Business Times - 10 Sep 2004

Hire or fire - it's easy to do it in S'pore

By DANIEL BUENAS

IF you're going to fire - or hire - an employee, Singapore is one of the best places to do it, according to a survey sponsored by the World Bank and its private sector lending arm, the International Finance Corporation.

Their report, Doing Business in 2005: Removing the Obstacles to Growth, also found that Singapore is the third easiest economy to do business in, with New Zealand coming out tops, followed by the US. This was based on seven indicators - starting a business, getting credit, protecting investors, enforcing contracts, closing a business, and hiring and firing workers.

According to the survey of 145 countries, Singapore is one of the easiest places for companies to hire or fire employees.

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It used indices to measure how difficult it is to hire a new worker, how rigid regulations are on working hours and how difficult it is to dismiss a redundant worker. Conditions covered by the indices included availability of part-time and fixed-term contracts, working time requirements, minimum wage laws and minimum conditions of employment.

Singapore notched the best possible score in terms of ease (0 out of 100) for all three indices, beating the US but sharing first spot with Hong Kong, which also scored 0.

The average score for the region (East Asia and Pacific) was 20.6 for hiring workers, and 22.7 for firing them, while the average for Organisation for Economic Cooperation and Development (OECD) countries for hiring/firing was 26.2 and 26.8 respectively.

In terms of firing costs - calculated on the basis of the number of weeks worth of salary in severance, notification and penalties that must be paid - Singapore was the seventh cheapest country, with workers being paid four weeks' worth of wages for dismissal.

The survey also measured the degree to which investors are protected through disclosure of ownership and financial information. On a scale of 0 to 7, with higher values indicating greater disclosure, Singapore scored 5, compared with a regional average of 3.9 and an OECD average of 5.6.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 10 September 2004 1500 hrs

Singapore prime office rents eased 0.3% in August: report
By Chua Chin Chye, Channel NewsAsia

SINGAPORE : Average prime office rentals in Singapore fell 0.3 percent in August from a month ago, hurt by softening rents in the Rest of the Golden Shoe area.

Rents of Grade A office in Raffles Place, Marina Centre and Orchard Road areas all held steady in August.

But not so for the Rest of Golden Shoe area, which comprises mainly older office buildings.

In its report, property consultants Cushman & Wakefield said landlords in that district had to lower rates to keep tenants, so rents there fell 1.4 percent in August from a month ago.

Over a three-month period, that area has seen office rents falling by a sharp 7.3 percent.

Cushman & Wakefield predicts that Grade A office rents will remain flat in the third quarter, as high oil prices dampened business sentiment.

Key transactions in August include MCL Land selling its 78 Shenton Way, a 99-year-leasehold commercial building, for US$88 million, or S$151 million.

All in, prime office rents averaged S$4.12 per square foot, per month in August. - CNA

Copyright © 2004 MCN International Pte Ltd

Time is GMT + 8 hours
Posted: 09 September 2004 1827 hrs

StarHub IPO likely to be priced between M1 and SingTel: analysts

SINGAPORE : Analysts are expecting StarHub's impending initial public offer to be priced in between SingTel and MobileOne's price levels.

They say that while StarHub has been losing money for the past three years, things may pick up soon.

In fact, one analyst believes StarHub could turn around and post a profit this financial year.

StarHub's three years of losses may not paint a very compelling picture for a company bound for a listing, but many analysts say StarHub deserves a closer look.

Brenda Lee of Daiwa Institute of Research points out that even loss-making companies have valuations.

She estimates that StarHub could be priced somewhere between that of rivals SingTel and Mobile One.

So, StarHub's IPO could be a success if the pricing is right.

Analysts point out that StarHub is an integrated telco, thus commanding a premium over rival M1, which only has a mobile business.

If StarHub secures a top-end valuation of S$3 billion, the telco will have a financial year 2003 enterprise value Ebitda multiple of 16 times.

M1's shares are now trading at an Ebitda ratio of 6.4 times, while SingTel's ratio for 2003 is 9.2 times.

Looking ahead, Daiwa's Brenda Lee believes StarHub is headed for a full-year profit.

In fact, its net loss of S$131 million in financial year 2003 was largely due to its aggressive depreciation policy, writing off over five years instead of the more usual eight years.

StarHub's main revenue driver is its mobile division, which brings home nearly half its revenues.

StarHub has a 28 percent market share of more than one million customers, as at end June.

Analysts believe that once StarHub's mobile business hits a critical mass, average revenue per user will improve significantly.

But not all analysts agree.

"StarHub has been offering this business quite aggressively, basically by offering good deals to clients, basically good cheap rates. But there's only so much you can grow in this segment, because the penetration of mobile phones in Singapore, roughly 80 percent. In other words, it's a very mature market," said Pieter van Putten, managing director of APS Asset Management.

And analysts believe that, unlike SingTel, StarHub will be tied down by local integration issues and will remain a local player, like MobileOne, in the forseeable future.

But there is definitely room for growth for its MaxOnline broadband business, given that StarHub's penetration rate is a low nine percent per population.

StarHub is relooking its strategy to gain a bigger broadband market.

And while its cable TV monopoly is not yet making money, analysts say internal restructuring is going on, given that StarHub merged with Singapore Cable Vision only a few years ago. - CNA

Copyright © 2004 MCN International Pte Ltd

SEPT 10, 2004
First local biotech IPO may be one of biggest listings
Company producing biodegradable heart stent made just $1m last year but could command market cap of $1b, say analysts

By Lee Su Shyan

SINGAPORE could soon get its first home-grown biotechnology listing - one that could result in one of the biggest initial public offers (IPOs) ever seen here.

Biosensors International, which has developed a revolutionary medical device called a biodegradable heart stent that is used to treat blocked arteries, is seeking a flotation that could well take place by the end of this year or early next year, market sources say.

Although Biosensors made a profit of only $1 million in the year ended March 31, biotechnology is such a key sector that analysts reckon the company could command a market capitalisation of around a billion dollars.

This would put it in the same league as the 58 companies already in the billion-dollar club by market capitalisation as of June 30. Other such companies include Singapore Post (SingPost) and M1.

The analysts also said that Biosensors is set to raise a hefty chunk of money that will be the largest amount seen since SingPost's IPO last year which raked in a whopping $684 million.

The listing will be a shot in the arm for Singapore and its drive to be an Asian biomedical hub as it tries to develop high value-added services, said bankers.

In Singapore, there are few other listed companies in the same sphere. Money-losing Genemedix, which is London-based, and AsiaPharm, which is China-based, are both more focused on developing drugs.

Singapore-based Biosensors is headed by founder and chief executive Lu Yoh Chie.

Its chief innovation is in the area of stents. A stent is a tube inserted into a clogged blood vessel or artery.

Last year, Biosensors became the first company in the world to develop a stent which was coated with a drug that will suppress infection and prevent rejection.

It later sold the rights to United States-based Guidant for US$20 million (S$34.1 million) and a licensing agreement, which will result in a steady stream of revenue for the company.

In April, it made headlines with a stent implanted into a heart patient here. The revolutionary development is that it is made of a biodegradable polymer - the first in the world - which avoids triggering a reaction in the patient's body.

Since then, it has implanted these stents in three other patients.

One analyst said: 'Biosensors is already a global player. With Asia's demographics and our ageing population, this product is going to be in demand. Heart disease is also one of the top killers in the developed world.'

Some reports have estimated the global stent market to be worth as much as $14 billion.

Other medical products made by Biosensors include catheters, which are long, thin tubes used to drain fluids from the body, and blood transducers, used in measuring pressure. These devices are also said to be part of a market with a potential value of US$15 billion.

Born in Japan, Mr Lu formed Biosensors in 1990. In 1996, Biosensors became the first local maker of medical devices here.

It has offices all over the world, including the US, Japan and China, but Mr Lu has chosen to make Singapore its worldwide headquarters.

'Singapore is the gateway to Asia, which offers an explosive growth of opportunities for health-care products, particularly cardiology, with the rise of coronary heart disease in this region,' he had earlier said.

'Singapore's strong medical infrastructure and the push towards life sciences is an added advantage.'

The group employs more than 250 staff worldwide. Extensive research and development, manufacturing, sales and marketing activities are carried out in Singapore.

Not only does it make groundbreaking products, but market players also say that Biosensors stands out from among its biotech peers in that it is profitable.

A check with the Accounting and Corporate Regulatory Authority of its latest financials filed this year shows that it had sales of $16.6 million and net profits of $1 million.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

SEPT 10, 2004
U.S.-SINGAPORE FTA
Use S'pore as gateway to Asia, US firms urged
By Bryan Lee

A DECISION made 15 years ago to use Singapore as a gateway to Asia is reaping an unexpected windfall for United States-based Minnesota Rubber.

The Singapore unit of the privately owned manufacturer is enjoying annual tariff savings of $200,000 to $300,000 thanks to the US-Singapore Free Trade Agreement (FTA) which came into effect in January.

Located in Tuas, the subsidiary has been making car-engine rubber seals, ear plugs and other rubber products, mostly for the Asia-Pacific, since it was set up in 1989 to tap regional markets.

But since the start of the year, profits from US-bound exports, which make up a quarter of the company's total output, have been boosted by lower tariffs and merchandising fees under the FTA.

The company was one example quoted yesterday by Singapore Manufacturers' Federation (SMa) president Lew Syn Pau of how the US-Singapore FTA is helping to boost trade relations between the two countries.

He was speaking at the signing ceremony of a strategic tie-up between SMa and the US National Association of Manufacturers (NAM).

But while Minnesota Rubber has benefited from locating its Asia-Pacific operations here, many of its fellow small and medium-sized enterprises (SMEs) in the US have yet to understand how they can use Singapore to enter markets in the region.

NAM president Jerry Jasinowski said that given the common language, business culture and legal framework between Singapore and the US, the Republic is a much easier launch pad for American SMEs wishing to expand into the region.

'They are perplexed about going into Asian markets. When they look at India and China, they are even more confused.'

Unlike big US corporations, which have long used Singapore to get a foothold in Asia, many American SMEs have not realised that they can 'find an easier path to Asia through Singapore'.

And this will be NAM's main focus in its tie-up with the SMa: enhancing the visibility of Singapore as a gateway to Asia.

On the prickly issue of the loss of US manufacturing jobs to Asia, Mr Jasinowski said there has been much exaggeration of the extent of outsourcing in the US.

He reckons that just 15 per cent of manufacturing activity of large US companies has been outsourced out of the country.

In any case, outsourcing is perfectly legitimate as lower costs and being closer to their customers will help companies do better, he said, adding that this in turn will translate into more jobs for Americans.

For Singapore manufacturers, the tie-up will help them find new opportunities and new markets in the US. Over the next 12 months, the SMa is looking to bring its members on business trips to the US as well as help them participate in major trade exhibitions in the country.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Time is GMT + 8 hours
Posted: 10 September 2004 1854 hrs

Singapore spa industry moves to keep up with Thailand and Indonesia
By Jennifer Alejandro, Channel NewsAsia

SINGAPORE : Singapore lags behind its neighbours Thailand and Indonesia when it comes to the spas, but it is taking steps to catch up.

The spa industry in Singapore is worth S$120 million -- that is less than Thailand's US$120 million, or S$200 million.

Singapore Spa Association vice president Eddie Tan explains why Singapore is lagging behind.

"Basically, it's the size of the country and they have very cheap labour; whereas Singapore is a very small area and confined, and we have to do the best of what we have," he said.

"Labour is a big component of the spa industry and that's where we grow according to what we can offer and whatever resources we have at hand."

Latest industry figures from the association show there are over 2,000 registered beauty centres here which offer so-called spa services.

But there are actually only 200 proper spas, which offer water body treatments.

Moves are currently underway to upgrade beauty centres to spa level, and to restrict spa licences to those offering water-based treatments.

The Singapore Spa Association says that right now, government agencies are helping spa owners expand overseas and the tourism board is promoting spa packages that are dubbed uniquely Singapore.

Uniquely Singapore means a one-stop shop for spa services.

Major players have developed a variety of spa settings: resort spas, medical spas, and of course, hotel spas like Amrita and Aspara.

But smaller players like J's rejuvenation place emphasise that the people factor should not be overlooked.

"I hope the association can set up a course for the people who are in this industry to request knowledge, to improve their attitude and also the customer service," said its director June Ng.

She says the edge that local players should aspire to is not just the spread of treatments offered but also excellent customer service, so clients will keep coming back.

That is one issue spa owners and operators can thrash out at next Tuesday's Spa Industry Day. - CNA

Copyright © 2004 MCN International Pte Ltd

Time is GMT + 8 hours
Posted: 10 September 2004 1910 hrs

China-based Fung Choi seeks SGX listing
By Chan Hwa Loon, Channel NewsAsia

SINGAPORE : China's Fung Choi Printing and Packaging is seeking a listing on the Mainboard of the Singapore Exchange.

Beverage and property group Fraser & Neave has a 33 percent stake in Fung Choi, and among Fung Choi's customers are Creative Technology and Procter & Gamble.

Fung Choi plans to use part of its IPO proceeds to fund its proposed joint venture with state-owned Guangdong Province Publication Group, which holds the rights to publish school textbooks in Guangdong.

Fung Choi expects net profit to almost double to HK$74.5 million, or S$16 million, for the financial year ending 30 June 2005. - CNA

Copyright © 2004 MCN International Pte Ltd

Friday September 10, 8:31 PM
Singapore's Hyflux to build US$50 mln China plant

SINGAPORE, Sept 10 (Reuters) - Singapore water treatment firm Hyflux Ltd. said on Friday it had been chosen to build a US$50 million a seawater desalination project in northeast China, its second major project in the country in three months.

Hyflux said it would build, own, operate and transfer the 50,000 cubic metres per day plant, with initial investment estimated at US$50 million, in Liaoning province -- a centre for heavy industries such as coal mining and automobiles.

It said in a statement the plant, to be completed in 2006, would supply industrial grade water to Huludao municipality for 30 years, with plans to double the capacity after 2008.

Hyflux, partnering Liaoning Zhengye Enterprise Group for the project, secured a US$90 million seawater desalination project in Tianjin in June.

The company, also building Singapore's first desalination plant, has identified China as the company's growth engine. Its shares closed flat on Friday at S$1.51 and are up 3.4 percent this year, in line with the broader market.

Copyright © 2004Reuters Limited. All rights reserved. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of Reuters Limited

Business Times - 11 Sep 2004

S'pore an attractive wealth mgt market, says report

Tough for new firms but some customer segments can still be tapped

By TAILA KRISHNAKUMAR

SINGAPORE remains an attractive market for wealth management but not for new players, said London-based business information provider Datamonitor yesterday.

In its latest report, Wealth Management in Singapore 2004, the company noted that the Singapore market is 'very well provided for, with the world's major competitors all present'.

Alan Shields, Datamonitor financial analyst and the report's author, said: 'It would not make commercial sense for new players to start moving in to service the domestic market.

'However, there are still significant customer segments that could provide competitors with opportunities to increase revenues.'

He said there was much scope for differentiated offerings that would appeal to specific sectors of the Singapore population.

'The segments that could potentially be of interest to wealth managers include non-resident Indians, Muslims, expatriates, high earners and entrepreneurs,' he added.

In the report, Datamonitor predicted that high net-worth individuals are set to get richer, with average assets rising to just over US$1 million in 2008 from US$982,000 last year.

This represents compounded annual growth of 7.7 per cent.

Datamonitor defines high net-worth individuals as people who have at least US$300,000 in onshore, retail liquid assets.

Such assets include cash, bank deposits, listed shares and bonds.

For the mass affluent - people with less than US$300,000 but more than US$50,000 - wealth will grow at 5.3 per cent a year in the same period.

'Wealthy investors have access to better investment opportunities, traditionally invest more heavily in direct equities and are better advised,' Datamonitor noted.

Over the past five years ended 2003, the number of wealthy individuals has swelled by a quarter to 415,000, or about 10 per cent of the population.

Their investible wealth grew to US$112 billion in 2003 from US$87 billion in 1998, a sign of the recovery from the Asian financial crisis in 1997.

But there were significant fluctuations during the five-year period, Datamonitor said. Affluent individuals owned 77.5 per cent of total retail liquid assets in 1998. Their share peaked in 2000, at 81.1 per cent. It then slid before recovering to 78.7 per cent in 2003.

'Growth in Singaporean affluent wealth has not been as marked as some of the other Asia-Pacific countries,' said Mr Shields, but added that future growth looked strong.

Datamonitor expects Singapore's wealthy population to grow by a further 29 per cent to just under 538,000 in 2008. Their liquid assets will rise at a faster pace of 39 per cent.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

SEPT 11, 2004
Asean business group seeks role in China free trade talks

A SINGAPORE-LED coalition of Asean business chambers intends to start talks with its counterpart in China so that the private sector can play a part in negotiations for the Asean-China Free Trade Agreement (FTA).

The Asean Chambers of Commerce and Industry (CCI) said yesterday that it hopes to be the bridge for businessmen in Asean to bring their concerns to the regional governments.

Asean CCI is already in regular talks with business chambers in Japan.

It intends to engage similar groups in the United States and China soon, Asean CCI president Freddy Lam said yesterday.

'China is keen to have dialogue with Asean CCI. We hope that we can help to hasten the speed of the Asean-China FTA,' he said.

Mr Lam, a council member of the Singapore Business Federation, was appointed president of Asean CCI in June. The presidency is rotated between the Asean countries every two years.

Set up in 1972, Asean CCI comprises chambers of commerce and industry of the 10 Asean countries.

Besides helping to disseminate information to the business community, the grouping also acts as a lobby group for Asean business interests.

For example, it is now lobbying for freer trade in agricultural products between Thailand, Vietnam, Laos, Cambodia and Myanmar.

