Mr Lee Yi Shyan at the Opening Ceremony of the Asia Pacific Food Expo 2011, 17 Nov 2011

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY AND NATIONAL DEVELOPMENT, AT THE OPENING CEREMONY OF THE ASIA PACIFIC FOOD EXPO 2011, THURSDAY 17 NOVEMBER, 5.30PM

Mr Wong Mong Hong, President of Singapore Food Manufacturers’ Association

Distinguished Guests

Ladies and Gentlemen,

Good evening.

Introduction

I am happy to be here today at the Asia Pacific Food Expo organised by the Singapore Food Manufacturers’ Association. To all our overseas friends, a very warm welcome to Singapore.

This Expo is one of Singapore’s largest food consumer events, with 150 booths showcasing foods from the Asia Pacific and an expected turn-out of 700,000 consumers. It is a key platform for our local food manufacturers to launch new products. This year, first time exhibitors from Poland and Ecuador will be here too, adding to the diversity of the product offerings.

Importance of Food Manufacturing Industry

Food is a topic that is close to a lot of our hearts. Not just because Singaporeans love to eat, the food manufacturing sector is also a critical part of our economy. It employs26,000 workers and contributes some $1.8 billion of value-added to the Singapore economy

[1]

. Many home-grown brands such as Bee Cheng Hiang, Ya Kun and Old Chang Kee have grown to be popular in regional markets.

Our food industry enjoys a good reputation here and overseas. Its reputation is built upon high quality and safety. Years of consistent investments in quality and safety has helped the industry to reach $3 billion

[2]

in export volume. There is still room for growth given that the size of the global food industry is projected to hit US$4,262 billion

[3]

by 2015.

Government is Committed to Improving Productivity of the Industry

To grow further, our food manufacturing industry must continue to innovate and raise productivity. Along the way, it may be useful to benchmark ourselves against the best in the world. For instance, labour productivity of some leading foreign food manufacturers is more than three times that of our local companies

[4]

. Singapore-based foreign food manufacturers such as Kikkoman and Nestle for example, have distinguished themselves with well-known brand names and a captive pool of customers in the region. They also invest in highly-automated equipment to take advantage of economies of scale.

To ensure our industry remains competitive, the Government has set aside $45 million to help our food manufacturing sector to enhance productivity over the next five years. The target is to achieve a 20 per cent increase in productivity by 2016, measured by average value-added per worker. To achieve this, we will need to look into three main areas – Automation, Innovation and Workforce Investment. Let me elaborate further.

Automation 

Automation is a key strategy that can help companies reduce their dependency on manpower and, therefore, increase productivity. Prima Foods’ new factory for instance is equipped with automated food production systems, including robotic arms and cartoning machines. This has allowed Prima to increase its production capacity by four times while hiring only two additional production operators at its packing section. By automating the manual processes, your company can make better use of thelimited manpower and focus on other higher value activities.

You could alsoleverage tried-and-testedtechniques such as lean manufacturing or Monozukuri to simplify workflows and reduce wastage toincrease productivity. Monozukuri is a term to describe the unique Japanese manufacturing style referring to the Japanese spirit or quest for manufacturing excellence. This approach to constantly improve production systems and processes leads to top-notch products. I understand that SFMA has been promoting the adoption of the Monozukuri among industry players. I would like to take this opportunity to commend SFMA for its unwaveringefforts.

Innovation 

Productivity can also be raised through innovation. Here, I’m referring to not only process innovation, but also product innovation.By keeping abreast of lifestyle trends, food manufacturers can endeavour to develop new and relevant products for their current markets or for new markets. When food company Sin Mui Heng came up with Halal chicken dim sum, itgenerated much interest in the Middle East and was even named as the official dim sum supplier for the 2006 Asian Games in Qatar. Such new products could sometimes command premium values and help companies stay ahead of the competition. As you would know, the Food Innovation Resource Centre, or FIRC, has helped companies to come up with a number of new and innovative products.

Innovation can also be applied to the product development process. In this year’s Product Development Competition organised by SFMA, 20 manufacturers and 111 students have collaborated to develop a total of 20 food novelty products. One of the winning products for this competition was Rainbow Rice jointly developed by Singapore Polytechnic and Highlanders International. Rainbow Rice targets the growing health-conscious market with its multi-coloured grains that are infused with a range of ingredients that fulfil our daily nutritional needs. I understand that it has been successfullycommercialised and has even gone on to win the “Best Healthier Choice 2009-2011” under the Singapore Institute of Food Science and Technology Food Product Awards Competition.

Workforce Investment

Lastly, let me emphasise the importance of building up a skilled workforce. We need a concerted effort to raise the industry profile to attract and retain talent. Food manufacturing companies have to invest in talents who can bring to fruition the potential productivity gains that I outlined earlier. I strongly urge you to enhance your R&D capabilities by hiring experts like food technologists and sensory experts to fuel innovation.

There are various Government schemes that support the productivity journey. These include SPRING Singapore’s capability development programmes and WDA’s WSQ programmes. For export, IE Singapore will provide assistance and linkages to overseas markets.

Conclusion: Productivity is a continuous journey

For all Singapore companies, ‘productivity’ cannot just remain a buzzword. It must translate into action if we are to continue to achieve sustainable economic growth. I encourage everyone here to adopt a productivity mindset, and it’s not about increasing the number of work hours per employee. There are many ways to improve productivity, all of which will lead to rewards of growth and higher margins. Furthermore, it should be a progressive chain that doesn’t stop at the company owners. By sharing the fruits of productivity gains with employees, there will be motivation to improve further, hence increasing productivity and wages. This would in turn attract more to join the industry, which would lead to growth.

For now, it is indeed heartening to note that SFMA is working closely with SPRING and other Government agencies to upgrade the industry. This will go a long way to ensuring the sustainability and competitiveness of Singapore’s food industry.

On this note, I wish everyone great success and a fulfilling time at the Expo. Thank you.

[1] Source: DOS, EDB and MRSD-MOM (2009)
[2] Source: EDB Census of Manufacturing (2004-2009)
[3] Source: IHS Global Insight, 2011
[4] Source: US Census Bureau, Annual Survey of Manufacturers, 2007; Japan Statistics Bureau, 2007; EDB Census of Manufacturing, 2007