kong director, corporate communications
Lowering Our Energy Bill
The Singapore Government has launched a S$17 million initiative to help firms consume energy more efficiently and effectively.
Gerald De Cotta Publishing Agent SPH Magazines Pte Ltd
Inside SBF
26
group editor-in-chief
Caroline Ngui group editor
Joanna Lee-Miller
SBF gains traction with members
Apex chamber helps businesses build stronger public-private engagement and help them access international markets.
editorial & creative senior editor
Dora Tay contributing editor
International Markets
Casuarina Peck
32
sub-editor
Annabelle Bok senior art director
Jayson Ong art director
Winnie Ong
Rapid Urbanisation in China
China’s strong demand for urban and consumer services is strengthening the country’s services industry.
senior designer
Mohamed A Rahman managing director
SME Resources
Dennis Pua
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general manager
Christopher Chan sales & client management associate account director
Kaz Lim
Tapping into Technology Adoption
A new S$51 million programme is helping companies gain access to the latest new technologies.
senior executive, client management
Neo Pei Shi publishing services team head
Alice Chee For advertising enquiries, please call +65 6827 6828 or +65 6319 6326
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This news magazine is published by SPH Magazines Pte Ltd (Registration No. 196900476M) for Singapore Business Federation (Registration No. ROS138/2002TAP). Copyright of the materials contained in this magazine belongs to SPH Magazines Pte Ltd and Singapore Business Federation respectively. Nothing in here shall be reproduced in whole or in part without prior written consent of SPH Magazines Pte Ltd or Singapore Business Federation. Views expressed in this news magazine are not necessarily those of SPH Magazines Pte Ltd nor the Singapore Business Federation and no liabilities shall be attached thereto. All rights reserved. Editorial enquiries should be directed to the editor, BiZQ, SPH Magazines Pte Ltd, Media Centre, 82 Genting Lane, Level 7, Singapore 349567. Tel: +65 6319 6319, Fax: +65 6319 6227, E-mail: bizq@sph.com.sg. Unsolicited material will not be returned unless accompanied by a self-addressed envelope and sufficient return postage. While every reasonable care will be taken by the editor, no responsibility is assumed for the return of unsolicited material. MCI (P) 242/04/2013. Printed in Singapore by timesprinters, Singapore (Registration No. 196700328H).
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Commentary
Managing Risk for Business Going back to basics with risk management strategies will benefit companies.
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usinesses, regardless of size, have one thing in common – they all face risks. Today, businesses use risk management to identify and mitigate financial exposure and to drive business strategy. In Singapore, the business community has been subjected to heavy doses of risk management advisories over the last 18 months as its importance was highlighted in the corporate regulatory regime. Several international risk management standards have also been developed over the years: ISO 31000:2009, AS/NZS 31000:2009, COSO ERM, principles and benefits of knowing business risks, the need for accountability, monitoring and reporting by the Risk Management Function, the role of the Board in risk governance, and more. Actively managing potential problems or opportunities can help to provide companies with a competitive advantage.
Unlocking strategic value U R management is increasingly Risk b being used as a strategic compass tthat redefines a company’s “true n north”. It challenges existing b business strategy, and facilitates d dialogues with the C-Suite aand Board to unravel business o opportunity. Hence, it is a catalyst ffor unlocking ideas and potential. Risk management can help b bring a business back to basics, and rrestrategise the company with its u underpinning objectives. At the heart of risk management iis the employees, each of whom is rresponsible for risks and accountable for his or her own actions. Risk management can be used to define employee values, set boundaries, and influence employee actions.
Driving mindset and culture investment, but China’s local practices are evolving, and investors continue to grapple with everchanging risk scenarios.
Leveraging on technology Technology innovation initiatives may bestow competitive advantages, but at the same time, they expose us to greater and different kinds of risk. Notwithstanding this, innovation is key to a sustainable economic future as it aims to bring about “better, faster, safer and cheaper” processes. Combining risk management and innovation can help companies increase their ability to produce the kinds of innovative products that spur growth.
Understanding best practices
Looking beyond issues
Internationalisation will be necessary in order to elevate our SMEs to a regional or global scale. But this will expose them to unknown threats, such as feasibility of export strategies and challenges in dealing with foreign regulations. For instance, countries such as China continue to attract foreign
The recent White Paper discussion on Singapore’s population and growth through 2030 continues to attract both praise and criticism. Business owners need to be poised to tackle potential labour shortages and the possibility of slower economic growth. In this context, using risk management
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t address the operating risks and to financial f losses is seeing the cup as only o half empty.
Entrepreneurs often lament about their employees’ inability to think and act as they would. What many fail to realise is that the roadblock to managing risks is often the business owner himself. The manner in which top management views risk will influence any emphasis on risk management activities, and the significance attached to risk information. It determines the success or failure of any risk programme. No message cuts clearer than a Board that evaluates and rewards individual performance based on risk-derived metrics. Take a step back, understand the importance of risk management and evaluate the extent of its implementation across your organisation. Avoid groupthink and jumping on the bandwagon. Just as businesses evolve, building the risk management model on the right foundations with the right intentions and aspirations will go a long way in benefiting businesses.
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This article was contributed by RSM Chio Lim PLC, the public accounting arm of Chio Lim Stone Forest.
20/9/13 10:52 AM
Oct•Nov•Dec 2013
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Economy Watch
Mr Wong Ngit Liong, CEO
Singapore’s GDP Improved in 2nd Quarter Gross Domestic Product rose 3.7% due to growth in the manufacturing and services sector.
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ingapore’s manufacturing and services sector advanced at its fastest rate in two years, resulting in its gross domestic product (GDP) registering 3.8% in the second quarter of 2013 on a yearon-year basis. With the release of the latest data on the Singapore gp economyy ((after National Day), the Ministry of Trade and Industry raised the 2013 growth forecast for the Singapore economy to around 2.5-3.5%, from the previous 1-3%.
The ministry added that the outlook for the Singapore economy has improved slightly, given that externally-oriented sectors like manufacturing, transportation and storage are likely to provide support for growth. This is in line with the gradual pickup in the global economy. y Domestically-oriented sectors such as construction and business services are also
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“The operating environment for the global electronics industry remains challenging. There is still no clear sign that customers’ end market is staging a strong recovery in the near term.” expected to remain resilient. Based on these data, the latest economic results exceeded all 12 estimates in a periodic Bloomberg News poll where the median prediction was for 8.1% growth.
Dimmer outlook for second half While many economists have described this latest quarter’s performance as “scorching” and “surprising”, the outlook on how the second half of the year will pan out is still up in the air. There are many variables relating to how much the global growth engines predicate and deliver on growth, and whether new turbulence is expected in the macroeconomic landscape. Deutsche Bank Chief Economist (India and ASEAN) Taimur Baig told BiZQ that the latest advanced estimates were “rather surprising”, given the slowdown in the regional economic momentum and the high frequency of economic data which have been “disappointing” and “have been mostly in negative growth territory this year”. Echoing Mr Baig’s sentiments, OCBC chief economist and
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of Venture Manufacturing
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GDP and Sectoral Growth Rates in 2Q 2013
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13.1 5.6 5.1 3.8 3.7 3.5 3.2 2.5 1.7 0.2 0
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THE ECONOMY GREW BY
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15 ( %)
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treasury research head Selena Ling explained: “While we are not pessimistic about the Asian economies and are still pencilling a very modest recovery going into the second half of the year, the odds appear to be somewhat stacked against a growth outperformance for Asian economies.” As the Singapore economy crossed into the second half of 2013, the trade ministry’s survey showed that the manufacturing sector grew by 0.2% in the second quarter, a reversal from the 6.7% contraction in the previous quarter. The electronics cluster grew by 1.9% on the back of higher export demand. What gave the sector its uplift was the biomedical manufacturing cluster, which expanded by 7.5%. In particular, the medical technology segment surged by 15% on the back of higher production capacities and strong export demand, while the pharmaceuticals segment grew by 6.1%, the ministry showed. The construction sector grew by 5.1% a year-on-year basis, marginally lower than the 5.8% growth in the preceding quarter. The expansion was underpinned by robust construction activities in the private sector. On a quarter-onquarter basis, the sector expanded at an annualised rate of 11.2%, faster than the 10.3% growth in the preceding quarter. The latest survey also showed that the finance and insurance sector expanded by 13.1% on a
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year-on-year basis, after growing by 10.6% in the previous quarter. Growth was supported by strong performances in the financial intermediation and sentiment sensitive clusters. On a quarteron-quarter annualised basis, the sector grew by 9.2%, following the surge of 51% in the preceding quarter.
Strong trading volumes Commenting on the latest advanced estimates, Bank of America Merrill Lynch economist Chua Hak Bin said that the services sector, in particular financial services, has been providing the underlying support that the Singapore economy needs. Indicative of this are various signs including strong loans growth and trading volumes. On the manufacturing front, economists that BiZQ spoke with pointed out that figures from the goods producing industries are higher during this past quarter, probably even busier than the preceding quarters. This suggests that overseas demand, particularly demand arising from orders to meet the needs of the year-end festive season, could be on the rise. While the macroeconomic numbers showed the upbeat nature of the economy, businesses on the ground have yet to come out of the woods, observed economists and various companies’ spokespersons. For example, Singapore
compared with the same period in 2012. Growth was driven by the finance and insurance, wholesale and retail trade and business services sectors EMPLOYMENT GREW BY 32,500, WHILE THE OVER ALL UNEMPLOYMENT R ATE INCREASED TO
2.1% THE CONSUMER PRICE INDEX INCREASED BY
1.6%
compared to a year ago
manufacturing icon Venture Manufacturing is still struggling to regain the performance and manufacturing activity levels it had seen just a year ago. Company Chairman and CEO Wong Ngit Liong said that the “operating environment for the global electronics industry remains challenging. There is still no clear sign that customers’ end market is staging a strong recovery in the near term”. As a result, Venture Manufacturing will continue sharpening its focus on increasing its market share from existing customers, and on winning new programmes and customers. It p.8
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Finance & Insurance Wholesale & Retail trade Construction Overall GDP growth Business services Information & Comms Accommodation & Storage Transportation & Storage Other services Manufacturing
Highlights of Singapore 2Q 2013 Performance
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Outlook through second half 2013
plans to complement this strategy with consideration of “strategic investments that meet its longer term objectives”.
Singapore GDP
20% 10%
Restrategise business structures Niche players in the manufacturing industry are beginning to revamp their business strategies and operate in segments where they have a competitive edge. One such player is Singapore-listed company Hi-P International. Following a difficult 2012,
Services growth
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Metal stamping company Miyoshi Precision is one of the many manufacturers facing similar challenges. Chief Executive Officer Andrew Sin said that even though the global economy has started to show initial signs of returning to stability, “significant risks remain which could undermine recovery”. “We expect that sales orders will continue to be weak in the next quarter (June to August 2013), and that allowances for the impairment of property, plant and equipment, and cost of investments shall be required to be made as a result of low sales forecasts,” he explained. The company expects to incur a loss in the final quarter of the year, which ends in August 2013, and acknowledges that the outlook beyond that “continues to be uncertain”.
