Mr Lee Yi Shyan at the 25th Anniversary Dinner of Singapore Precision Engineering & Tooling Association (SPETA)

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE 25TH ANNIVERSARY DINNER OF SINGAPORE PRECISION ENGINEERING & TOOLING ASSOCIATION (SPETA), 29 MARCH 2007, 7PM, ORCHID COUNTRY CLUB GRAND BALLROOM

Dr Felix Ong, President of SPETA 

Distinguished guests

Ladies and gentlemen

Good evening. Let me begin by congratulating the Singapore Precision Engineering & Tooling Association (SPETA) on your 25th Anniversary celebrations. I am pleased to be here this evening to join you in celebrating this significant milestone.

Singapore’s Capabilities In Precision Engineering - A Backbone Of Our Manufacturing Sector

Precision Engineering, or PE, is the backbone of our manufacturing sector. It is a critical capability that has enabled Singapore to achieve strong leadership today in many sectors such as manufacturing of hard disk drives, semiconductor equipment, machine tools, aerospace, and oil & gas equipment, just to name a few. These sectors rely strongly on critical PE skills for tooling and precision machining to manufacture precise modules and components.

Let me take an example of a modern product such as a lab-on-chip medical device, which could be used to analyze viruses such as SARS and bird-flu. It has a computer chip in the center sitting on a plastic carrier with numerous minute channels to carry reagents and medical samples from small reservoirs to the chip for analysis. We are able to manufacture such a sophisticated medical device here in Singapore because of our strong PE capabilities.

Fortunately, we recognized the importance of the PE industry early in our development. Hence, in the 1970s, with the help of partners from industry and foreign governments, Singapore set up various training institutes to equip our workforce with the formative PE skills for industrialization. Because of these efforts, Singapore was able to leapfrog its regional competitors to be the preferred location in Asia for manufacturing high value products.

Today, thanks to the strengths of the PE industry, Singapore has achieved global leadership in several manufacturing areas – for example, we account for 20% of the world’s hard disk drives and are a leading location in Asia for the production of oil and gas equipment. Last year, the PE industry achieved a manufacturing output of S$21.8 billion, growing 10.7% over 2005, with an employment of 94,800. With this, the PE industry contributed 9.6% of the total manufacturing output, and 25% of the total manufacturing employment.

PE Offers A Good Future For Our Workforce

With the advancement of manufacturing technologies, the PE industry has evolved from being just a skills-based capability in the 70s to one that requires the PE workforce to have mastery over computer control knowledge, complex manufacturing and measuring processes and inter-disciplinary engineering know-how. The PE industry is therefore transforming into a knowledge and capital intensive sector.

The evolution of the PE industry has also brought about changes in the working environment for the PE workforce. Today, for example, we operate state-of-the-art machines that often cost more than a million dollars each, in a highly controlled air-conditioned environment so as to achieve ultra-precision tolerances. The exacting demands of the modern PE industry require a workforce that has the ability to constantly upgrade and re-equip itself to meet the challenge of the growing sophistication of the manufacturing sector. The PE industry thus offers a good career growth path, ranging from ITE specialists to Polytechnic technologists and up to university graduates.

Increasing Global Competition

However, Singapore faces strong global competition, with several regional countries catching up with us in PE competencies. For example, investors are looking towards China and Thailand as lower-cost alternatives to make plastic and metal components. In recent years, Taiwan has gained much fame in being a strong competitor for consumer electronics manufacturing, an area which requires strong capabilities in PE. Japan is, and will continue to be, a role model for our PE industry to emulate and to match one day.

In the face of such rising global competition, the Singapore PE industry has to undertake measures to stay ahead.

Singapore - A Centre of PE Excellence

Singapore’s PE industry can and must become a Centre of PE Excellence. For us to achieve this vision, we have to ensure that we continue to be strong in three key capabilities – technological prowess, market knowledge and manpower.

