Countries in the region are adopting new initiatives in the precision engineering industry, signaling opportunities for Singapore companies. Take a look at some of the platforms you can tap to venture into markets overseas.
Made in China 2025: In May 2015, China’s State Council announced “Made in China 2025” (MIC 2025) – a 10-year national initiative to transform China into a global manufacturing powerhouse. The programme aims to increase the domestic content of core materials to 40% by 2020 and 70% by 2025.
China’s level of industrial automation remains low at fewer than 50 robots per 10,000 employees, compared to about 300 in Germany and Japan. China is also no longer a source of cheap labour, with average wages surpassing that of Indonesia, Malaysia and Vietnam. As such, the drive towards automation and digitalisation is a key focus and the total market size for MIC 2025 is estimated to be approximately S$363 billion from 2015-2025.
With Singapore’s manufacturing experience and track record in serving global high-technology manufacturers, local companies can work with Chinese manufacturers to create “smart factory” standards and solutions for the world.
The SME Centre @ SCCCI is a one-stop business service centre which supports Singapore enterprises in venturing into the China market through a suite of integrated services including business advisory, market information and business matching.
1. Start by trading with India first, to better assess market acceptance of your products. Manufacturing in India presents Singapore companies with opportunities to produce parts for export as well.
Cultivate strong relationships with local partners. Establishing a business in India requires much patience and persistence to learn the local conduct and culture of conducting business there.
Understand India’s tax rules and business setup process. In the business development planning process, leverage the “Make in India” programme, an initiative of the Government of India to encourage companies to manufacture their products in India.
India’s manufacturing sector contributes to about 50% of the country’s exports. It is expected to hit US$1 trillion by 2025. With the launch of India’s national manufacturing initiative –“Make in India” – which encourages companies to manufacture their products in India, you could consider India’s potential as a manufacturing base. The initiative covers states including Tamil Nadu, Maharashtra and Rajasthan.
Manufacturers are expected to benefit from the growing demand for automotive, consumer electronics and food products. Several top global automotive component suppliers have also announced plans to increase procurement from their Indian subsidiaries.
The SME Centre @ SCCCI provides a dedicated helpdesk to support Singapore companies in venturing into India through market outreach activities, business advisory, business matchings and projects facilitation.
Southeast Asia currently accounts for about 5% of global manufacturing value, with dominant stakes in industries such as chemicals, food and beverage, metals and motor vehicles. Some of the key markets in this region include Indonesia, Malaysia, Thailand and Vietnam.
SEA is the rising economy in the world. Overall foreign direct investment into ASEAN reached US$97 billion in 2016, according to the ASEAN investment report1. There are also over 1,600 economic zones within the region that have boosted socioeconomic growth.
Given its abundant land area as well as a young and hardworking workforce, SEA has good potential to grow as a manufacturing hub.
The Vietnam Singapore Industrial Park (VSIP) is a development of nine projects across Vietnam, providing land for industrial, residential and services. As one of the leading industrial parks in Vietnam, VSIP comes with complete on-site power generation, water supply and sewerage treatment facility.
VSIP offers land parcels and standard ready-built factories in a fully integrated manufacturing environment, and provides seamless and all-rounded manufacturing support from Vietnam and Singapore for your manufacturing needs.
The Nusajaya Tech Park consists 50 hectares of ready-to-built facilities, land plats for built-to-suit facilities and commercial space for individual business needs.
Home to an international community of MNCs and leading local enterprises, the location is ideal for companies in aerospace, precision engineering, electronics, food processing, information and communication technologies and services such as warehousing and logistics.
The Batamindo Industrial park is built on a strong foundation of key supporting infrastructure such as power generation, water and waste treatment, telecommunications, sanitary systems, firefighting and medical facilities, as well as excellent estate management.
The location offers custom-built facilities and a selection of ready-built factories with flexible layouts featuring separate areas for offices, production as well as loading and unloading.
The Bintan Industrial Estate offers prepared land parcels for companies who wish to build their own facilities from the ground up and a collection of ready-built factories. The location also provides sea freight services through its own onsite container seaport.
The port is a recognised international port-of-call – with a dedicated custom office, immigration and quarantine facilities that ensures secure, smooth and timely facilitation of freight shipments.
GlobalConnect@SBF is an international advisory centre in Singapore with a dedicated team of market advisors and FTA advisory team, helping SMEs access overseas markets through advisory, workshops, business matching and overseas missions.
The team works closely with enterprises to land their business overseas – tapping accumulated knowledge, expertise and networks to help companies scale and grow no matter which stage of internationalisation journey they are in.