1Q 12
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Slow recovery growth
GDP growth (RHS)
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CEO Yao Hsiao Tung made a strategic decision to revamp the company’s organisational structure and decentralise some of its core business units, including the mechanical business and the original equipment manufacturing and design manufacturing units. To sustain long term growth, Hi-P International has decided to focus on developing innovative products in the smartphone and tablet market segment. Although revenue slipped for the group early this year, Mr Yao believes that diversification of its customer base, continued improvements to its cost structure via automation, and focus on profitability and growth are key strategies that will tide the company over in the near future.
Gazing into 2013’s second half Looking into the crystal ball for the coming months, there is a mixed
Mr Irvin Seah, DBS economist
“Going into the second half of the year, we should continue to see steady and gradual improvement in the services sector. The risks on inflation and growth remains very wellbalanced. There’s little incentive for the MAS to deviate from its current monetary policy.”
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bag of views on how the Singapore economy will pan out. One of the biggest concerns has to do with Singapore companies finding that elusive growth market that will absorb their exports. Many had been expecting China to pick up the slack in global economic demand, but the latest data, released around Singapore’s advance estimates, show that China appears happy to close 2013 at about 7.5% GDP growth. As a result, the current view on the ground among the likes of p.10
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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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F Q1 3
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4Q 12
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Overall Index (out of 100)
Commerce/Trading
52.0
55.1
58.2
54.4
53.9
54.6
53.7
Construction/Engineering
51.1
48.1
52.1
54.0
54.5
55.4
56.1
Manufacturing
47.9
54.1
54.9
54.0
50.8
54.1
54.0
Business services
50.9
54.5
56.6
52.0
51.1
55.3
54.6
Transport/Storage
47.0
48.1
51.8
54.0
51.3
54.7
54.0
Overall
50.8
52.4
54.4
53.0
51.6
54.8
54.1
the year, we should continue to see steady and gradual improvement in the services sector,” DBS’ Irvin Seah said in a recent report. “The risks on inflation and
SMEs EXPECT SLOWER SALES, PROFITS FOR 2H 2013 According to the findings of the SBF-DP SME Index for Q3 and Q4 this year, SMEs expect sales and profits to pick up in the second half of 2013, albeit at a slower rate than in previous years. The Overall Index score for the two quarters dipped from 54.80 to 54.10 (see table above), indicating that SMEs are still slightly optimistic about their overall performance prospects in Q3 and Q4, but they are well short of being confident. Business expansion expectations continue to trend upwards as SMEs look for new ways to drive growth, including targeting new markets or introducing new goods and services. SBF CEO Mr Ho Meng Kit said: “The pickup in investment and business expansion indicators are encouraging signs that SMEs are making concerted efforts to drive growth, by investing in better processes and equipment rather than through manpower increase. “This is a positive reflection that SMEs appear to be taking up the
F
Outlook for 3Q13-4Q13 F (July 2013 to December 2013)
1Q 12
Deutsche Bank and Maybank Kim Eng is to maintain their current growth forecasts. Their respective forecasts for 2013 are at 2.5% and 2.3% – still within the Singapore government’s forecast of a 1% to 3% growth for 2013. Topping the range are the likes of Citigroup, which has raised its full-year forecast of growth in the Singapore economy to 3.2%, up from an earlier 2.3%. However, economist Kit Wei Zheng still expects Singapore’s growth to be “patchy” in the second half of the year. “We won’t be surprised if there will be a pull-back in growth in the third quarter on weaker sentiment and modest spillovers from a slowdown in China,” he added. “Going into the second half of
various schemes and initiatives introduced by the Government under the Budget 2013 Quality Growth Programme.” The Index is a joint initiative of SBF and DP Information Group. It is based on 3,000 interviews with SME owners and managers, as well as the actual financial performance of SMEs.
growth remains very well-balanced. There’s little incentive for the Monetary Authority of Singapore (MAS) to deviate from its current monetary policy.”
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Monetary policy stance appears appropriate Singapore’s current monetary policy stance appears appropriate for now and the Singapore dollar should close at around 1.2743 to a US dollar at year end, said OCBC economist Selena Ling. The bank’s threemonth SIBOR forecast is 0.39%, close to the current 0.37% as of 3 July 2013. Recent reports cite MAS as saying that it “has maintained its modest and gradual appreciation stance for the Singapore dollar NEER policy band, with no change to the slope and width of the policy band or the level at which it is centered”. This is “assessed to be appropriate for containing inflationary pressures, anchoring inflation expectations, and facilitating the restructuring of the economy towards sustainable growth”.
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ADVERTORIAL
Higher intelligence Australian expertise in information and communication technologies is seeing a greater number of international meetings being held around the country.
Information and communication technology (ICT) is now one of the largest areas of business in the world, with specialisations cutting across sectors including engineering and science. Many of Australia’s major universities and colleges have strong ICT faculties while government investment in ICT flows through Australia’s national science agency, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), and National ICT Australia (NICTA), a government and tertiary funded body with research labs in Canberra, Sydney, Melbourne and Brisbane. Collaborative research and development has led to ground-breaking Australian discoveries that are creating a global legacy. The most successful in the area of ICT to date was the invention by CSIRO scientists of an important piece of Wi-Fi technology that is today estimated to have been used in more than three billion electronic devices. In mid-2012 Brisbane played host to the IEEE World Congress on Computational Intelligence, attended by more than 1,000 computer scientists and information technology experts from 75 countries. According to WCCI General Chair, Professor Hussein Abbass from the Canberra Campus of the School of Engineering and Information Technology at the University of New South Wales, the congress was designed to “provide a stimulating forum for scientists, engineers, educators and students”. This was achieved in the high-tech Brisbane Convention & Exhibition
Centre through a number of activities including hosting live competitions of GO – a worldwide online game based on an ancient Asian version of chess - in which the world’s top professional GO players took on the computers, winning most of the time. Competitors were wired to enable their brainwaves to be mapped as part of a world first cognitive study in a bid to understand the differences of the physical and mental competency levels. Professor Hussein Abbass said competitions like these were a feature of the congress and were deliberately included to stimulate research and attract academic students. A number of scholarships were made available to encourage student attendance including those from developing nations. In 2014 the Gold Coast welcomes the 37th Annual Association for Computing Machinery, Special Interest Group on Information Retrieval (ACM SIGIR 2014). This event will be chaired by a new Gold Coast Convention Bureau Ambassador, Associate Professor Shlomo Geva from the University of Technology, Queensland. Professor Geva is predicting strong delegate numbers for the Gold Coast meeting because of the phenomenal growth and importance of information retrieval technology. He puts down securing the event to the appeal of the Gold Coast, the financial strength of the bid, a strong technical program, and local expertise.
VISIT
BUSINESSEVENTS.AUSTRALIA.COM FOR EVERYTHING YOU NEED TO PLAN YOUR AUSTRALIAN EVENT.
“Australia has a very strong research presence in information retrieval. Several eminent IR researchers are Australians, and there is ongoing work at the University of Melbourne, RMIT, and of course QUT. There is also strong research activity in IR by the CSIRO, and some at National ICT Australia (NICTA).” NICTA is also leading the charge in the field of “big data” research – a challenging new field of ICT that has developed through the phenomenal growth in technology use. IBM research estimates that we create 2.5 quintillion bytes of data every day – so much that 90% of the data in the world today has been created in the last two years alone. “Australia is at the cutting edge of big data research. NICTA has some of the best data scientists and machine learning specialists in the world, leading critical projects in financial services and natural sciences. Our mission is to achieve research excellence in information and communications technology and generate wealth for Australia and our big data team is doing just that”, comments Professor Hugh Durrant-Whyte, Chief Executive Officer of NICTA. It is Australia’s heavy focus on research and development in ICT, and its many conference venues that provide cutting edge technology which can fully service the sector, that will see the country continue to attract high-profile ICT meetings from around the world.
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BiZ Voice
Singapore, Ghana Boost Ties with Agreements SMEs eye growing opportunities in African continent.
IE SINGAPORE’S 2 OVERSEAS CENTRES IN AFRICA 1 GHANA 2 JOHANNESBURG
They serve as gateways for Singapore companies into the high growth regions of West and Southern Africa.
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merging markets outside Asia, especially on the African continent, are opening vast opportunities for many small and medium Singapore companies. The growing middle class in increasingly affluent Africa, for example, offers prospects for companies in sectors such as consumer goods, logistics, and oil and gas, among others. Barriers to market entry are also lower – companies that venture into emerging markets find an abundance of low-cost labour and land. According to IE Singapore, there is a rising interest in the continent. Some 55 Singapore companies are now doing business in 43 countries in Africa, up from 35 companies across 29 countries in 2010. Mr Cody Lee, Director of the Singapore Business Federation’s (SBF’s) global business division (Middle East and Africa), said that the apex chamber has seen growing interest among its 19,000 members in the eight to 10 trade missions a year that it organises to emerging markets outside Asia. Nigeria and Tanzania, among the fastest-growing economies
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in Africa, have attracted the most interest from Singapore companies, said Mr Lee.
Regional access One emerging African market is Ghana. An early indication of the strengthening economic ties between Ghana and Singapore is the bilateral trade that has increased sixfold over the past year to reach S$1.2 billion. Ghana’s strategic location also provides easy access to major economies such as the Ivory Coast, Mali, Niger, and Nigeria. There are close to 30 Singapore companies in Ghana today, contributing to growth in sectors such as agri-commodities, logistics, and infocomm technology. Reflecting the growing trade relations between both countries, Singapore and Ghana recently signed two memoranda of understanding (MOUs) and two partnership agreements to help companies from both countries link up. The Singapore Business Federation (SBF) signed an MOU with the Association of Ghana Industries to collaborate on joint missions and facilitate
the exchange of information. IE Singapore signed an MOU with the Ghana Investment Promotion Centre to jointly identify business opportunities and match Singapore companies with relevant partners in Ghana. IE Singapore has two overseas centres in Africa, one in Ghana (Accra Overseas Centre) and the other in Johannesburg, which will serve as gateways for Singapore companies into the high-growth regions of West and Southern Africa. Through these Overseas Centres, IE Singapore aims to promote trade and investment in the Economic Community of West African States ( ECOWAS) subregion, focusing on the logistics, oil and gas and consumer sectors, and also facilitate Ghana and ECOWAS companies looking to use Singapore as a base to expand into Asia.
