Speech by Deputy Prime Minister & Minister for Finance Mr Tharman Shanmugaratnam at the Opening Ceremony of Kim Hock Corporation Pte Ltd's Metal Shredder-Separation and Biomass Energy Plant

Mr Lim Kim Hock, Managing Director of Kim Hock Corporation,
His Excellency, Gerard Cockx, Ambassador of Belgium,
Distinguished Guests,
Ladies & Gentlemen,

Introduction

1. It gives me great pleasure to join you today at the official opening of Kim Hock Corporation’s new Metal Shredder-Separation and Biomass Energy Plant.

Kim Hock’s success story: learning from best practices; investing in technology

2. Kim Hock’s story is an inspiring one for two reasons.

3. First, it is the classic Singapore SME success story. Starting with how Mr Lim Kim Hock started the company in 1970 in the backyard of his grandparents’ farm, till today where it is one of the largest and most advanced recyclers of metal scrap. Kim Hock has also built up expertise in processing wood and horticultural waste.

4. Second, Kim Hock is an excellent example of how a company in what is often regarded as a traditional, “old economy” sector can transform itself into “new economy” - by embracing mechanisation, technology and best practice. Kim Hock started late in the game of mechanisation, but it was resolute in wanting to catch up.

5. There was no magic formula to Kim Hock’s transformation; neither was there a need for one. The company’s approach was straightforward:
- The management studied local and international best practices to work out what had to be done, and seized late-mover advantages.
- They decided to invest in machines and specialise in processing steel scrap to build competitive advantage.
- They built up a culture of constantly finding new ways to optimise operations and achieve cost savings wherever possible.
- Plus behind it all, a lot of hard work each step of the way.

6. Kim Hock’s use of biomass energy generated on-site to power its facilities is also unique, giving it a competitive edge in the industry:
- through lower energy costs,
- and new revenues from processing wood waste.

7. An essential part of the journey has been that of Kim Hock’s employees. They have benefited from its transformation journey.
- for instance, mechanisation has allowed its staff to perform higher-value tasks and command higher salaries. Kim Hock’s truck drivers are paid above the market average.
- While recruitment remains a challenge, good pay has helped the company to retain experienced staff, despite the tight labour market.

8. This new factory where we are gathered today is an important milestone for Kim Hock, one that I am sure will open up new possibilities for the company and set it up for its next phase of productivity-driven growth. Importantly, the new factory would double production capacity but only require 12% more staff.
- I hope that it will also inspire other SMEs in the waste management and recycling sector to find success in their own ways.

Upgrading our companies to seize opportunities in the waste management sector

9. There is no better time in Asia for the waste management sector.
Cities are growing rapidly, and the increasing focus on environmental sustainability is creating new demand for innovative waste management and recycling solutions.

10. In Singapore itself, the amount of waste we generate each year has more than doubled over the past decade, reaching 7.9 million tonnes in 2013, and this trend is expected to continue.
- But we have also raised our waste recycling rate from 48% to 61% over the same period.
- The waste management and recycling sector therefore plays a critical role in ensuring that we continue to have a high quality living environment in land-scarce Singapore, alongside our renewable energy and water sectors.

11. To seize the opportunities both locally and abroad, our companies will have to:
- Scale up, and move up the quality ladder.
- Leverage technology and skills to increase productivity in addressing growing constraints on land and foreign manpower.

Supporting productivity efforts in the waste management sector

12. Maintaining adequate, high-quality waste treatment capacity locally is crucial to achieving our target of a 70% recycling rate by 2030, and our long term aspiration to move towards zero waste in Singapore.

13. The Government is therefore committed to working with the sector to reach a new position, and supporting progressive companies in their efforts to become more technology and skills-focused.

14. For example, EDB has provided support for Kim Hock’s investments in its metal shredder-separation machines and biomass energy plant. Through a Capability Development Grant, SPRING is also supporting a project between Kim Hock and the Supply Chain Management Centre of Innovation to implement a new system that would help Kim Hock automate job assignment and scheduling and enable its waste collection fleet to take on more jobs per day.

15. Beyond EDB and SPRING’s broad-based schemes for companies, the NEA is also working with the sector to raise industry standards. For instance, the Singapore Standards on waste management terminology, recently launched in June this year, will enable the sector to perform at higher levels of transparency and professionalism, and help our companies to enter overseas markets.

16. The Government is also looking actively into new infrastructure possibilities for the sector such as a multi-storey recycling facility. A study is now being conducted to establish the synergies and cost savings that could be gained from clustering waste recycling players in such a facility, such as through the sharing of facilities and services, and intensifying land use by stacking up.

17. JTC will continue to render strong support to quality projects by companies that make productive use of scarce industrial land, transform industry practices or set new industry benchmarks, through land allocations or lease extensions.

Conclusion

In closing, I would like to congratulate Kim Hock once again, on its success over the past 44 years, as well as on the opening of this new factory today. You show how a far-sighted management team and engagement of employees can make a difference. It is my hope that we will see many more SME success stories in this sector.