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SMa President's 4th AGM Speech - Singapore Manufacturing ...

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Opening Address by Mr Edwin Khew, President of <strong>SMa</strong>on the occasion of the 4 th Annual General Meeting 2007<strong>SMa</strong> EDC Auditorium Level 61600hrs June 29, 2007Council Members,Members of <strong>SMa</strong>,Ladies and Gentlemen,Good afternoon to all of youThank you for taking time off from your busy schedule to attend this year’s <strong>AGM</strong>.I do appreciate your presence as it is not an election year.I would like to now take you through what your Federation has achieved over thefinancial year 2006 and then give you an idea of what is in stall for <strong>SMa</strong> for thenext 6 to12 months.Economic Review of 2006The <strong>Singapore</strong> economy continued to expand at a healthy pace in the firstquarter of 2007. GDP grew by 6.1% following a 6.6% growth in the previous1


quarter. 2007 GDP growth forecast for the remaining of the year is expected tobe in the range of 5.0-7.0%. We are looking at a good year ahead, for theremainder of 2007.2006: A Year of AchievementsI am pleased to report that <strong>SMa</strong> has managed to achieve a number of significantmilestones over the past year, amidst a challenging environment.Financially, <strong>SMa</strong> managed to achieve a revenue of $21m in 2006 compared to$12m in 2005. This represents a revenue growth of 75%. The <strong>SMa</strong> surplus for2006 was $1,187,000. However <strong>SMa</strong> decided to be prudent and made aprovision for bad debts of $631,000 in compliance with a change in bad debtspolicy in 2006 thereby reducing the 2006 surplus to $556,000. The 2006 surpluswas therefore $556,000 as compared to $300,000 in 2005 which still representsa healthy growth of 85%. In addition, we have continuously improved productivityyearly in <strong>SMa</strong>. Our operational efficiency ie our labour cost as a proportion of ourrevenue, has increased as the labour-to-revenue ratio dropped from 28.3% in2005 to 18.8% in 2006.In the area of membership recruitment, we managed to step up our efforts andbrought in 168 new members in 2006. Membership Services Division organised61 events to assist members in their business ventures. Some of these eventsinclude Conferences and Seminars on Public Sector Financing and Assistance2


with various government agencies, Driving Higher Profitability, Creating PowerfulBrands, Electricity Energy Savings, Masters of the Triple Chain etc. wereconducted for the benefit of our members. This works out to running one eventevery 4 working days.On the international front, <strong>SMa</strong> implemented a few new initiatives. In year 2006,our Industry Development Division organised 24 incoming and 8 outgoingmission trips and participated in 41 local and international trade fairs andexhibitions which included 37 country and industry specific seminars. Theseevents and trips opened up networking and business opportunities for ourmembers in new frontiers like Kazakhstan, Vietnam, Nanning and Guangxi inChina.To further assist members in their market research and investment overseas, theResearch and Corporate Communications Division published eleven countryreports from emerging markets like Vietnam, Indonesia, Panama and Pakistan.These reports were distributed free to all members and they can be downloadedfrom the <strong>SMa</strong>’s website. These Country Reports receive the highest hit ratesfrom our members and show the popularity of the Country Reports for EmergingMarkets amongst our members.On the home front, I am glad to announce that <strong>SMa</strong> School of Management(SOM) turned in good profits on its third year of operations which is3


commendable for any start up business and I would like to congratulate andcommend the management and staff of SOM for working well as a team andturning out such good results. In terms of sales, SOM’s 2006 revenue increasedto $5.5m from $3.1 million in 2005. This represents a revenue growth rate of77.4%. In terms of profitability, the net profit for 2006 was $289,000 compared toa net loss of $98,000 in year 2005.Last year, SOM partnered with prestigious foreign universities and institutions tolaunch eight new courses in Finance, Wealth Management, SecurityManagement, Mass Communications, Logistics, Accounting and Psychology tomeet the growing demand for high quality academic courses. To date, SOMoffers a total of 42 different programmes consisting of 1 doctoral, 9 masters, 12bachelors and 20 professional or advanced diploma and certificate programmes.SOM also partnered with the Chartered Institute of Marketing in UK to offerPostgraduate Diploma in Marketing and other certificate courses for businessmarketing.SOM is moving to become a Global Educational Institute as it launches a studentrecruitment exercise across Asia. SOM participated in several educational fairs inMyanmar, Vietnam, China, Indonesia and South Korea to recruit internationalstudents. You may ask why are <strong>SMa</strong> & SOM going regional? The short answeris with our partnership with the government we are expected to go regional tomarket and bring into <strong>Singapore</strong> students for the OHS courses that we will be4


