Singapore has long earned a reputation as one of the world’s most advanced economies in the Asia Pacific region. The Singapore economy is mainly driven by exports in electronics manufacturing and machinery, financial services, tourism, and the world’s busiest cargo seaport. Additionally, Singapore’s largest industry is the manufacturing sector, which contributes 20%-25% of the country’s annual GDP.
Hence, this article will provide you with the information that is related to manufacturing business in Singapore, and what are the opportunities for foreign investors in the area. Let’s find out!
The Manufacturing Business in Singapore
Singapore is located off the coast of the southern tip of the Malay Peninsula in Southeast Asia and made the country become one of the world’s leading chemical manufacturing sites. There are over 100 global petroleum, petrochemical and speciality chemical companies housed on 12 square miles of land.
Today, Singapore has built a strong and diverse manufacturing base, with leadership positions in sectors such as aerospace, electronics, biomedical sciences and precision engineering.
The manufacturing sector remains a significant contributor to Singapore’s economy, as it contributes about 20% to its GDP. Furthermore, manufacturing will remain a key part of the country’s economy as well. Singapore is also the fourth largest global exporter of high tech products.
The evolving nature of the industry will change the composition of manufacturing to one of low-volume but high-quality products that will require greater skills to produce. Furthermore, Singapore’s strengths in innovation, its skilled workforce and well-developed infrastructure position will bolster its role as a global manufacturing hub.
Based in the World Economic Forum’s Readiness for the Future of Production Report 2018, Singapore was ranked second globally and ranked ahead of 120 countries to top the 2017 DII Global Industry 4.0 Readiness Index.
The Trade and Industry Minister, Chan Chun Sing noted that the manufacturing sector can continue to expand if the industry is closely tied to research and development (R&D), because the process would also enrich the country after all. In addition, Singapore has to get its intellectual property protection regime right, and gives investors the confidence that they will be safeguarded here in Singapore.
Furthermore, Singapore has already embarked on a series of initiatives to ensure the economy is prepared for the future. For instance, Singapore has established the leading technology and solutions providers, and it offers the necessary technical expertise to maintain Industry 4.0 adoption. There are some biggest industrial names in the world that are now operating in Singapore, such as ABB’s robotics packaging centre to Accenture’s IoT Centre of Excellence and Siemens’s digitalisation hub.
Singapore’s fast-growing start-up is also an enabler for manufacturers to innovate and customise solutions to fulfil their needs. For example, German semiconductor giant Infineon turned to Hope Techbik, a local small and medium enterprise, to develop AGVs to transport materials across its production floor.
Not only that, Singapore has invested S$3.2 billion (€2 billion) in R&D in Advanced Manufacturing and Engineering, to build up the innovation capacity of companies embarking on Industry 4.0.
In 2018, Singapore’s research institutions opened two model factories that will help companies accelerate the adoption of Industry 4.0 technologies by implementing a collaborative environment to research and test-bed solutions before deploying them. However, through this initiative, the industrial equipment supplier Feinmetall has successfully achieved productivity improvements of 10 to 15%.
The pursuit of advanced manufacturing itself is not about achieving a one-off boost in productivity, but it is about equipping companies with the right tools and mindset to meet future challenges. It is indeed an evolution rather than a revolution because the companies can go beyond traditional cost to continue reorientation, refine and innovate their products.
The Opportunities for Foreign Investors
In 2018, Singapore acquired investments committing 10.9 billion Singapore dollars (about US$8.02 billion) in fixed asset investments, compared to 9.4 billion Singapore dollars (about 6.9 billion U.S dollars) in 2017. Singapore also anchored 6.2 billion Singapore dollars (about US$ 4.5 billion) in total business expenditure per annum in 2018, and if it compared to 2017, Singapore invested 6.5 billion Singapore dollars (about 4.8 billion U.S. dollars).
If these projects are fully implemented, they will create 17.400 new jobs, within the forecast range of 16.000 – 18.000 jobs, with an expected contribution of S$13.6 billion in Value-Added per annum. Hopefully, these projects will attract more foreign investors to venture in the country especially in manufacturing areas.
The Singaporean government is focusing on the key priorities to bolster the manufacturing business. Furthermore, the Singapore Economic Development Board (EDB) aims to strengthen two areas of the digital economy and work to attract leading manufacturers to invest in advanced manufacturing.
EDB also wants the country to become a regional platform for Singapore-based companies to export technologies and services through the Industrial Transformation Asia Pacific event.
More than that, Singapore will also look to become the digital hub for non-manufacturing companies, where people can learn best practices, access world-class capabilities and embark on their digital transformation journey.
Singapore has become a part of Singapore’s shift towards a value-creating, innovation-led economy, and that means it will continue to connect companies with Institutes of Higher Learning to establish corporate labs. In addition, it will help companies that are looking to create new products, services and businesses, and to support them on the journey of experimentation, commercialisation, and scaling out of Singapore.
The disruptive technology that happens recently will open up new possibilities. Some industries that were previously considered unviable are now becoming potential growth areas for Singapore, for example, mobility. The country can play a leading role in autonomous vehicles and smart mobility, that is supported by its advanced manufacturing capabilities and highly skilled workforce.
The investment in such areas will surely attract foreign investors for expanding the businesses here. The possibility to venture the business in manufacturing is more flourishing this year, and even in the future. Thus, the government keeps pouring incentives to impress more and more investors. In the end, it is always the right time to open up a business in Singapore, especially in the manufacturing business.