Distinguished Guests,

Ladies and Gentlemen,

Good morning,

Introduction

I am delighted to officiate this opening of the Asia Pacific Food Expo, and I congratulate the Singapore Food Manufacturers’ Association for organizing this inaugural regional food event.  In so doing, SFMA has helped position Singapore as a vital food hub and a gateway to the Asia Pacific market.

3          Both the Asia Pacific Food Expo and Wine For Asia are useful and important platforms for local companies and those from the region and beyond to interact and actively collaborate for mutual benefit.  I urge all companies here to seize the opportunity to exchange ideas and explore new frontiers.

The Prospects

4          The global food industry has a turnover of more than US$1.3 trillion, and also enjoys good growth. If we use the demand for packaged foods as an indicator, global growth is estimated at 4.4% while that sector in Singapore will grow by 5% per annum over the next few years.   This shows clearly the potential for development.

Singapore Food Manufacturing Sector

5          Today, Singapore’s food manufacturing sector comprises some 680 establishments, mostly SMEs.  It generates about $3.7 billion revenue and $11 billion in trade in 2002. 

6          The top 30 food manufacturing companies, like Tee Yih Jia, SFI, Nestle and Pokka make up 60% of the output value.  At the same time, other companies such as Sin Hwa Dee, Bee Cheng Hiang and Tai Hwa are steadily enlarging her footprints in both local and overseas markets.

Key Strategies

7          To venture successfully into regional and international markets, food manufacturers must have the right ingredients.  That is to say, they must focus on four key areas, namely

• creating newer and higher value food products,
• improving operational efficiency,
• raising the quality and standards and
• enhancing access to new markets. 

(I) Newer and Higher Value Products

8          Singapore has strength in food-related R&D.  We host 9 out of the 10 top flavours and fragrance companies here. Several global and local food companies are developing New Asian Food.  Singapore is also emerging as a location for food and feed additive application labs. 

9          R&D is no longer confined to the larger players in the industry.  Manufacturers of all sizes are now setting aside more resources to develop their R&D capabilities. This include new product development, shelf life extension, and new design and packaging technology.  One example is Greenearth Capital.  This 2-year-old company specializes in creating frozen desserts using premium fruits and natural products. It carries out most of its product development and testing in Singapore. The company’s flagship product, Strawberry Smile, is the company’s first frozen dessert. Today, it has expanded this luxury dessert range with innovative additions that combines cream or sorbet with fruits and its products are now sold in Asia, Europe and the US.

(II) Improve Operational Efficiency

10        Like all other sectors, the food manufacturing sector has to contend with rising business costs. The margins for processed food are generally thin, often less than 5%, with major cost components being raw materials and manpower. To remain competitive, manufacturers have adopted automation and upgrading the skills of their workforce as ways to enhance their competitiveness. 

11        In this connection, I am happy to hear that the SFMA has embarked on a programme to identify the skills gap and skills requirements of the sector. This initiative will help train and equip some 2,100 workers with certifiable skills, and make companies in the sector fighting-fit.

(III) Raise Quality and Standards

12        In the area of food, no amount of competitive pricing can substitute for safety, especially when selling to increasingly affluent markets.  Hence, about 20% of food manufacturers in Singapore have already adopted structured food safety systems such as HACCP or Hazard Analysis Critical Control Point system to give buyers greater assurance and peace of mind.  They are far-sighted, and I hope more will do so quickly so as not to deny themselves this competitive edge.

(IV) Enhance Access to Markets

13        As companies grow, they will want, and indeed need to venture beyond the domestic market.  And as they do so, they will discover that they have to do more to brand themselves, individually and sometimes collectively, so that they can get a positive response from the target markets and segments.

14        Realising this, the STB, SPRING Singapore and the SFMA jointly embarked on the Singapore Premium Food Gifts programme to help upgrade the capabilities of Singapore-based food companies so that they can create quality food gifts that meet export quality standards, and market them under the Singapore Brand. This also helps our food companies move into higher value products and be better able to tap on tourist market. To date, two phases of the programme had been launched resulting in the creation of more than 30 innovative gift food products.

15        The third phase of the programme will roll out early next year with the Health Promotion Board (HPB) when another 30 new, healthy food products will be launched.

Closing

16        With these remarks, it now gives me great pleasure in declaring open the inaugural Asia Pacific Food Expo and the opening of Wine for Asia 2004, and I wish you every success. 

Thank you.