doing with MOM and Workforce Skills Qualification (WSQ) programmes withWDA. Going regional also provides our members with trained people who theycan employ in <strong>Singapore</strong> and when they regionalise. It also provides us a goodrevenue stream.To meet the needs of this growing student population, SOM has relocated to alarger campus which faces the new National Library in May this year. The newbuilding aims to facilitate greater lecturer-student interaction and canaccommodate more than 2000 students.The Centre for Corporate Learning (CCL) achieved another record breaking yearin 2006 for skills training to members’ staff. There was a significant increase inthe number of seminars held and attendance in these events. A total of 348seminars were organised and total attendance exceeded by 12, 500 participants.The Enterprise Development Centre at <strong>SMa</strong> (EDC@<strong>SMa</strong>) on the other hand, hasreached out to more than 200 SMEs in seminars and conferences in the pastyear. Through these activities, EDC has delivered 200 consultancy projects toSMEs since inception, these include free business clinics and paid businessconsultancies. Through these activities, EDC business increased ten fold from2005 to 2006.5


EDC@<strong>SMa</strong> continues to work with strategic partners like SPRING<strong>Singapore</strong>, <strong>Singapore</strong> Workforce Development Agency, Workplace Safety andHealth division of the Ministry of Manpower, International Enterprise <strong>Singapore</strong>and the Economic Development Board to help our SMEs grow and to be able togo regional and global.GS1 <strong>Singapore</strong> (Global Standard 1) is the sole representative of EPC global Inc(Electronic Product Code)to implement the EPCglobal system. The conference inMay 2007 reported its first successful implementation of the EPC (ElectronicProduct Code)Information Service (EPC IS) in Asia. Reported were details onhow the real-time data of the goods in the supply chain was successfullycaptured by 13 EPCglobal/RFID Read Points using EPC IS in Hong Kong andChina. The sharing of real time data among trading partners using EPC ISrevolutionises the process of the data exchange to bring huge benefits tooperators within the supply chain. GS1 <strong>Singapore</strong> also worked with Agri-Foodand Veterinary Authority (AVA), Spring <strong>Singapore</strong>, <strong>Singapore</strong> Cold Chain Centreand <strong>Singapore</strong> Polytechnic to conduct three training courses at <strong>Singapore</strong>Polytechnic. They have trained a total of 58 personnel currently working in thecold chain industry including retailing, manufacturing, shipping and the airlineindustry.A number of major conferences were rolled out during 2006. These includeMOM-endorsed “Workplace Safety & Health – Prosecution or Sustainability”6


Telecast during primetime, each episode focused on a different manufacturingsector. The programme aimed to inject a new image to the <strong>Singapore</strong>manufacturing sector and promote vibrancy of the sector to our youth.I am very proud to say that <strong>SMa</strong> received many positive compliments fromvarious government ministries and agencies. At the National Security Dialogue,DPM, Professor S. Jayakumar praised <strong>SMa</strong> for a very well organised andsuccessful dialogue session with some 800 representatives from themanufacturing community.In January this year, I was one of the nine Nominated Members of Parliament(NMP) selected and sworn into Parliament. One of my first task as an NMP wasto submit members’ feedback on the <strong>Singapore</strong> Budget 2007. Initially apreliminary 2-man committee assisted me to screen and collate their feedback.Now a function committee, the Economic Feedback Committee (also known asEFC) has been put together comprising of a few volunteer council members andis chaired by Economics Professor Lim Chin of the NUS Business School.Besides collecting feedback from members, EFC may direct <strong>SMa</strong> Research andCorporate Communications Divisions to gather information by conducting regularresearch on major issues that concern their businesses. The EFC will collate andanalyse the findings and recommend relevant questions for me to raise inParliament sittings. I will encourage members to use me to voice issues you havein your business. I only have 1 term of 2 ½ years in Parliament.8


We are very fortunate that <strong>SMa</strong> as a Federation has strong links with ourgovernment and we continue to have regular dialogue sessions with statutoryboards and agencies. In 2006 <strong>SMa</strong> held members dialogue sessions with theCompetition Commission of <strong>Singapore</strong>, Customs & Excise, Inland RevenueAuthority of <strong>Singapore</strong>, Workforce Development Agency, SPRING <strong>Singapore</strong>, IE<strong>Singapore</strong> and Ministry of Manpower. We also had Industry Group specificdialogue sessions with the Health Sciences Authority, Building & ConstructionAuthority and the TCM Practitioners Board.Challenges and DifficultiesAs an established industry association, <strong>SMa</strong> has surmounted many challenges tobe where we are today. Even with globalisation and the new challenges it bringsto the manufacturing sector in <strong>Singapore</strong>, we at <strong>SMa</strong> have remained committedto our mission towards our members in making a difference for them in theirrespective industries.However, with <strong>SMa</strong> members coming from a wide spectrum of industries in themanufacturing and manufacturing–related sectors, the responsibility of meetingevery member’s need is becoming increasingly difficult with their diverse andcomplex requirements. Therefore, we are grateful for your kind understanding asyour Federation continues to change and adapt to support your needs asmembers.9


