Transcript of Speech by Prime Minister Lee Hsien Loong at the Malay-Muslim Business Conference, 7 May 2014

Minister Yaacob Ibrahim

Mr Zahidi Abdul Rahman
President, Singapore Malay Chamber of Commerce and Industry (SMCCI)

Distinguished guests, ladies and gentlemen

MALAY-MUSLIM BUSINESS CONFERENCE 2014

I am very happy to join you today for the Malay-Muslim Business Conference 2014, arranged by the SMCCI. I am glad to see so many thriving Malay-Muslim businesses here and they reflect the progress the community has made, along with other races and the success of your business ventures.

“The Art of Collaboration in Businesses: Fostering Ties within Asia”

The theme of this conference “The Art of Collaboration in Businesses: Fostering Ties within Asia” is a timely and a relevant one. Asia is on the move, Singapore is integrating more closely with our Asian neighbours and there are many exciting opportunities, all around us, for the bold and the enterprising. Whether it is in Islamic banking, whether it is in halal certification or whether it is in medical services for Muslim patients. But also opportunities in businesses which are not based on Malay or Muslim themes, but which take advantage of the growing markets and middle classes in the emerging economies, in Malaysia, in Indonesia, in ASEAN or even further afield in China and India.

But of course competition is also fierce. It is competition from all over the world and not just in Southeast Asia. And it is competition compounded by technological change, which is transforming businesses and industries. So to succeed in this environment, many opportunities but also great competition, businesses have to be efficient and well-run. Even if it is in an ethnic product like satay or a religious niche like halal foods, companies will face competition. And you need to be able to differentiate yourself, to stand out from the crowd and to offer that something special, either a product, a service or both. So people remember you, your brand, and you will grow.

Small and medium enterprises (SMEs) of course face many challenges and many of SMCCI’s members are SMEs. The 2013 SMCCI survey highlighted several of these issues, for example building expertise in operations and financial management, and also in promoting innovation and productivity, especially for micro-SMEs, the ones with just two or three employees. Manpower is another concern for your members. Berita Harian interviewed several SME owners last week and they all reported that they found it difficult to hire Singaporeans with the right attitude and the right skills sets so they were using part-time workers, or roping in their family members to help in the business. And some of them expressed the hope, and I am sure all of them felt the hope that the government would relax our foreign worker restrictions.

Developing local talent for SMEs

I know that SMEs are concerned about manpower, in fact very worried about it, especially as we reduce the inflow of foreign workers. All SMEs want more foreign workers, and it is not just Malay-Muslim SMEs. In fact we are allowing in a continuing flow of foreign workers so that the number of foreign workers here is continuing to grow, although not as fast as before, and not as much as the employers and companies would like. We know that even this is still not enough for the companies, and that SMEs have to turn away business because they do not have the workers to service this new business. But unfortunately we cannot ease up on the foreign worker limits and I hope companies will understand because we have to manage the inflow, we have to manage what we can accommodate in Singapore and we have to manage the total numbers. So what we can do is to help SMEs to maximise the workers’ contributions, whether they are local workers or foreign workers. And meanwhile we will also help SMEs to make jobs more attractive to Singaporeans, to raise their productivity and therefore you make the most of the workers you have.

Last year we launched the SME Talent Programme (STP) to match Polytechnic and Institute of Technical Education (ITE) students to SMEs. And under the STP, the government will sponsor the courses for the Polytechnic and ITE students. We will work with the SMEs to provide sign-on bonuses and job contracts for the students after they graduate. And it has had some success because many Polytechnic and ITE students have shown interest in the STP. I understand that SMCCI will partner trade associations and Mendaki to promote the STP, by identifying participating Malay-Muslim SMEs and matching them to Polytechnic and ITE students and then strengthening these SMEs’ human resource capabilities and business strategies.

Raising productivity and encouraging collaboration

We have the programmes to help you to attract talent but the best way to attract good people and keep them is to offer them exciting jobs and higher wages. And that is only possible if the companies raise their productivity and go up the value chain. And here too, the government is doing our utmost to raise SMEs’ productivity. We have been doing this for a long time, we have had results which are encouraging and this year we are introducing the Productivity and Innovation Credit Plus (PIC+) for qualifying SMEs, we are enhancing Innovation and Capability Vouchers to make it easier for SMEs to implement productivity improvements. And many companies are benefitting from this. For example Asyura Paste which is run by Ms Huda Rabani, which sells rempah, for those of you who do not speak Malay or Bahasa, rempah means the spices all mixed, stirred, ground, ready to be fried, wangi, which means fragrant. And SME Centre@SMCCI advised Ms Huda on expanding her production and tapping the PIC scheme. The PIC subsidised her purchase of industrial machines to prepare and to pack the rempah and soon her production will double. So I look forward to lots more satay, lots more curry, lots more serunding, then we know the productivity scheme has succeeded.

