SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE MEDTRONIC SINGAPORE OPERATIONS OPENING CEREMONY ON 10 MARCH 2011, 10:00 AM, AT 49 CHANGI SOUTH AVENUE 2
Mr. William Hawkins, Chairman and Chief Executive Officer, Medtronic Inc
Mr. David Adelman, Ambassador of the United States to Singapore
Distinguished Guests,
Ladies and Gentlemen,
Good morning.I am pleased to join you today at this opening of Medtronic Singapore Operations (MSO).
Since it first established its Singapore office in 1998, Medtronic and Singapore have enjoyed a fruitful partnership.Today marks an important milestone in Medtronic’s ever growing presence in Singapore, with the completion of its first Pacemaker and Leads manufacturing facility in Asia.
Singapore – a Home for Business in Asia
The Asia-Pacific market for medical devices is expected to account for 25% of global market share by 2012. The growth rate alone is expected to be double that of worldwide growth figures by 2015. [1] As the fastest growing medical device market in the world, Asia presents companies with an immense opportunity to expand the reach of their life-saving products and innovations.
In this regard, Singapore has much to offer businesses keen to tap into the healthcare market in Asia. Businesses can leverage on our skilled workforce, strong infrastructure and excellent connectivity to access the Asia market. Indeed, companies such as Medtronic Singapore Operations have chosen to site their high value-added manufacturing in Singapore. Medtronic joins a community of over 30 other Medical Technology companies manufacturing complex, high-quality medical products for regional and global markets in Singapore.
As a reflection of the growing maturity of this community, Medtronic and other medical device manufacturers in Singapore came together last year to form the Medical Device Manufacturing Advisory Council (MMAC).MMAC has proven to be a useful platform for leaders in the Medical Technology industry to share best practices in sustainable manufacturing, operational excellence and development of manufacturing talent.It also reflects the industry’s focus on achieving long term competitiveness and sustainability.
Beyond manufacturing, medical device companies have also recognised the importance of locating their strategic management functions in Asia to optimise operations and tap emerging market opportunities.A good many have chosen Singapore as their strategic base for Asia.Companies such as Medtronic, have even sited their international and Asia headquarters in Singapore. From its Singapore base, Medtronic manages its global operations outside the United States. This includes supply chain, business development and regulatory affairs. And to further enhance the supporting business environment for companies, initiatives were recently introduced to allow the pooling of foreign tax credits [2]. Companies now have greater overseas income flexibility in their foreign tax credit claims, reduced Singapore taxes on remitted foreign income and simplified tax compliance procedures.
Singapore – Partnering to Drive Innovation
With the rapid rise of healthcare demands in Asia, the need to innovate products that address clinical needs in the region has grown rapidly. A pool of local medical technology research and development (R&D) talent is therefore crucial for the growth of the Medical Technology industry. Last year, the Economic Development Board launched the MedTech IDEAS programme in partnership with medtech industry players. Medtronic was one of the first companies to participate in the IDEAS programme which stands for Innovate, Design, Engineer for Asia in Singapore.Under this programme, Medtronic will be sending a group of trainees to the US to learn about the product development cycle of cardiac devices.They will then bring this knowledge back to Asia and Singapore to seed Medtronic’s capabilities for innovation in the region.
In tandem, Singapore continues to invest in our research capabilities to develop innovation. Late last year, we had announced the commitment of S$16.1 billion over the next 5 years to spur research, innovation and enterprise [3].As just announced at the recent Budget, the Productivity and Innovation Credit scheme has been enhanced to allow a more generous tax deduction for expenses incurred in a number of activities, including R&D [4]. Coupled with our strong intellectual property protection framework, Singapore has the potential to be a key nexus for public and private researchers to collaborate and develop innovative medical products in Asia, for Asia.
Conclusion
Let me conclude by extending my heartiest congratulations to management and staff of Medtronic on the completion of your facility.Medtronic’s investment is a strong vote of confidence for our efforts in developing Singapore into a leading Biomedical Sciences hub.I look forward to many more years of successful partnership between Medtronic and Singapore.
Thank you.
[1] Asia Pacific is expected to see CAGR of 10.2% versus worldwide CAGR of 5.8% by 2012.It is expected to reach US$62.3 billion in revenue (2012).Frost and Sullivan Jun 17 2010 “Asia Pacific Medical Devices Market Ready to Skyrocket”
[2] The old foreign tax credit (FTC) scheme was computed on a source by source and country by country basis for each stream of foreign income (FI) remitted to Singapore.Any excess of foreign tax paid over the Singapore tax payable for the specific stream of FI cannot be used to reduce Singapore tax payable on other streams of income.Under the new FTC pooling system, FTC is computed on a pooled basis.The amount of FTC to be granted will be based on the lower of the pooled foreign taxes paid on the FI and the pooled Singapore tax payable on the FI.
[3] Announced in September 2010 after endorsement by the Research, Innovation, and Enterprise Council
[4] Introduced in Budget 2010, the Productivity and Innovation scheme allowed companies 250% tax deduction of up to S$300,000 of expenditure in each of the 6 qualifying activities:R&D, Approved Design, Acquisition of IP, Registration of IP, Purchase / Lease of Prescribed Automation Equipment, Training of Employees.In Budget 2011, the Enhanced PIC will confer 400% tax deduction of up to S$400,000 of expenditure in each of the 6 qualifying activities.It now also includes R&D done overseas.