To grow in an increasingly competitive global market, small and medium-sized enterprises (SMEs) need to stand out. In this new six-part, fortnightly series sponsored by Spring Singapore, FRANCIS CHAN takes a closer look at the local food manufacturing scene and how leading SMEs in the sector succeed by making the most of their resources.
SINGAPORE may boast only about 780 food manufacturers, but the sector still manages to punch above its weight in terms of industrial output.
The latest figures from 2008 show that manufacturing output and value-added from the sector amounted to $6.1 billion and $1.4 billion respectively.
This was a steady increase from about $5.7 billion and $1.3 billion in 2007.
Enterprise development agency Spring Singapore said food science and technology are gaining prominence in the manufacturing value train.
With this in mind, local food manufacturers have been enthusiastically investing in research and development (R&D).
Many firms are already introducing innovative products and enhancing their processes and packaging for better quality products with longer shelf-lives.
Spring also saw more firms adopting the Hazard Analysis and Critical Control Points certification, which it said can help companies gain a competitive edge in the global market.
Singapore Food Manufacturers' Association (SFMA) president Wong Mong Hong, however, believes more needs to be done at the industry level to ensure the sector continues to grow.
"The long-term objective is to look for new markets to supply to because exporting will always remain our main target for the survival of the industry," he said.
Like their counterparts in most other industry sectors here, food manufacturers are mainly local small and medium-sized enterprises (SMEs) operating in a modest domestic market.
SFMA figures indicate that only $2.2 billion worth of output is for local consumption, with the majority exported by slightly more than 100 firms.
To help more companies venture overseas, the SFMA organises about 10 trade missions to various markets each year.
"We've started to explore new emerging markets like South Africa and the Middle East," said Mr Wong.
Going abroad, however, does not always guarantee success, he noted. Food manufacturers need to have unique product offerings for clients overseas.
Mr Wong said there was a growing demand for healthier food products and firms here would do well to invest in R&D for more market-first products.
"We're now training manufacturers on food nutrition so they can make healthier and more nutritious products," he added.
Another area the SFMA is looking into is helping manufacturers develop better packaging to give products a longer shelf-life.
"The SFMA will run forums so that members can look at new ways of packaging, see what are some of the strong and weak points and perhaps even explore using environmentally friendly materials," said Mr Wong.
TARGET FOR SURVIVAL
"The long-term objective is to look for new markets to supply to because exporting will always remain our main target for the survival of the industry."
Mr Wong Mong Hong, president of the Singapore Food Manufacturers' Association
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