Yesterday, the Singapore-led secretariat also launched a new website for the grouping ( www.asean-cci.org ) to facilitate feedback from businessmen and provide more information to them on Asean matters. -- Audrey Tan

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

The New Paper - 13 Sep 2004

WHEN 'NO PROBLEM' MEANS GOT PROBLEM

AS A BUSINESSMAN, IT PAYS TO BE FAMILIAR WITH DIFFERENT CULTURES

By Eugene Wee

EVEN after two years of lessons, Mr Chris Yap, who manages a telecommunications company in Bangkok, doesn't dare to speak Thai with his clients.

'The Thai used in doing business is very different from the Thai you use in conversation,' he explained.

'That's why I don't dare speak it when dealing with clients because I'm afraid I will offend them.'

Mr Yap's experience is an example of how biculturalism can give Singaporean businessmen an edge overseas.

RIDE CHINA'S AWAKENING

Prime Minister Lee Hsien Loong highlighted this strategy for Singaporeans wanting to ride China's awakening as a global economic power during his National Day Rally speech last month.

While many Singaporeans have their sights set on China, some others prefer to look at other countries like Vietnam and Thailand.

A few intensive language lessons may get your foot in the door, but not understanding the culture can get that door slammed on your foot.

Mr Yang Razali Kassim, chairman of the Association of Muslim Professionals, who has worked overseas for many years, said: 'Sometimes knowing the culture is more important than knowing the language.

'By understanding the culture, you become more sensitive to the environment that you are operating in.'

INDIA: Problem of saying no

Problems arise even when the locals speak English. Like in India, where the reply to almost any request is 'no problem'.

But Mr T Chandroo, managing director and CEO of the Modern Montessori International group, advises that you should never take the answer for granted.

'People in India just can't say no to you,' said Mr Chandroo, who also sits on the board of directors of the Singapore Indian Chamber of Commerce and Industry.

'They feel that if they do, they are hurting your feelings and they get embarrassed.

'You tell them you want this, and they will say 'no problem, sir'.

'I have encountered many people who tell me that but, in the end, they don't know a thing about what they are supposed to do.'

THAILAND: Don't pray pray

Don't assume you know the customs and mimic what others do just to fit in.

You might just end up ostracising yourself if you get it wrong.

Mr Yap said that he has seen many Singaporeans trying to do the traditional Thai greeting of pressing their hands together at chest level and bowing their heads to touch the fingers.

'A lot of Singaporeans don't know that there is a very specific way of doing the greeting, especially if they are greeting senior people like government officials,' he said.

'They try to imitate it and end up looking like they are trying to 'pai pai' (pray in Hokkien). In the end, they may think they are trying to impress the Thais, but they end up being thought of as a joke.'

INDONESIA: Inviting trouble

No matter how much you think you know the language, there can still be misunderstandings. Take this example related by Mr Yang Razali.

A Malay Singaporean was flying to Indonesia to meet someone there.

The Indonesia man told the Singaporean that he will 'jemput' him when he arrives.

Jemput means 'to invite' in Malay.

'The Singaporean thought his Indonesian friend was inviting him out while he was in the country,' said Mr Yang Razali.

'But in Indonesia, 'jemput' means to go somewhere to receive someone.

'So when the Singaporean landed at the airport, he just went off to his hotel not knowing that his friend was at the airport waiting to receive him.'

VIETNAM: Eat first

Even if you have the language down pat, not knowing how to interact with locals can doom your business negotiations right away.

For example, in Vietnam, no matter how eloquently you are at presenting your proposal, your potential partners will shoot you down if you bring up business matters at your first meeting with them.

For Mr Martin Wong, managing director of Vietnam-based matchmaking agency Mr Cupid International Matchmakers, it took four trips to Vietnam to wine and dine his prospective partners before he even broached the subject of a business deal.

'The Vietnamese take time to warm to you,' said Mr Wong. 'If you talk to them about business proposals the first time you meet them, they get very turned off.'

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 13 Sep 2004

Satyam picks S'pore office to oversee India ops

By AMIT ROY CHOUDHURY

IN an unusual turn of events, Indian software major Satyam Computer Systems has expanded the role of its Asia Pacific headquarters in Singapore to include the Indian domestic market as well.

The Singapore office now looks after a region stretching from the Middle East and Africa all the way to Japan and including Australia and New Zealand - an area which the company designates as Rest of the World, after the Americas and Europe.

Speaking to BizIT, Virender Aggarwal, senior vice-president and head of Satyam's Asia Pacific operations, said several factors prompted the company's decision to run the rest of the world operations, including its Indian domestic business, from out of Singapore. A key consideration was, quite simply, that Singapore is a very efficient place to run a business, he said.

Last year, Satyam set up its disaster recovery centre in Singapore, bypassing locations like Mauritius and Malaysia. And while a market like Australia provided about three times the volume of business that Singapore does for the company, 'in terms of regional staff, Singapore is the best location for us,' Mr Aggarwal said.

But why run the domestic Indian operations out of Singapore? Mr Aggarwal explained that the market 'needs a strong focus' and the Singapore-based staff had the necessary expertise to provide such a focus.

According to him, the Asia Pacific operations 'have the experience of developing markets because we have been working in countries that do not have mature IT markets'. This experience will come in handy in developing the nascent domestic Indian market, he said.

Listing some of the factors which makes Singapore a good place for Satyam's regional headquarters, Mr Aggarwal said that despite it being a relatively high-cost country, wages and other costs were affordable because of low taxes.

Another major factor for Satyam was that office rents here are lower than what they pay in Delhi and Mumbai in India - and this in spite of being located in a prime area of the city.

An efficient work permit system - better than that in most other countries in the region, he claimed - was a big plus, as was the fact that Singapore is an international aviation hub and its connectivity with all the countries in which Satyam does its business was excellent.

Furthermore, many key business partners like SAP, Oracle and PeopleSoft have a big presence in Singapore. 'There is a lot of business dependent on technology partners and as a company we have a lot of partners. We are less of an applications management company than an applications development and maintenance company compared to other Indian vendors - a lot of our revenue comes from enterprise solutions and a lot of our partners have their Asia Pacific headquarters here,' Mr Aggarwal said.

Satyam recently forged a global partnership with Singapore-based System Access, a homegrown software company. Under the agreement, Satyam will help market worldwide System Access' products for the financial services industry.

The Hyderabad-based Indian software firm has around 1,800 people working for its Asia Pacific operations. Out of these, 225 are based in Singapore, about 300 in Australia and 100 each in Japan, China and Middle East. Thailand has about 50 people and the rest work out of India serving other Asia Pacific countries.

Asia Pacific contributed 16 per cent of Satyam's revenues of US$173 million in the last quarter of its present financial year. In the financial year ended March 31, Asia Pacific contributed 13 per cent of the company's total revenue of US$571 million.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 13 Sep 2004

Software firm VMware sets up regional HQ in S'pore

By AMIT ROY CHOUDHURY

FAST-GROWING enterprise software firm VMware has moved into Singapore with a bang, making the Republic its regional headquarters responsible for the Asia South and greater China region and appointing Koh Eng Kheng as regional director.

The move is all the more significant given that VMware was recently acquired by data storage powerhouse EMC. Founded in 1998, it is the global leader in virtual infrastructure software for x86-based systems, which allows software services to be deployed and managed independently of hardware.

Virtualisation is one of the fastest growing new technologies in the IT space. According to Mr Koh, virtualisation software allows users to run multiple operating systems, including Windows and Linux, simultaneously and independently in fully networked, portable virtual machines on a single PC or an industry standard server.

Virtual infrastructure provides a layer of abstraction between the computing, storage and networking hardware, and the software that runs on it.

'By implementing a virtual infrastructure, IT organisations can provision new services and change the amount of resources dedicated to a software service simply by interacting with a management console, as opposed to physically reconfiguring or re-purposing hardware,' Mr Koh explained. 'This makes existing resources more efficient and flexible, driving cost out of IT.'

Commenting on VMware's expansion into Singapore, Jim Lenox, director of VMware Asia Pacific said: 'VMware sees Singapore as a major area of opportunity for revenue growth as well as serving as a springboard to the region.'

Mr Koh added that Singapore provides a promising market opportunity for VMware solution adoption and also serves as a springboard for it into Asean, India and the greater China region due to its excellent infrastructure and proliferation of local talent.

'In terms of regional growth, India and Greater China pose tremendous opportunities - India is particularly strong in software development, business process outsourcing and customer support centres, while China is enjoying high server shipment rates,' he said.

According to Gartner analyst T Bittman, by the end of 2007, 40 per cent of the world's largest 1,000 companies will use partitioning technologies on Windows servers, and 'businesses that ignore virtualisation could wind up paying 15-25 per cent more than they need to by 2008'.

VMware has over 2.5 million users worldwide, with 5,500 enterprise server customers spanning every major vertical industry including financial services, healthcare, government, technology, education and manufacturing, Mr Lenox said.

EMC completed its acquisition of the company in January, spending about US$625 million in cash. At a second quarter earnings call for EMC early this year, VMware's revenue was posted at US$47 million, growing nearly 200 per cent year-over-year.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 13 Sep 2004

Sinwa sets up 3 units in Australia

SINGAPORE - Sinwa Limited, a regional marine supply and logistics provider has incorporated three wholly-owned subsidiaries in Australia to establish strategic alliances with three Australian companies engaged in marine supply and logistics activities.

These companies have markets and customer bases in key ports of Sydney, Melbourne, Fremantle, Port Hedland and Darwin.

The paid-up capital of the three wholly-owned subsidiaries - Sinwa AIMS Pty Ltd, Sinwa TMSS Pty Ltd and Sinwa IMES Pty Ltd - will be funded from internal resources.

Explaining the rationale for incorporating these subsidiaries, Mr Mike Sim, Sinwa's Executive Chairman and CEO, said: 'Australia is an important marine logistics market in the Asia-Pacific, largely because of the heavy bulk carrier traffic involved in the transportation of coal, livestock and other commodities within and outside Australia. In addition, the country has a sizeable cruise ship industry.'

For the first six months of this year, Sinwa posted a 10.6 per cent rise in net earnings to $2.9 million on the back of a 24.5 per cent surge in revenue to $33.0 million.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 14 Sep 2004

FTA route not for all Asian nations: trade expert

They must ensure that the focus is on the economic, not political agenda

By CHUANG PECK MING

(SINGAPORE) Asian nations should think twice about following Singapore in rushing to do free trade deals.

Even as Singapore is held up as a model for such trade agreements, trade policy expert Razeen Sally yesterday said countries in the region could end up with half-baked deals with little gains, and get entangled in red-tape - if they take the FTA route.

He said Singapore is an exception because it's a free port, has fairly open services sectors and no agriculture. 'It's a tiny city-state with efficient, joined-up government. Hence it's pretty easy to negotiate WTO-plus FTAs with Singapore.'

Unlike Singapore, others in the region are likely to be driven into a free trade pact by foreign policy and security concerns, according to the visiting scholar from the London School of Economics. And, he said, free trade talks in the region often bring nations in head-to-head clashes over protected goods and services, especially in agriculture.

'A combination of high political and low economic factors could result in a bewildering hotch-potch of weak and partial FTAs, with little net liberalisation or pro-competitive domestic regulation, and tied up in knots of restrictive, overlapping rules of origin,' Dr Sally said at a seminar on trade policy hosted by the Institute of Southeast Asian Studies.

'Trade diversion and associated static and dynamic efficiency losses may follow, repeating the mistakes of South-South discriminatory trade agreements in the 1960s and '70s,' he said.

Thailand, the first Asean country to emulate Singapore in launching several free trade talks at the same time, offers an object lesson in how not to negotiate FTAs, according to him.

'FTAs have become Prime Minister Thaksin Shinawatra's top trade policy priority, diverting political attention and bureaucratic resources from Thailand's activity in the World Trade Organization (WTO),' he said. 'Clearly, Mr Thaksin, who is also Thailand's leading businessman, feels he can control and get quick results from FTA negotiations, which he cannot do in the WTO. But political deal-making and symbolism have come at the expense of economic strategy.'

Dr Sally said Thailand has done little serious research, analysis and reflection on what bargaining positions to take in FTA talks, how the positions fit across different negotiations, how they relate to WTO commitments and, most importantly, how they fit with the broader national economic policy framework.

'Some negotiating partners have been chosen without due discrimination,' he said. 'What is the economic rationale for FTAs with tiddlers like Bahrain and Peru? The likely results will be patchy, quick-fix sectoral deals reflecting lobbying pressure on both sides, but with core goods and services sectors continuing to enjoy protection.'

But Barry Desker, former chief executive officer of the then Trade Development Board, has not written off Thailand's efforts - or those of others in Asia.

'Given the spate of FTAs that are being negotiated in the region, especially with partners outside East Asia, the test of their usefulness is whether they provide benefits that can be utilised,' he said. 'If the compliance costs are high as well as benefits are minimal because of the low volume of trade in goods and services, then FTAs that are concluded are likely to have the same impact as the agreements on the establishment of joint commissions which are often the outcome of ministerial visits.'

Mr Desker, now the director of the Institute of Defence and Strategic Studies, said Asian nations are rushing to conclude FTAs because, unlike economists who seek the ideal solution, governments focus on the politically attainable.

He noted that multilateral trade talks under the WTO last nearly a decade, even though they are launched with a three-to four-year timetable for completion.

'As governments in Southeast Asia work within four-to five-year electoral cycles, performance legitimisation is increasingly sought through the early conclusion of bilateral and regional FTAs which are justified on the grounds that they are 'WTO-plus' agreements,' he said.

Mr Desker said as long as there is trade liberalisation, it does not matter if it is at a bilateral, regional or multilateral level. 'Such FTA negotiations have the significant benefit of promoting technology and knowledge transfers, domestic reforms, productivity gains and improved development prospects.'

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 14 Sep 2004

S'pore delegation bound for Europe auto events

IN a bid to win a slice of the global automotive pie, a delegation of 11 Singapore-based electronics and engineering companies will be heading to Europe this month to sell their capabilities at two key industry events for this sector.

The companies will be taking part in a 14-day Automotive Electronics Parts & Components Industry Cluster Mission to Germany, Switzerland and the UK.

The delegation will participate in the bi-annual automotive show Automechanika in Frankfurt - the first time a Singaporean delegation is participating in this event - and the annual Bavarian Innovation and Cooperation Initiative for the Automotive Components Supplier Industry in Switzerland.

Apart from participating in these events, the mission will also visit key automotive original equipment manufacturers.

The mission is organised by International Enterprise Singapore in collaboration with the Singapore Precision Engineering and Tooling Association Automotive Chapter and supported by the Ministry of Economic Affairs of the State of Brandenburg, Germany.

'The growing trend of increased outsourcing . . . and the fact that European automotive players are now configuring their production networks in Asia to compete for the China market spell good opportunities for Singapore-based companies,' IE Singapore said in a statement.

IE Singapore's Frankfurt centre director Timothy Toh said that Germany files the largest number of patents in the auto parts industry in the world, and that the cutting edge innovation of this industry presents a 'good opportunity for potential suppliers to engage the creators of new technology'.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

SEPT 14, 2004
Fujitec is second foreign firm to delist from bourse recently
It follows ABN Amro's move last month and analysts say it raises question as to whether more foreign firms with SGX secondary listings may do likewise

By Lee Su Shyan

JAPAN'S Fujitec has become the second foreign company to move to delist its rarely traded stock from the Singapore Exchange (SGX) in recent weeks, following in the footsteps of Dutch bank ABN Amro.

Market players say that the Japanese company's departure again raises the question of whether more foreign companies with secondary listings on the SGX may follow suit, especially if they have not seen any trade for years.

There are more than 40 companies on the SGX which hold multiple listings.

The Japanese maker of lifts and escalators announced that it was withdrawing from the exchange here. It said its stock had been suspended from last Friday, and would be delisted 'in due course'.

In response to queries from The Straits Times, Fujitec said: 'Fujitec's shares have not been traded on the SGX for these years and the volume of depository receipts outstanding is quite little.'

Depositary receipts are documents certifying that the holder owns shares in a company.

In 1977, Fujitec put out a public offering of three million Singapore depository receipts. A check with Bloomberg shows that there have been no trades since 2000. The company is already listed on the Tokyo, Osaka and Luxembourg stock exchanges.

Other than a lack of liquidity in trading, another reason for such pull-outs may be cost.

Last month, ABN Amro said that it was pulling its shares off the mainboard, where they have been listed since August 1981.

It was also exiting its other listings such as those in London and Frankfurt, but keeping its New York Stock Exchange listing as well as one on its home exchange of Amsterdam.

Its reason? Costs and requirements of listing its ordinary shares on these exchanges 'outweighed the benefits'. The bank estimated that its listing costs on these exchanges had amounted to 'a couple of million euros'.

Still, the cost of keeping a listing here may not be that high. Based on the market value of the stock, annual listing fees for mainboard companies can range from $10,000 to $25,000.

Many of these companies were wooed to Singapore as part of the exchange's attempts to broaden its offerings, but they have not fared well.

One was carmaker Daimler-Benz, which withdrew its listing after its merger with Chrysler in 1998.

Investors are not interested in foreign listings, say retail investors.

Firstly, there is the foreign currency exposure. For example, Japanese companies' shares are still denominated in yen.

Also, the selling price on the domestic exchange is sometimes lower than the buying price in Singapore.

As well, investors do not get the opportunity to meet management or attend annual general meetings here.

Eventually, genuine investors will exit the shares, due to lack of liquidity, and buy them on their domestic exchange instead.

While investors' interest wanes, these companies may still be keen to keep a Singapore listing - as well as their other listings - to raise their profile.

For instance, among the Japanese companies, market players said that one reason for having a listing here was to raise the company's profile as it expanded into Asia.

Fujitec Singapore's operations started here in the 1970s.

Financial institution Nomura Holdings remains keen to be listed here, even though it is already listed in Tokyo, New York and Amsterdam.

