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SPEECH BY MR MAH BOW TAN

MINISTER FOR NATIONAL DEVELOPMENT

AT THE OPENING CEREMONY OF IKEA TAMPINES

 ON THURSDAY, 30 NOVEMBER 2006, AT 6.45 AM

Your Excellency, Ambassador Pär Ahlberger

Mr Hans-Göran Stennert, Chairman Of Ikano

Mr Tom Huzell, Managing Director, Ikano Private Limited

Distinguished Guests

Ladies and Gentlemen

1.               I am pleased to be here this morning to open one of Singapore’s first Warehouse Retail Projects – Ikea. 

2.               Many Singaporeans are familiar with Ikea.  Since the opening of its first store in Singapore in 1978, this Swedish company’s unique concept and philosophy have proven to be a draw to many people, and Ikea’s products have furnished many homes and offices in Singapore.

3.               Today, we witness another milestone in Ikea’s involvement here – the opening of its first warehouse retail development in Singapore. It heralds a new relationship between the company and Singapore, one that will add further value to the company, consumers and the community.

4.      It was just last year that we did the ground breaking for the first Warehouse Retail project here. In one short year, we are now at the opening of the Ikea project.  To many Singaporeans, this Ikea will offer yet another shopping experience.  But this opening actually represents a more significant and longer-term economic partnership between Ikea and Singapore. With this new project, not only is Ikea anchoring its operations in Singapore, it is now using Singapore to expand its operations in the region.

ECONOMIC GAINS

5.               The Warehouse Retail Scheme (WRS) was launched in 2004 to provide flexibility in industrial land use by allowing companies to co-locate their integrated business models with regional headquarters, retail, ware-housing and industrial activities.  Ikea is one of our three pilot WRS projects; the other two are Courts and Giant Hypermarket. Through the WRS, Ikea is able to build on its capabilities to offer not only retail service, but also provide strategic management and business development functions for its regional operations. 

6.      Beyond these functions, Ikea will be embarking on activities such as training, research & development (R&D) and providing operational facilities. For example, I understand that Ikea is establishing the Asian campus of the Ikea Business College here. This will be Ikea’s only training facility outside Delft, Netherlands. It is planning to carry out substantial R&D activities here, which will provide solutions for Ikea worldwide. Taking full advantage of Singapore’s connectivity and physical infrastructure, Ikea is also using Singapore as the location for regional warehousing, procurement, logistics and distribution, making Singapore its regional base for its activities in the Asia-Pacific.

7.      All this means more investments, more jobs and more spending in Singapore. The WRS projects will put Singapore at the forefront of best warehouse-retail practices and spearhead the rollout of new concepts in the region.  For Ikea, it means leveraging on Singapore’s strengths to reap substantial operational and cost efficiencies.

 COMMUNITY GAINS

8.               However, there is one group in the community that views this development with anxiety and concern, and this is the HDB retail shops in the vicinity. I can understand their concern.  How will the novelty of the new shopping concept and the competition from these three giant stores affect their business?  We cannot stop new developments or discourage investments, but we can facilitate and help local businesses improve themselves to meet the challenge.

9.               Recently, the Tampines Town Council formed a Business Liaison Committee and set up the Tampines Business Committee with the five Merchant Associations and business representatives in Tampines.  By pooling their resources and working together, the merchants will be able to organise big promotion events more effectively and efficiently. 

10.         An example of an initiative by the Tampines Business Committee is the Tampines Festival Light Up, which will be officially launched in December, and run for three months till after Chinese New Year. The lighting up of the streets in Tampines will not only spread the festive moods to the residents, but also inject vibrancy to the shopping experience in the heartlands.  Together with the opening of Ikea, I am confident it will bring festive cheer and more business to the shops, merchants and retailers in Tampines.

11.         Undoubtedly, the WRS will bring competition to the retailers in the vicinity, but it will also bring benefits. I am pleased to note that on its part, Ikea has committed to continue to work closely with the Tampines and Pasir Ris business community and merchant associations to boost the economic vibrancy of the area as a whole.  Together with the two other WRS projects here, Ikea will jointly organise training workshops, promotional events and job fairs to boost retailing standards, overall demand and job opportunities for the people in the area.  I hope the business community and merchant associations will take advantage of these opportunities to make this a win-win situation for everyone.

12.         The WRS projects will certainly add to the buzz in Tampines and Pasir Ris.   Singaporeans in general can also look forward to more variety in shopping experience and new vibrancy in this part of Singapore. Many are no doubt eager to see what this new place will offer. Let me end my speech soon so we can explore the store together.

CONCLUSION

13.         To Ikea, let me end by saying congratulations or gratulerar to our Swedish friends. I wish you every success!

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