Speech by MOS Teo Ser Luck at SMCCI Malay-Muslim Business Conference 2015 at Raffles City Convention Centre, Stamford Ballroom

Mr Zahidi Abdul Rahman, President, Singapore Malay Chamber of Commerce and Industry,

Distinguished Guests,

Ladies and Gentlemen,

Good Morning.

Introduction

It gives me great pleasure to attend this year’s Malay-Muslim Business Conference organised by the Singapore Malay Chamber of Commerce and Industry (SMCCI).

Importance of Internationalisation

The theme of this conference, “Business without Borders: Riding the Tide of Change”, is highly relevant for all Singapore businesses.

Given our small domestic market, Singapore companies need to internationalise to build scale and access new markets and customers. Companies that invest overseas are able to enjoy economies of scale, access resources such as manpower and land, as well as build new technological and business capabilities. In addition, when companies internationalise, they contribute to Singapore’s economy by creating good jobs for Singaporeans and economic linkages back to Singapore.

Our SMEs have become more active in internationalisation. Singapore SMEs’ stock of direct investments abroad has increased from S$29 billion in 2004 to S$52 billion in 2013. In addition, DP Info’s SME Development Survey has found that the proportion of Singapore SMEs with overseas revenue increased from 46% in 2013 to 50% in 2014.

Due to its geographical proximity to Singapore, ASEAN is an important market for Singapore. In 2013, over a quarter of Singapore’s exports were made to ASEAN markets. In particular, Malaysia and Indonesia were key markets, making up 12% and 10% of Singapore’s domestic exports in 2013 respectively.  The ASEAN Economic Community (AEC), which will be realised this year, will allow Singapore companies to export to ASEAN duty-free for virtually all products. With the AEC, Singapore exporters also stand to benefit from Mutual Recognition Arrangements (MRAs) which eliminate duplicative testing for products made in Singapore for export to other ASEAN countries. This will enable our companies to better capture opportunities from the growth and development in the immediate region.

Beyond ASEAN, emerging markets such as the Middle East will also become increasingly important for Singapore. The share of Singapore’s domestic exports made to the Middle East increased from 1.5% in 2011 to 1.8% in 2013. With the entering into force of the Gulf Cooperation Council – Singapore Free Trade Agreement (GSFTA) recently in September 2013, and with good progress being made on the Turkey – Singapore FTA, Singapore’s trade with the Middle East will continue to grow. One area that could play to our strengths, for instance, would be the stringent standards that we have adopted for Halal products. With increasing mutual recognition of such standards between Singapore and the Gulf Cooperation Council (GCC) states, our companies are in a good position to export Halal food products to the Middle East.  

Government Support for Internationalisation

The government has been actively helping SMEs to capture opportunities from internationalisation. IE Singapore’s Market Readiness Assistance (MRA) provides broad-based assistance for SMEs which are new to overseas expansion, while the Global Company Partnership Programme (GCP) provides customised help for companies with a more established overseas presence. In 2014, IE Singapore helped 28,000 companies venture abroad, of which 80% were SMEs.

This was an increase from the 26,000 companies supported in 2013. To more effectively support SMEs in their internationalisation journey, IE Singapore has recently enhanced the support level for SMEs under both programmes from 50% to 70% for three years.

Let me share with you two examples of SMEs which have successfully tapped on each of IE’s programmes. Mamanda, a high-end Malay cuisine restaurant, utilised the MRA Grant to conduct a market feasibility study of the New York market. IE’s overseas centre in New York also assisted Mamanda by introducing a potential business partner, and discussions between both parties are currently ongoing. Another beneficiary of IE’s programmes was Crayon Data, a data analytics firm, which tapped the GCP to enter the US market. The company was supported by the GCP in engaging in-market consultation services, to identify project leads and tailor its strategy for market entry. With IE’s assistance, Crayon Data secured two Proof-of-Concept deals within a month of beginning its engagements in the US. The company also used the GCP to engage a HR consultant to help it implement a HR framework that better attracts and retains top talent.

Building Capabilities for Internationalisation

Companies need to build strong fundamentals across their different business functions in order to succeed in internationalisation. To do this, SMEs can tap on SPRING’s Capability Development Grant (CDG) to develop capabilities, ranging from product and brand development and raising service standards, to staff training and financial management.

In particular, companies should actively consider how to leverage technology to transcend geographical boundaries. For example, Rosevalley, an SMCCI member, has established an e-commerce platform to sell fashionable Muslim modest-wear to customers in Singapore. Rosevalley was also able to successfully scale up this technology platform and business model to sell to overseas customers, covering Malaysia, Brunei, Indonesia and even Australia.

To help our companies grow their businesses through e-commerce, SPRING, IDA and other agencies have worked with SingPost to provide SMEs with access to a common ezyCommerce platform, which was rolled out last month. The ezyCommerce platform facilitates e-commerce activities across various online marketplaces. This platform covers the full range of the e-commerce value chain, from integrated warehouse functions and inventory management solutions, all the way to order fulfilment capabilities.  This benefits SMEs that want to adopt e-commerce, but lack the resources to invest in platform development. I understand that this platform has been very well received by SMEs, with many enquiries received since it was announced in March this year.

Connect with SMCCI and Leverage on their Services

I am heartened by the work that our industry partners are doing to support SMEs in their internationalisation efforts. In this regard, SMCCI has been actively establishing inroads into potential markets. The Chamber has led study trips to Malaysia, Indonesia, Japan and the United States for market assessment and to build relationships.

To enhance mutual cooperation among chambers in the region, an MOU was recently signed between SMCCI, Kamar Dagang dan Industri Jawa Tengah (Central Java Chamber of Commerce & Industry) and Generasi Muda Berjaya Malaysia (Young Entrepreneur Organisation Malaysia). Under this MOU, a B2B (business-to-business) e-commerce platform will be set up for the members of the three chambers. Each chamber will be responsible for ensuring the credibility of its suppliers and buyers using the platform, and also for purchasing insurance to protect both sellers and buyers. This is a milestone partnership that will help our businesses to open doors to important neighbouring markets, and facilitate B2B trading within the region.

In addition, SMCCI provides business advisory services and help for SMEs through the SMCCI SME Centre. The SME Centre has a Business Booster Programme – a 9-month long advisory and mentoring programme that helps SMEs to improve internal processes and follow through on a strategic roadmap to achieve sustainable growth. I strongly encourage our SMEs to take advantage of the services offered by the SME Centre. The Centre’s business advisors conduct advisory sessions to help you better understand and implement business management concepts, and provide advice on government assistance schemes which you can tap to address your business needs.

Conclusion

The event provides an excellent platform for SMCCI members as well as other SMEs to expand your business networks, and gain useful information on internationalisation and access to global and regional markets. I hope that many of you will uncover new opportunities in the networking and discussions that will take place later today.

I wish you a pleasant day ahead. Thank you.