A Nomura spokesman told The Straits Times: 'We think that it is important to be listed on the Singapore Exchange, which is one of the major markets in Asia.'

Aberdeen Asset Management - which is listed on London - has not seen a trade done in its shares since 1996.

But its managing director in Singapore, Mr Hugh Young, explained that there is still a rationale for the company to have a listing here, such as the possibility of raising capital.

He said: 'Asia, with Singapore as the headquarters, is a vital part of our business, representing over 30 per cent of our assets.'

Mr Young added: 'It was in part for profile and name awareness. Also at the back of our minds was, and still is, the possibility either to raise capital here or to be able to move shares from the UK register to Singapore.'

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

SEPT 14, 2004
MANPOWER SURVEY
S'pore employers expect to hire more next quarter
By Narendra Aggarwal

EMPLOYERS in Singapore have reported a significant increase in their intention to hire new workers in the October to December quarter, a new survey has shown.

One in six employers, or 17 per cent, plans to hire in the upcoming fourth quarter, compared to just 3 per cent for the same period last year, showed a survey by Manpower Inc, a leading global company providing employment services.

'Employer confidence continues to improve, with more employers adding workers to their payrolls this quarter' than they did in the year-ago period, said Mr Iain Herbertson, senior vice-president and managing director of Manpower Asia-Pacific.

'If we compare the results of the survey to what we are experiencing in Manpower Singapore, we can see a strong correlation, particularly in the financial sector.

'Overall, we are seeing more contract, permanent and executive job orders coming in, which is very promising indeed,' he added.

A total of 726 employers in Singapore (including the public sector) and 35,000 globally, participated in the phone survey aimed at gauging their across-the-board hiring intentions in the coming quarter.

The survey revealed a net employment outlook, or the net percentage of employers planning to take on new staff, of 14 per cent. That is calculated by taking the 17 per cent who plan to hire, less the 3 per cent who plan to cut jobs.

Still, the 14 per cent prediction was lower than the 19 per cent forecast for the third quarter in the previous survey.

'The latest figures are positive but not overwhelming like the last quarter. Good sign though. The labour market is moving nicely,' said Ms C.K. Goh, general manager of Manpower Staffing Services (Singapore).

Hiring is expected in all sectors in the months ahead except construction - the sole sector with expected declining worker numbers throughout this year.

The greatest optimism was in the transportation and utilities industries sector, where the net employment outlook was 24 per cent. This was closely followed by the finance, insurance and real estate industry sector with 22 per cent.

Elsewhere, continued positive hiring activity is expected in all countries surveyed by Manpower in the Asia-Pacific region, with employers in New Zealand reporting the most positive outlook for the quarter.

At the global level, 17 of the 19 countries and territories said they expect positive hiring activity during the October to December period, with 14 countries reporting stronger hiring levels compared to a year ago.

In the United States, Britain and Canada, seasonally adjusted results showed continuing employer optimism and solid hiring levels, said Manpower.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Business Times - 16 Sep 2004

Azeus lodges prospectus with MAS

SINGAPORE - Hong Kong company Azeus Systems Holdings Ltd, a provider of IT consultancy services, has lodged it preliminary prospectus with the Monetary Authority of Singapore on Thursday for a mainboard listing on the Singapore Exchange.

The company designs, implements and maintains a wide range of IT systems and computer software that range from e-government initiatives to the provision of solutions utilising innovative technologies.

While Azeus provides its services to the private commercial sector, its strength has traditionally been in the public sector, where the emphasis on quality solutions and technical abilities has enabled the company to clinch over 60 projects for more than 20 Hong Kong government departments.

For the financial year ended Mar 31, 2004, Azeus posted a 26.5 per cent increase in net profit and a net profit margin of 37.5 per cent.

Going forward, Azeus expects to increase its share in the Hong Kong public sector to HK$1.9 billion (S$150 million) in 2005. The company also intends to explore opportunities in new markets such as China as well as the IT outsourcing market in Japan.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 16 Sep 2004

S'pore firms should get on the Latin bandwagon

By DANIEL BUENAS

LATIN American businesses are turning their sights to Asia, and Singaporean companies should not miss the opportunity to tap into the cross-flow of goods and services between these two regions, Trade and Industry Minister Lim Hng Kiang said yesterday.

Mr Lim was speaking to more than 200 participants at the inaugural LatinAsia Biz 2004 forum which was organised by International Enterprise (IE) Singapore and the Singapore Business Federation, with eAngelz.com as managing organiser.

He said that emerging economic giants in Asia - such as China and India - have 'soaked up' Latin American exports, and that the region is now aggressively courting these economies.

'With our knowledge of regional markets in Asia, Singapore can offer our expertise as an Asian hub to Latin American investors,' Mr Lim said. 'Partnerships can be formed between Singapore-based companies and Latin American businesses keen to capitalise on the huge market in Asean and Asia.'

Mr Lim also said that Singaporean businesses should consider venturing into Latin America and that there are many opportunities from the regional integration within the region.

'A well-connected Latin America means that Singaporean businessmen who intend to base operations in one Latin American country can easily tap on these links to market their products to other neighbouring countries,' Mr Lim said.

As an example of a succes story, Mr Lim cited Singapore-based PC components and storage distributor eSys Technologies, which recently clinched a more than $50 million deal to provide computers to Mexico's dominant telecomms company and Internet service provider, Telmex.

According to IE Singapore, Singapore's total trade with Latin America in the first half of 2004 grew by over 20 per cent year-on-year to $3.3 billion, from $2.7 billion previously. The total trade in 2003 was $5.5 billion, 4.7 per cent lower than the $5.8 billion in trade registered in 2002.

IE Singapore chairman Wong Kok Siew said that, in the past, most Singaporean companies that ventured into the region came from the electronics and precision engineering (EPE) sector, although this is changing.

'Over the last two years, a new phenomenon has emerged,' Mr Wong said. 'Singapore-based companies investing in Latin America today are not limited to the EPE sector, but span a range of sectors including information and communications technology software and hardware, food products and services, education, textiles and garments, and hospitality and hotels.'

And it's not just Mexico which is drawing Singaporean interest, Mr Wong pointed out.

He cited Singapore-based RGM International, which invested an estimated US$111 million in two paper and pulp operations in Brazil, as a company which had moved into Latin American markets outside of Mexico.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

September 16, 2004
R&D leaders rewarded for contributions

By Koh Su Haw

SINGAPORE has much to offer to companies wanting to base their research and development (R&D) efforts here, Mr Kay Das said yesterday.

The country has a conducive research environment and “a great testbed for consumer products, with its strong emphasis on development of wireless and broadband infrastructure, something unique in Asia”, said Mr Das, the STMicroelectronics R&D director for Asia-Pacific.

He was one of two recipients of the 2004 National Science and Technology Medal.

The other medallist, who received the award from Education Minister Tharman Shanmugaratnam at the Grand Copthorne Waterfront Hotel, was Professor Low Teck Seng, principal and CEO of Republic Polytechnic.

Mr Shanmugaratnam also gave out two National Science Awards, a National Technology Award and two Young Scientist Awards to research scientists last night.

The annual National Science and Technology Awards recognise individuals and groups for their outstanding contributions to the advancement of research and development in Singapore.

Since Mr Das started STMicro’s R&D team here in 1995 with government incentives, his small research team has grown.

Today, he has a US$50 million (S$84 million) R&D budget and oversees 120 research staff, including those at a research office in Beijing.

In the early days, the team comprised mostly foreigners. Over the years, it has become a healthy multicultural mix with about half the researchers from overseas, Mr Das said.

Copyright © 2003 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 16 September 2004 2022 hrs

Seghers Keppel secures S$51m contracts in China
By Chan Hwa Loon, Channel NewsAsia

SINGAPORE: Seghers Keppel Technology Group has won three contracts, worth a total of S$51m, in China.

The environmental technology subsidiary of Keppel Integrated Engineering says the first contract is to provide engineering services for the Suzhou SuNeng Waste Incineration Power Plant.

The second contract, awarded by Suzhou SuNeng Waste-to-Energy Company, involves the basic design for the waste and ash handling facility at the plant.

The third contract is for some work on the first waste-to-energy plant to be built in Changshu city, Jiangsu province. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 17 Sep 2004

S'pore's August exports up 4.8%

SINGAPORE - Singapore's non-oil exports rose a seasonally adjusted 4.8 per cent in August from July, as microchips, petrochemicals shipments and pharmaceutical grew more than forecast, government data showed on Friday.

From a year earlier, exports expanded 29 per cent to S$11.5 billion, trade agency International Enterprise Singapore said in a statement. This is higher than economists' median forecast of 23 per cent.

The gains came as companies including Chartered Semiconductor Manufacturing Ltd and Pfizer Inc sold more computer chips and pharmaceuticals.

Total trade grew 28.1 per cent to $49.6 billion from $50.5 billion in July.

The latest trade figures look set to achieve the government's own forecast of up to nine per cent growth this year.

Manpower Minister Ng Eng Hen said on Friday that the economy may grow at a double-digit rate in 2004.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.


Business Times - 17 Sep 2004

Double-digit economic growth for S'pore possible

SINGAPORE - Manpower Minister Ng Eng Hean said Singapore may register double-digit economic growth this year. Speaking at a union conference, he said Singapore's economy is recovering and that more new jobs will be created.

He said it is important for Singapore to move away from a seniority-based wage system towards a flexible wage structure based on workers' performance.

This will enable a company to better withstand temporary upheavals in the economy by reducing employees' variable components and consequently, help them keep their jobs.

He said with globalisation and competition from other parts of the world, companies here need to be flexible and quick.

And to stay ahead of the competition, companies have to restructure their business to stay nimble.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 17 Sep 2004

Foreign banks in S'pore snatch huge chunk of domestic loans

Their overall loans grow 18-21% vs local banks' 0.2-9%

By SIOW LI SEN

(SINGAPORE) Foreign banks continue to gobble up a huge chunk of domestic loans, including the lion's share of new mortgages - leaving local banks pedalling furiously to stay ahead.

It looked initially that firming interest rates could slow the foreign banks' quest for market share, but so far there is no sign of this happening.

'It's no secret that to keep ahead of the market we have to remain innovative and deliver tangible benefits to our customers, especially in today's competitive environment,' said an HSBC spokesman.

It's not only in the mortgage area that the likes of HSBC Singapore - which grew its home loan book at a breakneck pace of 56 per cent in the year to end-June - are giving local bankers a headache.

The other consumer business - high margin unsecured loans that comprise credit cards and unsecured overdrafts - is dominated by foreign banks, which are taking about two-thirds of new business.

Figures from the three foreign banks that provided Singapore data in their end-June results show their overall loans grew between 18 and 21 per cent - way above the industry's 4.1 per cent.

In contrast, the local banks reported global loans growth between 0.2 per cent and 9 per cent.

According to the Monetary Authority of Singapore, non-bank lending at end-June - the latest period for which data is available - was up 4.1 per cent to S$175 billion from 12 months earlier.

This was led by growth of 16.2 per cent or S$7.7 billion in home loans and a 7 per cent increase or S$2.2 billion in unsecured loans to individuals.

HSBC Singapore and Standard Chartered Bank accounted for 22 per cent or US$1 billion (S$1.7 billion) of the S$7.7 billion increase in mortgages.

They also took a hefty 55 per cent or US$700 million (S$1.2 billion) of the industry's S$2.2 billion new loans to private individuals.

Maybank, which also reports its Singapore numbers - though not in the same detail as HSBC and Stanchart - said its overall loans growth of 18 per cent was from consumer and corporate business.

Citibank and ABN Amro Bank, both of which are also active consumer banks here, do not disclose Singapore data.

There is no doubt that the fierce contest for customers can be pretty bruising and lead to mixed results.

HSBC said profit before tax for Singapore was up 6.3 per cent to US$134 million.

Excluding Hong Kong, Singapore is HSBC's single largest market in the Asia-Pacific.

Stanchart said its operating profit in Singapore was broadly flat at US$90 million in an intensely competitive environment.

Singapore is Stanchart's second-largest market after Hong Kong.

Despite contracting margins, revenue growth was 4 per cent, fuelled by wealth management and asset growth in business financial services, Stanchart said.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

SEPT 17, 2004
Record 1,451 S'poreans in millionaires' club
Together they earned $3b and paid $374m in taxes in 2002

By Narendra Aggarwal

SINGAPORE'S big bucks brigade has just become even bigger. The number of the nation's wealthy elite earning a million dollars or more a year has risen to a record 1,451.

Those belonging to this exclusive club earned a handsome $2.1 million each on average in 2002, new figures from the taxman show.

And they are paying less tax than before as lower tax rates designed to keep Singapore competitive kick in. Still, they continue to account for a big slice of the total income tax paid.

If you are wondering who these well-heeled folks are, well, it can safely be assumed that they are top businessmen, chief executives, bankers, lawyers, accountants and doctors, among others.

But the taxman cannot reveal the list as such personal information is confidential under the Income Tax Act.

However, he does disclose that the total assessable income of those making a million dollars a year or more has also hit a new record at $3.07 billion.

The previous all-time highs in the number of those in the big bucks brigade and their annual income was in the year 2000, as the accompanying table shows.

That's the year the economy roared ahead recording a 9.7 per cent expansion in gross domestic product.

Then came the recession of 2001 when the economy shrank by 1.9 per cent.

But the big earners proved to be quite resilient to the slowdown that year as their numbers and assessable income dipped only marginally.

The latest figures show that the number of million-dollar-and-above earners in Singapore grew by 29 in 2002, the latest year for which such information is now available, from 2001.

At the same time, the total amount they made shot up by some $220 million in 2002. This is revealed in their year of assessment (YA) 2003 calculations done by the Inland Revenue Authority of Singapore (Iras) as at the close of the country's last financial year ended March 31, this year.

These figures are revealed in the Iras' 2003 annual report recently approved by Parliament, which details income earned in 2002, that is, YA 2003.

Despite the upswing in big earners, their tax liability has been going down in recent years. Last year, they were assessed to collectively pay $374 million, down from $472 million in 2001 and $558 million in the year 2000.

Their average tax bill dropped quite significantly from $332,000 on average in 2002, to $258,000 on average last year. In the year 2001, they had paid an average $390,000 as income tax.

This is because the country has been cutting its income tax rate so that Singapore can stay competitive amid rapid globalisation.

'To maintain and enhance our competitive advantage, we are decisively restructuring our tax system by shifting from direct to indirect taxes,' said Prime Minister Lee Hsien Loong in his chairman's statement in the latest Iras annual report.

In recent years, the corporate income tax rate and the top personal income tax rate have been reduced to 20 per cent and 22 per cent respectively, while the GST rate was raised to 5 per cent to offset part of the revenue loss.

Nevertheless, this small band of big earners play a big role in raising tax dollars for the taxman. Out of a population of just over four million, these 1,451 individuals accounted for more than 12 per cent of all personal income tax collected last year, for income earned in 2002.

In recent years, the rise in the number of big earners has been quite rapid.

It crossed the 1,000 mark for the first time in 1999, with a record 1,067 people on board.

The latest Iras annual report is available at its website: www.iras.gov.sg (under the 'About Us' section).

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Business Times - 20 Sep 2004

S'pore gives Nu Skin a springboard

Local distributors are driving the personal care firm's expansion into SE-Asia

By NANDE KHIN

NU SKIN Enterprises (NSE) - one of the largest direct selling companies in the world - has found a money-spinning machine in Singapore.

Not only is the country the top market in terms of per capita revenue for the New York Stock Exchange-listed company, Singapore is also key to NSE's expansion plans in South-east Asia, said Andrew Fan, vice-president of Nu Skin Enterprises South-east Asia, as well as Nu Skin Enterprises Greater China.

'The Singapore market is a springboard into the region for us. We see a lot of good quality people joining us as distributors in Singapore and they become leaders, meaning they are able to build a very good sales organisation,' said Mr Fan in a recent interview.

'They are also helping us to penetrate the other markets in South-east Asia, including Thailand, the Philippines, Malaysia and Brunei. We just opened in Brunei in August and we already have a lot of Singapore leaders bringing in business there.'

Singaporeans would be most familiar with NSE's personal care products under its Nu Skin division, but the US-based company also develops and sells health supplements under its Pharmanex division.

Since its incorporation 20 years ago, NSE - relying on multi-level marketing (MLM) - has collected over US$10 billion in gross revenue from the sale of more than 505 million product units.

MLM is a form of direct selling where distributors are rewarded not only on the sales accounted for by themselves, but also on those generated by the sales team they recruit. NSE works mainly through distributors to sell their products. It is only in China - where direct selling is illegal - that the company has retail stores.

The first half of this year saw NSE's revenue increasing 19 per cent over the same period last year to US$548.2 million. And Mr Fan said that the company is confident of achieving US$1.1 billion by the end of the year - more than last year's US$1 billion.

Singapore is in the top 10 markets for NSE in terms of sales volume, accounting for about 2 per cent of the firm's revenue. Japan is the company's biggest market, generating about US$500 million in revenue. The US contributes US$100 million, while Taiwan and South Korea each contributes US$70-80 million.

'But Singapore has less than four million people. Our 38 markets together have almost 2.5 billion people. In terms of population, Singapore is less than 2 per cent, but it is giving us more than 2 per cent in terms of revenue. So speaking in per capita terms, our Singapore market is actually our No 1 market,' said Mr Fan.

More importantly, Mr Fan stressed, is the fact that NSE's Singapore distributors have been going outside of Singapore to build their sales team, leading to greater sales in South-east Asia.

And it's not only markets like Malaysia and Brunei - which are newer than the Singapore market - that these distributors have been active in.

'Thailand was the first South-east Asia market we opened in. But it's only after our Singapore sales leaders started going there to expand their sales teams that we have been enjoying tremendous growth in Thailand.'

