Mr Lee Yi Shyan at the Opening Ceremony of MTA 2013

SPEECH BY MR LEE YI SHYAN, SENIOR MINISTER OF STATE, MINSTRY OF TRADE & INDUSTRY AND NATIONAL DEVELOPMENT, AT THE OPENING CEREMONY OF MTA 2013 ON TUESDAY, 9 APRIL 2013, 0945 HRS, SINGAPORE EXPO

Distinguished Guests,

Ladies and Gentlemen,

Good morning.

Introduction

I would like to extend a warm welcome to all participants and our overseas visitors to MTA 2013. 

Manufacturing sector continues to be a key pillar of Singapore’s economy

The manufacturing sector remains a key pillar of Singapore’s economy, accounting for 20 per cent of the GDP or S$60.2 billion in value added. In addition, manufacturing employs over 400,000 workers¹.

The precision engineering (PE) industry, accounts for about 15 per cent or S$8.8 billion of Singapore’s manufacturing value-added, and employs close to a quarter of Singapore’s manufacturing workforce.

Singapore’s precision engineering industry has evolved significantly over the years. From its initial traditional role as a supporting industry within Singapore, the precision engineering industry is continually evolving and transforming itself to serve global markets from Singapore. High value-added activities are also contributing to the growth of the complex equipment and component original equipment manufacturer, or OEM segments. An example would be Heptagon Micro Optics who has established its manufacturing facility for new wafer-level optics in Singapore. The precision modules & components industry segment had also grown by 3 per cent in 2012 due to higher production from optical instruments, photographic equipment and electronic connectors

Our precision engineering industry remains competitive and continues to stay at the forefront of technology

As the precision engineering industry in Singapore transforms and moves up the value chain, it is paramount that we remain competitive and continue to stay at the forefront of technology.

 The industry should thus continue to leverage existing technological transitions and improvements. I am heartened to see a trend where companies shift their emphasis from the mass production of simple parts, to the design, development and production of technology-intensive precision components and complex equipments. For instance, Rohde & Schwarz, a leading manufacturer of test and measurement equipment for mobile radios and radio communications, announced a S$85 million-investment to intensify its manufacturing, headquarters and R&D activities in Singapore. Rohde & Schwarz’s new facility at Changi Business Park will be completed by the end of 2013. This integrated facility which comprises headquarter, R&D and manufacturing functions will be the company’s first global hub, outside its headquarters in Germany. I strongly encourage all companies to keep up this positive trend to remain competitive.

Another exciting new area with strong growth potential is additive manufacturing or 3D printing. The development of additive manufacturing will benefit the precision engineering industry, providing solutions for industry verticals such as the aerospace, automotive, medical, marine, as well as oil & gas industries. There are already early signs of success. The Singapore Institute of Manufacturing Technology, or SIMTech, has developed a patented additive manufacturing process known as the laser-aided additive manufacturing, or LAAM technology. LAAM can be deployed for applications in the fabrication of new parts, surface modification and repair of high value-add components. For instance, LAAM could be used for the repair of small turbocharger components in the marine, oil and gas industry.

Strengthening capabilities through productivity enhancements

One urgent challenge for our companies is how to raise their productivity significantly. Studies have shown that the productivity levels of our precision engineering industry is only about half of that in developed economies such as the US, Germany and Japan. Hence, there is huge room for improvement.

PE productivity roadmap

Manpower development is a key enabler in boosting the productivity and capability development in the precision engineering industry. Therefore, we launched a S$52 million Precision Engineering Vocational Continuing Education and Training (PEVC) initiative² in 2011 to train a sustainable pool of 2,800 master craftsmen over 10 years. The PEVC also aims to create a progressive craftsmen career path to strengthen the professional image of the craftsmen trade, and help retain this pool of talent and valuable skill set in the industry.

In 2012, 83 craftsmen were enrolled in the inaugural intake of the precision engineering master craftsman (PeMC) programme at Nanyang Polytechnic. This first batch of master craftsmen will graduate in 2014, and they will be equipped with advanced skills to lead productivity improvements, carry out more complex operations, and utilise their deep technical knowledge to train the next generation of craftsmen.

Government Schemes

In addition, the Government has also announced several broad-base schemes in the recent 2013 Budget to help companies improve their productivity. The new PIC bonus will provide companies that invest a minimum of S$5,000 per Year of Assessment in PIC qualifying expenditure, a dollar-for-dollar matching cash bonus. Companies can claim up to S$15,000 over a three Years of Assessment period, and this bonus will be paid over and above existing PIC benefits.

Furthermore, the capabilities and productivity of our precision engineering suppliers are critical to support the increasingly complex demands of a high-mix low-volume manufacturing environment. Establishing a robust network of suppliers in and around Singapore will thus enable us to anchor complex manufacturing activities here. In order to further strengthen the supplier ecosystem, the Government has also announced an enhancement to the Partnerships for Capability Transformation (PACT) scheme at the recent 2013 Budget announcement. 

The PACT scheme encourages win-win partnerships between global manufacturers and local suppliers by upgrading the suppliers’ capabilities through the sourcing and qualification processes. PACT has been enhanced to bring in a wider range of supply chain activities undertaken between the manufacturers and the suppliers that can enjoy the incentive support. These include co-innovation, capability upgrading and sharing of best practices between manufacturers and suppliers within the supply chain.

Conclusion

Singapore is well-positioned to grow strongly in the precision engineering industry through productivity-led growth. We would like to invite companies and business leaders to join us in our efforts, and build mutually beneficial partnerships.

On this note, I wish the organisers, all participating exhibitors and visitors an enriching and successful event. I now declare MTA 2013, open. Thank you.

¹ Source: Economic Survey of Singapore 2012

² It is part of the Precision Engineering productivity roadmap under the National Productivity and Continuing Education Council (NPCEC)