How sharing services can help put Singapore dairy firms on the global map

By Tingmin Koe contact

- Last updated on GMT

Singapore company SMC Food 21 envisions the set up of a dairy hub, which provides a suite of services including R&D, processing and warehouse services. ©Getty Images
Singapore company SMC Food 21 envisions the set up of a dairy hub, which provides a suite of services including R&D, processing and warehouse services. ©Getty Images
A one-stop dairy hub that will offer a range of research and development, processing, warehouse and tech services could help Singapore firms slash costs and increase export opportunities.

That is according to SMC Food 21, a Singapore firm which manufactures and sells pre-blends of chocolate, ice cream, soup and other finished food products. 

In an interview with FoodNavigator-Asia, the managing director of SMC Food 21 Cheng Liang Chye shared his views about the dairy hub.

Besides a suite of services, he intends to incorporate a testing centre within the hub, which facilitates the food certification process, in turn saving costs and time for firms acquiring their services.

“If we could establish a channel for products to be tested in the laboratory, and the results are recognised by the Chinese and Singapore authorities, then one set of certificates will be sufficient. That will save a lot of cost for everybody, and also cut down on the logistics and timing for the product,”​ said Cheng.

He pointed out, currently, the product approval process takes about two to three weeks in Singapore and the importing countries.

“If we can do this, we will be able to harness bigger players to go through this channel together, which will be a good collaboration,” ​he said.

The project to build the dairy hub is currently awaiting land approval and the results will be out in one to two months’ time.

Once approved, the company will be able to build the hub on the land beside its current office at Chin Bee Crescent, and it is expected to start operations within three to five years.

Standing out from competitors

When asked how Singapore can stand out from foreign competitors, he pointed out three areas — higher standards, better tools and numerous free trade agreements that companies can tap into.

Although Singapore is not the cheapest place to manufacture products, the country has built its reputation on producing quality products, which is on par with any developed countries like New Zealand, Australia, Europe and the US, he elaborated.

“In fact, most of my customers feel that we are much better than the Europeans, because most of these plants in Europe and other countries are pretty old, because they started this much earlier than Singapore, and they may not have the best system and are not as quality-focused in terms of set-up. For us, we have been working very closely with the Japanese, so we adopt very high standards as compared to the world,” ​he said.

He cited the example of keeping food bacteria count to lower than what the international standard required.

“For international standard of food bacteria count, a 50,000 count is considered good quality grade (product), but we strive for 5,000 or even 1,000.“

Apart from working on product quality, he added that more could be done by the government to help local companies to navigate regulatory systems in other countries, such as building a centralised body.

“One of the biggest challenges (to break into foreign markets) is that each market is unique, each market has a set of challenges in terms of getting approval from their FDA equivalent organisations. This is probably one of the biggest challenges we face when we want to break into another country; we do not know clearly what is needed, so I guess the government can clear this route for Singapore companies,” ​said Cheng.

In an interview​ last year, Tong Shuh Lan, then director for food at SPRING Singapore — a body under the Ministry of Trade, also shared plans on how Singapore will boost its status as a food and nutrition powerhouse.

First home-grown firm to get CNCA

SMC Nutrition, the subsidiary of SMC Food 21, is the first home-grown company to get approval from the Chinese authorities for selling their infant formula products in China.

Cheng shared that it took the company more than two years to clear the complex China Certification and Accreditation Administration (CNCA) regulations.

Three milk formula brands, which is the maximum number allowed by the Chinese authorities, will be introduced to the Chinese market.

Besides SMC Nutrition, another two MNCs which have manufacturing plants in Singapore, have earlier received approval to market their Singapore-made products in China. They are Wyeth Nutritionals Singapore and Abbott Manufacturing Singapore.

To expand their range of products, the company is currently building a new facility to pump up their dairy produce, with a main focus on infant milk formula and functional beverages for adults, including milk powder fortified with multivitamins.

The firm has invested about SGD 20 million to SGD 30 million in building the facility which is next to its existing plant. It will go into operation during the first quarter of next year.

Through the new facility, Cheng hopes that SMC Nutrition will contribute to half of the company’s revenue. Currently, SMC nutrition generates 5% to 10% of SMC Foods 21's overall revenue.

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