Joint ventures Venturing into emerging markets with significant investment potential is one way for Singapore companies to diversify risks as they expand their presence globally. Two Singapore companies in the consumer services and urban infrastructure sectors inked partnership agreements with Ghana firms recently. One company is the consultancy RSP Architects Planners & Engineers, which signed an agreement with ABP Consult to jointly work together for the sourcing and servicing of real estate development projects in Ghana.
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GES 2013 Eyes Region Global summit spotlights competitive business landscape.
Roadmap to AEC 2015 This session will highlight how ASEAN is increasingly attracting foreign direct investment globally. The panel discussion in this session will provide insights into what the ASEAN Economic Community (AEC) 2015 can mean
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Growth in a dynamic landscape
to investors from the trade bodies, and how businesses can prepare themselves for the opportunities resulting from a more integrated ASEAN. The panel discussion will be led by Dr Sanchita Basu Das, Lead Researcher for Economic Affairs at the Institute of Southeast Asian Studies.
Eight growth trends in 2020 Karen Harris, Director of Bain & Company’s Macro Trends Group, will talk about how, despite dire headlines and marketplace frictions, eight trillion-dollar macro trends are at work in the global economy. The opportunities offered by both businesses and governments will offer new forms of innovation that will prove to be important for businesses.
Opportunities in new markets Panellists at this session will discuss how Asia and other new frontier markets are still experiencing growth at a moderately strong pace, despite Europe’s crisis. Mr Kevin Lu, Regional Director (Asia
Companies are quickly coming face-to-face with the reality that the ways they have built their successes over the last decade are no longer effective in the changing business landscape. They understand that even with the best operational strategies in place, they need to have innovative business models to stay ahead of the competition. Moderated by Mr Satish Shankar, a Partner of Bain & Company, this session gathers the game changers of various industries to share about their innovative business expansion strategies.
Managing talent Talent management is not merely a passing trend. It is a critical strategy that is here to stay. This session recognises that talent retention and development has to be managed successfully and sustainably. Professor Annie Koh, Vice President for Business Development and External Relations at the Singapore Management University, is moderating this session. Participants will discuss the various strategies that enable companies to leverage on talent management as a reliable succession plan for sustainable business continuity.
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Ministry of Trade & Industry
Global outlook 2014 During GES 2013, the keynote address will highlight the booming economic position of emerging nations relative to more advanced economies. Asia is now regarded as the “global economy’s growth engine”, both in terms of consumption and investment.
October 28-31, 2013 Resorts World Sentosa, Singapore
Pacific), MIGA, World Bank Group, will lead the discussion about where the opportunities are in these new frontier markets, how domestic demand is driven, and how businesses can balance growth opportunities amid the challenges in the global landscape.
S
ingapore is hosting the region’s leading business leaders’ forum – Global Entrepolis @ Singapore (GES) – for its 10th annual run from October 28-31, 2013 at Resorts World Sentosa Singapore. Presented by the Singapore Business Federation (SBF), the GES Business Leaders Summit 2013 is a global networking and business matching platform for influential senior business executives, entrepreneurs, high net-worth individuals, founders and policy makers who attend the forum each year. GES 2013 will feature more than 120 international speakers, who will provide insights on global trends and regional markets insights. The programme will help attendees understand some of the key issues discussed at the summit. GES Business Leaders Summit 2013 will be complemented by three SBF Focused Business Forums: Productivity & SME Convention 2013, Supply Chain Leadership Forum and the Asia Pacific Sustainability Leadership Forum.
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BiZ Voice
Vietnam and Singapore Strengthen Relations Singapore companies are important partners, says Vietnamese prime minister.
V
ietnam is marking its 40th year of trade relations with Singapore this year. Diplomatic relations were first established back in 1973. During a recent visit to Singapore, Vietnamese Prime Minister Nguyen Tan Dung said that Singapore companies are “important partners” in his country’s ongoing economic development. He said: “With extensive experience in project integration and implementation, Singapore companies are important partners for Vietnam as we encourage investments in the private sector. “This partnership is integral as we take steps to position Vietnam as an attractive destination for investment.”
Billion-dollar investments Singapore is the third largest foreign investor in Vietnam, with cumulative registered capital of S$33.5 billion across more than a thousand projects to date. In the first three months of 2013, Singapore overtook Thailand and Japan to become Vietnam’s top foreign investor. Singapore is Vietnam’s sixth largest trading partner, with total trade reaching S$15.8 billion in 2012, up from S$14.9 billion the year before. Vietnam is a country with promising long-term potential, and this is something that businesses should not ignore, said IE Singapore CEO Mr Teo Eng Cheong. Vietnam’s consumer sector is a growing area that is fuelled by an
Economic Impact of EU-Singapore FTA Trade agreement with Singapore is first step in region.
Ministry of Trade & Industry
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rade liberalisation is a key priority for the European Union (EU). According to the European Commission, 90% of added world demand over the next two years will be generated outside the EU. The institution has been working hard to conclude various free-trade agreements (FTAs) on a country and regional basis, in an effort to open up foreign markets. As of March 2013, the EU had 28 agreements in place.
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In Singapore, trade negotiations with the European Commission were successfully concluded at the end of last year. Singapore is the EU’s largest trading partner in Southeast Asia, and its 13th largest trading partner in the world. Singapore is also Asia’s second largest investor in the EU after Japan. The EU-Singapore Free Trade Agreement (EUSFTA) negotiations, currently under legal review, are expected to cover a comprehensive
expanding urban population. This growing middle class is also boosted by better educational qualifications and rising disposable incomes. It is factors like these that have created more room for foreign consumer brands in education, food and beverage, and health care. Among the recent expansions by Singapore companies is NTUC FairPrice, which opened its first hypermarket in Ho Chi Minh City – the first of many planned for the Vietnam market. Meanwhile, Sembcorp Development Ltd is operating four Vietnam-Singapore Industrial Parks (VSIPs), with progress underway for a fifth industrial park in Quang Ngai province in central Vietnam.
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agreement, which will create more opportunities for both European and Singaporean firms – especially in the fast-growing services area. The FTA is expected to enter into force in 2014.
Opening doors for Singapore The EU is an important trade and investment partner for Singapore. Even at the height of the debt crisis (2009-2011) in the Eurozone, EUSingapore trade in goods grew by some 40%, and trade in services by 41%. Investments to and from the EU continue growing to date. The EUSFTA will provide further impetus to strengthen this important partnership and open new doors for Singaporean businesses looking to trade with and invest in Europe.
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BiZ Feature
Plugging Singapore’s
Manpower Gap An ageing population and shrinking workforce, and the tightening of foreign manpower supply, are impacting Singaporean businesses. BiZQ looks at some new and innovative ways to bridge this labour shortfall.
Getty Images
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ingapore’s experience of high GDP growth rates in the 1990s, and to a lesser extent the last decade, are increasingly becoming a distant memory. Singapore businesses must face up to the reality of having to manage their corporations in an era where manpower dynamics are significantly different from what they used to be. First, Singapore’s 3.3 million citizen population is starting to age, and its manpower pool is seeing its supply of fresh young blood decline. But this shrinking can be slowed if more older Singaporeans choose to upgrade their skill sets and stay employed for a longer time. The Government’s recent tightening of labour rules regarding foreign manpower has resulted in a reduced inflow of foreign workers. Additionally, it has increased foreign worker levies as well as the
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qualifying salaries for S Pass holders. These forces and concerns have been steadily converging, and have recently been highlighted in the Population White Paper that was issued earlier this year. The Paper lays out the Government’s plans to maintain overall workforce growth at 1% to 2%, and achieve 2% to 3% productivity growth annually in order to enable the republic to attain an average GDP growth of 3% to 4% a year until 2020.
SBF’s position on population What is clear, however, is that a continued slide in workforce growth will have devastating consequences for many companies. The Singapore Business Federation (SBF) has been warning local businesses about this. In response to an invitation by the National Population and Talent Division to provide views and suggestions on Singapore’s
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17 and the economy. It recommended that the Singapore government seek consensus from the local business community, and lend it support in dealing with these critical issues. Although Singapore’s total population is projected to reach 6.9 million by 2030, local businesses will be impacted by slowing workforce growth from 2013 to 2020 – half the average growth rate of the last three decades. In its paper, SBF projected that workforce growth will decrease even further from 2020 to 2030, constraining businesses and limiting growth. This will have devastating consequences for many companies. “Some companies do not realise its impact but are seized with the prospect of an over-crowded island of 6.9 million people. We must explain to Singaporeans that many businesses will be in jeopardy if they cannot adjust to this demographic tsunami that will hit us,” said SBF CEO Ho Meng Kit. SBF explained that as the number of Singaporeans in professional, managerial, executive and technical (PMET) jobs increases, there will be a corresponding shortage of local non-PMETs. Many industries cannot run on p.18
Mr Ho Mng Kit, CEO of SBF
“Some companies do not realise the impact but are seized with the prospect of an over-crowded island of 6.9 million people… many businesses will be in jeopardy if they cannot adjust to this demographic tsunami that will hit us.”
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Crossing the talent bridge In view of the tight manpower market and the war for talents among companies, SPRING Singapore has introduced the SME Talent Programme (STP). The programme aims to channel fresh raw talent from Singapore’s polytechnics and Institutes of Technical Education (ITEs) into meeting industry manpower needs. The STP was developed to give SMEs a boost in attracting people who are dynamic, driven, and capable of leading and growing them towards business sustainability and excellence. The STP provides graduates with opportunities to work directly with SME bosses, pick up a wider range of skills and capabilities, and make a real difference to these businesses. The programme already has a head start towards its goal – six trade associations and business chambers are partnering six educational institutes, to provide the industry with a steady pool of skilled manpower. Under the STP, interested SMEs will be able to source Singaporean talents from local polytechnics and ITEs to meet both their short term and long term staffing needs. Over the next five years, SPRING Singapore will work with these 12 organisations to match 3,000 polytechnic and ITE students with local SMEs. Currently, the six participating trade associations and business chambers are: The Association of Small and Medium Enterprises; Print and Media Association, Singapore; Restaurant Association of Singapore; Singapore Chinese Chamber of Commerce and Industry; Singapore Manufacturing Federation; and the Textile and Fashion Federation (Singapore). These organisation are finely attuned to the needs of their respective sectors, and are thus in the best positions to help SMEs fulfill their talent requirements.
SPH - The Straits Times
population and related policies, the apex chamber shared its Position Paper on Population last December. The paper stresses the importance of achieving a sustainable pool of high-quality manpower to continue driving Singapore’s economic growth and competitiveness in the years ahead. SBF stated that a shrinking and ageing workforce against the backdrop of a stagnant Total Fertility Rate (TRF) will have serious implications for businesses
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BiZ Feature a staff comprising mainly PMETs. For example, the retail, food and beverage and hospitality industry will always need a large number of lower-skilled workers. Currently, these sectors are already unable to attract enough locals. Those that cannot adapt will close and jobs will be lost.