Two thirds of the $57 million paid in sales commissions to NSE's Singapore distributors since the company's inception here in December 2000 come from distributors' overseas sales.

NSE has 25,000 active distributors in Singapore, including preferred customers and distributors buying products directly from the company. Mr Fan said that about 1,000 people sign up as distributors each month. Most of these are customers who initially sign up as distributors to enjoy wholesale prices, but soon start to build up a sales network.

NSE is now looking to open in Indonesia and India - potentially huge markets just based on their population size. 'Singapore would be a good supply of top quality distributors to offer sales leadership in these future markets,' said Mr Fan.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 20 Sep 2004

RosettaNet opens 1st centre outside US here

Local high-tech firms stand to gain from its expertise

By AMIT ROY CHOUDHURY

ROSETTANET, a global consortium promoting e-business standards, is setting up a centre in Singapore, its first outside the United States, to help the group address emerging trends and leading edge technologies more effectively.

RosettaNet's $2.4 million Architecture Centre of Excellence, announced here last week, is a collaborative effort between RosettaNet, Infocomm Development Authority of Singapore (IDA), Nanyang Polytechnic (NYP) and other industry organisations and high tech companies.

IDA's chief executive officer, Tan Ching Yee, said her organisation was pleased that RosettaNet had chosen Singapore to be the first location outside of the US to house the Architecture Centre.

'This signifies that Singapore has the necessary talent, infrastructure and business knowledge to help RosettaNet and industry partners further promote valuable e-business standards and solutions,' Mrs Tan remarked.

She added that local Infocomm technology (ICT) companies will benefit by building new competencies and leveraging the expertise that the centre brings. 'The economy also benefits through the development of new capabilities in Singapore, thereby helping our manufacturing and logistics companies gain a competitive edge,' she added.

'As B2B (business to business) industry infrastructure continues to mature, a greater number of emerging technologies and related frameworks are introduced into the marketplace. In creating the centre, we acknowledge that architecture is a critical element of the standard,' said Herman Stiphout, president of RosettaNet.

The centre will, among other things, explore how leading edge technologies such as web services and RFID (radio frequency identification) can be incorporated into RosettaNet standards.

Nanyang Poly will host the centre at its School of Information Technology, and provide resources to manage the operations and coordinate development work. Additional resources, such as on-loan architects, hardware and software, are being sponsored by Cisco Systems, GridNode, HP, IBM, Institute for Information Industry, Intel, Microsoft, NCS, Oracle, and Singapore Computer Systems.

RosettaNet is a non-profit consortium dedicated to the collaborative development and rapid deployment of open, Internet-based business standards that align processes within the global trading network. More than 500 multinational firms from various industries participate in RosettaNet's strategic standards and services development, Mr Stiphout said.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

SEPT 20, 2004
S'pore eyes Islamic banking pie
In its bid to expand its reputation as a financial hub, a MAS team will go to the Middle East to explore the concept

By Sue-Ann Chia

SINGAPORE intends to promote Islamic banking products to expand its reputation as a financial hub, and will collaborate with countries such as Malaysia and Brunei in this area.

The Monetary Authority of Singapore will also send a team to the Middle East by early next year to explore the concept, Senior Minister Goh Chok Tong, who is also MAS chairman, said yesterday.

Elaborating on previously-announced plans to forge closer ties with the Middle East, a task he is taking on since becoming Senior Minister, he said he will also visit Kuwait, and possibly Saudi Arabia, to strengthen bilateral ties.

Mr Goh said last month that Singapore should develop expertise in managing Arab wealth here, and develop as a centre for Islamic financial services.

Speaking on the sidelines of a community event yesterday, he said Singapore would work with Malaysia and Brunei in this regard, not compete with the two neighbours which already have developed Islamic banking services.

'Ours is a value-add role, not functioning as a major Islamic centre,' he said.

'But it would help us to expand our reputation as a financial centre.'

According to some estimates, Islamic banks manage US$250 billion (S$425 billion) in Islamic investments globally, while conventional banks control about US$200 billion to US$250 billion in Islamic investments.

Building relations with the Middle East also includes setting up the Asia-Middle East Dialogue, an initiative by Mr Goh to bring together representatives of the two regions.

A steering committee will meet next month to decide on how the dialogue should proceed.

The committee comprises representatives of Kuwait, Jordan, Egypt, Bahrain, Malaysia, Thailand, Bangladesh and Singapore.

During a 10-day tour of Egypt, Bahrain and Jordan in February, Mr Goh said that the idea had received strong support.

Such dialogues, he said at the time, are important because both regions have traditionally looked to the West for trade and political linkages.

A timetable was set to hold the first dialogue in Singapore next year.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Business Times - 21 Sep 2004

Busan targets S'pore, HK firms in US$15b free zone drive

Korean port city aims to become business hub, offers tax breaks

By JEAN CHUA

(SINGAPORE) The Busan government is going all out to help the city's port become North Asia's business hub, setting aside millions of dollars this year to attract foreign investment.

Part of the strategy is the 10,000 ha Busan-Jinhae Free Economic Zone next to the port. The Busan Metropolitan City government has also signed an MOU with IE Singapore to formalise collaboration and encourage Singapore-based companies to invest in the economic zone. 'The free zone will be divided into five areas with each aimed at a specific sector,' said Chang Soo-man, commissioner of the free zone.

'For example, the New Port area will focus on marine logistics and distribution, while Myeongji and other areas will focus on knowledge-based industries, scientific research, international business and leisure. Current investment priorities for the free zone include logistics, research & development and high-tech industries, and real estate.'

Mr Chang was in Singapore yesterday with the city's mayor, Hur Man-sik, and Busan Port Authority president Choo June-suk to drum up interest in the free zone. About 80 representatives from Singapore companies attended an investment seminar organised by the Busan government, the Busan Port Authority and the Busan-Jinhae Free Economic Zone Authority.

The government is offering incentives to help lure US$15 billion of foreign investment - including manufacturers, logistics companies and regional headquarters - to the free zone. Investors have been promised 'red carpet services', tax incentives and financial subsidies, including a three-year exemption from corporate tax, plus two years at half the standard rate, rental and land subsidies, English as the free zone's second official language and special labour rules.

The city is also in talks with international schools and medical groups, including Singapore's Raffles Medical Group, to set up facilities for foreigners in the free zone. Busan is specifically targeting Singapore and Hong Kong companies in its investment drive. And Mr Chang said several local groups have expressed interest in the free zone.

South Korea was Singapore's eighth-largest trading partner last year, with trade totalling US$11.3 billion, says IE Singapore. Singapore was also South Korea's eighth-largest export market and seventh-largest foreign investor, with US$2.9 billion of funds last year.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 22 Sep 2004

S'pore's Islamic banking plans won't hurt: KL

(KUALA LUMPUR) Malaysia, seeking to be a centre for Islamic financial services estimated to be worth US$250 billion, said Singapore's plan to offer similar products will not undermine its efforts and will instead boost the industry's development.

'The market out there is very large, and greater activity will contribute to the development of Islamic banking and finance on a global basis,' Zeti Akhtar Aziz, governor of Malaysia's central bank, said at a conference in Kuala Lumpur. 'It's not at all a threat to us.'

Singapore plans to collaborate with Brunei and Malaysia in promoting Islamic banking products as it expands as a financial centre, The Straits Times reported on Monday, citing Singapore's Senior Minister Goh Chok Tong, who is also chairman of the island's central bank.

Malaysia, whose US$115 billion economy is South-east Asia's third largest, is working on developing its financial and legal framework to make Islamic banking viable, Ms Zeti told government and company officials at the conference.

'The approach to building a sustainable and progressive Islamic financial system involves the creation of key financial components like banking, insurance and fund management, given the linkages and interdependence,' she said.

Ms Zeti added that attention was also being given to the regulatory and legal framework.

'The hallmark of a well-developed financial infrastructure is an effective legal and regulatory framework that underpins the stability of the financial system, and contributes towards market confidence,' she added. 'The requirement to manage risk becomes more important because of the unique particularities of the (Islamic) contract.'

HSBC Holdings Plc, Citigroup Inc and other Western banks are competing for business among the world's 1.5 billion Muslims by offering financial products that meet Islamic law. - Bloomberg

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 23 Sep 2004

FUJITSU ASIA
Fujitsu spending $47m to expand its regional HQ

Japanese IT giant to hire 200 more staff to enhance services and solutions business

FUJITSU and Singapore have a 30-year relationship that is still going strong. And like any long-term couple, they know that pledges of commitment must be renewed.

This happened last month - on Fujitsu's 30th anniversary in Singapore. EDB presented the Japanese IT giant with the IHQ award, and for its part, Fujitsu announced that it will spend $47 million to expand its regional headquarters in Singapore.

The $47 million will be used to hire and train 200 more staff and to enhance the company's services and solutions business. Singapore has been Fujitsu's South-east Asian headquarters since 1997, when it set up Fujitsu Asia Pte Ltd here.

But headquarters functions have been beefed up this year, with administrative, logistics, strategic business development, marketing and sales operations for South-east Asia being consolidated in Fujitsu Asia.

'Such an expanded role has made Fujitsu Asia a more vibrant hub for its regional businesses and shared services for Fujitsu Asia Group companies,' says Fujitsu Asia Group CEO Norikazu Karasuda. Besides Singapore, Fujitsu Asia Group has companies in Malaysia, the Philippines, Thailand, Vietnam and Indonesia.

Mr Karasuda says Singapore's 'excellent ICT (InfoCommunications Technology) infrastructure, established legal framework, highly-skilled and multilingual work force and social and political stability' makes it an ideal place for regional operations.

Fujitsu is one of the world's top three IT services companies, and the Fujitsu Asia Group aims to be a significant ICT solutions provider in South-east Asia. So it is expanding its Singapore operations with this in mind.

'IT outsourcing will be an important part of our new strategy to propel growth for Fujitsu in South-east Asia,' says Mr Karasuda. 'We will primarily focus on data centre and desktop services in the region as part of our suite of managed services. Also, marketing efforts will also be aligned towards achieving growth in areas such as IP network solutions and services.'

Fujitsu Asia Group's revenue from South-east Asian sales was about $680 million in 2003. About half of this came from hard disk drives and the other half from IT products & services business, which comprises systems and network integration, data centre services, outsourcing services and telecom infrastructure. Fujitsu Asia Group expects revenue to double to $1.2 billion by March 2007.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.


Business Times - 23 Sep 2004

SAP ASIA PACIFIC
S'pore top choice to launch Shared Services Centre

FOR business solutions provider SAP, Singapore wasn't just an ideal location for its Asia Pacific headquarters, it was also the best place to launch its Shared Services Centre (SSC).

SAP has played a major role in the business software industry in Singapore for 15 years, since it set up its Asia Pacific headquarters here.

The company's Asia-Pacific region excludes Japan but includes Australia and New Zealand.

In October last year - when it received the IHQ award from EDB - SAP announced that it had selected Singapore as the global launch market for its first SSC.

'Singapore promotes a spirit of innovation and technology leadership and has a world-class infrastructure. All of these attributes are critical to SAP's expansion in Asia Pacific,' says SAP global field operations president Leo Apotheker.

The SSC will be the cornerstone for SAP's business innovation in Singapore and the region.

The Walldorf, Germany-based company offers a range of high-end ERM (enterprise resource management), supply chain, logistics and process management solutions. Its clients here include Singapore Airlines, Singapore Press Holdings, United Overseas Bank, ST Engineering, SingTel, JTC Corp and City Developments.

'SAP Asia Pacific has taken the route of 'insourcing' and concentrated all software contracts, human resources, payroll, education, consulting, as well as finance and administration (F&A) functions in the region into the SSC,' said its chief financial officer Colin Sampson.

This regional management hub will enhance corporate governance by ensuring more efficient and effective risk management that will result in annual cost savings of up to 40 per cent, he says. 'The SSC in Singapore is now the model for SAP's other regions, as well as for customers and partners who are looking to adopt shared services.

The company expects to more than double its SSC headcount here to 45 next year from the current 21.

Looking ahead, Mr Sampson says the shared services process will expand to include other functions, such as demand generation for education services and facilities management.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 23 Sep 2004

S'pore a home base for Altus

A decade after shifting here from Hong Kong, Altus' CEO tells UMA SHANKARI why he still believes it is the best choice for his headquarters

IN 1992, the Altus group's headquarters was located in Hong Kong, but CEO Robert Sumantri was understandably nervous about Hong Kong's impending merger with China, scheduled for 1997. He thus started looking around for a new base for his company. Singapore immediately came to his mind.

'There really is nowhere else we could have gone,' Mr Sumantri said. 'The infrastructure provided by Singapore and Hong Kong had, and still has, an edge over most of the other countries in the region.' Although Mr Sumantri added that neighbouring countries are catching up, he still feels that Singapore remains the best choice he could have made for Altus' headquarters, even after a decade.

A subsidiary of the Altus Group, Altus Shipping and Logistics, recently applied for and received a 10-year extension to the Approved International Shipping (AIS) enterprise scheme this year.

Under the scheme, international ship-owning and ship-operating companies that base their strategic management activities for their regional operations here in Singapore get tax incentives for a period of 10 years.

Altus Shipping and Logistics had previously been granted incentives under the scheme in 1993, and when it ran out last year, Mr Sumantri did not hesitate before applying for a 10-year extension, which was recently granted, thus committing his company to another 10 years in Singapore.

The company also won an International Maritime Award, which is awarded by the Maritime and Port Authority to honour leading maritime companies and recognise their growing operations and continued contributions to the Singapore economy.

Set up in 1973, Altus aims to offer one-stop supply chain management to the customers whose goods it transports. The group was set up by Harjoko Sumantri, the father of the present CEO, to service the export of commodities from Indonesia to North Asia.

Since then, Altus has grown from originally owning and operating a fleet of log bulkers to a diversified fleet of multi-purpose vessels, bulkers, containers and tankers that are able to service the group's growing trade in clean petroleum products, chemicals, edible oils and higher-value-added exports in the Asia-Pacific region.

The company presently has six vessels, of which four are registered in Singapore. 'At the peak, we had 27 vessels,' said Mr Sumantri, explaining that the company trades its vessels in order to achieve greater profitability. The company currently has about 98 employees worldwide, of whom 55 are in Singapore.

Altus moved to Singapore in 1993 when the then Trade Development Board (now IE Singapore) sent missions to Hong Kong to encourage companies to relocate here.

'We were very impressed with their presentations. It made it easier for us to pack up and leave,' said Mr Sumantri, adding that he was also offered a chance to be a permanent resident here, which served as a secondary incentive.

Since his move to Singapore, he has settled in well here. His five children are embedded in the Singaporean academic system. Together with the extension to the AIS scheme awarded to Altus this year, that fact serves as an indication that Altus has made this country its permanent home.

'We'll be here for quite some time,' said Mr Sumantri. The company has received a substantial amount of help from the government, which Mr Sumantri praises as being 'very supportive and pro-active'.

Relocating to Singapore from Hong Kong also proved to have advantages for Altus other than those that are purely economic. As the bulk of its business is in South-east Asia (mainly Vietnam, Indonesia and Singapore), Singapore's central location comes in handy. For example, Mr Sumantri travels frequently to Indonesia, where the company has its historical roots, and that's just a stone's throw away from Singapore.

'The fact that Singapore is a big transshipment hub is also very useful as most of the cargo for the particular sectors that we are looking at go through the Singapore port before reaching their ultimate destination,' said Mr Sumantri.

He believes that as the company looks to expand in Asia, having the group's headquarters in Singapore will prove handy due to the established infrastructure and the central location. 'We feel that growth in the next decade will come from this part of the world,' said Mr Sumantri.

According to him, Altus has a strategy that focuses on Asia exclusively. 'There are so many countries that we can still set up in here in Asia, so we're not actively looking outside Asia at the moment,' he explained. He believes that especially with China booming the way it is now, there will be many more Asian owners, and Altus will see a lot more business from this part of the world.

Mr Sumantri also has words of praise for the financial infrastructure in place here. 'Most of the investment and financing for our business is being driven from here, so it makes sense to locate the group headquarters here,' said Mr Sumantri.

He explained how when Altus first came to Singapore in 1993, there were hardly any banks that offered ship financing, but that has since changed. 'Some services are a bit slow in coming here as compared to Europe, but they are getting here,' he says.

Altus is currently a private business, but Mr Sumantri said that he would want to see the company listed eventually. 'It (listing) is something that we are definitely thinking about because our business is capital conscious,' he said.

'At some point, one of the best ways to have access to long term capital is by being listed.' However, he believes that the company has to grow further before it can get listed.

While Altus has looked at different markets, Singapore would be Mr Sumantri's prime choice for going public since it is, after all, the company's home base.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 23 Sep 2004

Analysts divided over S'pore's attraction as offshore hub

WHILE Singapore is gearing up to become a major hub and provider of high-end business process outsourcing (BPO) and shared services, analysts differ on their perception of how much success the country can have as a BPO destination.

The Economic Development Board (EDB) of Singapore believes the country is well on its way to becoming a destination of choice for offshore services and is well-positioned to ride the offshoring wave just as it did the manufacturing wave in the 60s, 70s and 80s.

However, Arno Franz, partner and Asia Pacific managing director of Technology Partners International (TPI), remains sceptical of Singapore's ability to become a major offshoring destination. He feels Singapore's cost structure is simply too high for it to become a major player in outsourcing. He points out that the country had lost a lot of its IT business to China over the past few years due to cost issues.

Mr Franz feels Singapore can only play a very limited role as a hub in multi-location sourcing. 'I simply do not see what they (Singapore) offer. The sourcing providers will do this not on location and most of the sourcing providers have operations in Singapore to support the financial industry there, not to support broader sourcing strategies.'

However, Sujay Chohan, vice-president and research director of Gartner, feels different countries offer different strengths in BPO. 'Some countries have a strength that is in demand today, for example low cost,' he said. 'Singapore should not be compared to India or the Philippines, or for that matter even with China from a BPO perspective.'