I would like to take this opportunity to share 3 challenges <strong>SMa</strong> faces.1) <strong>SMa</strong> has not been able to collect some payment of membership subscriptionfees promptly from members. You can see from the large provisions we haveallowed of over $600,000 reflects the severity of the problems we face every year.Your understanding and support is needed as it is at this time in our growth anddesire to support and add value to our members that <strong>SMa</strong> needs these funds.We cannot afford to write off $600,000 every year.2) Globalisation has impacted many MNCs and has caused them to relocate tolower-cost countries. With increasing competition, <strong>Singapore</strong> will have to remakeitself and restructure to move up the manufacturing value chain. There are asmany as 200 other business and trade associations in <strong>Singapore</strong>. Many of theseassociations provide specialised services and products to a specific industry.There are also many of these associations offering their membership for free.<strong>SMa</strong> will have to try and generate more business revenue so that in time we canlower the membership fees to make the <strong>SMa</strong>’s value proposition more attractivefor members. We therefore have problems of membership attrition yearly.3) The recruitment and retaining of staff has continued to be one of our greatestchallenges due to <strong>Singapore</strong>’s buoyant employment market. As the economycontinues to grow more jobs will be created in the near future. Hence, retaininggood and capable people to work in <strong>SMa</strong> will be even tougher. I ask you to be10


patient with our secretariat staff and to appreciate what they are doing. Servicing2800 companies is not an easy task.ProjectsLooking into the immediate future, this year marks an important milestone for<strong>SMa</strong> as we celebrating our 75 th Anniversary. A gala celebration dinner will beheld on Tuesday, 16 October 2007 at the Shangri-La Hotel. I am pleased toinform you that the Prime Minister Lee Hsien Loong has accepted our invitationto be the Guest-of-Honour. We are expecting about 800 guests including MPs,senior civil servants, foreign diplomats and captains of industry to grace thisoccasion.I look forward to your support as it will be the highlight of 2007 where werecognise some 75 year old members, launch our Strategic Action Plan (SAP)and provide great entertainment. I encourage you and your staff to join us.Invitations and tickets will be out within the next weeks.<strong>SMa</strong> will be moving to new premises next year. With our lease at The Enterpriseending in June next year, we were informed by JTC recently that our lease willnot be extended as they have earmarked this site for redevelopment.11


Meanwhile, with the support of Council I will be putting together a committee tofind suitable premises location and to decide on how <strong>SMa</strong> can fund this newpremises which will hopefully house all our activities under 1 roof.In the new <strong>SMa</strong> premises, we will be looking at setting up an incubation centrefor small businesses with funding from EDB’s LEAD programme where we will beproviding local SMEs and manufacturing start ups with subsidized office spaceto jumpstart their businesses. There will also be space for SME manufacturersfrom developed economies like Germany, Switzerland, Austria, USA, Denmark,etc. This is in support of EDB’s initiative to accelerate the growth of <strong>Singapore</strong>start-up companies and to attract foreign SMEs to <strong>Singapore</strong> so that themanufacturing sector will double its manufacturing output to $300 billion by 2018and create more than 15,000 new manufacturing jobs every year up to 2018.Included in <strong>SMa</strong>’s new premises will be a Regional Centre for OccupationalSafety and Health Training with support and funding from the Ministry ofManpower and also a WSQ training centre supported and funded by the<strong>Singapore</strong> Workforce Development Agency (WDA) to provide skill developmenttraining for some 30,000 to 40,000 Professionals, Managers, Executives &Technicians (PMETs) in <strong>Singapore</strong>.I have taken some pains to report activities last year and provide a sketch of thefuture <strong>SMa</strong> and the load the Council and Secretariat will have to carry for the12


next 12 months to plan, construct and have ready a new home for <strong>SMa</strong>. It will beextremely challenging but we do not have many options available to us. The onlypositive thing is that we have the full support of the various government agencieswhich should expedite the process. I do however like to appeal to members tosupport and help out during the next 12 months, if the Council feels we needmore hands and heads. So I hope you will readily respond and lend a hand if Iwrite and seek your assistance.I would like to close by thanking Council, EXCO, various Industry GroupsFunction Committees, and all members for your support and hard work. I wouldlike to specially thank the Secretary General, Dr Roger Low, and his heads ofdepartment and staff in <strong>SMa</strong>, GS1, SOM and EDC, for their dedication, hardwork and perseverance often putting in long hours to achieve the 2006 results. Ilook forward to the continued support of all, especially in the next 12 months, tohelp us all achieve a more vibrant and stronger <strong>SMa</strong> that will add value to all itsmembers and help each company grow.13

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