Significant labour shortages
SPH – The Straits Times
Keeping the Government’s macroeconomic targets in mind, just about every trade and industry organisation across Singapore is now feeling the pinch of the industry-wide manpower shortage. The Association of Certified Security Agencies (ACSA) told BiZQ that its members are facing a “huge shortage of workers”. The Singapore Contractors Association said that while construction demand will continue to remain strong in the coming years, its members may be unable to cope with more projects given the labour market’s current trends. The Restaurant Association of Singapore (RAS), which represents more than 1,300 restaurant outlets, said that the Government’s move to curb foreign worker supply will hurt both the sector’s business and Singapore’s reputation as a global city with a vibrant F&B sector . Manufacturers will also face challenges in attracting and retaining workers and the pace of transformation will be a major challenge and concern to manufacturers, the Singapore Manufacturing Federation said.
TECHNOLOGY UPGRADES CAN HELP BUSINESSES COPE Analysts say that many industries can benefit from effective technology upgrades, which will help raise efficiency, mitigate cost increases, and ease manpower crunches. Mr Don See, Director of Technology at Standard Chartered Bank’s global equity research unit, said: “If we look at the F&B space, investment in mobility applications, in devices can actually help to smooth out their process workflow. Taking orders via iPad, via smartphones will reduce the need for labour or person manning the cash registers for example, so the waiters can double up.”
Tackling labour shortages 1 PART-TIME POOLING PROGR A MME RUN BY SPRING SINGAPORE
An effective mechanism for addressing manpower shortages 120 companies have employed around 3,000 part-timers under the programme
Flexibility for staff, businesses
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Recent issues of BiZQ have discussed how businesses can employ automation, innovation and productivity improvements to overcome short term challenges. Recently, a number of innovative new business practices to address Singapore’s manpower shortages have come into the spotlight. One such solution, in the F&B sector, is the use of the Part-time Pool Programme (PTP). Run by
OUTSOURCING
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Reduces internal manpower bottlenecks, resulting in an increase in revenue If part-time pooling and outsourcing do not work out, companies may need to reconsider their supply-chain processes, training programmes, and human resource policies
SPRING Singapore, the programme currently employs only 3,300 staff. While it is still in its early days, it is already proving to be a powerful mechanism for addressing manpower shortages. One business which has jumped on board is the Jumbo Group of Restaurants, a home-grown seafood restaurant chain that has managed to transcend the shortage of local manpower by leveraging on the PTP. Essentially, the restaurant first maps its staffing needs onto an innovative and flexible working schedule. It then taps into the SPRING Singapore programme to find staff – mostly older workers who need some flexibility in managing their work and household schedules – who are able and willing to match their availabilities to Jumbo’s flexible schedule. As a result of this two-way, adaptable approach, Jumbo has been able to take on 150 PTP workers to meet the needs of its day-to-day restaurant operations. The group’s 150 PTP staff juggle their own schedules between contributing to their employer and managing their own interests. Echoing Jumbo’s sentiments, The Asian Kitchen’s general manager, Ms Angeline Ng, said that “employing part-timers eases our operational needs, especially during our peak periods. In turn, our productivity level increased as a result of the cost effectiveness.”
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Outsourcing strategies Outsourcing certain functions to third parties is another strategy being pursued by businesses. Examples of this include sourcing for food and beverage products from Malaysia, and outsourcing the manufacturing of furniture to strong players in Indonesia (see sidebar Building Up Creative Talent, on the experience of Singapore’s furniture makers). Scores of companies are finding out that outsourcing reduces their internal manpower bottlenecks significantly, resulting in an increase in revenue. One such company is Green N Fresh. To help food makers and restaurants deploy sufficient workers to wash and clean its required amounts of green vegetables every day, the company has a unit that cuts, washes and packs raw vegetables. Green N Fresh co-owner Mr Alvin Chua said that the company is able to deliver a tonne of fresh vegetables to his downstream customers daily, and that this is a significant jump from just 300kg a year ago. Another supplier, FreshDirect, which supplies 200kg of ready-toserve lettuce to eatery chain Salad Stop! daily, now has 250 customers, up from 200 a year ago. And Seah’s Spices, which sells pre-mixed spices, has about 200 customers now – 20% more than in 2011. Whether part-time pooling, outsourcing, or another yetto-be developed innovative business approach is put into play, challenges always bring more opportunities. If automation and outsourcing do not work out, however, companies may need to reconsider their supply chain processes, adopt in-house training programmes and tweak their human resource policies.
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BUILDING UP CREATIVE TALENT Barely 30 years ago, Singapore’s furniture industry was still operating out of dusty settlements such as Sungei Kadut, with low-skilled workers employed to churn out runof-the mill products. Fast forward to 2013 – the industry has radically transformed itself: It creates great products with good designs, uses advanced automation and manufacturing technology, and markets itself as a premier source of quality products. It achieved all this even though skilled talent had been on a decline. The Singapore Furniture Industries Council (SFIC) set up the SFIC Institute to spearhead training and development initiatives, including 10 government-approved and funded courses and an apprenticeship scheme, said an SFIC spokesperson. The aim is to build a pipeline of skilled designers for the industry. Successful graduates are issued the WSQ Advanced Certificate in Industrial Design. “Building on our core strengths and design capabilities, we are well on the way to achieve our goal of raising Singapore’s furniture industry’s global market share to 1.5% by 2015,” said SFIC Presidential Advisor Mr James Goh, who is also Executive Chairman at homegrown furniture company Lorenzo International. SFIC members have artfully developed and enhanced their design
Mr James Goh, SFIC Presidential Advisor and Executive Chairman, Lorenzo International
“Building on our core strengths and design capabilities, we are well on the way to achieve our goal of raising Singapore furniture industry’s global market share to 1.5% by 2015.” competencies within Singapore while exploring or setting up overseas manufacturing bases to collaborate and compete globally.
Partnership ventures SFIC and the ASEAN Furniture Industries Council recently completed a trade mission to Indonesia, which has a vast furniture manufacturing base and diverse natural resources. SFIC President Mr Ernie Koh said that “the increasing importance of design in the furniture market gives rise to collaborative opportunities for our members to network with the local manufacturers and businessmen... I believe that this significant trade initiative will pave the way for new ventures and partnerships, ensuring continuous progress for the furniture industry in the region.” SFIC will be working with government agencies to upgrade the skillsets of local workers so as to enhance their employability in a knowledge-driven society. Plans are already underway to explore collaborations with international industrial designers, trainers with industry experience, and government agencies to offer more relevant courses, seminars and workshops to nurture the local workforce.
SPH – The Straits Times
Over the past year, SPRING Singapore has seen 120 companies employ close to 3,000 part-timers under this programme.
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In BiZ With In BiZ With
Kelvin Cuff
Sustaining an Unbroken Lineage
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BizQ
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Mr Wong Fong Fui, Chairman and Group CEO of Boustead Singapore, tells BiZQ about the importance of mentoring the next generation.
For Mr Wong (in grey), good leadership means grooming and training future leaders who are capable of continuing the proud history of a company.
A
s a distinguished mentor in the SBF Mentorship Programme, Mr Wong Fong Fui, Chairman and Group CEO of Boustead Singapore, often shares his vast experience with SMEs on challenges regarding entrepreneurship, strategic business development, and leadership. Mr Wong’s openness in sharing about entrepreneurial leadership has often inspired attendees of SBF’s leadership events. He was recently a mentor to SBF members who attended a dialogue session on the myths and realities of sustaining an unbroken lineage in business. There, he spoke about why some businesses struggle for growth or even for survival, while others prosper and thrive. It is a common concern among many business leaders amid the increasing uncertainties and vagaries of the global economic situation.
How would you describe your passion and commitment in becoming a mentor? As a mentor in the SBF Mentorship Programme, the past two years have been a truly enlightening experience. I’ve had my fair share of managing companies in different industries through different cycles, as well as experiencing situations from the good to the bad, to the plain ugly. The longer one has been around, the more experiences one accumulates – lessons in business and in life. In this respect, it is good to see mentees – especially enterprising individuals in general – succeed. In sharing my experiences, my hope is that the mentees will understand where potential opportunities and pitfalls lie, gain a greater awareness of many issues, and thereby increase their probabilities of succeeding. I want to save them the trouble of having p.22
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BizQ
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In BiZ With the same painful experiences that I went through, which could have been totally avoided had a mentor been sharing his wisdom with me. The irony of being a mentor is that I too am constantly learning from my mentees, which means that sometimes the roles are reversed and the mentor becomes the mentee. In life, we all have experiences that we can share, whether we are old or young. In your opinion, what does it take to become a good mentor? Definitely, a listening ear (to listen to the challenges that mentees are facing) and the ability to analyse and learn from personal experiences, especially negative ones. A good mentor needs to be able to effectively communicate the lessons he’s learnt to his mentees. If a mentee is willing to keep an open mind, then he or she will probably gain the full benefits of mentorship. What I have been doing as a mentor in the SBF Mentorship Programme is what I have always been doing at the Boustead Group with my team of senior executives, ranging from MDs and CEOs to senior managers at the head office and subsidiary levels. Although we have a talented team of senior executives, a key part of the team’s development, grooming and training has happened through my imparting whatever I can to them in terms of my experience, so that the next generation of leaders can take something away with them and be ready to take over the reins when the time comes. How do you help family-run businesses understand the sustainability of an unbroken lineage? Although my two sons work within the Boustead Group, we have more than 700 employees globally, and 70% of our employees are engineering professionals or specialised geo-spatial consultants. In maintaining the longevity of a company, managers need
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“In maintaining the longevity of a company, managers need to understand that it is their duty to not only provide good leadership, but to also constantly evaluate, develop, groom and train future leaders who are capable of continuing the proud history of a company. ” to understand that it is their duty to not only provide good leadership, but to also constantly evaluate, develop, groom and train future leaders who are capable of continuing the proud history of a company. Nobody lives forever. Leaders who understand this will put extra effort into imparting their experiences and insights to future generations. Our founder, Mr Edward Boustead, understood this. He did not have a son to take over Boustead & Co, but he made sure that he groomed tried-and-tested mercantile assistants (the equivalent of today’s management trainees) to run the business. Good trainees would be promoted to partners, and the best among them would be made a senior or managing partner. It was a system that worked extremely well, and it enabled Mr Boustead to identify his successor, Mr Jasper Young, who took over from Mr Boustead after his death in 1888. I recently met a descendant of the Young family who was en route to his university internship in China. He had an interesting story to tell us about his third great grandfather,
Mr Jasper Young. Born to a poor Scottish family, he went to London at the age of 18 as he heard that Boustead & Co was offering jobs in the Far East. Poor as he was, he walked all the way from Scotland to London – over 700km. After many weeks, he finally reached London and met Mr Boustead. To his chagrin, he was told that he was too young to join the company! Undeterred, Mr Young then took on a tough job in a Liverpool foundry for three years. When he turned 22, he returned to Mr Boustead who was so impressed with his determination and strong character that he took Mr Young on board and posted him to Singapore. Some of Mr Young’s descendants eventually also became part of the Boustead Group family. Each generation mentored the next; succession was by merit. We continue to apply these valuable lessons today. How is corporate governance important in an organisation, especially when family members are running different parts of the business? As an SGX-listed company, we already follow high standards of corporate governance as part of our listing requirements. This is something that should be applied regardless of family members’ involvement in the business. Mr John Lim, a veteran business leader and immediate past Chairman of the Singapore Institute of Directors, sits on our Board of Directors and heads the Audit Committee. He has been a great help in ensuring that we maintain our high standards of corporate governance. Important decisions concerning the Boustead Group are collectively made by a group of senior executives. Board approval is required for any material decision to be made for the Group. In addition, we ensure that we have systems in place to uphold corporate governance, so as to protect our shareholders’ interests.
