Speech by Minister S Iswaran, Minister for Trade and Industry (Industry) at the opening ceremony of Pepperl+Fuchs’ Global Distribution Centre

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SPEECH BY MR S ISWARAN, MINISTER FOR TRADE & INDUSTRY (INDUSTRY) AT THE OPENING CEREMONY OF PEPPERL+FUCHS’ GLOBAL DISTRIBUTION CENTRE, FRIDAY, 14 OCTOBER 2016, 10:30AM

Your Excellency Dr. Michael Witter, Ambassador of the Federal Republic of Germany to Singapore,

Mr. Michael Fuchs Senior, and Mr. Michael Fuchs Junior, Shareholders of Pepperl+Fuchs

Distinguished Guests,

Ladies and Gentlemen,

Good Morning.

Introduction

1.      It is my pleasure to join you today for the opening ceremony of Pepperl+Fuchs’ Global Distribution Centre.  I am also glad to welcome again to Singapore, your CEO Dr. Gunther Kegel who is one of our Singapore Economic Ambassadors to the German Mittelstand. 

Long-standing partnership between German Mittelstand Pepperl+Fuchs and Singapore

2.       Today, in Singapore, there are over 1,000 Mittelstand companies who have been quietly and steadily contributing to our economic development and growth.  They have chosen to invest in Singapore because of our proximity and connectivity to the emerging, high-growth regions in Asia, our trusted business environment, our liveability as a green city in the heart of Asia, as well as our diverse and deep talent pool.

3.       Pepperl+Fuchs is one such company that has been here since establishing a small sales office in 1979.  Over the years, you have evolved to become one of the larger German Mittelstand Champions in Singapore, employing around 1,000 people.  As we have come to expect of a Mittelstand Champion, Pepperl+Fuchs’ products – sensor technology for factory automation – are made to the highest quality and with the most innovative processes.

4.       The Singapore office serves not only as the Asia Pacific regional headquarters, but also undertakes a range of high-value activities, ranging from product development and manufacturing, to supply-chain management.  The launch of this S$65 million Global Distribution Centre, which boasts a state-of-the-art, Internet-of-Things-enabled (IoT-enabled) High Bay Automated Storage and Retrieval System (ASRS), marks yet another significant milestone in the partnership between Pepperl+Fuchs and Singapore.

Pepperl+Fuchs Singapore will leverage synergies from integrated advanced manufacturing and logistics activities

5.       Before the launch of this centre, Pepperl+Fuchs’ supply-chain and logistics operations were decentralised, dispatching finished products that were manufactured in Singapore to local warehouses in the Asia Pacific region, before they reached end customers.  This resulted in higher operating costs from running different warehouses, as well as longer delivery times for customers’ orders.  I am therefore encouraged to learn that Pepperl+Fuchs has taken the lead in the adoption of productivity-enhancing technology, which benefits not only your internal processes but also your workers.

6.       I understand that with four new automated stacker cranes and 17 intelligent workstations, this new Global Distribution Centre will enable Pepperl+Fuchs to consolidate its entire warehousing and logistics operations for the Asia Pacific region in Singapore, and increase the level of support which your Singapore manufacturing operations provides to distribution centres in Europe and the United States of America.  With this expansion, Pepperl+Fuchs will achieve both a 40 per cent increase in productivity, and also an up-skilling of job roles through the application of automation technologies.  Warehouse operators can be retrained and deployed to less repetitive tasks that require a higher level of skills, thereby improving their job scope and prospects.

7.       I was also told that this is the world’s first facility where the ASRS (Automated Storage and Retrieval System) is built on top of the pallet warehouse, allowing the company to house both storage systems on a single plot of land.  This significantly increases the site’s land-use efficiency, which is especially critical in Singapore.

The Industrial Internet of Things has been identified as a key capability in our Advanced Manufacturing thrust

8.       This new Global Distribution Centre by Pepperl+Fuchs has valuable synergy with your strong manufacturing presence in Singapore.  The manufacturing sector, which contributes about 20 per cent of our GDP, will continue to be a key pillar of the Singapore economy.  The Government will continue investing significantly in advanced manufacturing technologies to better position our companies for the future.  Under the Government’s Research, Innovation and Enterprise (RIE) 2020 plan, S$3.2 billion has been dedicated to support research in Advanced Manufacturing & Engineering.  We have identified the Industrial Internet of Things as a key capability among the new technology areas.  And we certainly hope to see more successful deployments following in the footsteps of your highly automated Global Distribution Centre.  Advanced Manufacturing is also one of the key growth sectors that has been identified by the Committee on the Future Economy.    

9.       Today, I am happy to say that Pepperl+Fuchs is part of a pioneering group of companies in Singapore which has leveraged Industrial IoT technologies to digitalise their facilities.  For instance, Chevron Oronite, as part of its effort to enhance the efficiency and productivity levels in its chemical plant on Jurong Island, has also partnered Emerson Electric, a US engineering firm, to install a wireless plant network infrastructure to conduct real-time monitoring of plant personnel and field equipment.  Similarly, just last month, dorma+kaba, a building equipment manufacturer, announced that it would be engaging Siemens’ new Manufacturing Design consultancy to implement Industrial IoT solutions in its new factory in Singapore. 

Talent development will be key to the manufacturing sector’s success

10.     This digital future would not be possible without skilled talent, and I am pleased to note that Pepperl+Fuchs continues to invest heavily in Singapore’s young engineering talent, sponsoring dual studies in Germany and the Singapore Institute of Technology (SIT) for Singaporean polytechnic graduates.  The Poly-goes-UAS programme, amongst other manpower initiatives, contributes to building a pipeline of skilled local talent, and grooms Singaporeans into industry leaders, which is key to delivering sustained growth and giving companies the continued confidence to invest in Singapore.

11.     One example of a scholar from Pepperl+Fuch is Mr Pang Shun Toll, a graduate of Singapore Polytechnic, who is enrolled in Duale Hochschule Baden-Württemberg (DHBW) in Mannheim, Germany.  He is now doing his pre-university internship with the company after completing language lessons, and I am told he strongly recommends the Poly-goes-UAS programme to all engineering diploma holders for how it uniquely provides students with “many hands-on working opportunities” and “several internship stints during their stay in Germany”.  Apart from picking up a new language, this chance to network internationally has also granted him a “vital edge in the hyper-connected global industry”. 

12.     Thanks to the support of like-minded industry leaders such as Pepperl+Fuchs, the dual studies programme continues to gain momentum, with eight companies awarding 39 scholarships over the past three years.  Like Pepperl+Fuchs, Singapore will continue to invest in our workforce through the national SkillsFuture initiative, supporting Singaporeans in developing the skillsets required to take on good jobs. 

Conclusion

13.     Let me conclude by congratulating Pepperl+Fuchs on your continued success in Singapore and thank you for your contributions towards our Advanced Manufacturing talent and capabilities with this Global Distribution Centre.  With a concerted push by industry and the government, we will continue to find niches of opportunity to sustain our collective growth story. 

14.     Thank you.