Mr Ernie Koh, President, Singapore Furniture Industries Council (SFIC),
Distinguished guests,
Ladies and gentlemen,
A very good morning to all of you. I am happy to be here at the opening of the International Furniture Fair Singapore 2014 (IFFS) and the 31st ASEAN Furniture Show (AFS). I would also like to extend a warm welcome to our overseas visitors who are in Singapore to attend the fair.
Resilience amidst Changing Economic and Manpower Landscape
2 Asia continues to present many opportunities for our furniture industry. Within Asia, the middle class is expected to account for an estimated 80% of the growth in global spending from now till 2030[1].
3 The 2013 Furniture Industry Survey conducted by SFIC reflected a positive economic outlook for our local furniture companies. Since 2010, the operating income of our furniture companies has been growing at an average of 3% year-on-year. This is expected to grow from $5.8 billion[2] in 2012 to $6.3 billion in 2014. I am glad to share that 86 companies have tapped on the Singapore government’s $17 million Furniture Productivity Plan to embark on initiatives to enhance operational efficiency, grow top-line and explore new markets. This has helped to improve the sector’s productivity and increase its value-added per worker.
4 The International Furniture Fair Singapore and ASEAN Furniture Show have progressed well from its humble beginnings in 1981. They have since grown from a trade event with participation from five[3] countries into an international trade fair, well-attended by visitors from over 100 countries. A major complementary platform to this trade show is SingaPlural, which was launched in 2012 by SFIC. SingaPlural is a multi-faceted showcase of Singapore’s design capabilities, including architecture, urban planning, landscaping, interior furnishing, as well as graphic and fashion design. For this year’s SingaPlural, Robinsons Orchard hosted the 48-hour Challenge, where participating design teams transformed retail spaces into sensorial merchandising displays.
5 Having seen how the Italian retailers collaborate with their furniture makers on creative window displays during the world-acclaimed Milan Furniture Fair, SingaPlural, likewise, has collaborated with various partners and government agencies such as NParks to bring design showcases closer to the public.
6 I would like to commend SFIC for taking the initiative to foster strategic partnerships with other trade associations and businesses to bring SingaPlural to greater heights.
Design and Innovation
7 Design is a critical differentiating factor for the furniture industry. Furniture firms can gain competitive advantage in the long term when they incorporate design thinking in their strategies. SFIC has identified design thinking as one of the key thrusts to help companies with the 3i’s: to improve, integrate and innovate. For example, with the support of the DesignSingapore Council, Star Furniture, a manufacturer and retailer of lifestyle furniture, collaborated with designer, Jerry Low of ABalcony, to create a range of designer pieces known as JotterGoods. This has allowed the company to secure a design showcase space in the imm Cologne trade fair in January. Star Furniture has started to see the success of JotterGoods in contributing to its top line, and is confident of the returns on investment from this design collaboration going forward.
8 Good design thinking also improves operational efficiency. For example, Cathay Interiors, an interior fit-out specialist, received support from SPRING Singapore’s Capability Development Grant to overhaul its production processes, redesign its workflows and invested in automation. As a result, the company was able to double its production capacity and labour productivity.
Internationalisation and export for growth
9 Next, faced with a small domestic market, Singapore companies have to look beyond our shores for opportunities to expand their business and grow their productivity. Emerging markets in China and Southeast Asia, as well as the developed markets of the United States and Europe, offer promising opportunities for our companies.
10 HTL International, a manufacturer of leather sofas and leather upholstery hides, recognised the need to effectively respond to fast-pace and competitive emerging markets like China. Tapping on IE Singapore’s Global Company Partnership, HTL embarked on an extensive rebranding exercise to reposition the Domicil brand, and initiated a customer insights study as part of its efforts to refresh its brand. Their efforts have helped it successfully enter the China market.
11 Companies like Sunray Woodcraft Construction, an interior fit-out specialist, and Falcon Incorporation, a furniture contract manufacturer, have seized the opportunity to capitalise on Myanmar’s booming economy by setting up overseas marketing offices there. With in-market facilitation from International Enterprise (IE) Singapore, both companies were able to establish Myanmar offices and work with local partners to suss out business leads in the country’s growing hospitality and retail sector.
12 Companies can also venture overseas to streamline their business cost and improve their productivity. Many have relocated their lower value-added operations to regional locations to keep their operating costs lean. At the same time, they continue to recognise Singapore as a base for higher value-add activities like finance, marketing and design development. This has enabled them to enhance their competitiveness.
13 Last year, over 30 companies participated in four missions and tradeshows led by SFIC and IE Singapore. Through these, they explore leads and widen business contacts. I want to encourage more companies to leverage such business missions organised by SFIC and IE Singapore to venture overseas.
14 In addition, to promote stronger industry clustering and develop an ecosystem for the furniture and furniture-related sectors, SFIC, the Singapore Chinese Chamber of Commerce & Industry and the Singapore Timber Association are in talks with JTC and SPRING to develop a specialised, multi-tenanted facility. When completed, the facility will cater to a comprehensive ecosystem of furniture, suppliers and furnishing companies, fostering closer business collaborations and helping to boost productivity.
Conclusion
15 I wish to commend SFIC for spearheading many industry initiatives for its members and charting new grounds for the Singapore furniture industry. From establishing international platforms such as IFFS, AFS and SingaPlural, to match-making Singapore companies with foreign business partners, to building strategic partnerships with both private and public agencies, SFIC has been relentless in its efforts to develop the Singapore furniture industry and drive continued growth. I hope that you will continue to put in your best so that your members, associates and partners grow, expand and are successful on the global stage.
16 I wish all of you a fruitful time at IFFS 2014. Thank you.
[1] Source: “Asian Affluence: The Emerging 21st Century Middle Class”, June 2011 (www.morganstanleyfa.com/public/projectfiles/35257b34-b160-45e4-980d-8bca327db92b.pdf)
[2] Source: SFIC-SPRING Furniture Industry Survey 2013