​SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE FOOD PRODUCTIVITY CONFERENCE 2013, AT SINGAPORE EXPO ON 16 OCTOBER 2013 AT 9.10 AM

 

Distinguished Guests,

Ladies and Gentlemen,

 

Good morning.

I am happy to join you today at the Food Productivity Conference, a hallmark event for the food industry. I am glad to know that both the food services and food manufacturing sectors are working in close collaboration to organise this conference.

 2          The food industry is important to Singapore. It creates jobs for over 120,000 workers[1], contributes almost 1.6% to our GDP[2], and is essential for our food security. The sector has experienced good growth so far and we should continue capitalising on the demand in Asia to grow the sector. We should aim to be one of Asia’s top culinary capitals, and develop a vibrant and innovative food industry.

 

Importance of Collaboration to Achieve the Vision of Food Industry

3          Our companies need to build business models that allow them to compete globally. One way is to upgrade and restructure our industry. However, on their own, companies may be small and lack the economies of scale to innovate and invest in new technology. This is why we have chosen to focus this year’s conference on “Improving Productivity across the Value Chain”. This theme underscores the importance of collaboration in improving productivity, and staying competitive and relevant to the world.

4          Indeed, such collaborations are the source of productivity growth and competitive advantage in other leading food industries. One such example is the Food Valley NL. Located in central Netherlands, the Food Valley NL is a vibrant cluster of agro-food companies and research institutions dedicated to agriculture and food research. It is one of the world’s largest food and nutrition cluster, with a strong culture of collaboration that helps start-ups and businesses grow.

5          Companies in Singapore can also improve productivity and stay competitive through collaboration on many fronts, and with different stakeholders. This will help us transform for higher productivity. We see three areas for such collaboration – product development, sharing facilities, and internationalisation.

 

Collaborating to Develop Innovative Products and Processes

6          First, restaurateurs and food manufacturers can collaborate with our Institutes of Higher Learning (IHL), so as to tap their food expertise to develop innovative products or enhance existing ones. For example, Polar Puffs & Cakes have worked with the Food Innovation and Resource Centre (FIRC) to extend the shelf-life of their chocolate roll without compromising on quality. This will support their plans to export its chocolate roll to Southeast Asia. In addition, companies can also work with our institutions to improve processes. For instance, A*STAR’s Technology Adoption Programme (TAP) supports companies in adopting technological solutions by linking the technology needs of companies to solution providers. I encourage companies to make full use of A*STAR’s TAP programme.

7          Companies can also collaborate in non-core activities. Three of our noodle manufacturers – Jia Jia Wang, Seng Kang and Leong Guan – had leveraged on Jia Jia Wang’s distribution vehicles to deliver noodles to clients in the same hawker centres. This has resulted in a reduction of delivery cost for all three companies. For Seng Kang and Leong Guan, they can now focus on their core food business.

8          I am pleased to share that food companies can now look forward to collaborating on similar models to outsource non-core activities. The Restaurant Association of Singapore (RAS), together with the Singapore Food Manufacturers’ Association (SFMA) and Singapore Manufacturing Federation (SMF), have tapped on SPRING’s Collaborative Industry Project (CIP) grant to help restaurants outsource the preparation of non-core food items to food manufacturers. This will not only free up the restaurants’ preparation time but also enable the food manufacturers to scale up and invest in more automation. I am heartened to note that more than 90 food companies have participated in the first business matching session. I encourage more of you to participate in this CIP.

 

Sharing of Facilities to Achieve Economies of Scale and Cost Savings

9          The second area of collaboration is to aggregate demand and share common costly food facilities and equipment. The High Pressure Processing machine is one example. This machine sterilises food while retaining the nutritional content, a benefit conventional methods are not able to achieve. Through sharing, smaller companies with less investment capital are able to spread the high costs and risks while benefitting from the use of the machine. I encourage companies to explore sharing such technologies. The government will help support this effort by providing suitable infrastructure. As an example, we are exploring the development of a multi-user food hub which would facilitate the sharing of facilities among companies.

 

Encouraging Internationalisation for Scale

10        The third area where our companies can collaborate is when they internationalise.  Our small domestic market makes internationalisation a necessary strategy for our local companies to grow and remain competitive. IE Singapore supports companies in their overseas ventures through its Global Company Partnership and Market Readiness Assistance frameworks. These help companies build internal capabilities, facilitate new market entry and enhance their market presence.

11        IE Singapore also facilitates partnerships as it recognises the importance of collaboration for companies to internationalise. For example, it is working closely with the SFMA to initiate a Singapore food showcase at the Yiwu International Commodity Trade Mart in China – the world’s largest commodity mart. By banding together, food companies were able to showcase a comprehensive suite of food offerings which strengthens the Singapore brand. This will help them gain mindshare and grow in China.

12        These collaborations bring us one step closer to achieving our vision, and transform the Singapore food industry into a global culinary capital.

 

Progress Update on the Productivity Roadmaps for the Food Industry

13        There is also a need for restaurateurs and food manufacturers to improve productivity to stay competitive. Thus, in 2011, the government rolled out two sectoral productivity plans to improve the productivity of the food services and food manufacturing sectors. I am happy to note that both plans have gained traction.

14        More than 850 food companies have embarked on productivity and service upgrading projects. Areas include raising topline through service excellence and adoption of food standards, improving processes through automation and workflow redesign, as well as upgrading the workforce.

15        I would like to highlight the good progress of the Food Automation Unit (FAU) which was launched last year. To date, the FAU, which aims to help companies automate, has reached out to over 170 food manufacturers. 10 projects to upgrade the automation and packaging capabilities of companies are also in the pipeline. Eng Bee Foodstuffs is one local noodle manufacturer that has benefited from the FAU. It customised a machine to automatically apportion, weigh and transfer noodles for packing. The company expects output per worker and packing speed to increase by four times.

16        Over 2,200 CEOs, productivity managers and workers have also been trained. In particular, through the SME Talent Programme, RAS has reached out to over 500 students. I’m glad to note that within the last 5 months alone, 29 students were successfully matched to 13 SMEs in the food services sector. 

17        This is a good start, but much more can be done and I strongly encourage all of you to focus on upgrading at all levels, from operations to management.

 

Conclusion

18        Today’s Food Productivity Conference is an important one. While we have seen good progress on labour productivity in the last couple of years, we need to build on these efforts and bring more companies on board the productivity journey. Those who have visited Japan might have patronised small eateries where customers pick their meal choices and make payment using a self-service ticketing machine, without much staff intervention. Such productivity-enabling solutions can be useful for our quick-service F&B outlets or even hawker stalls.

19        The government remains committed to supporting our food industry to improve productivity. We want every restaurateur and food manufacturer to stay competitive and we also wish to see industry-wide productivity improvements. While the government provides support, I urge you to embark on your own productivity improvement initiatives.

20        This year’s Food Productivity Conference marks the first time we are bringing together our food services and food manufacturing entrepreneurs. It features renowned local and international industry specialists, thought leaders and experts, making it an ideal platform for sharing experiences and best practices. I hope you will gain valuable insights and ideas, as well as build networks and partnerships across the food industry value chain or with other industries.

21        I wish you a fruitful time at the conference.  Thank you.