According to him, 'Singapore has certain high end skills which the market may not be ready for yet. The hub concept has made Singapore what it is today, so extending it is good.'

Management consultancy AT Kearney's 2004 Offshore Location Attractiveness Index, which is widely followed by companies seeking to outsource, rates Singapore as the fifth most attractive destination for offshore ventures, behind India, China, Malaysia and the Czech Republic.

It says Singapore offers excellent education and infrastructure, and gives high ratings for economic and political stability, IP (Intellectual Property) security and aggressive government promotion of the ICT sector. These continue to reinforce Singapore's position as a favourite location for regional service functions.

AT Kearney feels that given Singapore's small size it 'will likely remain a high-end niche player in the long term, and an important candidate for companies considering offshore hubs'.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 24 September 2004 0904 hrs

Wooing the Islamic billions
By Val Chua, TODAY

SINGAPORE : It's a phenomenon that has captured the imagination of the world's biggest financial institutions, with some US$1 trillion ($1.7 trillion) of wealth worldwide waiting to be managed.

It has also become a top priority for the new chief of Singapore's de facto central bank.

The target is Islamic banking, a niche area of religiously-approved finance that is growing at 15 per cent globally, but remains largely a mystery, even among some Muslims.

As the Monetary Authority of Singapore's (MAS) new chairman, Senior Minister Goh Chok Tong has pledged to boost Singapore's status as a centre for Islamic financial services.

How the Republic intends to do this, and whether it will succeed, is still unclear.

After all, despite being a regional financial centre, Singapore is lagging behind trailblazer Malaysia, now a key Islamic financial hub after it fast-tracked the liberalisation of this sector to attract rich Saudis following the 911 attacks.

Earlier this week, Malaysia's central bank governor Zeti Akhtar Aziz said Singapore's Islamic banking ambition was not a threat to its own industry's development.

"The market out there is very large and greater activity will contribute to the development of Islamic banking and finance on a global basis," Dr Zeti said. "It's not at all a threat to us."

SM Goh has said Singapore plans to collaborate with Brunei and Malaysia in promoting Islamic banking products, and intends to send an MAS team to the Middle East later this year or early next year.

Compared to Malaysia, Islamic banking is at its infancy in Singapore, due largely to a lack of awareness and a small domestic market that hasn't gotten the big boys excited.

Mr Michael Araneta, a senior research analyst at The Asian Banker, said: "In Singapore, banks have articulated their wish to go into Islamic banking, but we have not seen them going through in a big way. Maybe they don't see the demand or have the expertise."

Hence, the retail face of Islamic banking is restricted to a handful of unit trusts and Takaful Islamic insurance.

OCBC is the only active local player in the market, offering two Islamic deposit accounts to the man-in-the-street.

But it has failed to replicate here the success it has had in Malaysia, where it is the No 2 foreign player in the field with some RM457 million ($204 million) in Islamic banking loans.

Market watchers describe the local situation as a "chicken-and-egg problem". Reluctant players who are not keen to enter the small domestic market exacerbate the lack of awareness and demand.

"It won't work if only Muslims participate. We have to get in the non-Muslims too, as in Malaysia," said Mr Syed Ghazaly Alqudsi, chairman of the Young Entrepreneurs Network of the Singapore Malay Chamber of Commerce & Industry.

Interestingly, some 70 per cent of Islamic banking customers across the Causeway are Chinese.

Observers said dividends given to Islamic account holders - in line with the "profit-sharing" principle of Islamic banking - are higher than current low interest rates, hence the high take-up among non-Muslims.

Meanwhile, local players are also looking to lure Arab riches here through Islamic funds. Fund managers hope to do this by first tapping into the Muslim-populated region and then the Middle East.

"Liquidity remains plentiful and funds from the Middle East to Brunei are keen to be invested in such products," said DBS Asset Management's (DBSAM) executive chairman Greg Seow.

DBSAM, which manages four Islamic funds in Singapore and Malaysia, said it is at "an exploratory stage" to understand the emerging business opportunities in the Middle East.

UOB Asset Management - which launched its first Islamic fund in Malaysia in July - hopes to gather its track record first before venturing into the Middle East in six to 12 months' time. And while OCBC said its "core business and strengths remain in the regional market", it has not closed the door on the Middle East market.

What Singapore needs is to "quickly increase its critical mass" in terms of Islamic counter parties and approved product range, said DBSAM's Mr Seow.

Observers also called for a separate regulatory framework for Islamic banking.

Ms Penelope Phoon, head of the Association of Chartered Certified Accountants (ACCA) Singapore, said: "What enables OCBC's Islamic Banking division to be so big in Malaysia but not in Singapore? It is obvious that the dual banking system facilitated this growth."

For instance, a central bank which has "interest-based" policies may pose some operational problems for an Islamic bank, she noted.

Looking ahead, market watchers said there is also much scope for the development of an Islamic market for debt securities and lending in Singapore.

Said Mr Helmi Talib, a practising accountant and a member of the ACCA: "Islamic trade financing has also been a neglected area in Singapore, although it is big in London and Bahrain." - TODAY

Copyright © 2004 MCN International Pte Ltd

SEPT 25, 2004
Singapore eyes big slice of games pie
A Games Creation Community set up to develop and market made-in-Singapore games hopes to have 20 titles in 2 years

By Ho Ka Wei

THE electronic gaming industry here looks set to take off in a big way, now that creators, financiers and distributors have been brought together to produce made-in- Singapore games for the world.

The establishment of the Games Creation Community (GCC) yesterday means that the creator of a commercially viable game will no longer be at a loss for where to turn to for financing or distribution.

Already, 12 game start-ups and 12 partners, including SingTel, StarHub, Pacific Internet and foreign players like Japan's HI Corporation, are part of the network. Fortune Ventures, a venture capitalist firm, has also come on board as a financial partner, and it may be joined by others.

The community will even have a base: the Nanyang Polytechnic School of Design, which has been teaching digital media design courses since 1996 and is equipped with production studios and information technology to support testing and development.

In true gaming style, the launch of the community yesterday was heralded by rapid fire rounds blasting an animated fighter plane to bits on a big screen.

Guest of honour Heng Chee How, Minister of State (Trade and Industry), said he hoped to see successful companies emerge from the community to help 'shape and root the games industry here'.

The community - an Economic Development Board initiative - wants to focus on creating games for mobile phones before moving on to online and console games.

It wants to nurture 15 to 20 game companies, both local and foreign, within two years and have 20 to 30 game titles under its belt.

The nascent digital media industry has picked up steam from a recent spate of games-related activities.

This includes the new high-speed distribution and hosting network called the Games Bazaar in June, Singapore being named as the host for next year's World Cyber Games Grand Finals, and Lucasfilm announcing last month its plans to set up an animation studio here next year.

The media industry, which includes the gaming sector, is expected to contribute 3.5 per cent of Singapore's gross domestic product by 2012, up from the 1.6 per cent now.

Games studios are most enamoured with the quarterly 'pitching session' to publishers - players who can package and sell their products to the global market.

Nexgen Studio managing director Alvin Yap, 31, said: 'Now, if the publishers don't know you, you are cut off immediately. But with the GCC bringing in publishers, the pitching sessions will give us a fair chance of being heard.'

According to British business intelligence firm Informa Media, the global gaming pie was worth US$33.2 billion (S$56.6 billion) last year, and is estimated to grow to US$52 billion in 2007.

Start-ups like SL Interactive and Brownbear Mobile Games say mobile games can be created in as quickly as two months. Both have already made a mark on the global digital media map.

SL Interactive's game, Phantom Operations, is built into Nokia's gaming phone N-Gage QD for the Asia Pacific. Sony Ericsson is looking to distribute Brownbear's shooting game, Ares II.

Brownbear's business development manager, Miss Tan Wei Wei, 33, said: 'Distribution is the biggest hurdle for games developers.' She expressed hope that the GCC would help in this aspect.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

SEPT 26, 2004
Outsourcing: Govt to check out 12 services
By Li Xueying

THE Government has identified 12 services which could be outsourced to private companies as part of the ongoing economy drive.

The functions submitted by government ministries and statutory boards are: library and legal services; human resource; training; carpark services; call centres; IT; facilities, document and project management; security; and finance and accounting.

They will be 'market-tested' - that is, comparing the cost of delivering the functions in-house with what is charged by the private sector. If a private company can deliver a service more cheaply and effectively, it will be hired to do the job.

The Government calls this process best-sourcing. The idea is for public agencies to get the best value for their money. They will complete their market-testing by next March, said the Finance Ministry.

Outsourcing has been in the news in recent weeks, with the Manpower Ministry, Singapore Airport Terminal Services and Singapore Airlines announcing that they are farming out jobs.

The Finance Ministry told The Sunday Times that government projects contracted out from February last year to June this year have created $24 million worth of business for the private sector.

Best-sourcing has led to some 220 government workers being retrenched, it added.

Prime Minister Lee Hsien Loong had introduced market-testing for new government services in the Budget speech last year. This year, the aim is to market-test 5 per cent of non-core functions.

Government outsourcing led to $1.8 million in savings last year. Among those which out- sourced projects were:

-The Inland Revenue Authority of Singapore, which outsourced its cheque processing to banks last year. It used to process more than 600,000 cheques a year, taking three to six days to clear one cheque. The banks take a day and do it at a much lower cost.

-The Housing Board, which hived off its parking enforcement services at 30 per cent of its carparks, driveways and service roads, in August last year. Two companies, Premas International and Chubb Singapore, took over the patrolling. Altogether, 214 HDB officers were retrenched.

-The Singapore Police Force, which outsourced its vehicle maintenance this year for a $5 million fee, one of the largest contracts farmed out by the civil service.

-The Economic Development Board, which has been outsourcing property management, IT functions, publications, printing and travel services.

-The Urban Redevelopment Authority, which farmed out the processing of cheque payments received through post.

Apart from outsourcing some non-core operations, government agencies must also cut their staff by 3 per cent every year over the next three years - or pay $10,000 a year for each extra officer. Up to 8,100 jobs are expected to be cut as a result, through resignations, retirements, redeployment of staff and other staff-trimming measures.

When contacted, most of the 15 ministries and four statutory boards declined to give more details on how they would outsource their operations or cut down staff numbers. But the Ministry of National Development said: 'Should MND not be able to meet the desired target of 3 per cent manpower reduction for each financial year, we will pay the headcount surcharge.'

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

HK firms disclose less than those in S'pore, Malaysia

Weekend • September 25, 2004

HONG KONG —The standards of disclosure among companies in Hong Kong's Hang Seng Index are lower than those in top Singapore and Malaysian firms, according to a study by Standard & Poor's.

The study, conducted together with the National University of Singapore (NUS), assessed annual reports available at the end of June this year, of the 33 companies in Hong Kong's blue-chip index. "In terms of mean score for the companies sampled from five countries, Hong Kong ranks third," said NUS associate professor Mak Yuen Teen.

Hong Kong was followed by Thailand and Indonesia. Among the shortcomings of Hong Kong companies that the study highlighted were the lack of independent directors on their boards and a failure to disclose directors' attendances at board meetings or their remuneration packages. — Dow Jones

Copyright MediaCorp Press Ltd. All rights reserved.

SEPT 27, 2004
Japanese firm's entry boosts gaming in S'pore
Branch aims to come up with four titles within three years; another company expected to open office here by year end

By Ho Ka Wei

ONE Japanese gaming company has set up shop here and another is expected to follow suit by the end of the year as the fledgling games industry here looks set to take off.

G-Gadget, a subsidiary of 14-year-old video-game maker Genki, has opened an office here, and employed 10 Singaporean graphic designers and programmers who may eventually produce games for cellphones and consoles.

The office expects to employ some 50 staff, mostly Singaporeans, in four years.

Another Japanese company, Koei, is likely to open a Singapore office by the end of the year.

Initially, G-Gadget's team of Singaporeans will help with projects that will come out of its headquarters in Tokyo.

But while doing this, they will be learning from experienced foreign counterparts who will be seconded here.

Eventually - within three years - the aim is to get the Singapore office to come up with four game titles.

G-Gadget managing director Shuichi Ohira said: 'Eventually, I expect this office to be run by someone from Singapore.'

The company was lured here by several factors, including very attractive grants offered by the Economic Development Board, which offered to fund part of the manpower and equipment costs.

The other draws, said Mr Ohira, were the lower manpower costs, compared with those in Japan, and his hope that 'new ideas for games could emerge in this multi-racial environment'.

He also cited the widespread use of English here, saying it would help G-Gadget develop games that can be targeted at the American and European markets.

The opening of G-Gadget's office here comes on the heels of the establishment of a Games Creation Community last week to develop made-in-Singapore games for the world market.

This community will help creators of commercially viable games with financing or distribution.

It already has 12 game start-ups and 12 partners, including SingTel, StarHub, Pacific Internet and foreign players such as Japan's HI Corporation.

The EDB has taken an active role in developing the sector by sending aspiring games developers to companies in Japan and the United States as part of a training scheme.

More than 50 have been trained under the Training and Attachment Programme.

EDB director of infocomm and media Quek Swee Kuan told The Straits Times: 'We're definitely continuing with the programme. We're also working with the universities and polys to see how we can increase the intake in courses like digital media to support the industry.'

Meanwhile, the Singaporean employees at G-Gadget Singapore are raring to go.

Aged between 22 and 30, they are a mix of those with industry experience as well as people like Mr Ian Pang, 25, who is fresh out of school.

The National University of Singapore computer engineering graduate said: 'It's not often you'd find people saying, 'Yay! I'm going to work', but that's what it is for me every day.

'I enjoy applying what I've studied, making games and playing games.'

That such jobs pay well is the icing on the cake: Animators and programmers at G-Gadget draw a monthly pay packet of about $2,800, while a top game developer can draw as much as $150,000, Mr Ohira said.

But the real rewards are intangible, say gaming professionals.

G-Gadget graphic designer Wilson Ong, 26, said: 'It's the thrill of seeing someone, someday, engrossed in your game. That's the satisfaction.'

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Business Times - 27 Sep 2004

S'pore Aug factory output grows 5.3%

SINGAPORE - Singapore's manufacturers produced 5.3 per cent more goods in August compared with a year ago, but the growth slowed sharply from July's 19.1 per cent on-year rise as the production of drugs and other biomedical products plunged, the Economic Development Board said Monday.

On an adjusted month-on-month basis, manufacturing output last month fell 1.1 per cent, compared with a revised gain of 2.6 per cent in July, the EDB, said in a statement.

Excluding the biomedical sector, whose output can swing sharply from month to month, Singapore's industrial production index rose 20.2 per cent from a year ago compared with a rise of 18.6 per cent in July.

The biomedical manufacturing cluster contracted by 37.3 per cent, largely due to a decline in the pharmaceutical segment. A different product mix of fine chemicals accounted for the 40.1 per cent fall in pharmaceuticals output in August compared to last year. The production of medical devices contracted by 11.3 per cent as there was less output catering to the US and European markets.

The electronics cluster surged ahead with 29.9 per cent growth in August. All segments expanded except the data storage segment.

Cumulatively, total manufacturing output for the first eight months of this year grew 14.7 per cent compared to the same period last year.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 27 September 2004 1733 hrs

Volvo sets up regional centre in Singapore, eyes Asian acquisition

SINGAPORE : Swedish automaker Volvo may make an acquisition in Asia to boost its market share.

The company is looking to this region for growth, as its European and North American markets slow.

The firm revealed this as it opened its new regional headquarters in Singapore, which will spearhead the expansion of its Asian business.

The new site in the Tuas area is spread over some 19,000 square metres.

It will allow all of Volvo's business areas in Singapore to operate under one roof.

Among other things, the new facility will give Volvo the option of storing aircraft parts in Singapore to serve its Asian customers faster.

Volvo says it has chosen Singapore because of its location, human talent, logistics efficiency and the strong support given by the government.

From its Singapore headquarters, Volvo is looking to expand its share of China's truck market.

The Swedish firm currently has 40 percent of the imported heavy truck market in China.

Back in March, it signed a deal with two partners - China National Heavy Truck and First Automative Works - to invest US$105 million in an engine plant.

Earlier this month, Volvo maintained its 2004 forecast for a rise in its European sales to 250,000 trucks from 230,000, and gains in North America of 30 percent.

Deputy Chief Executive Officer Lennart Jeansson, who is on a business trip to Singapore, says Volvo was aiming for heavy truck sales growth of about 10 percent in Asia this year, about the same rate as in Western Europe.

But he declined to give an Asian forecast for 2005. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 28 Sep 2004

Selangor halal hub woos S'pore investors

(SHAH ALAM) The Selangor State Investment Centre (SSIC) will meet Singaporean officials and investors in Kuala Lumpur on Friday to promote the Selangor halal hub at Pulau Indah near here.

'We need to convince them about the benefits that they can achieve when they invest and do business at our halal hub,' SSIC general manager Mhd Jabar Ahmad Kembali said.

The global market for halal food products from both Muslim and non-Muslim countries was estimated at US$500 billion while in Malaysia alone it was estimated close to US$10 billion, reported the English version of the Utusan Malaysia.

A discussion on the matter with Singapore's High Commissioner to Malaysia, Ashok Kumar Mirpuri, as well as investors from the republic has been scheduled at the Singapore High Commission in Kuala Lumpur on Friday, Mr Mhd Jabar said.

He added that SSIC would also promote the halal hub project to investors from Dubai and would take 'follow-up' action with potential investors from China as well.

The Selangor halal hub covers an area of 60 hectares and investors at the hub can expect fast track approval from the relevant regulatory agencies.

