SPEECH BY MR LIM HNG
KIANG, MINISTER FOR TRADE AND INDUSTRY,AT THE MAXA 2006 CONFERENCE ON
TUESDAY, 31 OCTOBER 2006, AT 9.10 AM, AT THEATRE – LEVEL 2, SUNTEC
INTERNATIONAL CONVENTION AND EXHIBITION
CENTRE
Distinguished guests
Ladies and gentlemen
Good morning. I am pleased to open this morning’s proceedings on such a high note of confidence in Singapore’s manufacturing sector.We have done well so far, and the government is committed to enhance the sector further. However, at the same time, we know that we cannot afford to be complacent. Therein lies the impetus for the Manufacturing Excellence Award, or MAXA, which has been introduced to celebrate Singapore’s manufacturing excellence.
It is heartening to witness the active participation of so many companies in the inaugural Award. We have known all along that there are many world-class manufacturing companies in Singapore. Even so, the quantity and quality of the applicants still positively surprised us.
It is these MAXA winners and applicants, and the more than 8,000 manufacturing companies here, which are the bastions of our manufacturing sector. They constitute the critical driving force behind Singapore’s economic growth over the last four decades.
Singapore is a competitive location for the full manufacturing value chain
Even though Singapore is a global leader in the manufacture of high value-added products, there persists the misconception that the sector is losing its shine due to challenges from lower-cost countries. The fact is, over the last 10 years, the manufacturing sector’s growth has surpassed most of the other sectors, and is ahead of our GDP growth.
Besides successfully growing our
manufacturing sector, we have also built up a complete value chain
of capabilities. These capabilities range from production to
innovation, design and supply chain
management.
Production
capabilities
Firstly, let me talk about production.Singapore is home to first world, sophisticated manufacturing
capabilities, with high value-added. We have established global and
regional leadership in various industry segments. On a global
basis, we build or manufacture 70 percent of offshore oilrigs, and
25 percent of hard disk media, just to name a few. We rank amongst
the world’s top three for refining. Singapore is also Asia’s number one for flavours and fragrances; and for
aerospace maintenance, repair and overhaul
(MRO).
Our strengths in production have
attracted MNCs like MSD[1] Singapore, one of the MAXA finalists, and the world’s
sixth largest pharmaceutical company by sales, to set up two
manufacturing facilities in Singapore, producing for the global market. In July, it announced a
S$100-million expansion of its pharmaceutical formulation facility
here.
Over and above the
expansion of physical space and production volumes, companies are
also extending their technological capabilities. Hamilton
Sundstrand, for example, is building a new 149,000 sqm plant to
manufacture high-end aerospace components, whilst Matsushita
Electric Industrial is building Singapore’s first
large-scale plasma display TV manufacturing
plant.
Innovation and
R&D
Secondly, innovation and R&D are important areas that
will drive Singapore’s growth.International companies find Singapore to be an attractive location for their global R&D
centres, undertaking projects ranging from product and process
development, to upstream research. Currently, over 60 percent of
national R&D spending is undertaken by the private sector, and
we are seeing an increasing number of companies setting up their
corporate labs here – such as BASF, GE Water and
Vestas.
This year’s MAXA finalists
have all invested significantly in innovation and R&D. The MAXA
judges have singled out BD Medical[2] for the MAXA Product Innovation Award, as it has
successfully developed innovative products to meet the unique needs
of its markets.As early as 2003, Leica Instruments Singapore had
moved all its R&D and manufacturing operations to
Singapore. Kenwood
Electronics Technologies also conducts extensive R&D activities
at its research centre here.And in March this year, Seagate
Technology International, the inaugural MAXA winner, doubled its
local R&D team to 400
people.
Design
capabilities
Thirdly, Singapore’s industrial
design capabilities are beginning to capture the world’s notice,
having won numerous industry awards for design excellence in the
recent
years.
Already, we have a strong talent base for industrial
design. Last year, we received a strong boost when BMW DesignWorks
set up its first-ever design studio outside the United
States and Germany. The red dot
design awards, the equivalent of Hollywood’s Oscars in the
design world, were also established here, making Singapore
the
only country in the world outside Germany to host the red
dot design competition, and house a red dot design museum. Further,
Seagate’s one-inch 8GB drive was wholly designed in
Singapore.
