SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE 75TH ANNIVERSARY DINNER OF THE SINGAPORE METAL & MACHINERY ASSOCIATION, FRIDAY, 18 MARCH 2011 AT 8.00 PM, COMPASS BALLROOM, RESORTS WORLD CONVENTION CENTRE

Mr Khua Kian Keong, President, Singapore Metal & Machinery Association

Distinguished Guests

Ladies and Gentlemen

Good evening.

Introduction

I am pleased to join you this evening for the Singapore Metal & Machinery Association’s (SMMA) 75th Anniversary celebration. This is a significant milestone for SMMA and reflects SMMA’s long-standing history of service to its members.

Last year was an exceptional year for Singapore. Our economy grew 14.5 per cent last year, with much of this growth contributed by the manufacturing sector. SMMA is part of the manufacturing sector; so you would have contributed to this good performance. This year, the outlook continues to look promising with the economy projected to grow at a more moderate but yet healthy 4 to 6 per cent. The Singapore economy has proven its resilience and we have managed to rebound from the global economic downturn that first started in 2008.

Our small and medium enterprises (SMEs) have played a key role in the Singapore economy’s successful recovery. SMEs employ 6 out of every 10 workers and contribute nearly half of total enterprises’ value-added in the economy. Going forward, whilst there will be business opportunities to capitalize on as our economy continues to grow, there will also be challenges for our companies to overcome. A key challenge is rising business costs. Inflation is a growing worldwide concern. Disruptions to food supplies due to bad weather and strong demand from rapidly growing economies are helping in part to push global commodity prices up. The ongoing unrest in Middle East is also driving up oil prices.

To meet this challenge, companies must make better, and more productive, use of its resources. This includes upgrading and up skilling its employees. To help SMEs, the government has put in place various initiatives in areas such as financing; productivity and capability upgrading; and access to overseas markets.

Productivity-Driven Growth Is Essential for Long Term Sustainable Growth

In the area of productivity, measures such as the SME Productivity Roadmap (SME-PRO), by SPRING Singapore and the Singapore Workforce Development Agency (WDA), provides a systematic, 3-step approach for companies to improve their productivity. To help SMEs embark on SME-PRO, productivity advisors under the Productivity Management Programme (PMP) help SMEs to perform Integrated Management of Productivity Activities Assessments, or IMPACT assessments in short, to diagnose the productivity performance of their organization. To date, 317 SMEs have been provided with advisory services under PMP.SPRING also hosts a dedicated Internet portal – Productivity@Work - which offers a one-stop online platform of productivity-related information and resources that enterprises can tap on for self-help.

At the recent Budget, a slew of measures were also announced. Many of them are targeted at SMEs to help them manage their business costs and raise productivity levels. This includes significant enhancements to the Productivity and Innovation Credit (PIC) scheme. When introduced last year, the PIC allows businesses to deduct from their taxable income 250% of their expenditures in any of the six broad categories of investment under the scheme, for example, training or investment in automation equipment. This tax deduction has now been increased to 400% this year. The cap for such claims for each category of investment has also been increased from $300,000 to $400,000 of expenditure.

For firms to continue to achieve sustainable growth, internationalization must also be integral to their growth strategy. The International Enterprise Singapore (IE Singapore) provides several schemes to assist firms in their effort to expand into overseas markets. One such scheme is the International Marketing Activities Programme (or iMAP), which provides support for trade associations and chambers to organize overseas business missions. The scheme reimburses up to 70 per cent of eligible expenses related to the organizing of overseas business missions to the trade association.

I would therefore like to encourage all our SMEs and SMMA members to leverage all these resources to continually upgrade your productivity, set your sights overseas and seize the business opportunities that present themselves.

Conclusion

On this note, I extend my warmest congratulations to the SMMA again as you celebrate your 75th Anniversary and I wish you the very best in your future endeavors.

Thank you.