SSIC, as the promoter of Selangor halal hub, would need to convince investors that they would benefit from the project amid rising demand for halal products, Mr Mhd Jabar told Bernama news agency.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

September 28, 2004

Giving Singapore another go
After failing to rise in Singapore, Hiro Tan carved himself a slice of success in his native Malaysia with his Rotiboy Bakeshoppe chain. Now he has big plans after opening its first outlet here

By Janice Wong

THE Malaysian media dubbed Mr Hiro Tan's business "the BreadTalk of Malaysia".

Like Singapore's homegrown bakery chain BreadTalk, Rotiboy Bakeshoppe's wildly popular and has grown rapidly.

After opening 11 outlets in Malaysia in three years, Rotiboy is ready for the Singapore market. Mr Tan, 39, recently opened his first takeaway outlet here at China Square Food Centre.

A snaking queue forms daily for its famed coffee-flavoured Mexican Buns, which are baked on the spot in an open kitchen. As many as 4,000 of the buns, priced at $1.20 each, sell in a day.

In Malaysia, from City Square at Johor Baru to Suria KLCC at Kuala Lumpur, 20,000 buns are sold daily, generating RM6 million (S$2.7 million) in revenue last year.

But, unlike BreadTalk, Rotiboy was not an overnight success. Mr Tan, a Penangite who graduated from the University of Malaya, had a rough start.

Born to a family of bakers, Mr Tan came to Singapore in 1991 to seek work. He felt lost and tried many jobs including teacher, property agent, insurance agent and airline station manager. Sometimes he resigned; sometimes he was fired.

A failed romantic relationship further took the edge off his enthusiasm. Then he attended a motivational course by Asiaworks Training in 2000.

Mr Tan, still a bachelor and a Singapore permanent resident, recalled: "I feared failure. Through the course, I realised that events are neutral and we have a choice in reacting to them.

"For example, if demand for my buns falls, I can see it as a failure, or as a chance to rest and learn."

He decided to return to Malaysia and pursue what he is good at - baking. He relocated his humble family bakery from Penang to an upmarket location at Subang Jaya in late 2001. Business was poor as there was not enough human traffic.

In 2002, he eyed a busier spot at the ground floor of Wisma Central mall at Kuala Lumpur.

His family had no more capital after ploughing everything into renovating the first outlet, so his brother's car, a Proton Satria, was sold for RM7,000.

"That only covered rental," Mr Tan recalled. "There was still not enough money to buy an industrial oven, so I bought a small, two-deck conventional oven that could only bake eight buns. That was how dire the situation was. It was make or break."

Clearly, he made it.

The smell of his Mexican Bun, his sister's secret recipe, wafting from the oven was all it took to draw customers.

"We sold 20 on the first day, 100 the next day. My brother and I had to make trips to and from the other outlet at Subang Jaya for extra buns because the oven could not cope. Soon 1,000 were flying off the shelf without any promotion at all."

It wasn't long before he had the RM29,000 for a big oven. He then expanded the confectionary selection to include cakes and beverages - a cafe concept he hopes to replicate in Singapore later.

Rotiboy employs 200 workers in Malaysia. Mr Tan targets 25 outlets in Malaysia and the same number in Singapore.

The second Rotiboy is due to open at Raffles MRT station in November.

It's a trophy of sorts.

Mr Tan added: "Singapore is the place I lost everything. When I returned to Malaysia, I told myself that if I can open a bakery chain in Singapore some day, I would have made it."

Copyright © Singapore Press Holdings, 2004. All rights reserved.

Time is GMT + 8 hours
Posted: 28 September 2004 1829 hrs

MDS Sciex to open drug tool factory in Singapore
By Chan Hwa Loon, Channel NewsAsia

SINGAPORE : Canadian firm MDS Sciex will open a new plant in Singapore to manufacture scientific instruments used by researchers working on drug development.

The new plant will complement the company's existing one near Toronto, which now will focus on more complex instruments.

The Singapore plant will make less complex, higher-volume instruments.

It will begin making the cellular analysis product line next year and selected mass spectrometers in 2006.

The amount of investment MDS Sciex will put into the Singapore plant was not disclosed. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 29 Sep 2004

S'pore scores in openness of business climate

By CHUANG PECK MING

(SINGAPORE) Singapore is ranked right up there with industrial nations in providing one of the most open business climate for investments and business decisions, according to the Kurtzman Group, a US-based consultancy firm.

In a study of the small scale but frequent risks - frauds, bribery, legal and regulatory tangles and unforceable contracts - that affect business in 48 countries, Kurtzman found Singapore has one of the world's most transparent business climates, along with countries such as Finland, Britain, the United States, Sweden and Switzerland.

According to Kurtzman's opacity index, which measures risks linked to unclear legal systems, regulations, economic policies, corporate-governance standards and corruption, Singapore's business climate is even more open than that of Germany, Japan and France. Among Asian cities, only Hong Kong is better than Singapore on that score.

Developed by Joel Kurtzman, chairman of the Kurtzman Group and a senior advisor to the world's largest professional services firm, PricewaterhouseCoopers, the opacity index shows Singapore has an index of 24 (where 100 = complete non-transparency) - an improvement over three years ago when its opacity index was 29.

Finland has the lowest index - 13 - which makes its business climate the most transparent among the 48 countries in the study. Lebanon and Indonesia have the highest index, 59.

Singapore is not far behind Finland in terms of a business-friendly economic policy (a sub-index of 25 against 23 for Finland) and regulatory structure (10 against 9), but it has a big gap to close especially in accounting and governance practices (50 against Finland's 17).

'Although the large-scale risks - earthquakes, wars, coups d'etat and major acts of terrorism - are front-page news, the small-scale - fraudulent transactions, bribery, legal and regulatory complexity and unenforceable contracts - represent the real costs to business,' says the latest opacity report.

'Greater awareness of these risk factors that put the brakes on commerce can enable companies to make better portfolio and direct investment decisions regarding where to develop markets, locate productive resources or find the best outsource partner, and can also help governments understand how to make their countries more attractive locations for investment and to measure their progress,' it says.

Using the US - which has an opacity index of 21 - as the base (0 per cent), the study also calculated an opacity risk premium (or discount) expressed as an interest rate equivalent for countries. Singapore has an opacity premium of 0.65 per cent, which means if a US investor wants to do business here, he needs to get a return of 0.65 per cent greater to offset the risk.

If an investor wants to do business in Finland, which has an opacity premium of minus 1.83 per cent, he could actually receive a smaller rate of return than in the US and still justify the investments.

The study found highly opaque countries are among the least developed. These countries also tend to deter foreign direct investment, although China (opacity index of 50) is an exception because of its huge market.

According to the study, a one-point rise in a country's opacity index correlates to a US$986 fall in per capita income; one per cent drop in net foreign direct investment as a percentage of gross domestic product; 0.9 per cent dip in stock market capitalisation as a percentage of GDP; and a 57 basis-point rise in average borrowing interest.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 29 Sep 2004

S'pore in top five forex markets: BIS

By LARRY WEE

SINGAPORE has retained its position as the fourth-largest global centre for foreign exchange activity, and the second-largest centre in Asia after Tokyo, according to an April 2004 survey by the Bank for International Settlements (BIS).

Daily average foreign exchange turnover in the Singapore market rose to US$125 billion in April 2004, a 24 per cent increase over 2001, according to the influential BIS survey of global foreign exchange and over-the-counter (OTC) derivatives activities, which is conducted once every three years.

This latest estimate is based on a new methodology adopted by the BIS, which gathers data from the sales desks of dealing rooms all over the world. Previously, data was collected from trading rather than sales desks, on which basis Singapore would have recorded an even larger 51 per cent increase in average daily forex activity since 2001, according to an estimate by the Monetary Authority of Singapore (MAS).

Commenting on the survey results yesterday, Ong Chong Tee, assistant managing director of the MAS, said: 'In addition to the robust performance seen in foreign exchange activities, our increased market share for OTC derivatives is a strong sign that the treasury sector in Singapore continues to grow in breadth.'

The BIS survey, its sixth since 1989, also revealed that the daily average turnover in OTC derivatives here had almost tripled from US$6 billion in 2001 to US$17 billion this year. This makes Singapore the twelveth largest centre for such activities globally, and the second-largest in Asia.

The MAS announced, in addition, that the latest BIS survey findings will be followed by the release of its own comprehensive survey of local treasury activities today, which will include trends in forex, interest rate and fixed income activities.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 29 September 2004 1524 hrs

JTC ties up with United Engineers to build print media hub
By Chua Chin Chye, Channel NewsAsia

SINGAPORE : JTC Corporation has partnered United Engineers Developments to build the S$30 million Print Media Hub in Paya Lebar iPark.

It is part of JTC's year-old strategy of collaborating with private developers in its industrial development projects.

JTC also says it is still considering extending rental rebates come December to help its 7,000 tenants adjust to the improving but still challenging business environment.

United Engineers will design, build and operate the Print Media Hub.

The 32,000 square metre facility will house small- and medium-sized print and media companies, with shared facilities like IT infrastructure, warehousing and training amenities.

UE will have a 30-year lease, with an option to renew for another 30 years.

Construction is expected to begin in the first quarter of next year.

"For the end users, we have brought some new ideas on how to put together the building," said Jackson Yap, group managing director and CEO of United Engineers.

"For instance, the warehouse, instead of each of our clients having their own warehouse, we have a centralised warehouse, thereby saving them the need to have different warehouses," he said.

"In the past, JTC would have just built these projects ourselves. But I think moving forward, we want to tap the private sector for their capabilities," said JTC chief executive Chong Lit Cheong.

On Tuesday, JTC had invited proposals, also from private developers, to jointly build a 350-room business hotel and the second phase of Biopolis project, both at Buona Vista.

Back home, Singapore's biggest industrial landlord says rental rates are in a "sweet spot", at levels not seen since the late 1980s and early 1990s.

Since 2002, JTC rental rebates have been extended four times, saving tenants some S$1.2 billion.

And JTC says it is presently mulling whether to extend rebates by another half-year, when they expire this December. - CNA

Copyright © 2004 MCN International Pte Ltd

SEPT 30, 2004
S'pore 'well placed' to tap high-end outsourcing boom
Seminar told it has right formula: specialist skills, intellectual property protection, legal and regulatory environment, infrastructure

By Sue-Ann Chia

WITH provision of outsourcing services looking set to be the next in-thing for firms here, consultants at a seminar said Singapore should aim to position itself as a major hub and provider of high-end business services.

It can attract foreign firms to outsource in niche areas such as back-office operations like credit analysis and treasury operations for investment banking firms, media animation and biomedical research services.

That is because Singapore has the right formula, executive director of PricewaterhouseCoopers Corporate Finance Amitava Guharoy said at the Global Business Processes Outsourcing (BPO) seminar yesterday.

There are specialist skills here, intellectual property protection, good infrastructure and a conducive legal and regulatory environment.

That is a major reason why Lucasfilm, for instance, is setting up a production studio here next year, and Ford has outsourced its IT services for 12 countries in the Asia-Pacific region to NCS, a SingTel subsidiary, he said.

He acknowledged Singapore is moving this way as it knows it cannot compete with lower-cost countries like India for low-value business such as call centres.

'The proactive surge that Singapore is doing to position itself as an outsourcing choice is the right thing to do,' he said.

His views mirror those of the Economic Development Board (EDB), which is confident Singapore is well-positioned to ride this new wave of outsourcing, as it did when manufacturing was similarly affected in the 1960s, 1970s and 1980s.

The EDB said in July that more than 30 major projects were outsourced here last year, creating more than 1,000 highly-skilled jobs. And more companies are on the way.

But Mr Arno Franz, partner and managing director of Technology Partners International, was sceptical about how successful Singapore could be with its limited supply of skilled labour.

'Singapore has no natural advantage to compete with other offshore outsourcing locations,' he told The Straits Times later.

'India produces two million graduates a year, while Singapore has a total population of about only four million.'

But management consultancy Gartner estimated Singapore's BPO sector would grow twice as fast as the rest of the world.

Its research in August indicated companies could spend up to US$506 million (S$863 million) in outsourced IT-enabled business processes in Singapore.

Meanwhile, a survey by ACA Research in May found that only three in 10 firms here outsourced back-office operations as some were not aware of technology or feared loss of business control. But five in 10 said they intend to do so in the next five years.

Mr Franz believes outsourcing will accelerate if the civil service, the largest employer, takes the lead.

But Mr Guharoy said it is inevitable, as firms are pressured to constantly improve business margins and efficiency.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Time is GMT + 8 hours
Posted: 29 September 2004 2156 hrs

Animation may be Singapore's next big export
By Michael Lim, Channel NewsAsia

SINGAPORE : Cartoons and other animation could become Singapore's next big export -- that is view of Marcel Fenez, the head honcho of the Cable & Satellite Broadcasting Association of Asia.

The media industry, which includes gaming and animation, is expected to contribute three percent of Singapore's gross domestic product by 2012, up from the 1.5 percent now.

In particular, animation for games and other forms of entertainment has considerable export potential.

"There is a huge demand for animation products as a genre. Whether that is a TV channel or whether that is a input into gaming the market demand for animation-based entertainment is huge," Mr Fenez said.

"The key thing it has to be make content that appeals to the wider audience. So looking for the story lines, looking for perhaps focusing in the areas of animation which are heavily technology dependent genres -- that's where Singapore can compete."

And the top export destination is China.

"In terms of the programming gap if you look at the number of channels that are in China, most of the networks would have at least one dedicated animation channel, if not more. The programming gap is many, many thousands of hours each year and at the moment there is very little supply, so there is great opportunity," Mr Fenez said.

Besides animation, Mr Fenez also sees Singapore exporting its Chinese entertainment shows to China.

And he suggests working with both Hong Kong and China based companies on a co-production basis, something which MediaCorp, the parent of Channel NewsAsia, is already doing. - CNA

Copyright © 2004 MCN International Pte Ltd

Time is GMT + 8 hours
Posted: 01 October 2004 2305 hrs

Singapore launches Games Exchange Alliance to drive software development
By Ken Teh, Channel NewsAsia

Singapore wants a slice of the US$1 billion online gaming market.

Online games are taking Asia by storm.

So the Infocomm Development Authority is spearheading a massive initiative to turn Singapore into the one-stop shop for companies who want to launch games in Asia.
And the new Games Exchange Alliance, which comprises 12 Singapore companies including big names like Pacific Net and 1-Net, aims to help games companies get their software on the shelves as quickly as possible.

Jasper Tan, Chairman, Games Exchange Alliance, said: "As you know content is king but without distribution networks you basically can't get the games or the content into the hands of the consumer. That's why GXA is so significant what we're trying to do here is to try and support gaming companies in commercialising their games not just in Singapore but also in Asia Pacific."

Charles Uhm of Magics said: "I truly think Singapore will play a key role in bringing the games into the region. The 40 percent broadband penetration of households tells us a lot of things about bringing gaming into Singapore."

Innovative mobile phone games which allow gamers from different countries to play against each other have already made inroads in Thailand, Malaysia and Philippines.
But the creation of the Games Exchange Alliance is part of a much larger initiative to digitise Singapore.

What this is means is that authorities are working to make Singapore a digital hub be it through digital movies or games, it's target is to hit $500 million worth of digital transactions by 2006. - CNA

Copyright © 2004 MCN International Pte Ltd

This story was printed from TODAYonline

Asean's battle with the big boys

Weekend • October 2, 2004

Jaime Koh
jaime@newstoday.com.sg

AT the height of the Asian crisis in 1997, South-east Asian leaders articulated their vision for an economically-integrated Association of South-east Asian Nations (Asean) by 2020.

They took a major step towards that goal with the signing of the Bali Concord II in October last year, which proposed the formation of an Asean community with three pillars — political and security, economic and socio-cultural.

And this week in New York, Asean ministers banded for the first time to sell the region as one integrated bloc to investors.

"Today, Asean does not merely exist as a name — it thrives as an active and interdependent network of forward-looking nations," said Singapore's representative at the event, Minister for Trade and Industry Lim Hng Khiang.

The arguments for an economically-linked Asean are compelling. Under the Bali Concord II, an Asean common market of goods and services known as the Asean Economic Community, which includes the removal of non-tariff barriers, would be formed by 2020.

The plan would see the removal of red tape, opening up of key service sectors and visa-free travel for all Asean nationals.

The ultimate goal is to boost the region's competitiveness against rivals such as China and India.

But beyond bold declarations of intent, can South-east Asian governments realise their dream of a truly integrated region?

Sceptics have voiced concerns about the feasibility of such an ambition, citing the different levels of economic development, disparate political regimes and the varying domestic stability of the members.

But Asean is not starting from scratch.

The framework for integration is already present in the Asean Free Trade Area (Afta), the Asean Framework Agreement on Services and the Asean Investment Area.

Afta, for instance, aims to slash down to between zero and 5 per cent in tariffs.

What then is stopping the regional body from moving forward? One major reason cited is the lack of political will.

"Genuine economic integration requires a strong political dimension," said Professor Frederic Neumann, adjunct professor in the South-east Asia Department of the Johns Hopkins University's School of Advanced International Studies.

"Deep integration is not a pleasant process. All countries gain and lose, and within societies there are gainers and losers. The political will is the 'glue' that keeps the process together and provides the necessary momentum forward," he told Today.

"This is where Asean always hits a bump. Among Asean officials, integration is seen as a zero sum game where you bargain hard to stave off any losses and only accept changes that entail unqualified gains for your own country."

Prof Neumann also said that the distant target date of 2020 itself undermined the credibility of the project and was a sign of the weak political will in Asean.

"If Asean leaders are really ready to make big steps, why wait for so long?" he asked.

Some have argued that the slow pace of integration is an obstacle in itself. There are suggestions that countries frustrated by the snail pace are turning to bilateral trade agreements (BTA) with other countries, usually a non-Asean country.

Singapore, for instance, has signed bilateral pacts with a host of countries, including Australia, Japan and the United States. The Republic has many more under negotiation. Critics have argued that BTAs undermine the aim of integration.