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20/09/2013 10:39
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Innovations
Boosting Energy Efficiency in SMEs Singapore Government sets aside S$17 million to help firms cut their utility expenses by 10%.
E
nergy efficiency has helped many companies reduce business costs by trimming their utility bills. Industry-related energy use, in particular, accounts for 40% of total electricity use and over 80% of gas use in Singapore. To help SMEs improve their energy efficiency, the Singapore Government has set aside S$17 million in an initiative to help SMEs assess, monitor and improve their energy performance. Launched this year, the SME Energy Efficiency Initiative will help some 300 SMEs achieve at least 10% savings in energy costs over the next three years. This initiative is expected to help SMEs lower operational costs and improve productivity by optimising energy consumption through improved energy efficiency.
SPH - Zaobao
Start with energy audit As the industry association for sustainable energy, the Sustainable Energy Association of Singapore (SEAS) will lead this initiative with support from SPRING Singapore, the National Environment Agency, and the Infocomm Development Authority of Singapore. SEAS will lead by being the onestop shop for information about the initiative, from advising firms on which energy service provider they
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Utilising key resources
THERE ARE 4 STEPS in the process to achieving lower energy costs: 1 ENERGY AUDIT 2 ENERGY MONITORING SYSTEM 3 ENERGY EFFICIENCY PROJECT IMPLEMENTATION 4 ENERGY EFFICIENCY THOUGHT LEADERSHIP
Through these steps, SMEs will be able to audit, manage, and implement energy efficient solutions using existing government grants, coupled with private sector project financing where required.
SMEs are being urged to undertake energy efficiency projects to optimise the use of key resources, mainly energy; this will ultimately impact business competitiveness and continued growth, which is in line with Singapore’s drive towards sustainable development. There are four steps in the process to achieve lower energy costs: Energy Audit, Energy Monitoring System, Energy Efficiency Project Implementation, and Energy Efficiency Thought Leadership. By following these steps, SMEs will be able to audit, manage, and implement energy efficient solutions using existing government grants, coupled with private sector project financing where required. The SME Energy Efficiency Initiative will also offer technical training to equip SMEs with the knowledge required to maintain and continually improve their energy usage while lowering operational costs. SMEs that intend to implement sustainable long-term energy efficiency solutions in their organisations can apply for existing government grants at each stage of the process. For example, SMEs
24/09/2013 18:51
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can get in touch with, to starting an energy audit or seeking advice about energy management solutions. The association will also provide training courses to help SMEs understand how best to apply energy efficiency in their businesses in order to improve productivity, maximise returns, and achieve energy efficiency in their manufacturing processeses. With the number of people increasing in resource-scarce Singapore, energy demands are rising – and so are energy prices. Currently, companies are highly dependent on fluctuating oil prices. But paired with renewable energy sources, energy efficiency is the first step to Singapore’s ability to fight high energy costs and sustainably meet this rising demand for energy.
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Energy-related expenses amount to a significant portion of SMEs’ operating costs. Energy accounts for about 13% of total operating costs in manufacturing SMEs, and this has been increasing – driven upwards by rising fuel prices. Improving energy efficiency will help SMEs address rising energy costs and lower overall business operating costs. The SME Energy Efficiency Initiative was conceptualised to help SMEs assess, monitor and improve their energy efficiency. It comprises four key areas of support, and allows SMEs to tap on existing funding schemes administered by SPRING and IDA. This simplifies the application process for SMEs, and encourages them to take action. A total of S$17 million has been set aside to help some 300 SMEs achieve at least 10% savings in energy costs over the next three years.
can use SPRING’s Innovation and Capability Voucher (ICV) to engage one of 11 pre-qualified Energy Services Companies (ESCOs) to conduct an audit of their current energy usage and identify areas to improve their energy efficiency. For energy monitoring, funding is available to offset the costs of installing systems for long-term continuous self-monitoring of energy consumption. Funding is also available to SMEs embarking on larger energy efficiency projects involving process optimisation, workflow redesign, or the installation of energy-efficient equipment or technologies. Finally, the initiative also supports energy efficiency thought leadership, via the development of a pilot training programme with McKinsey Capability Center: Green Campus. It will drive the sustainability of energy efficiency initiatives in relevant SMEs.
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How SMEs can benefit
SMEs can tap on the following four areas of support to improve energy efficiency: AREA
OBJECTIVE
DESCRIPTION
Energy Audit Innovation and Capability Voucher (ICV)*
To help SMEs conduct simplified health checks on the energy efficiency of their operations
SMEs can engage any of the 11 prequalified Energy Services Companies (ESCOs) to conduct an energy audit of their operations. The energy audit scope entails: ● Gathering facility-wide energy usage, deriving performance indicators, and comparing against benchmarks ● Proposing broad conclusions and recommendations with respect to operational practices, energy efficiency, and stating the capital expenditure, annual cost/kilowatt hour (kWh) savings, payback, etc. ● Making recommendations such as improvements to facility design, operations and management, as well as energy efficiency
Energy Monitoring System (EMS) iSPRINT*
To allow SMEs to monitor and take control of their energy consumption
SMEs can customise and install an EMS to carry out real-time monitoring of their operations’ energy consumption, set baselines and performance indicators, and identify any anomalies. SMEs can embark on projects that involve meaningful improvements in the energy efficiency of their operations, resulting in significant energy savings.
Energy Efficiency Project Implementation Capability Development Grant (CDG)*
Energy Efficiency Thought Leadership Capability Development Grant (CDG)*
* Funding scheme
To help SMEs embark on energy efficiency improvement projects
To drive the sustainability of energy efficiency initiatives in the organisation
Examples of energy efficiency projects include, but are not limited to, the following: ● Installation and use of energy efficient equipment or technologies with a proven track record in effecting energy savings in an industrial facility ● Implementation of projects involving process or workflow redesign ● Energy efficient technology research and development A pilot training programme for energy efficiency will be conducted in collaboration with the McKinsey Capability Center: Green Campus. The Green Campus Learn and Apply Programme for SMEs consists of four days of on-site training and 12 review sessions. The programme is spread over six months to allow SMEs to learn and then apply what they have learnt in their operations. Throughout the process, they will be guided by McKinsey’s Green Campus faculty members.
SPH - Zaobao
SME Energy Efficiency Initiative
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Inside SBF
Gaining Traction for SBF Members Apex chamber announces new office at SBF Center.
Breaking new ground at SBF ●
Celebrated 10th anniversary with a series of signature events for members ● More than 70,000 participants across 470 events in 2012 ● Strong business voice, locally and internationally ● 8 out of 17 Budget 2012 recommendations by SBF-led SME
Committee (SMEC) accepted by Government ● Strong representation of Singapore’s business interests at ASEAN and APEC platforms ● Received a record 117 incoming delegations ● Broke new ground with missions to Myanmar and frontier markets in Africa
to grow,” said SBF Chairman Tony Chew. Some 200 representatives from member companies attended the AGM held on June 27.
Mr Tony Chew, SBF Chairman
Alvinn Lim
10th anniversary
More than 70,000 members participated in 470 events organised by the Singapore Business Federation (SBF) last year. At its 11th Annual General Meeting (AGM), SBF reported that both its local activities and international forays have been wellreceived by its members. SBF led 21 overseas business missions in 2012, with a focus on Myanmar and Africa. It also received 117 incoming foreign delegations comprising government and business representatives keen to explore trade and investment opportunities. “With strong support
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from our members, the Federation is in an important position to advocate for them as the Singapore economy restructures. The good participation in our activities shows that members value them and that we have provided opportunities for them
Forum, and the Singapore Sustainability Awards. As part of the 10th anniversary celebrations, SBF also firmed up the strategic plan outlining its aim to become a more issue-centric organisation. This means that the apex chamber will focus on building stronger engagement between the business community and the Singapore Government. In addition, it aims to be
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SBF celebrated its 10th anniversary last year with a series of signature events, concluding with a gala dinner on October 10 with President Tony Tan Keng Yam as the guest of honour. Other notable events included a business dialogue with Emeritus Senior Minister Goh Chok Tong, a briefing on the global economic outlook by executives from Temasek Holdings, the Global Entrepolis @ Singapore (GES) Business Leaders’ Summit, the Russia-Singapore Business
“SBF has gained more traction with its members, government agencies, local trade associations and chambers, and the international business community.”
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Permanent premises for SBF located along Robinson Road and Cecil Street Better and more convenient facilities for members Opportunities for networking, build capacity, share knowledge Levels 6 to 8 for SBF and SBF Foundation Expected to be ready in 2017
attention from the business community, Government and media. On the international front, SBF has long represented the interests of the Singapore business community at ASEAN and Asia-Pacific Economic Cooperation (APEC) Business Advisory Council meetings. Over the years, it has made several positive contributions to the ASEAN Economic Community 2015 initiative and APEC’s efforts towards regional economic integration for a Free Trade Area of the Asia-Pacific.
Emerging markets a credible voice of business and a value creator, helping businesses build their capabilities and access to international markets.
Voice of the community The SBF-led SME Committee (SMEC) found early traction in its advocateship when eight of its 17 recommendations were accepted in Budget 2012. SMEC is a key channel between SMEs and policymakers, helping to address issues affecting small businesses. On the issue of foreign manpower policy, which affects many SMEs, SMEC organised a dialogue between its members and Acting Minister for Manpower Tan Chuan-Jin. SBF also issued a Position Paper on Population which outlined its views and suggestions on Singapore’s population and related policies. This position drew widespread
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As a result of slowing demand from key export markets, SBF led
exploratory visits to emerging markets in Asia, Africa, Latin America, as well as central and eastern Europe. It broke new ground by mounting three missions to Myanmar and six missions to 11 African economies last year. SBF also hosted visits from high-level delegations, including those led by Mr Anibal Cavaco Silvathe, President of Portugal, Mr Jose Maria Neves, Prime Minister of Cape Verde, and Mr Igor Shuvalov, First Deputy Prime Minister of Russia.
