Speech By Mrs Lim Hwee Hua, Minister in Prime Minister's Office and Second Minister for Finance and Transport At The Food & Hotel Asia 2010 Opening Ceremony on Tuesday, 20 April 2010 At Singapore Expo, 9.20AM

Mr Stephen Tan,
Chief Executive, Singapore Exhibition Services

Mr Albert Teo,
Second Vice President, Singapore Hotel Association

Distinguished guests,

Ladies and Gentlemen,

1.   I am very happy to join you today at the Food and Hotel Asia 2010 opening ceremony.  I welcome all our friends from overseas who have flown thousands of miles here for Asia's biggest food and hospitality trade show. This event has always been an excellent platform for buyers and sellers alike to meet and discover the latest developments in the business.

Positive outlook for Singapore's food and hospitality sectors

2.   Although 2009 was a challenging year for both the food and hospitality sectors, it ended on a relatively high note as our economy pushed into the New Year with positive growth.

3.   Visitor arrivals reached 9.7 million in 2009, underscoring the strong performance in the final quarter of 2009 and exceeding the year's forecast of 9 to 9.5 million visitor arrivals. The strong growth looks set to continue as visitor arrivals to Singapore grew 24% year-on-year to 857,000 visitors in February 2010, a record for the month of February.^[1] The food sector has also shown resilience. The sector produced an output of $6.6 billion, or about 3.1% of the total manufacturing output^[2]. From 2003 to 2008, Singapore's total domestic food exports showed a compounded annual growth rate (CAGR) of 11.3%, from $2.2 billion to $3.8 billion^[3]. The food services sector also saw an 8.5% rise in operating receipts from 2007 to $5.1 billion and a total value added of $1.77 billion for 2008^[4].

4.   Moving forward, the food and hospitality sector looks poised for further growth. Riding on Asia's expected growth, the demand for food products, services and tourism is set to expand even further.

Staying Competitive in the Global Market Place

5.   Against this positive outlook, how can food manufacturers leverage on these opportunities to sustain their growth momentum?

6.   Over the years, Singapore food manufacturers have been leveraging on internationally recognised certifications to tap into overseas markets. SPRING Singapore, the enterprise development agency, has been working closely with the Singapore Manufacturers' Federation and Singapore Food Manufacturers Association to encourage the industry to adopt international standards such as the Hazard Analysis and Critical Control Points (HACCP). With this standard, consumers are assured of food product safety; therefore increasing consumer confidence in the company's products. It is encouraging to note that many of our local food manufacturers with export potential have achieved the HACCP certification. In fact, 389 food establishments are HACCP-certified today.

7.   Another internationally recognised certification that has gained traction among food manufacturers here is the Halal certification. Recognising that the global Halal market is worth some US$600 billion a year and is expected to rise by 10 to 20% annually for the next few years, the Majlis Ugama Islam Singapore (or MUIS), also known as the Islamic Religious Council of Singapore, has played a significant role to help companies tap opportunities in this area. Over the years, MUIS has worked with its counterparts overseas so that Singapore-made Halal products can be exported with greater ease. This has enabled Singapore to successfully export products to the corners of the world from the ASEAN region to the Middle East and even Europe.

8.   Singapore also introduced a new "whole food plant" Halal certification scheme in December last year. This scheme breaks away from the traditional "product" scheme where products are individually certified as Halal. The traditional scheme may be tedious for companies which produce multiple products. Now, companies who opt for the new "whole food plant" scheme will have all their products certified as Halal as long as these products originate from that plant. This will help to shorten the company's time to market and provide greater assurance to Muslim consumers.

9.   One such company that has achieved this certification is Ellaziq Pte Ltd, a subsidiary of Golden Bridge Food Manufacturing Pte Ltd. Ellaziq produces processed meats and was specially set up to tap the fast-growing Halal food market. After attaining Halal certification for its plant, the company expects sales to grow to $12 million by 2012.

Free Trade Agreements as a tool to tap into overseas markets

10.   Singapore food manufacturers have also been able to stay ahead of global competition through the Free Trade Agreements, or FTAs. Take, for instance, the ASEAN-China FTA (ACFTA). China and the six founding ASEAN countries – Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand – have removed tariffs on some 90 per cent of imported goods, covering 7,000 product categories beginning this year. The other four ASEAN members – Vietnam, Laos, Cambodia and Myanmar – will follow suit in 2015^[5]. Trade between China and the 10 ASEAN countries has grown from US$59.6 billion in 2003 to US$192.5 billion in 2008.  This spells good news for our local food companies looking to break into the fast-growing Chinese market. These FTAs therefore act to benefit our local food companies by reducing trade barriers.

11.   FTA-savvy companies which have tapped on the numerous agreements that Singapore has signed with other countries have reaped enormous returns. One such company that has done so is Prima, which exports their flour, pastes and sauces to China, Vietnam, Thailand and Indonesia.

12.   Foreign food manufacturers can also benefit by partnering our local companies to jointly develop new products to reach out to new markets.

FHA 2010 - a strong platform for companies to network and launch new products

13.   It is encouraging to see that FHA 2010 has multiplied in strength.  In 2008, over 52,000 trade attendees from the food and hospitality industry attended the show. I am told there are more than 2,500 exhibitors this year and the number of participants is expected to surpass that of FHA 2008. This platform provides an excellent opportunity for companies to network, form new contacts, find out about developments in the food and hotel industry and explore new business possibilities.

14.   With our government agencies and our food and hospitality industry working closely hand in hand, I am confident that these sectors will continue to flourish, making Singapore-based companies export-competitive and Singapore, an exciting food and tourist destination.

15.   I wish all of you a fruitful and rewarding time at FHA 2010.

Thank you.

^[1] STB Tourism factsheet (Dec 2009, Feb 2010), https://app.stb.gov.sg/asp/new/new03a.asp?id=11423

^[2] Source: EDB Principal Statistics by Industry (2009p)

^[3] Source: DOS Economic Survey Series 2008, EDB Principal Statistics by Industry, (2003-2007)

^[4] ESS DOS, 2008

^[5] AsiaOne Business, 8 Jan 2010 http://www.asiaone.com/Business/News/SME+Central/Story/A1Story20100106-189999.html