Dr Thang D Nguyen, a former manager for Asia at the World Economic Forum, said that while BTAs "are not the root causes of the slow pace of economic integration and trade liberalisation within Asean, they tend to be a distraction".

"This is because members see the immediate, overwhelming benefits from getting a BTA with some economic giants, say the US or Japan, or China," he said.

Asean secretary-general Ong Keng Yong last year also cited several other hurdles to economic integration — including the individual national priority of each member country, the lack of knowledge and information about what economic integration is, as well as terrorism and Sars, which has shaken investor confidence.

So will an integrated Asean become a reality in the face of such pessimism?

Prof Neumann believes that it will.

"But the driver will not be Asean," he noted. "Integration will happen not because of Asean, which will be catching up with the reality of integration rather than being its principal architect," he said.

Dr Dennis Hew, fellow at the Institute of South-east Asian Studies noted that in many ways, integration is already a reality. He cited Afta as an example.

"It's a question of what degree of integration one is expecting."

Copyright MediaCorp Press Ltd. All rights reserved.

OCT 2, 2004
insight
Ten things you should know about outsourcing

Recent outsourcing moves by Singapore Airport Terminal Services and Singapore Airlines have led to retrenchment and pay cuts for staff. Should workers be afraid? What can they expect? And how can they cope? Insight pins down the 10 things workers should know about outsourcing

By Lydia Lim

#1 IT'S NOT NEW

BEFORE the army outsourced cooking to private-sector caterers, meals were prepared in-house by soldiers.

In those days, getting rice that was cooked just right was a daily challenge for the average NSman.

The rice was cooked in a huge pot, so those who showed up early for lunch got the under-cooked bits on top. Those who showed up late would end up with the burnt bottom bits.

That changed after meals at cookhouses were turned over to contractors like Singapore Food Industries and NTUC Foodfare from 1997.

They have good reason to make sure the meals are tasty, since part of what they are paid depends on how well servicemen rate their food. The move also freed up 750 soldiers for other tasks.

The Defence Ministry, among the first here to outsource, has been farming out tasks like aircraft maintenance since the 1970s.

#2 PUBLIC SECTOR'S DOING IT

TODAY, more government agencies are following suit.

They're reviewing the way they get things done, especially in areas that are not central to their core business.

Often, they find that companies which specialise in these areas can get the job done better and for less.

That's why the Inland Revenue Authority of Singapore (Iras) outsourced its cheque processing to banks last year.

It receives 600,000 cheques a year and used to take between three and six days to clear each one. The banks take just one day.

Another statutory board that has outsourced is the Housing Board. Last year, it hired Premas International and Chubb Singapore to patrol a third of the carparks under its charge.

Moves like these saved the Government some $1.8 million last year.

#3 THE PRIVATE SECTOR IS TOO

PROFITABLE companies like Singapore Airport Terminal Services (Sats) and Singapore Airlines are also outsourcing more as competition heats up in their sector.

More than a thousand Sats employees were either retrenched or had their pay cut when the company decided last week to outsource tasks like aircraft cleaning, food packing and baggage handling.

The move raised the share of work contracted out by Sats from 19 per cent to 30 per cent.

Singapore Airlines will shed 70 staff from its finance department and another 130 IT employees by the end of the year as it outsources both these functions.

Those in the business say outsourcing is a growing trend.

Mr Cheng Suan Soon, director and general manager of Hewlett Packard's managed services (Southeast Asia), says: 'I've been in this business for many years and I've never seen the level of interest I'm seeing now.'

#4 WHAT'S CATCHING ON

THE contracting out of lower-value work like cleaning, security and facilities management is already widespread here.

What's catching on now is the outsourcing of services, such as IT and human resources.

Among the latest to do so is the Ministry of Manpower (MOM).

Earlier this month, it signed a $21 million three-year deal to outsource its IT functions to Hewlett Packard (HP).

More firms are headed down this path, according to a recent survey of 50 Singapore companies done by ACA Research.

Commissioned by IT company Unisys Asia Pacific, the survey revealed only 28 per cent of the firms polled used an external provider for back-office work - tasks like data entry and claims processing.

Of these, only one firm had outsourced offshore - to India.

But more than 50 per cent of those polled had plans to outsource these operations in the next five years.

Mr Indraneel Roy, South-east Asia managing director for human resource consultancy Hewitt Associates, says a decision by one firm to outsource often has a ripple effect on others in its sector.

'Once one major player does it and gains significantly, then the others also have to do something different and, in most cases, they also outsource,' he says.

#5 IT'S ONSHORE - FOR NOW

BECAUSE many local firms are opening up their IT and human-resource processes to outsiders for the first time, they feel more comfortable if the work continues to be done here, a practice known in business circles as onshore outsourcing.

As long as that is the case, there will be no outflow of jobs from Singapore to lower-cost countries.

But this could change a few years from now, predicts Mr Roy.

This is based on feedback from Hewitt's clients, all of whom plan to review whether or not to offshore - that is, move overseas - their HR functions over the next three to five years.

A survey of 150 small and medium-sized enterprises (SMEs) done last year also indicated as much.

Carried out by consulting firm Grant Thornton International, it found that 16 per cent of the SMEs polled had already transferred some of their operations overseas, while 14 per cent planned to do so within two years.

#6 IT'S HERE TO STAY

ONE reason companies now outsource services is that they can, thanks to advances in technology.

Take an airline that wants to outsource its ticketing functions.

What it needs is a way to put all the information it has on its flights and seat availability onto a computer system, which can then be accessed by someone outside the firm.

The same goes for a credit card company that wants to outsource its call centre functions.

In the past, that was not possible. Now it is.

IT security has also improved, so companies worry less about giving data to an external provider.

With recent advances in technology, more complicated services can now be performed not just outside the company, but also in a country half-way round the world.

That's why Indian radiologists based in Bangalore can now analyse CT scans and chest X-rays of American patients being treated in US hospitals, and Indian accountants can process American tax returns for Ernst & Young.

#7 IT HELPS KEEP COSTS DOWN

COSTS are today a big concern in both the private and public sector.

Companies face ever thinner margins now that competition has gone global. Outsourcing helps them keep their costs in check.

That explains why SIA and Sats are doing it.

By the end of next year, Sats will have to compete against two foreign firms for Changi Airport's ground-handling business, worth $1.2 billion a year.

The Government has opened the sector to competition, to help Changi fend off regional rivals keen to take its place as a leading air hub.

Sats estimates that outsourcing will save the company $20 million a year from 2006 onwards.

As for SIA, the outsourcing of its finance and IT functions will yield cost savings of about $15 million a year from next year.

For the public sector, outsourcing is a way to lower costs in the face of tighter budgets.

The target for ministries and government agencies is to market-test 5 per cent of their non-core functions this year.

This involves comparing the cost of providing the service in-house with the cost of engaging a private-sector vendor to do so.

If the private sector can do it for less, the function will be outsourced.

#8 SOME WORKERS WILL GAIN

MR YEW Poh Seng, 35, actually got a small pay increase after the Manpower Ministry outsourced its IT functions to HP.

As part of the deal, affected staff from MOM's IT department could choose to join HP, which Mr Yew did.

Skilled workers like him stand to benefit from the outsourcing trend.

When they move from a company where IT is a support service to one where IT is the core business, their career opportunities usually improve.

It's usually up to the company doing the outsourcing to decide whether their staff should be transferred as well.

In the case of MOM, it specified in its tender that its IT staff should have the option of joining the firm that clinched the deal.

Not every firm sees this as the best way to outsource.

Some use the opportunity to upgrade to newer technology, which their own staff may not be familiar with.

In those cases, it may not be possible for the staff to be re-hired by the firm taking over.

#9 OTHERS WILL LOSE

THERE were no pay increases for Sats Staff affected by the recent outsourcing. Some 108 of them were retrenched and another 1,064 were asked to join the companies taking over the work, but as contract workers and at lower pay.

Unlike the MOM staff, the Sats staff were mainly lower-skilled workers doing manual work, such as cleaning and food packing.

It's these workers who are likely to be hit hardest by outsourcing.

In a commentary published in NTUC News this week, NTUC deputy secretary-general Lim Swee Say expressed concern that outsourcing could 'degenerate' into yet another way to exploit low-skilled workers.

He told Insight via e-mail that the labour movement was watching the development closely.

'Should we come across unfair treatment of workers in the industry, we will bring it to the attention of MOM and the top management of the companies concerned,' he said.

As the outsourcing trend grows, the National Trades Union Congress strategy is to help rank-and-file workers learn new skills.

It will also work with its tripartite partners to nurture outsourcing into an industry that creates jobs for Singaporeans, he said.

The aim is to get companies in higher-cost countries to outsource certain functions to firms here.

One company that has done so is American auto giant Ford, which outsourced its IT services for 12 countries in the Asia-Pacific region to NCS, a SingTel subsidiary.

#10 THERE ARE LIMITS

IN THE United States, where the outsourcing of services has been taking place for a good 20 years, the tide seems to be turning.

Hitting headlines recently was a decision by JP Morgan Chase, America's second largest bank, to cancel a US$5 billion (S$9.5 billion) IT outsourcing deal it had signed with IBM two years ago.

The official explanation offered by JP's chief information officer Austin Adams: 'We believe that managing our own technology is best for the long-term growth and success of our company.'

Professor Ang Soon of the Nanyang Business School, who specialises in technology outsourcing, thinks the more likely reason is concern for the privacy of customer data.

Banks like JP Morgan cannot allow client data to leave US shores. The problem they are facing is that the IT firms they have outsourced to are offshoring the work to lower-cost countries like India.

That explains why banks are taking back these functions, a trend experts call re-insourcing.

Prof Ang says firms are also beginning to realise that while outsourcing and offshoring cut some costs, they can also raise others.

One example: companies end up spending a lot of time co-ordinating the provision of a service, especially if this has to be done across different time zones and work cultures.

'After a while, some companies just feel it's not worth their while to spend so much time managing this,' she says.

So as it turns out, the outsourcing trend has its own built-in brakes, and companies are just now beginning to feel the impact.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Business Times - 02 Oct 2004

Full marks for inkjet refill kits by Fullmark S'pore

Having made it big, Fullmark now eyes US$1b barcode ribbon market

By CONRAD TAN

FULLMARK Singapore is one of those home-grown success stories that - if told often enough - may sound like fiction.

But there is nothing unreal about the success it has achieved. Starting out in Singapore in 1978 as a manufacturer of refills for ballpoint pens, the company now has a global presence with sales in over 140 countries covering a wide range of computer supplies, including refill kits for inkjet printer cartridges, printer ribbons, thermal fax supplies, CD-ROMs and printing media.

Today, it is probably best known for its low-cost inkjet cartridges and its refill kits - priced at around $10 each - which are used to replenish empty cartridges at a fraction of the $60 cost of buying a replacement.

One of its associate companies, Inke, created a stir in the IT community in September last year when it launched an automatic cartridge refilling device - the first of its kind - that promised an end to the messier conventional methods that require the use of syringes and considerable manual dexterity.

Unsurprisingly, Fullmark has not made itself too many friends among the large printer manufacturers who stand to lose revenue if large numbers of consumers refill their old cartridges or use Fullmark's replacements rather than buying new ones.

But as Fullmark director and Inke founder Tan Kong Cheok points out, the company is careful to respect the patent rights of the original manufacturers. The company is in the business for the long term and 'I can't afford to have my distributors being sued for patent right infringement', he says.

So Fullmark employs its own research team to design its inkjet cartridges and formulate its own ink. When the company is unable to design a cartridge that is compatible with a particular printer without infringing the rights of the original manufacturer, it looks for a way to refill the cartridge instead, hence the refill kits.

Just eleven months after its official launch, the Inke machine is now marketed in 35 countries and Mr Tan Kong Cheok hopes to achieve sales of $5 million this year. The Fullmark group is expecting a turnover of $55 million for 2004 and is aiming for $70 million next year.

Their success has not gone unnoticed and many others have since entered the business.

Today, 'the Singapore market is saturated' with inkjet refill kits from various competing manufacturers besides Fullmark, and it accounts for only 2 per cent of the group's sales, says Tok Thiam Kiat, general manager of Fullmark's Singapore and Malaysian operations.

But the small team of 100 staff in Singapore belies the importance of the company's presence here, says Mr Tok.

Although the company's manufacturing activities were outsourced to Malaysia in 1990, the Singapore headquarters still house the research and design, logistics, sales, administration, and distribution functions which form the heart of the company.

And if imitation is the sincerest form of flattery, then the competition thinks highly of Fullmark. Its success at home and abroad has spawned competitors with names like Foomark and Fumark in China which have eaten into its sales there, says Mr Tok.

Undeterred, Fullmark chairman SS Tan takes a philosophical view of such rivalry. 'If there's competition, that means there's money to be made in the business, otherwise nobody would be joining in.'

Much of the company's success boils down to his sheer doggedness. 'I have no other interest, except in the business,' he adds.

Still, conditions in the industry have been tough - and the results brutal. During the 1990s, the company was forced to close down several overseas manufacturing plants and sales and distribution offices in China, Hong Kong, Vietnam and the US after 5-10 years of operations

Following the dotcom bust at the turn of the century, its subsidiary Fullmark Micro pulled out of the computer distribution business altogether - despite the fact that it was contributing 'over $100 million a year to our group turnover,' says Mr SS Tan. Fierce price wars among retailers meant that profit margins were too low - it 'wasn't worth it', he says.

But he is undaunted by the challenges ahead. 'Our company can survive, if we are willing to change,' he says, citing the Inke machine as an example of how he hopes to stay ahead of his rivals.

So is a public listing on the cards? 'We'll think about it,' he laughs. It is clear though, that after 26 years in operation as a self-financing company, an IPO is not an urgent priority for him. The current focus is on Inke, Fullmark's newest baby.

The group has already sunk some $5 million into Inke, and it plans to invest a further $5 million, he says.

Fullmark will hire an additional 20 staff by the end of the year to beef up its Singapore sales and research teams, and another 200 people in Malaysia for its manufacturing operations.

The company now controls 8 per cent of the world's output of thermal transfer ribbons for fax machines, despite having entered the market just two years ago, says Mr Tok.

For the future, the company has set its sights on the market for barcode printer ribbons used by manufacturers, distributors and retailers to print the humble yet ubiquitous barcode - currently a US$1 billion market, he adds.

And even with the advent of lower-cost laser printers, Mr Tan Kong Cheok is confident that 'there will always be a market for inkjet supplies and printer ribbons', he says, noting that many new multifunction devices such as three-in-one fax machines and computer scanners with built-in printers use inkjet technology too.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 03 October 2004 1608 hrs

Outsourcing part of employment landscape: Manpower Minister
By Yvonne Cheong, Channel NewsAsia

SINGAPORE: Outsourcing is part of the employment landscape, says Manpower Minister Ng Eng Hen.

Speaking to reporters after a PAP event, Dr Ng said globalisation means lifetime employment in one company is no longer guaranteed.

So, the education system must be geared towards making sure workers have employable skills for life.

Dr Ng said: "We need to put the outsourcing issue into context, it's a way that the companies find efficiencies. For that specific company, it may not mean retrenchments, that's one aspect. For some, it does but at the same time when they outsource, there are a number of mechanisms that companies have employed. For example, as we have said, for the Manpower Ministry, basically when they outsourced, many of the staff got transferred to the company that was outsourced." - CNA

Copyright © 2004 MCN International Pte Ltd

Time is GMT + 8 hours
Posted: 04 October 2004 0817 hrs

Singapore praised as 'model APEC citizen' in report

SINGAPORE : Singapore's achievements since 1996 towards achieving the free trade and investment goals set out by the Asia-Pacific Economic Co-operation (APEC) grouping should be lauded and set an example for the rest of the group's members, according to an APEC secretariat report that will be released in full on Monday.

The report describes Singapore as a "model APEC citizen" in the implement-ation of its individual action plan (IAP) and collective action plans (CAPs) to achieve its Apec goals.

IAPs and CAPs serve as a roadmap for Apec economies to achieve the goals of free and open trade and investment in the Asia-Pacific region established at the Bogor summit in Indonesia in 1995.

Two APEC economies, Singapore and Taiwan - officially known as Chinese Taipei in the grouping - are having their IAPs reviewed at the current round of APEC meetings in Chile.

The report's author, Mr Chen Wenjing, said Singapore set an example as it aimed to achieve its APEC goals in 2010, which is ten years ahead of schedule.

"Singapore has been fully implementing its World Trade Organisation (WTO) commitments and actively participating in the process of achieving free and open trade in the APEC region.

"In the area of trade in goods, Singapore maintains a very liberal regime, with 99.9 per cent of the tariff lines entering Singapore duty free. Singapore remains relatively free of trade barriers and does not make use of non-tariff measures inconsistent with the WTO agreements.

"The non-tariff measures are applied mainly for public health, safety, security and the environment, or for fulfilling international obligations."

Mr Chen also drew attention to Singapore's efforts to deal with the challenges posed by globalisation.

"Singapore faces major domestic and external challenges in the changed world," Mr Chen said.

To remain a dynamic economy, immediate measures and long-term strategies are being undertaken to cope with global uncertainties and to reposition the economy to be a leading global city and a hub of talent.

Steps include lowering costs, training people, reforming the tax regime, restructuring the economy, giving full play to the twin growth engines of manufacturing and services and boosting external ties, he said. - TODAY

Copyright © 2004 MCN International Pte Ltd

Business Times - 04 Oct 2004

SGX is only new entry to Top 20 in latest transparency index

534 firms included in CTI, making this the biggest survey undertaken so far

By PENELOPE PHOON
AND GRAHAM OWENS

THIS fourth and penultimate edition of the Corporate Transparency Index (CTI) 2004 sees the Singapore Exchange replacing Singapore Food Industries in the 'Top 20' list with a score of 79 points.