But one constraint on increasing productivity is the size of the companies. Because when the company is very very small, only two or three workers, it is very difficult to justify investments in automation. It is very difficult to scale up successful projects. You start small but after a while you have to grow not so small, a little bigger, and a little bit bigger, and then you can raise your productivity as you grow. Therefore we are providing grants to companies to join forces to raise productivity through the Collaborative Industry Projects and we also encourage SMEs to work together with larger companies under a programme called the Partnerships for Capability Transformation (PACT) programme, small company work with a bigger one to learn from the bigger one’s practices, best practices and to upgrade your capabilities. So I hope the Malay-Muslim SMEs and SMCCI members will take full advantage of all of these programmes.

Helping SMEs venture overseas

By raising productivity and hiring better workers, SMEs will be in a stronger position to venture overseas – whether to sell your products and services, or to expand your production capabilities. And I was talking to some of your speakers and members just now and they were telling me how many of the SMEs actually already have a significant part of their clientele or business outside of Singapore, even up to 70 percent of their business, in Indonesia, in Malaysia and even beyond. There are opportunities in Indonesia, many opportunities, I see the Ambassador is here, he will tell you more about them because Indonesia is prospering. In Malaysia, also prospering, also many opportunities and one option of course, the one which is just across the causeway and which we have been talking about, and that is Iskandar Malaysia. There are opportunities there for companies to go. It is not so far, it is not so unfamiliar. You can take advantage of lower costs there, you can take advantage of more space there, more land there and at the same time stay close to Singapore. I encourage companies to look at these opportunities seriously, and find out more from the speakers over the next two days, and including the speakers from the Iskandar Regional Development Authority (IRDA) which is speaking tomorrow. We will also help SMEs to go overseas, and to fly Singapore’s flag and do well. IE Singapore has partnered SMCCI to bring Malay-Muslim SMEs overseas. They are subsidising your participation in international trade fairs and business missions, providing grants to offset the upfront costs of market research and setting up overseas businesses. I saw IE Singapore and SPRING and Agency for Science, Technology and Research (A*STAR) all have presence at the exhibition here, at the display just now and I encourage SMEs to join forces with one another, and take advantage of these services. And join forces not just with other Malay-Muslim SMEs but also with other companies as well.

SMCCI

The SMCCI has a role to play in these efforts. You represent many Malay-Muslim companies and your SME Centre has helped more than 3,000 companies upgrade your capabilities, whether it is in financial management, operational expertise. And your business missions open up new overseas markets.

So I encourage the SMCCI to reach out to more Malay-Muslim start-ups. Many are helmed by young entrepreneurs, in exciting new fields, including several who are going to speak at the Conference, Syaira Mohammad Suhimi from Fluff Bakery, Aidil Zulkifli from KreditAja.com and many others. I think it is good to bring them in early so that they can contribute to the Chamber and help other companies to succeed as they have done.

I would like to encourage many more Malay-Muslim companies to join the SMCCI to take advantage of the services, provide feedback, and in time also leadership to the Chamber.

CONCLUSION

The Malay-Muslim business community has come a long way. In the early years of Singapore, entrepreneurs like Haji Ambo Sooloh and Haji Kahar Abdul Ghani also know as Haji Kahar Palembang, ran successful businesses and they made valuable contributions to our society and community. Today we have new companies like Jumain Sataysfaction (F&B) or The Wedding Gallery organising wedding ceremonies. Or professionals working for big companies like Suhaimi Rafdi working for Cathay Organisation or Nizam Idris working for Macquarie Bank, whose companies have been successful and they have been successful both here and abroad. All of them are participating in this Conference, and helping the next generation of businessmen succeed. With the opportunities in Asia, and a base in Singapore, I am confident that we will see in the years to come many more Malay-Muslim enterprises. So I congratulate SMCCI on a successfully organising this Conference and I wish businesses and participants every success over the next two days. Thank you very much!