AMID concerns that economic restructuring may be hurting Singapore's growth, Minister of State for Trade and Industry Teo Ser Luck is "quietly optimistic" that the economy will hold up well.
But Mr Teo yesterday stressed that "external demand and external economic factors" also influence Singapore's fortunes.
"I believe we are holding up quite well," Mr Teo said, responding to queries about a slowing manufacturing sector.
Growth was 2.1 per cent in the second quarter over the same period last year, far slower than the first quarter's 4.7 per cent expansion.
The main drag on Singapore's growth was manufacturing, which grew just 0.2 per cent in the second quarter over last year, down from 9.9 per cent in the first quarter, according to advance estimates released on Monday by MTI.
"We have to look at whether in the next quarter, things will hold up. But I'm quietly optimistic that this year, we should hold up well, but it also depends on external demand and external economic factors," he said.
"Because Singapore is very much export-oriented and very globalised, so a lot of other external economies' movements and volatility will affect us as well... I think our economy can still experience growth, especially in some sectors."
Mr Teo was speaking on the sidelines of a visit to Matex International, which he cited as an example of a small and medium- sized enterprise (SME) that has the potential to become a multinational company.
Founded in 1989, Matex, a chemical company that produces dyes for the textile industry, is collaborating with German partners to develop indigo dyeing technologies to cater to growing demand for more eco-friendly denim production.
Denim dyeing is a highly pollutive process but Matex has developed a dyeing product that uses up to 25 per cent less water and takes only two-thirds of the time required compared with traditional dyeing processes.
Through MTI's Intellectual Property Intermediary (IPI) scheme, Matex was able to collaborate with the National University of Singapore to develop a wastewater treatment technology for its dyeing process.
"Matex has a very high potential to make it big and scale up to a different league. The question is whether it has the resources, talent and sustainability to do so," Mr Teo said.
"To bring (its product) to commercialisation, it has to do it within a window of opportunity. The issue is whether it has identified that time span, and whether it has been able to grab the opportunity to do so.
"We hope to build more multinationals out of our SMEs, and this is one company that possibly has the potential... The innovation coming out of a company of this size is a good role model for the rest of the SMEs."
Challenges to commercialising its technology include skilled labour shortage and a lack of space to expand its production plant, and funding.
"We have to develop the business from here, but set up the plant overseas and protect the IP in Singapore," Dr Tan Pang Kee, Matex's chief executive and managing director, said. "But there are many more competitors overseas. Whatever (know-how) we bring out there, it gets copied very, very fast. At the beginning, when we first brought our know how to China, we were pioneers.
"After five years, we found similar products in the market, and that (brought down) the prices. So for the company to grow, we have to keep in the pipeline different versions (of our technology)."
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