Mr David Kelly, Executive Director, British Chamber of Commerce Singapore

 

Mr Sukhbir Singh, British Malaysian Chamber of Commerce (BMCC) Board Member and CEO of M&N Group of Companies

 

Mr Yap Wee Kee, Partner, Capital Markets Group, KPMG in Singapore

 

Ladies and Gentlemen

 

Introduction

 

1.            A warm welcome to all of you.

 

2.            As many of you may know, the Johor-Singapore Special Economic Zone (JS-SEZ) and the competitive environment now takes place against a very challenging macroeconomic landscape. It is not just for the UK, not just for Singapore and Malaysia. It is also about the undermining and the retreat of a rules-based global trading system, and in fact, a changing world order as we know it.

 

3.            Since the imposition of US tariffs, global trade flows have been progressively reshaped and continue to be reshaped. Supply chains have already faced significant disruptions. Business confidence has taken a hit as companies brace against the headwinds. In fact, the markets have reacted quite differently. You will see global growth momentum also rising. However, the prognosis is not that straightforward. If you look at our NODX figures just yesterday, it is down 11%. Why? One, it is because companies have been front loading their exports ahead of potential tariff imposition. Secondly, it is not just the country specific tariffs, but also potential sectoral tariffs on pharmaceuticals, semiconductors, that will impact. Therefore, we want to be very clear-eyed. We know that the economic situation is precarious, and we may be going into winter.

 

4.            With this backdrop, it is more important then that countries are like-minded, businesses are like-minded, and we compete together. That is the essence of why we are doing the JS-SEZ. We signed the JS-SEZ agreement just nine months ago, in January this year, and the whole point was to tap on the complementary strengths of Singapore and Johor. In order to be competitive and see Johor-Singapore as one, for investors and potential companies to invest, that's how we then can be competitive. We are competitive because we are complementary.

 

5.            Singapore's strengths are: A stable government political situation, rule of law, mediation, and a strong financial sector. But we have our limitations - we just do not have land and natural resources. Therefore, Johor’s land and natural resources will come into play and complement Singapore's strengths. It allows for Johor and Singapore to better compete for global investments together. That is the value proposition, and that is why we are doing it – because Johor, Singapore and the SEZ will offer the best of what Singapore and Johor has to offer. Singapore can function as a coordinator to oversee manufacturing functions in Singapore, in the region. In fact, we see that many manufacturing companies are already interested, and already have a footprint in the SEZ. Companies are also interested, and they are setting up their regional HQ here. You will see many of them already here. They are also setting up R&D functions here. They are relying on Singapore's strong networks of our 28 FTAs, and strong layers of financing and strong market protection.

 

6.            I mentioned earlier about Johor strengths in land as well as natural resources, but they also can function as a very important springboard for companies, UK companies, that can now springboard to ASEAN markets and Asian markets, all the while maintaining very strong links to global networks that Singapore has already been putting together for decades.

 

7.            Today, many companies are already benefiting, by twinning their operations or also growing their businesses and developing new capabilities. To make this a little more pragmatic and where the rubber hits the road, let me share two examples:

 

a.    You may know Paris Baguette; South Korea’s SPC Group is responsible for Paris Baguette. SPC group has chosen to site its Halal manufacturing plant in Johor, at the same time establishing its Regional HQ and innovation centre in Singapore that drives the R&D of new products. Currently, the SPC Group ships its products to numerous Paris Baguette stores across Southeast Asia.

 

b.    The second example is Agrocorp International, a Singapore-based agri-commodity firm that is expanding its footprint in the region. Together with Japan’s leading dairy company, Megmilk Snow Brand, both companies are jointly developing a new protein extraction facility in Johor’s Tanjung Langsat to manufacture protein and starch products from climate-friendly crops like pulses. That is a protein manufacturing plant. But where do you get the R&D? The R&D and this particular plant and project will use specialised protein extraction technology, which was developed by Agrocorp in Singapore in conjunction with the Singapore Institute of Technology.

