SMEs get a boost from FairPrice scheme

At NTUC FairPrice outlets, it is not uncommon to see products from Singapore brands like Bobo, Khong Guan and Sing Long being prominently displayed.

This is no coincidence but part of a scheme to promote local brands, introduced by Singapore's largest grocery chain in 2009.

The number of local small and medium-sized enterprises (SME) benefiting from this Suppliers Support and Development Programme has gone up by about 30 per cent from 230 in 2012 to 302 last year.

Under this programme, FairPrice invests more than a $1 million a year to offer a 50 per cent discount on product and listing fees and to organise knowledge and networking seminars, said Mr Victor Chai, the chain's director of purchasing and merchandising (fresh and frozen).

In addition, FairPrice pays the firms within a month, instead of the norm of two months.

One of the key concerns of smaller businesses is maintaining a healthy cash flow, said Mr Chai.

"The programme alleviates the firms' financial burden and they can, in turn, use their savings and higher profits to launch a product earlier or invest in technology to boost productivity," he said.

The programme is open to Singapore-owned companies, or foreign companies here which have local employees and local productions or distribution facilities, with an annual turnover of less than $5 million.

Currently, FairPrice, which has more than 140 outlets, carries more than 4,500 local products, making up about 10 per cent of its range.

"We have seen an increase in awareness and support for locally produced goods grow over the years," Mr Chai said.

Sing Long Foodstuff, which has been supplying FairPrice since 1983, is one of the SMEs that has seen business grow since joining the scheme in 2012.

The scheme has reduced the need for Sing Long to take bank loans and this has helped it to save on interest costs.

Its managing director, Mr Ng Chin Nyan, said: "We are able to use the savings to invest in technology and manpower to tackle challenges, and to scale up the business."

His business has grown 6 per cent year on year since 2012.

Sing Long hopes to expand overseas and is looking to groom talent.

It currently exports to countries like Malaysia, Australia and Canada, but hopes to also open factories in neighbouring countries.

Association of Small & Medium Enterprises president Kurt Wee said SMEs are capable of manufacturing house-brand products, which tend to be no-frills products, and should be roped in more.

He said: "The initiative is welcome and useful. The help in cash flow is extremely good, because it is material to SMEs."

FairPrice's Mr Chai is happy to do his bit to help local products.

"I am proud that our locally made products are able to stand shoulder to shoulder with international brands in terms of quality and value, and I am happy to support them," he said, adding that his own kitchen is also stocked with goods from these SMEs, from oil to coffee and eggs.

30%
The number of local SMEs benefiting from the Suppliers Support and Development Programme has risen by about 30 per cent from 230 in 2012 to 302 last year.

$1m
Under the programme, FairPrice invests more than $1 million a year to provide a 50 per cent discount on product and listing fees and to organise knowledge and networking seminars.

jalmsab@sph.com.sg

This article was first published on February 20, 2017.
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