As Singapore searches for ways to reinvent itself, food is emerging as a new source of economic nourishment with exports growing while other sectors of the economy are in retreat.
Known more for being an exporter of high-end electronics and technology products, the city-state has begun to establish itself as a maker of high-quality processed and ready-to-eat food.
Manufacturers make no excuses for producing popular food items at a higher price than Asian rivals, saying they overcome the cost factor by focusing on the quality of the products and the country's squeaky clean image.
PHOTO: AFP
"We always have the upper hand because Singapore has a reputation for hygiene and quality," said Diana Kwek, a director at Thong Siek Food Industry Pte. Ltd, which makes fishballs and other seafood-based products.
With a small domestic market of less than four million, Singapore food manufacturers said they had to turn overseas, with the result that food and beverage exports grew nearly two percent last year while the overall economy shrank by the same amount.
Tee Yih Jia Food Manufacturing Pte Ltd, which began 25 years ago as a local spring roll skin maker, now holds at least 50 percent share of the global market, according to market development manager Laureen Goi.
The company, whose name means "number one corporation" in Mandarin, has expanded its range to include items such as the Indian roti paratha bread and ready-to-eat crepes.
Nearly 90 percent of the company's revenue comes from exports. Last year, export sales totalled S$122 million (US$68.5 million).
This is despite the fact that its products, sold mostly under the "Spring Home" label, are on average 30 percent more expensive than rival products.
Kwek, from seafood-oriented Thong Siek, said her company was working to make exports worth at least 50 percent of income. Last year, exports totalled S$32 million accounting for 30 percent of revenues.
The export market "is definitely very important," she said.
"The bulk of revenue is 30 percent from the export markets and we are looking to strike a balance of 50:50 here."
A key to reaching that goal is to cater to the growing Asian immigrant populations across the globe especially in North America.
"The Asian market is always our stepping stone," Kwek said, adding that the company was pushing aggressively into Canada.
"We always have to make ourselves seen and our brand available in these [Asian ethnic] markets before we can get into the mainstream," she said.
Last year, Singapore posted a 1.9 percent rise in exports of food and beverage products worth S$1.75 billion (US$983,150).
The growth was all the more remarkable as the export-dependent country suffered severely from a global economic slowdown which saw its overall trade last year fall by 9.4 percent to S$426 billion from the previous year. International Enterprise Singapore, the island's trade body, said food-related exports were expected to rise again this year after growing 12.3 percent in the first four months to S$613 million.
"Looking at the trend itself, like the performance last year, in spite of the slowdown, we see food and beverage exports growing," said Tan Li-lin, a deputy director with the trade body. Investing heavily in automation to make up for labor costs, putting extra emphasis on innovation and catering to the specific needs of customers are key factors behind their success.
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