 

8.            So you see this complementary play coming into fruition – You manufacture tin Johor, and you have the R&D and IP protection in Singapore. The Government will continue to partner our Malaysian counterparts at the federal level, as well as the state level, to enhance the JS-SEZ’s overall value proposition. We will do so in a few ways. This is with the objective of improving cross-border goods connectivity, enabling freer movement of people, and strengthening the overall business ecosystem within the Johor-Singapore region.

 

9.            We have already put in place some of these initiatives. Some of you have already been using them, and some are coming online very soon. You will know that if you travel from Singapore to Johor, if you use your MyICA Mobile application, you will have passport free QR code clearance. That is at our land checkpoints. But the news today is that the Malaysian side has also MyNIISe, which allows for Singaporeans and foreigners to also use QR code passportless clearance coming into Singapore. So it is both ways, Singapore doing its part, Malaysia doing its part.

 

10.         We also then have the RTS Link that is scheduled for completion in December next year. Once completed, it takes you five minutes if you travel from Woodlands North MRT station. I have been on the ground, and the construction is on par, and it is on target, and on time.

 

11.         For goods, we are also streamlining customs procedures for land, intermodal transshipments. I think it is a game changer if we do it well, and it will help us to differentiate ourselves from other SEZs. On Malaysia's end, they have also been doing a lot of work in making sure that there is a one-stop centre – Invest Malaysia Facilitation Centre – Johor (IMFC-J). It is meant to streamline investment facilitation across Malaysian states and federal agencies. I understand there are about 27 different agencies in Malaysia to get clearances through, and IMFC-J will help to streamline the process.

 

12.         On our part, we also a JS-SEZ Project Office, led jointly by MTI, Enterprise Singapore and EDB to support Singapore-based companies keen to expand and to do more in the JS-SEZ. On the Malaysia side, there is the IMFC-J; on Singapore’s side, there is the JS-SEZ Project Office.

 

13.         These are just little building blocks for us to make sure that the JS-SEZ has the best chance of succeeding. By introducing these initiatives, we aim to layer and to establish a strong foundation to ease uncertainty and help businesses navigate the initial challenges of entering a new market. Our aim is to force the environment to encourage global investors and many of you representing UK businesses to anchor more confidently your operations in the JS-SEZ.

 

14.         Switching my gears a little bit, because this is a BritCham event – What does it then mean for UK companies? As one of Singapore’s key trade and investment partners in the Europe, the UK plays a critical role in advancing our goals and the JS-SEZ as a project. In fact, the UK is Singapore’s 6th largest global investor, with FDI stock exceeding SGD$150 billion in 2023. The UK has also many companies in Singapore, over 6,000 companies. That is quite a strong presence that has been using Singapore as a gateway to Southeast Asia and to the broader Asia Pacific region.

 

a.    We have a robust political, economic, and people-to-people relationship. As governments, we have also supported this business-to-business architecture through very advanced ways of ensuring business-to-business confidence. Let me share what this trade architecture is. For example, we have the UK-Singapore free trade agreement, but Singapore and UK are also advancing trade architecture beyond traditional free trade agreements, both on the digital side with the UK-Singapore Digital Economy Agreement, and on the green and sustainability side, through the UK-Singapore Green Economy Framework. These agreements form the bedrock of our economic relationship, and it makes it much easier for companies to trade and invest across our markets.

 

b.    At the same time, the UK also maintains strong business presence in Malaysia. British Malaysian Chamber of Commerce  is at the forefront of welcoming businesses and also connecting them to opportunities. You have many UK companies across a variety of sectors, that includes finance, digital, manufacturing and also energy. This underscores the potential of trilateral synergies between the UK, Singapore, as well as Malaysia.

 

15.         BritCham’s steadfast support has helped, in fact, deepen business links between the UK and local communities. So it is really good to see both the Singapore and Malaysian BritCham chapters, coming together to come up with new ideas, catalyse new opportunities. We look forward to BritCham’s continuous support as a bridge between UK, Singaporean and Malaysian companies, to explore all of these opportunities that you will uncover in the JS-SEZ.

 

16.         Thank you very much for your attention. I urge all of you to also think along these two lines again – how we can complement one another strongly, and how we can compete for new investments as a Johor-Singapore Special Economic Zone. Thank you.