Speech by Mr Lee Yi Shyan, Senior Minister of State, Ministry of Trade & Industry and National Development at Official Opening of the International Furniture Fair Singapore / ASEAN Furniture Show, Décor Show and Hospitality Show 2013, Saturday, 9 March 2013, 10.00am, Singapore EXPO
Mr Ernie Koh, President, Singapore Furniture Industries Council (SFIC),
Distinguished guests,
Ladies and gentlemen,
A very good morning to all of you. A warm welcome to all our overseas visitors for the International Furniture Fair Singapore (or IFFS) and the Asean Furniture Show (AFS) which is celebrating its 30th anniversary. The partnership between the two shows has become a premier platform to present the best of the region’s furniture collection to the world.
I would like to also take this opportunity to congratulate SFIC for the successful opening of SingaPlural 2013 yesterday evening. This eight-day design festival, featuring 350 design installations from local and international design talents across diverse disciplines from furniture, architecture to landscape and graphic, will certainly add to the buzz and vibrancy among the trade and business exchanges at IFFS/AFS during this period. I hope to see SFIC and the other seven design associations under DesignS further strengthen their partnership and the development, growth and showcase of our local design talents across creative industries in the world market.
Rising above the Challenges to Ride the Next Wave of Growth
The global furniture trade is seeing a shift in market gravity. Fairly good growth is expected to be seen in the Asia Pacific, South America, Middle East and Central Eastern Europe, compensating for the otherwise weak demand from Europe and USA. Overall, we expect a healthy 5 per cent1 growth for the industry worldwide.
In Singapore, our furniture companies are facing some challenges such as rising business costs and a tight labour market. The Government understands these challenges confronting our companies, and have thus introduced a suite of measures in Budget 2013. They are meant to help companies restructure and mitigate rising business costs in a tight labour market. There are also programs to help companies expand internationally and tap into new opportunities in the region.
Indeed, I am heartened to know that many of our local furniture companies have taken positive steps to meet these challenges head on. Since the launch of the S$17 million Furniture Productivity Plan in 2011, we have committed $9.6 million to support 63 companies to raise productivity2. Let me elaborate.
Design & Innovation
First, design and Innovation. Furniture companies are increasingly aware of the value of design as a core strategic differentiator and competitive advantage in order to drive growth. By tapping on talented local designers, companies like STAR Furniture were able to create beautiful collections for both existing markets and new customer segments – thus driving innovation through design and product lines.
The use of technology such as virtual reality is also transforming the way companies conduct marketing and customer engagement. Air, a multi-faceted furniture design and retail specialist, is investing in a virtual simulator to help customers preview their favourite furniture pieces in their actual home environment on a mobile device. The company hopes to increase annual sales in the next three years by up to 10 per cent. Air also intends to develop an e-commerce platform to integrate with this application, and hence possibly breaking into new customer segments for the company.
Process Optimisation
Productivity is also about efficiency from streamlined processes. I am pleased to note that a number of furniture companies have deployed Enterprise Resource Planning (ERP) systems to integrate and streamline operations for more effective decision making, and acquiring robotic manufacturing capabilities to better respond to customers in time-sensitive contract projects.
Lam Chuan, for instance, a leading supplier of laminates, has developed a streamlined order tracking process. Using bar code scanning, the system displays specifications on project orders for line workers to execute. It also automatically tabulates the project costs for clients. As a result, the company reduced its man-hours in manual data entry by 50 per cent, achieved 100 per cent on-time delivery of orders and increased production output by 15 per cent.
New Market Exploration & Internationalisation
Furniture companies in Singapore have always been regional players. Many have established presence in regional markets such as China, Indonesia and Malaysia. Some have also ventured into newer markets like Sri Lanka, India and even Mongolia.
Besides Asia, there are other bright sparks in the world. Ewins, an established supplier of furniture components and fittings, is an example of a company that has ventured beyond traditional markets into Brazil, India and Nigeria. Ewins has widened its business network through active participation in global component fairs. Today, it is also seeking to expand its value chain both upstream and downstream by contract manufacturing furniture products for end users.
Singapore furniture players must continue to seek new markets for growth. Supported by our government agencies, a number of SFIC members participated in imm Cologne (Germany) and Furniture China (Shanghai), achieving more than S$10 million in spot orders. This is a good start.
Conclusion
In closing, I wish to commend SFIC and Singapore furniture companies for your can-do spirit in transforming the industry. I assure you of Government’s continued support from International Enterprise Singapore and SPRING Singapore and other agencies to build and expand your business. On this note, let me wish you a most fruitful and rewarding time at IFFS/AFS 2013. Thank you.
1 World Furniture Outlook 2012/2013 by Centre for Industrial Studies (CSIL), Italy.
2 As of Dec 2012