SBF Center SBF CEO Ho Meng Kit also announced that the Federation will have a permanent home at the SBF Center from 2017, in
Far East Organisation’s new commercial development along Robinson Road. SBF Chairman Tony Chew said: “This new office will serve as a hub for SBF members, local and international trade associations and chambers, and the wider business community. It will provide businesses with opportunities for networking, capacity building, and knowledge sharing in a conducive environment.” In thanking Mr Philip Ng, CEO of Far East Organisation and SBF council member, Mr Chew said: “SBF is delighted that Far East Organisation has decided to name the development SBF Center at no cost to SBF.”
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Change in Membership Exemption Rule More than 6,000 members do not need to reapply. More than 6,000 member companies will benefit from a change of rule for Singapore Business Federation’s (SBF) membership exemption this year. SBF recommended this change to the Ministry of Trade & Industry based on feedback from members. Previously, members had to apply for membership subscription exemptions annually if they meet the requirement of not having any employed staff in the previous year. The Exemption Order has been revised in July to provide Continuous Exemptions
for companies that have three consecutive years of exemptions (including 2013). With this revision, about 6,000 companies will not need to apply for annual exemption from 2014. However, these companies would need to inform SBF should they employ staff, as their Continuous Exemption status would lapse. Commenting on this rule change, SBF CEO Ho Meng Kit said that this revision is a win-win situation for both SBF’s members and the Secretariat.
“It makes it easier for affected companies as they would no longer need to file exemptions annually. This will also reduce the volume of work handled by our Membership Services Department,” said Mr Ho. He added that more changes will be implemented in the future to make membership services more convenient and accessible to SBF members. Mr Ho also urged companies who are exempted to continue to keep in touch with SBF’s activities and programmes through its website.
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SPH - The Straits Times
SBF’S NEW HOME AT SBF CENTER
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Inside SBF
Myanmar’s Trade Potential
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Seminar on the country’s progress and promise. The Singapore Business Federation (SBF) recently organised a country-centric seminar (Myanmar: Progress, Potential and Promise) to update members on important investment regulation, market entry and tax considerations for doing business in Myanmar. Myanmar’s real GDP growth is projected to accelerate to 5.4% in 2013/14, and is expected to strengthen further from 2014/15 to 2017/18. In the early part of the forecast period, expansion will be underpinned by large projects funded by investors from China, South Korea and Thailand, in a number of sectors such as power, petroleum, and infrastructure. Private consumption growth is expected to remain steady at around 4% a year, and will be an important contributor to economic expansion. Improved access to capital and foreign markets is expected to spur activity in other parts of the economy, such as tourism, textile manufacturing, agriculture, and fisheries. The construction industry is also expected to contribute to GDP growth as the number of infrastructure projects rises on the back of
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MYANM AR’S GDP
Growth in 2013/14 is projected to accelerate to
5.4% Expected to strengthen further in 2014 to 2018
private sector investments and aid inflows from multinational donors. The number of foreign firms granted investment approval rose to 62 from April to December 2012, well above the total for the three previous fiscal years. A sharp increase in approvals for manufacturing indicated a welcome diversification from the past focus on energy and mining. The Myanmar government is likely to continue to pursue a policy of re-engagement with the West.
Venturing into Africa SBF led a 15-member delegation to Mozambique and Angola in May. SBF led a 15-member delegation on an eightday business mission to explore trade and investment opportunities in Mozambique and Angola in May. Representatives from the Ministry of Trade and Industry and IE Singapore were also part of the delegation. Organised by the SBF Africa Business Group (AfBG), the business delegation marked SBF’s second and third visits to Mozambique and Angola as part of the Federation’s ongoing efforts to explore business opportunities in sub-Saharan Africa’s lusophone (Portuguesespeaking) countries. The delegates were from companies representing oil and gas services, oil and gas equipment, luxury goods, consumer electronics, food and beverage products, construction materials, automotive parts, shipping and logistics, urban planning, land transport and defense, and water technology industries.
Growth opportunities According to the World Bank, both these economies offer great promise and growth opportunities, with annual GDP growth rates over the last decade averaging out at 7% for Mozambique and 11% for Angola. Singapore’s total trade with Mozambique and Angola in 2012 stood at S$179 million and S$493 million respectively. Mozambique is one of the most consistent economic performers on the African continent, buoyed by coal and natural gas commodity exports. The ports of Maputo, Beira and Nacala also serve as trans-shipment points for goods entering the central African countries like Zimbabwe, Zambia, and the Democratic Republic of Congo. Angola is the third largest economy in terms of GDP (after South Africa and Nigeria) and the second largest producer of oil (after
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ANNUAL GDP GROWTH
Growth rate over the last decade averaging
Tanzania, Singapore sign MOUs Increase in trade collaboration and infrastructure development projects.
7% 11%
for Mozambique;
for Angola.
Nigeria) in sub-Saharan Africa. The oil and gas sector still dominates its economy, and as such, the government is keen to promote other industries, chiefly mining, agriculture, and tourism. During the mission, our delegates had the opportunity to meet with representatives from public and private sector organisations from both countries, including Mozambique’s Investment Promotion Centre, Angola National Private Investment Agency, and legal, accounting, tax and financial institutions. Business matching sessions were also organised with the local business communities, facilitated by the Mozambique Chamber of Commerce and Chamber of Commerce and Industry Angola.
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SBF also organised a business mission to Ghana, Ivory Coast and Cape Verde in July. It visited Accra (capital of Ghana), Abidjan (economic capital of the Ivory Coast) and Praia (capital of Cape Verde). The trip was organised in conjunction with a Singapore delegation.
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Four Memoranda of Understanding (MOUs) were signed between Singapore and Tanzania to increase collaboration in trade, infrastructure and energy development, marine and port services between both countries. At the recent TanzaniaSingapore Business Forum held in June, the signings were witnessed by Tanzania President Jakaya Kikwete and his 70-strong delegation of government and business representatives. Tanzania government officials and institution leaders briefed 200 forum attendees on economic developments, investment laws and incentives and available opportunities and projects. SBF Vice-chairman Teo Siong Seng observed: “As Tanzania shifts from an agriculture-based to an industry- and energy-based economy, opportunities for Singapore companies abound.” He explained: “Given our developmental expertise and complementary
strengths, particularly in port services, logistics, housing, infrastructure planning, and oil and gas services, there are many ways in which we can contribute to mutually beneficial growth.” One of the MOUs signed was between SBF and its counterpart, the Tanzania Private Sector Foundation. The agreement aims to enhance trade and investment between the business communities of both sides through the facilitation of direct exchange of information, trade delegations, and the promotion of business opportunities. The three other MOUs comprised: ● A joint venture between Singapore container ship operator, Pacific International Lines, service provider Swire Pacific Offshore, and Tanzania conglomerate MAC Group, to provide offshore oil and gas logistics; ● A project for energy development between Singapore private equity holding group, Intrasia
Capital Pte Ltd, and Tanzania’s National Development Corporation (NDC); ● A framework to explore cooperation and collaboration between Intrasia and Tanzania’s NDC in the areas of port development, management and operations.
Rising bilateral trade Tanzania, with an average annual GDP growth of 7.2%, is ranked 5th among the world’s 10 fastest growing economies by the International Monetary Fund (IMF). It is also the leading East African foreign direct investment (FDI) destination, and one of sub-Saharan Africa’s top FDI destinations, attracting US$1.1 billion (S$1.4 billion) between June 2011 and June 2012. Singapore and Tanzania first established diplomatic relations in 1980. While bilateral trade stood at S$126.5 million in 2012, this is expected to increase with rising trade confidence.
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Inside SBF
Business mission to Russia Jun 17, 2013
Engaging the Business Community
SBF and IE Singapore led a joint business mission to Russia to explore collaborative partnerships. Held in conjunction with the 4th Russia-Singapore Inter-Governmental Commission (IGC), the mission was co-chaired by Singapore Deputy Prime Minister Tharman Shanmugaratnam and First Deputy Prime Minister of Russia Igor Shuvalov. This year, the IGC focused on trade and investment, information and communications.
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. Singapore-Kyushu (Japan) Business Forum Jul 19, 2013
Dialogue with DPM Tharman Shanmugaratnam – Eminent Leaders’ Series Jul 29, 2013 This dialogue session between Deputy Prime Minister Tharman Shanmugaratnam and SBF members centred on the global economic outlook and its impact on Singapore. DPM Tharman urged the 180 business leaders present to press on with productivity improvements and economic restructuring. SBF council member Piyush Gupta moderated the dialogue.
SBF inked a MOU with Kyushu Economic Federation (Kyukeiren) to increase trade and investment, and boost relations between Singapore and Japan’s Kyushu region. Over 100 businessmen attended the forum. The event also commemorated the 40th anniversary of ASEAN-Japan relations.
Business mission to Ghana and Ivory Coast Jul 22, 2013
ASEAN Business Awards 2013 Aug 20, 2013
Senior Minister of State for Trade and Industry Lee Yi Shyan led a business mission to Ghana and Ivory Coast with SBF and IE Singapore. The delegation learned about Africa’s market dynamics, economic landscape, and opportunities from leading government institutions and businesses.
Seven Singapore companies clinched eight out of the 21 ASEAN Business Awards presented at the ASEAN Business & Investment Summit held in Brunei. The awards honour outstanding ASEAN large businesses, SMEs and young entrepreneurs. SBF facilitated the applications from 18 Singapore companies and led a delegation of nine companies to participate in the award ceremony.
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International Markets
China’s Urban Needs Strong demand for urbanised and consumer services.
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any Singapore companies are eager to play a role in China’s ongoing urbanisation, and with such demand for various consumer services, many industry experts say that strong growth lies in China’s services trade. China’s economy is proving resilient in the face of a volatile global economy. The World Bank expects its GDP to expand 8.4% this year. The strength of the Chinese economy lies in its stable fundamentals: huge consumption growth potential and sustained urbanisation. Last year, Singapore was China’s 13th-largest trading partner, as well as its third-biggest source of foreign direct investment after Hong Kong and Japan.
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Singapore companies in China are also confident about the Chinese economy; it has remained a top investment destination for them in recent years.
Largest services export market China is currently Singapore’s fifth largest services export destination. In 2012, Singapore companies invested a total of US$6.33 billion (S$8.05 billion) into China, a 3.4% increase year-on-year, making Singapore China’s third largest investor. To date, Singapore’s actual cumulative foreign direct investment (FDI) into China is US$59.3 billion. Despite the recent announcement of China’s expected economic slowdown, Singapore companies remain upbeat
about the country’s long-term prospects. Mr Lam Joon Khoi, Secretary-General of the Singapore Manufacturing Federation, said foreign investors should be encouraged by the Chinese government’s emphasis on structural and financial reforms. He recently told the Singapore media that the SMF “believes the Chinese economy will continue to have good prospects for Singapore businesses because of its large local demand, rapid rate of development, and the growing affluence of its population.” Echoing similar sentiments, Mr Poh Choon Ann, Singapore Business Federation (SBF) Business Delegation Leader and Vice Chairman,
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam
“China’s rapid urbanisation provides significant opportunities for Singapore companies. They can also provide professional services, and partner Chinese companies who are looking to grow in regional markets.” SBF China Business Group, observed: “China is entering a new phase of economic development. Rapid urbanisation and a growing middle-class have spurred a greater demand for quality services. “Singapore companies have a proven track record in China, and are wellpositioned to add value and contribute to the growth of trade in services, as the sector is liberalised.”
