SPEECH BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND EDUCATION, AT THE OPENING CEREMONY OF MTA 2011 ON WEDNESDAY, 23 MARCH 2011, 1010 HRS , AT SINGAPORE EXPO

Excellencies, Distinguished guests, Ladies and Gentlemen,

Good morning.

Introduction

I will like to extend a warm welcome to all overseas and local participants and visitors to MTA 2011.Since the launch of MetalAsia’s (MTA) exhibition and conference in 1980, this event has grown steadily, and established itself as an international platform for precision engineering and metalworking companies to showcase technologically-advanced capabilities and manufacturing equipment

Manufacturing is a key pillar of Singapore’s economy

Manufacturing remains a pillar of Singapore’s economy, accounting for 22 per cent of the GDP in 2010.This corresponds to a total manufacturing output of S$270 billion.And, the government is committed to maintaining manufacturing contribution at between 20 to 25 per cent of GDP in the long term.

As the backbone of manufacturing, the precision engineering (PE) sector is a key enabler for Singapore’s high-value manufacturing.It contributed 10 per cent, or over S$26 billion of Singapore’s manufacturing output last year and employs close to a quarter of Singapore’s manufacturing workforce.

Singapore’s precision engineering sector has evolved significantly over the years.It has expanded its scope from supporting primarily the electronics and computer peripheral industries, to a diverse base of industries such as Complex Equipment, Oil & Gas, Aerospace, CleanTech and MedTech.Our PE sector has also produced global leaders in areas such as semiconductor equipment manufacturing.For example, Singapore currently manufactures 70 per cent of wire bonders used in the global semiconductor industry.

Strengthening Capabilities

Nevertheless, there is room and potential for even more growth in the precision engineering sector if we can strengthen our capabilities and further boost our global competitiveness.Studies have shown that the productivity levels of our precision engineering sector is only about half of that in developed countries such as the US, Germany and Japan.To raise our productivity, we need to move up the value chain by broadening and deepening the industry’s scope.We can do so by building on four key foundation blocks: our advanced manufacturing capability, Research & Development, a strong supplier ecosystem, and talent.Let me elaborate.

Manufacturing Capability

Over the years, Singapore’s manufacturing industries have sought to consistently upgrade their manufacturing capabilities.We are now able to produce more precise components and complex systems that meet global standards and demands.

The complex equipment sector is a good example and a number of key manufacturing projects announced last year illustrate this.Applied Materials, the world’s leading supplier of nano-manufacturing equipment, opened its first Asian semiconductor equipment manufacturing facility in Singapore, as part of a major expansion to serve customers in the region.

Ultratech, a leading supplier of lithography and laser-processing systems, also opened a facility in Singapore to manufacture lithography steppers for the advanced packaging and the high-brightness LED markets.

R&D capability

The second building block is R&D.Late last year, Prime Minister Lee Hsien Loong announced a national budget of S$16.1 billion to support research, innovation and enterprise for the period 2011 to 2015.This is a 20 percent increase over the allocation for the previous five year period, 2006 to 2010.In particular, the focus will be on facilitating collaboration between industry and public research institutions to foster greater commercialisation of R&D.

With this support, firms in the precision engineering sector have an even greater incentive to partner our research institutes, and institutions of higher learning, to develop the solutions to address real-world challenges.For example, the Singapore Institute of Manufacturing Technology (SIMTech) together with Component Technology - a home-grown company that distributes production equipment for semiconductor manufacturing in the region - has jointly developed a 3D wire-bond inspection system, which is the first of its kind in the world.This technology has shortened the time needed to inspect wire bonds dramatically, from 10 seconds to a mere 0.3 seconds.

Supplier ecosystem

The third key element in our precision engineering industry pertains to a strong supplier ecosystem.The capabilities of our precision engineering suppliers are critical to support the increasingly complex demands of a high-mix low-volume manufacturing environment.Their role has evolved from contract manufacturing to the provision of manufacturing solutions.Establishing a robust network of suppliers in and around Singapore will enable us to anchor complex manufacturing activities here.

To further strengthen the supplier ecosystem, the government announced a new programme last year - Partnerships for Capability Transformation, or PACT.As part of PACT, S$250 million has been made available to facilitate and support strategic partnerships between industry leaders and their key suppliers.The funds will assist locally-based suppliers to upgrade their capabilities in order to be qualified and certified by their potential customers.

Talent

The fourth and final building block concerns talent.The strength of our manufacturing base is founded on the breadth of the talent available in Singapore, ranging from highly skilled craftsmen to engineers and research scientists.We will need to continuously upgrade our talent pool to meet the anticipated industry demand for higher skills and knowledge.

For example, a manpower initiative to train diploma-level technologists was launched in 2007.Through this S$76 million programme, the Centre for Digital and Precision Engineering was set up in Nanyang Polytechnic to train students in product design, prototype development, tooling design and precision machining.Today, 370 students are enrolled in the Digital and Precision Engineering Diploma programme and its pioneer batch of 100 students will graduate this year.In addition, the Nanyang Technological University (NTU) will launch in October this year a Master of Science degree in Precision Engineering with a specialisation in Optics.

Moving forward, Singapore needs to further deepen our precision engineering skills to rival the engineering and craftsmanship mastery seen in advanced countries like Germany, Japan and Switzerland.New industry training programmes will continue to be developed and I encourage all companies to come forward and tap on these programmes to upgrade and upskill your talent.

Conclusion

With these initiatives in place, we believe that Singapore is well-positioned to grow strongly in the precision engineering sector through productivity-led growth.

On this note, I wish the organisers, all participating exhibitors and visitors an enriching and successful event.I now declare MTA2011, open.