Dr Cheong Choon Kong, Chairman, SATS,

Distinguished Guests,

Ladies and Gentlemen,

Good morning,

I am pleased to join you here today for the official opening of SATS Inflight Catering Centre 1.

SATS has come a long way since its modest start as part of the Malaya-Singapore Airlines more than 50 years ago. Since then, it has grown from strength to strength, developing into one of the premier players in the world providing a full spectrum of integrated ground handling and inflight catering services.

Changi Airport was recently named the "Best Airport Worldwide" and "Best Airport Asia" by Airport World, the UK based magazine of the Airports Council International. This was not the first time that Changi had won such accolades. SATS, as one of the key service providers at Changi Airport, has no doubt contributed significantly to our efforts in securing and upholding Changi Airport’s status as a key aviation hub in the Asia-Pacific region. However, we cannot rest on our laurels. Competition between airports in the region has been increasing. There are new airports nearby which are out to seize market share. We must gear up for more competition.

To ensure that Changi Airport continues to distinguish itself as the airport of choice amongst airlines and air passengers, supporting services must be of a consistently high quality.

The standards of inflight catering will provide an added incentive. The global inflight catering industry is worth more than $25 billion annually. Passengers are more discerning and expect better quality meals when flying. They are also requesting for personalised services and gourmet menus.

As a result, inflight catering can affect an airline’s competitive advantage. Airlines will demand high quality, impeccable hygiene standards and price competitiveness from inflight caterers. Hence, SATS will need to provide responsive and customised services to meet the needs of the airlines.

The new SATS Inflight Catering Centre is geared to provide airlines with the best catering available. The latest technology and innovative management is combined to meet airlines high catering standards. The inauguration of this facility when Singapore is just emerging from a recession demonstrates that SATS has the confidence to look beyond the slowdown and to position itself for the future.

This new Inflight Catering Centre exemplifies the company’s commitment in enhancing its capabilities and services to tackle emerging competition. Costing a total of $217 million to build, including $77 million worth of kitchen equipment and material handling systems, it offers an impressive state-of-the-art inflight catering facility to meet international airlines’ stringent requirements.

The new centre will allow SATS to boost its efficiency, productivity and responsiveness with capacity to meet future growth and demands. SATS is clearly positioning itself to provide better services in the years ahead.

This focus on providing quality services will be increasingly important as new players enter the market and our competitors become more proficient. Businesses and workers will therefore not just have to be more productive, but also be imaginative and proficient in all areas of their work. This will require better trained and higher skilled workers.

Hence the government has supported skills upgrading efforts to enhance our human capital. The Government has worked hand-in-hand with private and people sector partners to put in place many programmes to facilitate and encourage individuals to upgrade themselves and engage in lifelong learning. Examples of such programmes include the Skills Re-development Programme (SRP) for which the government has set aside $140 million.

Nonetheless, we must be clear that while Government supports skills upgrading, training remains the joint responsibility of workers and their employers. Individuals must recognise the rewards from skills upgrading and take charge of their own learning. Every worker must become a lifelong learner.

Employers must also take responsibility for investing in the training and upgrading of their workers. To remain competitive, Singapore companies will have to constantly re-engineer strategies to cope with changing market conditions. They will have to equip employees with the skills and knowledge to stay ahead of competitors. In this intensely competitive business climate, the key to survival is "skills, skills and more skills".

I therefore commend SATS for its wise investment in the training of its workers. In FY 2001/2002, SATS spent $7.3 million to provide more than 20,000 training places for its staff. I understand that SATS has stepped up its efforts to provide continuous training to its staff to furnish them with skills to handle its state-of-the-art systems, including a two-month hands-on programme. To maintain a high level of culinary skills, a dedicated and fully equipped Training Kitchen has also been set up within the facility. SATS has also sent staff to overseas kitchens for training to pick up new ideas. The result speaks for itself. SATS has managed to garner no less than nine awards for the excellent quality of its products and high standard of service in the past two years. These awards included the "Most Consistent Caterer Award" by Cathay Pacific in 2000 and "Partners in Excellence Award (Gold)" by British Airways in 2001

The Singapore economy is recovering from last year’s recession despite the uncertainties ahead. We are witnessing fewer retrenchment exercises and the number of retrenched workers has declined from the peak of above 8,000 in the third quarter of 2001 to about 4,800 for the first quarter of this year. Unfortunately, job creation will not rise as rapidly and unemployment could hit a high of about 5% to 5.5% by the second half of this year.

The picture is, however, not all gloomy. For example, MOM’s March 2002 job vacancy survey showed that there were nearly 14,000 jobs available in the private sector alone. The restaurant and hotel sector, including inflight catering, had the highest vacancy rate at 2.3%.

SATS’ experience is a case in point. SATS Catering today employs more than 2,800 workers. It offers a congenial work environment with sophisticated equipment to put an end to much manual work. Nonetheless, the company still has more than a hundred vacancies. In fact, it has difficulty recruiting local workers.

SATS offers competitive salaries. Qualified cooks can earn up to $2,600 per monthly. The company provides transportation and additional allowances for employees performing late shifts. There is an MRT station nearby. So why are Singaporeans are staying away from such jobs?

The SATS experience is not unusual. My Ministry has been helping retrenched workers find new jobs. We have been able to match 6 out of 10 persons who registered for employment assistance despite the poor employment market. Yet only about 15% were eventually placed. The vast majority either was not hired or did not take the job offered. This means that many jobs remained unfilled while unemployment continues to rise. This is not a healthy situation.

Today, we are facing a totally new economic environment. Unlike the 1985 to 1986 recession, the jobs lost in this downturn are unlikely to return even after the economy recovers. The companies that moved out or downsized their operations in Singapore are unlikely to restart such activities in Singapore again. This is especially so in the manufacturing sector.

It is important for workers to acquire skills for new jobs in different industries. We have to change our attitude and be prepared to move to where new jobs can be found. We must learn to be more flexible. We must be prepared to learn new skills. We must even be prepared to accept a lower starting pay and more difficult working conditions.

We are in an era of rapid changes. Remaining inflexible and focussed on past ways of earning a living is not the solution. Bending with the wind and moving with the tide will ensure our survival. For workers who are out of jobs now, learning a new skill to take on a new job is the only way to remain employable. I urge all workers to take advantage of the Government’s many skills upgrading programmes to enhance their employability and for those who are unemployed, to better their chances of getting a new job.

The opening of the SATS Inflight Catering Centre today further affirms SATS’ commitment to develop a competitive and vibrant inflight catering service to support Singapore’s position as a regional airhub. With this new centre, SATS is better positioned to serve its airline clients and to help anchor more such clients to Changi.

On this note, I would like to offer my warmest congratulations to the management and staff of SATS on the opening of this centre. I wish SATS every success in the years ahead.

Thank you.