Mr Lee Yi Shyan at the Launch of the Food Innovation & Resource Centre (FIRC)

SPEECH BY MR LEE YI SHYAN MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE LAUNCH OF THE FOOD INNOVATION & RESOURCE CENTRE (FIRC) AT THE SINGAPORE POLYTECHNIC AT 10:00AM ON TUESDAY, 29 MAY 2007 

Mr Edwin Khew, President, Singapore Manufacturers’ Federation

Mr Allan Tan, President, Singapore Food Manufacturers’ Association

Mr Low Wong Fook, Principal, Singapore Polytechnic

Ladies and Gentlemen

Introduction

Good morning. I am delighted to be here today to launch the Food Innovation & Resource Centre (or FIRC). I congratulate SPRING and Singapore Polytechnic for their joint efforts in successfully connecting the technological capabilities of our educational institutions with the business interests of our local industry and enterprises.

Food Companies need Technology Innovation to Succeed

In the past, Singapore food companies stood out among competitors for our quality and lower cost products. However, the situation is fast changing as other companies are now able to offer similar products at the same quality and perhaps at a lower cost. With such keen competition, our companies must find ways to differentiate their products to stay relevant and grow. One way to do this is to innovate and harness new technologies to develop new and higher value products.

The Japanese food companies have been doing this. They produce a wide range of food products that is well-received around the world. This is because their innovative products and packaging stand out from their competitors’. From frozen microwavable sushi to antioxidant chocolate, Japanese food companies have set themselves apart with new products that are at the forefront of food trends and technologies. This is how they maintain their edge and why their products continue to command a premium. Our companies should do the same.

I am encouraged that a number of our companies have already embraced the need to innovate, and have expanded overseas successfully. These companies have invested resources to come up with innovative products and processes. One example is Fountainhead Manufacturing, which makes Western condiments and sauces under the Tropicana and Tropic Choice brands. They have developed various unique new products, such as a "Nachos Cheese Dip" catering to Asian tastes, halal Teriyaki sauce and a vegetarian "Mayo D'Lite" sauce.

Another company is Bee Cheng Hiang, best known for its bak kwa. By re-engineering the formulation and processes of its existing core products, Bee Cheng Hiang has diversified into modern and innovative products such as floss sticks with cheese dip, floss popcorn cookies, and broth that can be used as soup stock. Besides innovating products, Bee Cheng Hiang is also innovating on its processes, and is designing and building automated processing lines to generate these new products.

These are encouraging signs. But our companies must do more to maintain our edge in the face of increasing competition.

Launch of the FIRC

The Government recognises that many SMEs do not have the resources and know-how to go into technology innovation. This is why SPRING launched a $150 million Technology Innovation Programme (or TIP) last August to help SMEs make use of technology to develop innovative products. One of the programme’s key initiatives is to strengthen the technology infrastructure to support the innovative capabilities of SMEs. To achieve this, SPRING has been working with the Ministry of Education and the Polytechnics to set up Centers of Innovation (COI) for key industries. This is to leverage on the existing linkages between the Polytechnics and industry.

The FIRC is the first such COI to be set up. It will provide technology consultancy and advice to help our food companies develop technology applications that they can quickly adopt and commercialize. The center will invest some $7 million in state-of-the-art food processing and development equipment over the next three years. This will allow SMEs to create and test new products at the center. The FIRC will go beyond product creation, and SMEs can explore applications in such areas as sensory, process, packaging and shelf-life evaluation technologies.

The Singapore Polytechnic, which has a well-established food technology programme and a good track record for consultancy services to local enterprises, will manage the FIRC. For example, I understand that the Polytechnic has helped develop first-in-the-market products such as low-sodium, low fat Chinese sausages and microwavable Asian ready-meals. With the Singapore Polytechnic’s assistance, the companies only took nine months to translate their ideas into actual products on the market. SMEs can look forward to working with the FIRC to come up with more innovations like these and bring them to the market quickly.

Conclusion

I am happy to note that the FIRC has already garnered strong support from the industry. Singapore Polytechnic will sign MOUs later with the Singapore Food Manufacturers’ Association and the Singapore Manufacturers’ Federation for the use of the center's services. With good industry support, we anticipate that some 275 projects will be completed in the first five years, generating a total value add of $115 million.

Under the TIP, SPRING will also defray part of SMEs’ project costs to help build up their in-house technological capacities. I therefore urge our food companies, particularly SMEs, to tap on the FIRC’s expertise to adopt new technologies so that they can commercialize their innovations quickly and stay ahead in the global market.

Thank you.