Significant opportunities In a recent business mission to Beijing, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said that
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there are opportunities for Singapore’s professional services firms as Chinese companies go global. He explained: “China’s rapid urbanisation provides significant opportunities for Singapore companies. They can also provide professional services, and partner Chinese companies who are looking to grow in regional markets.” Speaking at the second China International Fair for Trade in Services (CIFTIS), Mr Tharman said that both countries have already made significant progress in building the foundations for the crossborder flow of services. One example of such international effort is CIFTIS, China’s only State Council-endorsed, national-level and comprehensive trade in services fair. This is
LARGEST SERVICES CHINA IS CURRENTLY SINGAPORE’S FIFTH LARGEST SERVICES EXPORT DESTINATION.
a significant platform for service companies from various cities to exchange ideas and forge partnerships. The event brings Chinese and Singapore companies together in a significant way. While Singapore is a small country, it has several niche areas of expertise that could be relevant to other countries, he said. “Singapore companies, with familiarity of many overseas markets and the advantage of a multilingual workforce, are ready to work with Chinese companies to bridge ‘last-mile’ gaps in new business environments when they invest overseas,” Mr Tharman observed. Several Singapore law firms and business advisory companies are already present in China.
companies may re-shore certain manufacturing activities or bring them closer to final consumer markets in the developed world. “It is therefore important for us to explore every opportunity to expand intra-Asian trade and investment in goods and services, and thereby open up new opportunities for growth,” he said. “I am also optimistic that Singapore and China will continue to work closely to facilitate freer flow of services trade, through the China-Singapore Free Trade Agreement (FTA) and the ASEAN-China FTA. In addition, we look forward to establishing new opportunities through our negotiations of the recently launched Regional Comprehensive Economic Partnership.”
Regional activities
SBF led Singapore delegation
Mr Tharman also made the point that regional initiatives are especially important in the post-crisis global environment. For example, international
SBF led a 150-strong Singapore delegation to CIFTIS in May; the companies were from diverse industries such
as urban solutions, logistics, and education and skills training. This year, 27 Singapore companies and business associations showcased their expertise in services at the Singapore Pavilion at the Beijing event. Participants included Hyflux, Ascendas, DBS Bank, YCH Group, Rajah & Tann, RSM Chio Lim, Nanyang Polytechnic, NTUC LearningHub and Sino-Singapore Guangzhou Knowledge City. With the theme Singapore – Modern Services, Liveable and Sustainable Cities, the Pavilion focused on five modern services sectors: logistics and information communication technology (ICT) services, urban solutions and environmental services, professional services, educational services and skills training, and business chambers. One other event highlight was the Singapore Day Seminar, which was aimed at promoting p.34
In 2012, Singapore companies invested a total of
S$8.05 billion
Singapore’s cumulative actual foreign direct investments (FDI) into China is
S$75.42 billion
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in China, a 3.4% increase year-on-year, making Singapore China’s third largest investor.
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International Markets Singapore’s strengths in the professional services – especially for Chinese companies looking to expand into the region. More than 140 representatives from both Chinese and Singapore companies attended the seminar, titled Singapore: Your Partner For Internationalisation. It was co-organised by SBF and the Ministry of Trade and Industry, and supported by IE Singapore. The seminar, which helped foreign companies understand how to leverage Singapore’s professional services to internationalise, was represented by successful local firms in the financial, legal and audit industry. “It is an important event and we were looking forward to showcasing Singapore’s capability in services,” said Mr Poh.
SPH - The Straits Times
Professional services Minister of State for Trade and Industry Teo Ser Luck, who attended the Singapore Day Seminar, said: “Singapore’s services companies are able to provide professional, practical and costeffective services, as well as solutions in areas such as financing, legal, accounting and audit, and intellectual property rights. “Chinese companies looking to internationalise can also rely on the accumulated expertise and experience that Singapore companies have in the Singapore and ASEAN markets.” There are several examples of how Singapore professional
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services firms – from legal advice to finance and accounting – are making their mark in helping Chinese firms expand rapidly abroad. One Chinese group wanted to internationalise its operations and decided to set up companies in 10 countries in one move. It engaged local business advisory firm, SBA Stone Forest, to help it do this. An SBA Stone Forest spokesperson explained how the company connected the client with its international network of firms to help them understand the taxation and laws of doing business in different countries. It also helped the Chinese company to set up the 10 overseas units, as well as a firm in Singapore to manage these units. Rajah and Tann was one of the legal companies from Singapore, highlighted by Minister Teo, that is playing a prominent role in facilitating companies’ financing needs. The legal firm was recently involved in raising S$190 million of bank loans to one of China’s largest steel companies for its overseas operations. Mr Chia Kim Huat, a Rajah and Tann partner, said that many Chinese firms now use Hong Kong as their overseas gateway. However, they can also take advantage of the benefits offered by Singapore’s numerous free trade agreements with different countries, if they set up investment holding companies in Singapore as a springboard.
SBF leads members on mission trips The Singapore Business Federation (SBF) led several business missions to China in April and May this year. The aims of the trips were to facilitate networking between Singapore and Chinese companies, and to encourage the latter to access both Singapore and the regional markets through Singapore. Here, we outline a few recent missions to Guizhou, Chongqing and Beijing.
delegation and SBF both believe that bilateral cooperation will grow significantly, especially now that flights between Singapore and Guiyang have become available.
Guizhou At the invitation of the Guizhou government, the Guizhou business mission in April was led by China Business Group (CBG) Vice Chairman Mr Poh Choon Ann. The Singapore delegation met with several provincial and county government officials, and visited potential investment and development areas. The trip programme included visits to Congjiang, Guiyang and Kaili. The Guizhou
Chongqing SBF’s new initiative, AccessAsia@Singapore, partnered the Chongqing Federation of Industry & Commerce to organise a seminar – Accessing Global Markets and Asia Through Singapore – in Chongqing in May. SBF conducted the seminar with AccessAsia partners United Overseas Bank, Wong Partnership, and Mazars. Presentations were made to about 400
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Chinese companies on how they can leverage on Singapore as a strategic gateway to Asia and global markets. Singapore’s Economic Development Board (EDB) and the Singapore Exchange presented an overview of the Singapore economy, and Singapore’s strengths as a financial hub, respectively. The seminar was timely, as an increasing number of Chongqing companies are looking for a business hub from which to expand into Asia and global markets.
Beijing AccessAsia@Singapore recently participated in the 2nd China (Beijing) International Fair for Trade in Services (CIFTIS).
In collaboration with SBF Global Business Division (North Asia) and IE Singapore, AccessAsia organised a seminar titled Singapore: Your Partner For Internationalisation – Seminar On Singapore Professional Services. The seminar featured two facilitated panel discussions on Singapore’s
position as a financial services hub for Chinese companies, and using Singapore to manage risks in overseas expansion (taxation, legal and intellectual property). AccessAsia invited partners from United Overseas Bank, DBS Bank, Oversea-Chinese Banking Corporation,
WongPartnership, Rodyk & Davidson, Rajah & Tann, and RSM Chio Lim as panelists during the event. The Business Matching platform also provided opportunities for Chinese companies to interact with AccessAsia partners and Singapore companies.
CIFTIS is supported by the World Trade Organisation, the United Nations Conference on Trade and Development, and the Organisation for Economic Cooperation and Development. The inaugural CIFTIS, held in 2012, received more than 100,000 trade visitors from 83 countries and regions around the world.
Singapore participated in the inaugural CIFTIS last year. This year, CIFTIS 2013 saw participation from heads of state of various countries, ministers, ambassadors to China, supporting chambers of commerce, Chinese official representatives, international businessmen, and Chinese and overseas trade visitors.
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China International Fair for Trade in Services
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exchange ideas and forge partnerships. The exhibition currently covers 12 services sectors, including business services, educational services, environmental services and financial services.
SPH - The Straits Times
The China International Fair for Trade in Services (CIFTIS) is held annually at the China National Convention Centre in Beijing. It serves as a platform for global services companies to
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International Markets
10th China-ASEAN Expo CHINA’S BUSINESS
The 10th China-ASEAN Expo 2013 (CAEXPO) was held in Nanning, Guangxi Province, China, in September. The CAEXPO, co-organised annually since 2004, is an effective platform that promotes cooperation between China and ASEAN member countries in the areas of trade, investment and tourism. This year, CAEXPO’s main theme was Regional Cooperation And Development: New Opportunities, New Driving Forces And New Stages. The Singapore Business Federation (SBF) was appointed by the Ministry of Trade and Industry – for the eighth consecutive year – to organise and lead the Singapore National Pavilion. The pavilion profiled Singapore’s capabilities in the areas of urban solution services, education services, professional services, logistics, and other services. It will also feature Singapore-China economic and business cooperation. The Singapore National Pavilion also boasted a
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feature wall highlighting the success stories and accomplishments of successful CAEXPO participants from the past decade. Industries targeted this year include: ● Urbanisation and Environment ● Education and skills training ● Professional services ● Tourism and hospitality. The Expo featured an ASEAN-China forum, which offered a key platform for cooperation between the attending leaders. This edition of the CAEXPO took on a more significant meaning apart from marking the event’s first decade in the exposition scene. It was also the 10th anniversary of the establishment of the China-ASEAN strategic partnership. In 2003, China signed the Treaty of Amity And Cooperation in South-east Asia to ensure peaceful relations with Southeast Asian nations, and began implementing a comprehensive strategic partnership with the regional bloc. According to figures provided by the Chinese Ministry of Commerce (MOFCOM), bilateral trade volume between China and ASEAN in 2012 was at US$400.1 billion, an increase from US$362.9 billion (S$457.1 billion) in 2011. For more information, refer to caexpo.org.
CLIMATE SURVEY
Singapore companies remain committed to China despite rising costs, according to IE Singapore’s inaugural China Business Climate Survey which was conducted in late 2012. This is largely due to the fact that their motivation for establishing a presence in China included the market opportunities it presented and its strong growing economy. Cost factors were important and, even though Singapore companies’ margins
may be shrinking, these companies are staying put in China. This reflects their confidence in the future of the Chinese market, and the fact that most plan to be in China for the long haul. The findings, which were released in March, are based on a survey with 402 senior executives of Singapore companies with a presence in China, as well as an in-depth focus group with selected participants. This survey was conducted from October to December 2012.