Technological Prowess

The first component is technological prowess. Countries which are strong in this area include Germany, Japan and Switzerland. These countries are able to produce 256 cavity multi-component molds, high-end rotational square molds, with ultra-precision machining. They design and engineer highly automated manufacturing lines in clean rooms, and unmanned integrated tool rooms. Owing to their strong PE technological prowess, global customers are prepared to pay top dollars for German, Japanese and Swiss products.

Likewise, we need to shape our PE industry into the mold of these leading nations in PE. Today, there are pockets of strong PE capabilities in Singapore. For example, Nanotechnology Manufacturing does ultra-precision machining under sub-micron tolerances; Univac Precision makes high cavity molds for medical components; Advanced Material Technologies specializes in powder injection molding of complex metal and ceramic components. But we need to further broaden and deepen our PE competencies by acquiring and developing cutting-edge PE technologies. It is no longer enough for us to compete on being technically more competent and delivering on time with the right quality. Clients are increasingly looking for PE companies that can provide value-added services such as business solutions, product development and process improvements. This is the new competitive landscape that we are facing.

Market Knowledge

The second component is market knowledge, the ability to anticipate trends and participate in new markets and geographies. Our PE companies must understand constantly changing market requirements and adapt their products and processes to these new markets and geographies. To be successful in doing so, companies must be able to offer a spread of expertise across different industries. A PE company specializing in and supporting, for example, the consumer electronics sector must also be able to do the same in other sectors such as medical devices and aerospace. With such broad-based capabilities, our PE sector will be able to sustain product and market diversity to compensate for the ups and downs of business cycles.

New Generation PE Manpower

The third and final component is manpower. Today, we have a pool of very experienced and skilled PE manpower. However, we need to upgrade their capabilities to meet the challenges of tomorrow. Let me use again the example of the lab-on-chip medical device which I earlier described.

To produce this device, a team of highly experienced designers with good knowledge of plastic and metal characteristics is required to design the steel mold. The fabrication of the mold is done by highly skilled machinists using state-of-the-art Computer Numeric Controlled machines linked to a central computer. These machines are able to change tools and jobs pieces automatically without human intervention. Such a complex manufacturing system requires good PE and engineering informatics skills to operate. The mold would then be used in an automated injection molding machine in a cleanroom environment to manufacture the carrier 24 hours a day, 7 days a week. Good process know-how is needed to ensure high yield and continuous operation. The entire process from design to mass manufacturing would require a team of very experienced PE talent with qualifications ranging from Nitec, diploma to university and post-graduate degrees.

Besides the medical technology sector, we will also see similar PE environments in the electronics, aerospace and industrial equipment sectors. According to EDB’s projections, the PE industry will be creating some 5,000 jobs over the next four years, many of which will require the new capabilities just described.

To enable our PE manpower to take on these challenges, EDB, SPRING, WDA, the Institutes of Higher Learning and SPETA are working on new diploma programmes and apprenticeship schemes to develop new generation PE skills, and to rejuvenate and upgrade the PE workforce.

By getting the fundamentals of technological prowess, market knowledge and manpower right, Singapore will be well positioned to enter the same league of excellence in PE capabilities as Germany, Japan and Switzerland.

Industry Ownership

Aside from these fundamentals, the success of the PE industry in Singapore has always rested on the strong support from industry players such as you. As I have mentioned earlier, we managed to leapfrog our competitors in the 70’s because of industrial leadership and support. As such, I would like to encourage the industry to once again take on the leadership and ownership role in developing Singapore’s PE industry to make the next giant leap forward, and ensure that Singapore is technically competitive with the world’s best.

On our part, the Government will continue to support the development of the PE industry with grants for training, R&D and innovation. Suppliers can also leverage on the EDB’s Supplier Development Initiative and SPRING’s Capability Development Programme, to help PE suppliers build up their capabilities and facilitate the transfer of technology from their OEM clients.

Conclusion

On this note, I would like to congratulate SPETA again on your 25years of achievements. SPETA has done well in playing a leadership role in Singapore’s PE industry, and I have every confidence that it can and will continue to do so by building up a new generation of PE capabilities and manpower. I wish you every success for the future of the PE industry.

Thank you.