Singapore identifies scope for continued food manufacturing growth as e-commerce and innovation increases

By Millette Burgos

- Last updated on GMT

Related tags Industry Manufacturing Food industry

Singapore identifies scope for continued food manufacturing growth as e-commerce and innovation increases
E-Commerce and innovation is driving the growth of Singapore’s food manufacturing and food services industries - but firm's need to quicken the pace of technological change, according to the government body responsible for boosting enterprise. 

Spring Singapore - an agency under the Ministry of Trade and Industry responsible for helping Singapore enterprises grow - recently held its Year in Review event for 2016.

It said food innovation projects supported by Spring’s Food Innovation Resource Centre (FIRC) increased from 109 in 2015 to 134 in 2016. FIRC offers technical advice and process development services to local food manufacturers. The agency’s Food Innovation Cluster (FIC) on the other hand, foster closer collaborations and sharing of resources.

Another initiative is helping local companies engage with e-commerce platforms such as China-based Tmall. Currently, there are 130 Singapore-made food products available in Tmall from 23 local companies since 2015.

Spring chief executive Poon Hong Yuen said Singapore has a strong brand reputation abroad and local food manufacturers are leveraging on this brand power to market their products overseas.

The local food manufacturing industry plays a significant role in Singapore’s economy. Currently more than half of the industry’s output are exported to countries like Japan and China.

In 2015, the industry contributed S$3.7 billion (US$2.6 billion) to Singapore’s GDP and employed about 40,000 workers.

Despite the economic slowdown in 2016, some 16,300 enterprises (including those from the food services and manufacturing industries) embarked on projects to improve their business capabilities, according to the yearly review.

When fully implemented, the projects from these companies will create S$7.8bn in value added to the economy and some 21,400 skilled jobs. Compared to 2015, these represented increases of 13% and 43% respectively, it added.

For 2017 Spring will focus on the implementation of more industry transformation map (ITM) strategies and help scale-up promising small medium enterprises (SMEs,) to strengthen Singapore’s position as a start-up hub and enhance the business ecosystem to support enterprise growth.

“The success of local enterprises is critical to Singapore’s economy. Together with our partners, Spring is committed to supporting enterprises to grow and to upgrade their capabilities,”​ said Poon.

In 2016, the agency launched 23 ITM's to help develop various industries in the republic.

The biggest challenge of the food services industry is reliance on manpower. According to the ITM for this sector, mass adoption of technology at the front-of-house and back-of-house of F&B establishments will drive industry transformation.

These include encouraging businesses to use digital services for example, to facilitate food orders and bill payments for front-of-house.

The agency is also advising the use of kitchen automation such as automatic dishwashers to ease on labour costs and reliance for the back-of-house.

Spring is working with the National Environment Agency (NEA) to see how these productive technologies can work in new hawker food centres.

Other food services initiatives rolled out last year include support for ready-made meal production companies, and opening up the first VendCafe in Singapore (located in Sengkang), which reportedly drew crowds to its vending machine offerings when it launched last August.

According to the industry ITM, while the food services industry contributes to 0.8% of Singapore’s GDP, it employs about 160,000 workers, which is a disproportionate 4.5% of the republic’s workforce.

“The next few years will be critical for the food services industry’s restructuring efforts. To achieve sustainable growth, the industry must invent innovative, manpower-lean business formats and adopt technology at a quicker pace,”​ said Kee Ai Nah, group director (Industry & Enterprise), Spring Singapore.

“For example, only 15% have adopted digital service solutions and we would like to encourage more companies to embark on such productivity initiatives by 2020. To facilitate this, Spring will offer time-limited grant support until the end of 2018,”​ she added.




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