Mr S Iswaran at the Ministerial Visit to Fong’s Engineering & Manufacturing Private Limited

SPEECH BY MR S ISWARAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE MINISTERIAL VISIT TO FONG’S ENGINEERING & MANUFACTURING PRIVATE LIMITED, AT 10AM ON FRIDAY, 30 MARCH 2007

Mr Jeremy Fong

Managing Director, Fong’s Engineering & Manufacturing Private Limited

Distinguished Guests

Ladies and Gentlemen

Introduction

I am pleased to join you for this morning’s visit to Fong’s Engineering.I would like to thank Mr Jeremy Fong and his colleagues for their hospitality in hosting us.

Overview of the Precision Engineering (PE) Industry

The precision engineering, or PE, industry is a key pillar of Singapore’s manufacturing sector.It supports a wide range of manufacturing industries ranging from the traditional electronics sector to new growth sectors such as aerospace, and has played a critical role in attracting and retaining key manufacturing clusters in Singapore.

Apart from playing an important supporting role, the PE industry itself contributes significantly to our economy.In 2006, the industry generated an output of $21 billion and contributed to 13% of manufacturing value added.It is also one of the largest contributors of manufacturing employment, employing one in four workers in the sector.

Over the years, our PE industry has established an international reputation for quality and reliability. Last year, 19 Singapore companies made the Forbes Asia SME list, a ranking of the top 200 companies in the Asia Pacific with sales below US$1 billion.Of this 19, four were from the PE industry, namely, Unisteel, First Engineering, Micro Mechanics and MMI Holdings.This speaks well of our PE companies’ standing and potential in the international manufacturing arena.

Today, Singapore commands a sizeable global market share for several PE products.Our companies account for 70% of the global market for semiconductor wire bonder units, 60% for auto axial insertion machines and 10% for household refrigerator compressors.

Our vision for the PE industry over the next decade is to develop the industry into a key Asian manufacturing partner, offering unique, cost effective manufacturing solutions for a diverse range of growth industries.To achieve this, our PE companies, particularly our Small and Medium Enterprises, or SMEs, need to diversify beyond traditional sectors into new growth markets.

Overview of the MedTech Industry

One such market is medical technology or MedTech in short. MedTech is an integral component of Singapore’s biomedical manufacturing industry - which almost quadrupled its output in a short span of six years from 2000.MedTech builds on our traditional strengths in electronics and PE with the new areas of Life sciences. Medical products, which can range from syringes and catheters, intravenous sets and infusion pumps, to hearing aids and pacemakers, require electronics and PE capabilities at both the product development and manufacturing stages.

Our MedTech industry’s value added grew by 26% from $883 million in 2004 to more than $1.1 billion in 2005.Today, our MedTech companies employ 7,000 workers, accounting for more than 60% of employment in the biomedical manufacturing sector.

Singapore is well positioned to capitalise on the global and regional growth in Medtech.Our track record for delivering high quality components, sub-assemblies and finished products efficiently has attracted many MedTech companies to establish operations here, including manufacturing facilities.These include globally renowned companies such as Applied Biosystems, Baxter, Becton Dickinson, Fisher Scientific, Hoya Healthcare and Siemens Medical Instruments.This presents many opportunities for our PE companies to enter the biomedical market to support them in their production, from metal casting to surface treatment.

MedTech Capability Development Programme

The government is committed to supporting the upgrading efforts of our local enterprises to raise productivity and offer more innovative products and services.To this end, we launched the Capability Development Programme, or CDP, in October last year. To date, the CDP has been rolled out for the Marine, Logistics, and F&B sectors.

To realize Singapore’s efforts as a bio-medical hub, it is my pleasure to announce today the launch of the MedTech CDP.This $5 million programme aims to encourage and support our PE SMEs to embark on capability development projects in areas such as process improvement and product development.With this programme, I am confident that our SMEs will be able to meet the stringent outsourcing requirements set by global MedTech companies, and increase their MedTech–related sales by$300 million over the next 3 years.

Fong’s Engineering as an example of a key SME supplier to the MedTech industry

I am also pleased to say that Fong’s Engineering is amongst the first PE SMEs that have been awarded a grant under the MedTech CDP.

Established in 1982 by Mr Jeremy Fong to provide design and machining of simple jigs and fixtures for the electronic industries, Fong’s Engineering has since diversified and now owns high-end precision machining equipment and sub-assembly lines dedicated to the biomedical industries.Today, the company produces assemblies and components used in medical testing and surgical instruments for companies such as Perkin Elmer, MDS Sciex and Stryker Endoscopy. Fong’s Engineering is now a key SME supplier to the MedTech industry, deriving more than 60% of its revenue from the industry.

With the support from the MedTech CDP, Fong’s Engineering will implement a new quality management system dedicated to medical devices manufacturers, the ISO-13485. This will help the company redesign and streamline its current manufacturing process to address the requirements of the biomedical industry. Not only will it improve Fong’s Engineering’s operational efficiency and profitability, it will also allow the company to explore new areas of opportunities within the MedTech industry.

Conclusion

The MedTech Capability Development Programme reflects the government’s commitment to upgrade the capabilities of our SMEs in order to diversify into new growth markets and move up the value chain. SMEs such as Fong’s Engineering that enhance their capabilities to offer more cost-effective and competitive solutions for customers, will position Singapore as an even more compelling location for global companies to establish their operations.By strengthening our local supplier base, I am confident that we will be able to remain competitive and continue to attract higher value added activities in the face of stiff global competition.

I therefore encourage all precision engineering SMEs who are interested to upgrade their capabilities related to the MedTech industry to apply for the MedTech CDP.

Thank you