Supply chain
management
And lastly, let me touch on supply chain management. We are
now experiencing a migration of global manufacturing to the region
and within Asia, the trend is for MNCs to distribute the value chain of
activities within a network of plants – to capitalise on
comparative advantages, and to diversify risks. Singapore lends itself well to such an
arrangement.
Our integrated supply chain
management infrastructure, which spans information technology,
managerial, financial and legal expertise, and transport links to
the world via our world-class seaport and airport, ensures
optimised and cost-effective global
deliveries.
Industry leaders such as Motorola, STMicroelectronics and
Cooper Cameron recognise the sophisticated supply chain
capabilities offered by Singapore. For example,
Motorola has set up its Global Supply Chain Control Tower here.
Similarly, our MAXA finalists are leveraging on Singapore’s supply chain capabilities
to reach out to their regional and global
markets.
Singapore’s value propositions for manufacturing
activities
Singapore
was recently named the world’s most
competitive place for business[3], as well as the world’s easiest place to do
business[4]. These accolades bear testimony to our standing as a
choice manufacturing location. The conferment of the MAXA Singapore
Advantage Award to Philips DAP[5] demonstrates how one company has successfully tapped
into Singapore’s value
propositions to boost its competitiveness in the global
market.These value propositions did not appear overnight, but were
the result of much concerted effort over the years. Allow me to
elaborate on four main
areas.
World-class
workforce
First and foremost, we have a
world class workforce. Singapore’s workforce has
ranked highly in many international rankings. We have achieved this
through sustained emphasis on developing expertise to ensure depth
of knowledge and sophistication of skill.These efforts are usually
undertaken in tandem with industry partners and we are continually
retraining our workers to keep up with technology and meet the
evolving needs of
industry.
Investments in
infrastructure
A second key element in Singapore’s success in manufacturing has been our heavy investments
in infrastructural projects, conceptualised and created to meet
industry needs.Some note-worthy projects include JurongIsland, and Biopolis and Fusionopolis at One-North. More
recently, the Government announced plans for the SeletarAerospacePark, which will take Singapore aviation and MRO activities to the next level, and the
Jurong Rock Caverns, which will create space in land-scarce
Singapore for chemical
storage.
Connectedness
to the world
Thirdly, our connectedness to the rest of the world.
Singapore is committed to pursue a strategy of expanding our economic
space through our network of global and regional free trade
agreements. Our network of FTAs is designed to support our business
community in moving up the value-added ladder and knowledge chain.
Today, we have 13 concluded FTAs and we will continue to work
towards expanding this network to include other emerging markets,
such as the Middle East and South Asian
economies
Vibrant
enterprise ecosystem
Finally, let me touch on an often less noticed, yet
significant advantage that Singapore has as a manufacturing hub – Singapore’s vibrant enterprise ecosystem. One of the deciding
factors for manufacturers in the choice of location for their
operations is the availability of a pool of qualified
suppliers.This is something that we have built up over the years,
across the various
industries.
But we are not resting on our
laurels. As the outsourcing trend looks set to gain in momentum, we
launched the Supplier Development Initiative (SDI) last
year.Through this win-win partnership between international OEMs
and Singapore-based suppliers, local suppliers will be upgraded to
international OEM standards, while the OEMs will enjoy better
support from them.
Manufacturing is a key driver of Singapore’s growth
Moving forward,
manufacturing will continue to feature prominently in
Singapore. Manufacturing investments
create jobs across the entire value chain. These jobs are no longer
only production-line positions – they span a wide range and offer
different challenges.Manufacturing also leads to spin-offs in other
industries and diversifies our economic base.These are compelling
reasons for the Government to remain committed to growing
manufacturing.
Last year, EDB
announced that it aims to double manufacturing output to S$300
billion, and value-added to S$80 billion by 2018. The sector should
also continue to account for a quarter of Singapore’s GDP. EDB has informed me
that we are on track to meet the targets and the sector has been
experiencing healthy growth in both output, as well as mindshare.I
am heartened to hear this.
Conclusion
In closing, I would like to
congratulate the winners and finalists of MAXA 2006 – Seagate, BD
Medical, Philips DAP, Kenwood, Leica, and MSD. We will hear from
the MAXA winner, judges and partners later in the Conference, and I
am sure they will inspire us to reach for even greater
heights.
I urge public and private enterprises to work together to
put Singapore manufacturing on the world map.The MAXA tagline –
“Singapore Made. Globally Admired.” – is a claim which I hope all of
you will proudly
make.
Thank
you.