Survey Analysis Which of the following are reasons why your company initially decided to start doing business in China? Total number surveyed =402; Answered “none of the above” =2% Market opportunities
80%
Growing economy
71%
Customers/Clients are doing business or located there
53%
Lower costs
48%
Competitive labour market Competitors doing business or located there Suppliers doing business or located there Support from the Singaporean Government
42% 34% 33% 25%
Market forces were the key driver for approximately four-fifths of Singapore companies in deciding to establish a presence in China. Cost factors (such as the competitive labour market and lower costs in general) were only taken into account by half of the companies surveyed.
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Hyflux is dedicated to delivering solutions for a sustainable and secure water future. With a fully-integrated platform and proven membrane technologies in water and process streams, Hyflux is the partner of choice for cost-effective and environmentally responsible solutions in seawater desalination, water recycling, wastewater treatment and potable water treatment. Over the years, Hyflux has amassed in-depth experience in designing, developing, testing and commissioning, operating and maintaining industrial and municipal water treatment plants of various sizes and functions. Through its projects across the world, Hyflux has left an indelible imprint on the communities that it serves, driven by its commitment to produce water that is clean, safe and affordable. HYFLUX LTD 80 Bendemeer Road, Hyflux Innovation Centre, Singapore 339949 Tel: 65 6214 0777 Fax: 65 6214 1211 Website: www.hyflux.com
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International Markets
Water Firms Expand into China Singapore companies firm up industrial park projects.
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hina is facing a growing need for water and effective water solutions to support its development. In industrial sites where authorities are increasingly focusing on sustainable development, there is an increasing demand for solutions for the effective treatment of complex industrial wastewater and water reclamation. Many water companies in Singapore have their sights set on China, as stricter discharge limits imposed by the Chinese government and water shortages in parts of the country are pushing up demand for watertreatment services in the country. Since 2006,
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the number of companies in Singapore’s water sector has doubled to about 100, and S$470 million has been committed to fund water research, government data shows. Over the same period, Singaporebased water companies secured more than 100 international projects worth close to S$9 billion. “Singapore should be one of the world’s dominant players in water. It should be the Silicon Valley of water,” said Mr Jim Rogers, co-founder of the Quantum Fund.
Hyflux eyes Yunnan province In April, Hyflux Ltd announced that its subsidiary, Hyflux
Investment Consultancy and Management Service (Tianjin) Co Ltd, had signed two memoranda of understanding (MOUs) for water projects in Yunnan province. The company is collaborating with the prefectural governments of Chuxiong and Qujing to develop water and environmental projects in the two cities, including Chuxiong Development Zone, Luliang Industrial Park and local townships. The projects covered under the MOUs include the development of water recycling, wastewater treatment plants, potable water treatment plants, as well as related infrastructure projects. The investment value for each project in both provinces is estimated to be about RMB 1.2 billion (S$467 million) and less than RMB 2 billion respectively.
Sembcorp integrates water solutions Sembcorp Industries Ltd’s S$21.5 million industrial wastewater treatment plant in Zhangjiagang, Jiangsu province, was the first in China to be granted the licence to treat high concentration industrial biodegradable wastewater directly from source, without any pre-treatment required by customers. The water reclamation plant is capable of producing 20,000 cubic metres per day of industrial water and up to 4,000 cubic metres per day of demineralised water. Sembcorp’s solution was to treat multiple
Mr Jim Rogers, co-founder of the Quantum Fund
“Singapore should be one of the world’s dominant players in water. It should be the Silicon Valley of water.” streams of complex industrial wastewater to meet strict environmental standards and further integrate wastewater treatment, water reclamation, and water supply into a “closed loop”. The company’s total water management model reduces liquid discharge and conserves precious water resources. It represents a significant advancement for the water management industry in China. With this facility, Sembcorp’s total investment in the Zhangjiagang Free Trade Port Zone amounts to almost S$65 million. It now manages the entire water cycle of the free trade port zone, providing total water and wastewater management solutions to its customers. For this innovative model, Sembcorp’s Zhangjiagang facilities were selected by the governments of Singapore and China as showcases for bilateral cooperation in water management.
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SME Resources
TAP-ping into Technology A*STAR scheme to help SMEs raise productivity. A new S$51 million programme - the Technology Adoption Programme (TAP) – is helping companies gain access to new technology. The scheme will help small and medium enterprises raise productivity by an average of 20% over the next three years. This will be done through customisation, technology transfers, training, and deployment of various technologies including ICT, RFID and robotics. The TAP initiative, managed by the Agency for Science, Technology and Research (A*Star), was unveiled during the Budget debate. The aim of this scheme is to aid more than 1,000 technology adoptions by SMEs. The programme, which was launched this year, connects companies to appropriate vendors of new technology, operating in both the public and private sectors. Intermediaries with industry experience will be used to link the firms with these vendors. The programme will be piloted in six sectors: construction, food
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TAP SCHEME – The Technology Adoption Programme The Technology Adoption Programme (TAP) involves the following procedures: Companies will receive advice from a team of experienced technology intermediaries in areas or processes where productivity could be improved via technology solutions. Companies will then be matched by these technology intermediaries to the solution providers (technology implementers), who will develop
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manufacturing, precision engineering, marine, aerospace, and retail. Companies in these six sectors can use the Productivity and Innovation Credit (PIC) Scheme to offset the costs of their adopting these new technologies. The programme will be extended to other sectors after the pilot. In 2011, more than 500 SMEs claimed PIC for research & development (R&D) activities that they had undertaken, up from about 430 companies in 2010. The total PIC expenditure by SMEs in 2011 was about S$183 million. Under a part of the programme known as T-Up, researchers
and implement suitable solutions or technology for them. Training will also be provided as part of the technology transfer process. If a suitable solution is not available, researchers within A*STAR Research Institutes, universities and polytechnics will help to identify and translate novel technological platforms to deploymentready ones which companies can adopt.
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For more information, email A-STAR_TAP@a-star.edu.sg with your company’s name, industry sector, contact details, productivity challenges to address, and other queries.
Companies ( tech needs)
PCs, SME Centres & COIs
INTERMEDIARIES
Public sector
Private sector
TECH IMPLEMENTERS
TECH IMPLEMENTERS
(eg. COIs@Polys, A*STAR RIs)
(eg. System Integrators)
TECH DEVELOPERS
(RIs, Universities, Polys, CREATE)
from A*Star are seconded to SMEs. This seems to be producing healthy results. A recent A*Star survey of companies participating in T-Up showed that 79%
of respondents launched new products between 2009 and last year. To date, 413 researchers have been seconded to more than 240 companies under the scheme.
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SME Resources SME Workshops Employment of Foreign Workers – Legal Obligations October 25 SBF Seminar Room, Keppel Towers
It is essential for business owners, managers and HR practitioners to understand the legal implications in employing foreign workers, and be compliant with the Employment of Foreign Manpower Act (EFMA). This workshop aims to introduce HR managers to the dos and don’ts of employing foreign workers. Case studies and exercises will be discussed during the workshop to help participants acquire the right skills and knowledge. www.sbf.org.sg
Enterprise Risk Champions Training Course
The programme provides an in-depth understanding of the business, social and regulatory contexts of key risk management issues, and the challenges organisations face in designing and implementing risk management policies. www.sbf.org.sg
Tax Matters: A Matter of Due Diligence November 14 SBF Seminar Room, Keppel Towers
IRAS has been stepping up audit efforts on companies with a high risk for potential non-compliance. You need to be fully aware of the possible tax risks associated with your company’s business activities, and ensure full compliance with tax laws. This one-day workshop aims to give participants a clearer understanding of the income tax compliance process, and how to manage potential corporate tax risks so as to avoid monetary and reputational loss.
SBF Seminar Room, Keppel Towers
November 28-29
SBF and the Asia Risk Management Institute (ARiMI) developed the Enterprise Risk Champions (ERC) Training Course to help companies drive their business projects from design to integration, with the ultimate goals of improving sustainability as well as differentiating risk capability for profitable growth.
SBF Seminar Room,
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www.sbf.org.sg
Keppel Towers
This two-day certification course, organised by SBF in collaboration with a bizSAFE training provider and approved by the Ministry of Manpower, aims to help SBF members embark on the bizSAFE journey. The five-step bizSAFE programme endeavours to
summit will focus its annual outlook on the global financial landscape and provide insightful analysis of the impact of leadership transition in major economies on regional businesses. globalentrepolis.com
AnaLabAsia 2013 November 27-29 Suntec Convention Centre
ASEAN’s accelerating demand for healthcare is one of the catalysts to the region’s growing R&D industry. To stay competitive in this industry, many countries have increased their R&D activities. These include the collaborative setup of the ASEAN Cosmetic Testing Laboratories Network. The three-day AnaLabAsia 2013 will witness a gathering of the region’s key players in the analytical technology, laboratory technology, biotechnology and diagnostics industries. analab-asia.com
Upcoming Events
www.sbf.org.sg
Develop A Risk Management Development Plan
October 29-November 1
assist SMEs in building up their Workplace Safety and Health (WSH) capabilities, in order to achieve quantum improvements in safety and health standards at the workplace. The workshop takes participants through a guided process, starting with top management demonstrating their commitment towards WSH, and acquiring risk management capabilities and implementing a WSH Management System. Participants will also be introduced to the Risk Management concept and its methodology. The lectures, discussions and practical exercises aim to help them internalise concepts and principles for workplace application. Participants will be awarded bizSAFE level 2 certification, recognised by the Workplace Safety & Health Council, upon completion of the course.
Global Entrepolis @ Singapore October 28-31 Resorts World Sentosa
Global Entrepolis @ Singapore (GES) – the region’s leading annual business leaders’ forum – is back for the 10th time. The GES Business Leaders Summit 2013 is a global networking and business matching platform for influential senior business executives, entrepreneurs, high net-worth individuals, founders and policy makers. Presented by SBF, the
LETTERS FROM OUR READERS If you have any views, comments or suggestions about BiZQ or 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.
20/09/2013 10:56
Business Voice, Value Creator Voice of the Business Community • Advocating key issues that impact businesses
Value Creator • Helping companies • • •
Build competitiveness Tap into new business opportunities Realise their true potential
Established on 1 April 2002, the Singapore Business Federation (SBF) represents more than 18,400 companies, as well as local and foreign business chambers and key national trade associations that contribute significantly to the Singapore economy. It fosters an environment conducive for enterprise and acts as a bridge between government and businesses in Singapore. The Federation also provides services and programmes to assist its members to build resilience and competitiveness. Championing the interests of the business community in trade, investment and industrial relations, SBF is the apex business chamber that promotes trade expansion and business networking through missions, exchanges and bilateral, regional and multilateral forums. For more information, please visit our website: www.sbf.org.sg
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