MMI Holdings and Stamford Tyres recorded a creditable 73 and 72 points respectively to muscle their way into the Top 30.

This latest instalment of the 2004 index includes all companies which have released financial results to the SGX up to Sept 15. A further 99 companies have been added to beef up the total surveyed in this year's exercise to 534.

This is the biggest and most inclusive survey to be undertaken so far.

For those who are new to the 2004 CTI, scoring is undertaken by reviewing the financial reports and associated documents, such as press releases and fact sheets, against a scorecard which is split into two sections - content and context.

Information is released to the SGX via Masnet by all mainboard and Sesdaq-listed companies and listing regulations stipulate that this should be done within 60 days of the financial year-end.

Reviewing the latest additions to the CTI reveals that only 26 per cent of newcomers have scored a combined 'content' and 'context' pass-mark of 50 points or more.

Overall, 36.1 per cent, or 193 companies, achieved the pass-mark.

This remains considerably higher than the 22 per cent of companies reaching the pass-mark in last year's index and the momentum towards improved financial transparency and disclosure is encouraging.

A further 134 companies posted scores of 45 to 49 points and can reasonably be expected to boost the pass-mark next year.

The Singapore Exchange posted the highest score in the 'content' section, which assesses the quality and quantity of the information which is disclosed, with 49 points out of a possible 60.

More than 95 per cent of new additions to the CTI surpassed the 30 point pass-mark in this section.

Overall results show that OCBC and SingTel remain top scorers with 54 points and the pass rate for 'content' now stands at 96.7 per cent.

In the 'context' section, which scores the effectiveness of how the 'content' is communicated to the markets, a possible 40 points are available.

Recent IPO LifeBrandz, the health, beauty and lifestyle brands developer and marketer, scored a high of 35 points in this section.

New entrants did not fare so well, however, and only a disappointing 13 per cent scored 20 points or more.

Overall, 18.5 per cent of companies achieved a 50 per cent pass-mark. Qian Hu Corporation remains the only maximum scorer with 40 points.

Last year's CTI only covered companies with a Dec 31 financial year-end, so comparable scores are not available for the majority of 99 newcomers. Therefore, an analysis of climbers and fallers in the index is not possible.

This latest phase of the CTI includes listed companies with a financial year ending between Dec 31, 2003, and July 31, 2004.

The new additions are mainly companies with a June 30 financial year-end. Some July 31 year-end early releases are also included.

Expect the final 2004 transparency index to be published in early December. That version will include around 40 companies which are expected to release their results up to the end of September.

Ms Phoon is Head of ACCA Singapore and Mr Owens is from Nottingham University Business School

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 04 Oct 2004

Shop till you drop - it's easier with plastic

Banks draw credit card users with discounts, tie-ups with retailers

By JOYCE KOH
AND TAILA KRISHNAKUMAR

TO shop till you drop has become a breeze with the multitude of credit cards at your disposal.

But these days, it's not just the lure of cashless shopping that is enticing consumers. It's also the discounts, promotions and flexible repayment schemes that is making credit cards the choice means of payment for shoppers.

With shopping almost a staple of peoples' lifestyles, there is a huge consumer market out there for banks, which are competing ferociously for a bigger share of the spending pie.

Understandably for most banks, retail makes up the largest segment in terms of both credit card volumes and billings, which is why many are so lavish with their promotions and extensive with their tie-ups.

As Raymond Ang, DBS's managing director and head of cards and unsecured loans for consumer banking in Singapore, put it: '50 per cent of all credit card charges are retail driven at DBS. It is extremely important. We stack up our programmes to support this programme.'

Indeed, it would be rare to find a bank without retail-tailored programmes. Maybank, for instance, has about 400 retail and travel tie-ups where cardmembers can enjoy up to 30 per cent discounts. OCBC has tie-ups with more than 600 merchants offering special discounts for anything from petrol to cinema tickets.

On its wide range and variety of tie-ups, Cynthia Liaw, head of cards business at Maybank Singapore, said: 'Our programme was designed to let our cardmembers enjoy discounts and privileges not just for the occasional splurge or pampering but also for products and services they consume on a regular basis.' She noted that retail merchants like FILA, GNC, Best Denki and Swatch have seen business from Maybank card holders increase by 30 per cent to over 50 per cent after their tie-ups with the bank.

How banks choose their partners is simple: 'They must be reputable brands that the customer can easily identify with, and must be able to provide good customer service to our cardmembers,' said UOB's head of credit centre Janice Ang.

Some banks have also tied up with department stores to co-brand their credit cards, latching on to the popularity of these stores. Such partnerships include OCBC-Robinsons, DBS-Takashimaya and Citibank-Tangs.

At Citibank, cardmembers get a permanent 6 per cent off Tangs items, and sales at the outlet have increased by 30 per cent since last year.

'Typically we do co-branding because there is critical mass in the benefits and the customers that will want to visit our co-brand partners,' said DBS' Mr Ang.

With the slew of treats out there enticing shoppers, how do banks ensure they stand out from the competition?

There is, of course, the regular contact with clients once a month to alert them to places where they can get special promotions. But it is during the traditional seasonal events like Christmas and the Mooncake Festival where banks go all out to differentiate themselves from the competition.

For example, Citibank credit card holders get a special deal from Tangs on Christmas Eve: they can exclusively enter the store from 9pm till midnight and enjoy Christmas discounts before the mad rush begins the next day.

Indeed, with competition in the credit card segment getting more intense - and rewards more enticing - shopping sprees are becoming more affordable, and effortless.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 04 Oct 2004

PM Lee to sign double taxation pact with M'sia

He is making introductory visits to M'sia and Brunei

AN improved and updated double taxation agreement with Malaysia awaits Prime Minister Lee Hsien Loong when he makes his introductory visit there tomorrow.

Mr Lee will in his capacity as finance minister sign the revised Double Taxation Agreement with Prime Minister Abdullah Badawi, who is also Malaysia's finance minister.

The revised agreement, which covers both individual and corporate income taxes, is said to be clearer and contain better terms. And it will 'facilitate' business and investments between the two countries, which have stepped up economic cooperation since Mr Abdullah took over the reins from Mahathir Mohamad a year ago.

Singapore and Malaysia in 1968 first signed a double taxation agreement, which was subsequently amended in 1973.

In keeping with Asean tradition, Mr Lee, who succeeded Goh Chok Tong in August, is kicking off a round of visits to Asean capitals to introduce himself as Singapore's new prime minister. He will fly into the Malaysian capital at midnight tonight, after calling on Sultan Haji Hassanal Bolkiah of Brunei earlier in the day.

That Brunei and Malaysia are Mr Lee's first ports of call reflect the close and important ties Singapore has with the two countries. The significance attached to the visits is also seen in the high-level and large delegation travelling with Mr Lee. Accompanying him are Foreign Affairs Minister George Yeo, Defence Minister Teo Chee Hean, Education Minister Tharman Shanmugaratnam and other senior officials.

Ties between Singapore and Malaysia have warmed up under the new Malaysian leader, even though outstanding bilateral issues remain.

Mr Lee and Mr abdullah, who last met at a Chinese New Year gathering in January, will probably touch on the issues in their scheduled hour-long talk. But officials on both sides are not looking to any big progress during the visit.

The two leaders are also expected to discuss the forthcoming Asia-Europe and Asean summit meetings. The first is to take place in Vietnam this Friday, while the second meeting is due to be held in Laos at the end of next month.

Mr Lee is scheduled to be back tomorrow. During his absence, Deputy Prime Minister Tony Tan will be Acting Prime Minister.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 04 Oct 2004

S'pore can be outsourcing hub

But IT companies must move now, or risk being overtaken by Asian competitors moving up the value chain

By AMIT ROY CHOUDHURY

A TWO-DAY conference on business process outsourcing (BPO) held here last week ended, aptly enough, with a panel discussion on 'What's next on the BPO cards for Asia-Pacific'. Most of the earlier discussion had focused on the Indian experience, which was understandable since India has established itself as the leading offshore BPO destination. But the fact that the conference was held in Singapore was an indication of how quickly business process outsourcing (BPO) has surfaced on the radar screens of almost all major countries in the Asia-Pacific.

Just how large is this market that everyone wants a piece of? Research agency Gartner estimates that in 2002 the total BPO business worldwide was worth US$110 billion and of this amount only US$1.2 billion, or just 1 per cent, was sent offshore to other countries. By 2007, predicts Gartner, the total BPO business will grow to US$173 billion of which US$24 billion or about 14 per cent will be sent to other countries.

The figure of US$24 billion for offshore BPO, that too three years from now, is not very impressive at first glance. So is the hype over BPO misplaced?

Experts argue that BPO is indeed the services industry of the future, and it's easy to understand why. Technology is making it possible to deliver more business processes remotely, and this is increasing the strategic role that offshore BPO is set to play in an increasingly globalised world.

According to Gartner, enterprises worldwide currently spend 12-15 per cent of their revenue on business processes of one kind or another. With improved technology most of these processes can be moved to offshore locations. This would dramatically increase the offshore portion of the BPO market.

So where does Singapore fit into the whole scheme of things? Since it cannot compete on cost with, say, India or the Philippines, many feel that the country's only hope is to position itself at the high end of the worldwide offshore BPO market - in areas like financial research, healthcare services, and media and animation.

The reasoning for this is sound, given Singapore's qualitative skills. But this is not the only card that Singapore can play. Companies here can aspire to a broader role in the world BPO game. To understand how, one needs to look at what the large American global outsourcing players have done to meet the challenge posed by Indian BPO outfits.

After being on the retreat initially, companies like IBM and Accenture have gone into India and set up captive operations, recruiting local talent at local rates. They are using their Indian operations as a backoffice, thus reducing costs while at the same time keeping their advantages - a large US presence, and an end-to-end solutions package which many customers find irresistible.

Top Indian vendors have countered this strategy by moving up the value chain themselves, going into consulting and providing end-to-end solutions to match the IBMs and Accentures of the world. As a result, their costs have also gone up - in short they are increasingly beginning to look and act like the global US players.

This has resulted in a number of very good second-tier Indian BPO companies coming to the limelight - providing top class BPO services along with low costs.

It is with these companies that Singaporean IT firms need to develop linkages with. In fact, they should forge tie-ups not only with these companies but also with similar companies in other parts of Asia such as the Philippines and China.

Singapore is uniquely positioned to act as the front office for these companies, and it can be the hub which would connect them with potential clients in the US and Europe.

The BPO industry is in a state of flux at present, but ultimately what will emerge is a set of global players which are not country specific. A company could be doing high-end, high-cost outsourced research in genetics in, say, Singapore, or IT services out of India and call centre operations in the Philippines.

If they are to be a part of this evolution to become world-class IT services companies offering BPO 10 years down the line, Singapore firms need to take baby steps now. Staying in the comfort zone of trying to be just a niche high-end player will not make Singapore the Asian hub for the worldwide offshoring industry.

The time to buy into the Indian and Asian BPO industry is now, not a few years down the line. It will be too late then.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 04 October 2004 2304 hrs

Singapore's manufacturing expansion weaker than expected in September
By Michael Lim, Channel NewsAsia

SINGAPORE : The latest Purchasing Managers Index shows the expansion in Singapore's manufacturing sector weakened more than expected in September, as rising oil prices started to take their toll.

The Index came in at 53.6 points for last month, a full point below analysts' median forecast of 54.6.

Singapore's manufacturing sector has expanded for 16 consecutive months as at September.

But last month's expansion was much weaker than expected, as new export orders bear the brunt of oil prices that hover above the US$40 per barrel level.

"Oil prices right now are very unsteady. But if it continues to remain for a long period, I think all the cost structures will change," said Professor Philip Poh, chief executive of the Singapore Institute of Purchasing & Materials Management.

"As it stands, quite a number of companies, especially even electronic ones, because of the high input prices they are facing very squeezed margins. So it's either they increase their sale prices or they would have to look at alternative cost reduction."

Despite the high oil prices, the electronics industry's expansion managed to stay rather strong.

The Purchasing Manager's Index for electronics was down by a mere 0.2 point.

Other industries still performing well were chemicals and petroleum.

Those that disappointed included biomedical, food, metal and machining.

But a silver lining in the manufacturing sector is in the greater job opportunities for skilled workers.

"Moving ahead, I think that the manufacturing sector, in terms of employment, is definitely positive compared with last year," Professor Poh said.

"I think last year we had a negative situation, but this time around it is still positive and the latest figures, as I understand, the employment situation, is still expanding. That is certainly a good sign moving ahead to the end of the year and probably early next year." - CNA

Copyright © 2004 MCN International Pte Ltd

OCT 4, 2004
S'pore job market at its strongest in 3 years

THE job market is the best it has ever been in three years, as firms crank up recruitment in the wake of the economic rebound.

The optimism is reflected in the just-released Hudson report, which looks at employment trends every quarter. Its findings are that firms are hiring more employees this year, compared to the last two years.

The report found that strong hiring levels in the last nine months will continue towards the last three months of the year, with 43 per cent of firms intending to recruit workers, led by those in the IT and telecommunications sector, and followed by the accounting and financial services sectors.

The results are based on a poll of 500 firms in August.

One indication of an improving employment market is that some job seekers, particularly those with specialised skills, are requesting a salary increase of up to 50 per cent when applying for new positions - and they are getting it.

But researchers at Hudson caution that external factors can affect the Singapore economy, so companies are being cautious and not expanding beyond their means.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

OCT 5, 2004
Chinese expert applauds S'pore's Apec trade efforts

Country has been meeting goals for a free trade area in Asia-Pacific, says vice-president of trade body

By Suryani Omar

TAKE a bow, Singapore.

The Republic has won praise from a Chinese senior economist who conducted an independent review of the country's efforts at helping to create a free trade and investment area in the Asia-Pacific region.

Singapore was 'a model citizen' and should be congratulated for its considerable achievements in meeting goals set by the inaugural Asia-Pacific Economic Cooperation (Apec) summit in Bogor, Indonesia in 1994, Mr Chen Wenjing found.

In fact, Singapore was ahead of schedule, and was an example to other countries, Mr Chen, who is senior economist and vice-president of the Chinese Academy of International Trade and Economic Cooperation, found.

Apec, with 21 members including the United States, China, Mexico, Chile and Hong Kong, has set targets to achieve a free and open trade and investment area for the region by 2010 for industrialised economies and 2020 for developing economies.

And as part of updating Apec on the progress of the free trade plan, each member economy is being assessed in an Individual Action Plan.

Yesterday, Mr Chen presented his report on Singapore to a meeting of Apec member economies in Santiago, Chile.

The review focused on 13 key areas including:

-Tariffs;

-Non-tariff measures;

-Intellectual property rights;

-Customs procedures; and

-Competition policy.

Mr Chen said Singapore was well on track in meeting its free trade goals.

He concluded: 'Singapore has been fully implementing its World Trade Organisation commitments and actively participating in the process of achieving free and open trade in the Apec region.'

'In the area of trade in goods, Singapore maintains a very liberal regime, with 99.9 per cent of the tariff lines entering Singapore duty-free,' he said in the report.

He also found that Singapore applies non-tariff measures largely for the purpose of maintaining public health, safety, security, the environment and meeting international obligations.

Besides that, Singapore also scored well in the areas of services and investment.

The services sector was found to be open with few restrictions, with exceptions such as legal services, broadcasting and banking.

Meanwhile, government moves to encourage investment by cutting corporate income tax rates, for instance, were viewed favourably.

Mr Chen praised Singapore's strategies in meeting 'major domestic and external challenges in the changed world'.

He said: 'Immediate measures and long-term strategies have been and are being undertaken to cope with uncertainties and reposition the economy to be a leading global city and a hub of talent, by lowering cost, training people, reforming tax regime, restructuring economy, giving a full play in 'twin growth engines' of manufacturing and services, and expanding external ties.'

The study also commended the measures taken to facilitate trade flow by making Customs procedures simpler.

One example was the TradeNet system which enables Customs and trade declarations to be done online.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Time is GMT + 8 hours
Posted: 05 October 2004 1719 hrs

Singapore achieved good long-term returns on its assets: Finance Ministry
By Chan Hwa Loon, Channel NewsAsia

SINGAPORE : The Ministry of Finance said Singapore had achieved good long-term returns on its assets.

It said Singapore's investments continued to perform creditably when compared to international market benchmarks, such as Morgan Stanley Capital International equity indices, as well as against market peers.

The Ministry was responding to credit rating firm Standard and Poor's estimates that Singapore's returns on assets are 'markedly inferior' to Hong Kong's.

It said that, unlike S&P, the Singapore government does not include capital receipts in its definition of budget surplus or deficit.

And capital receipts are excluded because they do not constitute a stable source of income.

The Ministry said Singapore adopted a more prudent approach because the country will spend according to its means on an ongoing basis, and not live off gains from the past.

It said a significant portion of Singapore's portfolio was already being managed by external fund managers.

These managers provide an additional benchmark for assessing performance. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 05 Oct 2004

How affluent Singaporeans live, work and play in 2004

SINGAPORE - Singapore's increased confidence has translated into higher product ownership, increasing purchase intentions and improving lifestyle.

A survey by Synovate, a leading global market intelligence company showed that in just the three months to end June 2004, the elites of Singapore have managed to find more time to relax.

The number of people taking one or more, or three or more leisure trips is up 1.3 per cent on both measures.

There's also been an increase in the number of affluent Singaporeans taking five or more hotel nights, up 2.4 per cent to 27.7 per cent.

An all-time high number of 31.9 per cent of affluent Singaporeans now own laptops or notebooks.

Likewise, ownership of a mobile phone with internet access hits an all-time high- it's up over 2 points to stand at 30 per cent and shows steady increases for every quarter measured.

This continuing trend is good news for mobile manufacturers and 3G networks and service offering planners.

Luxury watches worth more than US$500 are owned by 25.3 per cent of these elite Singaporeans, with 6.8 per cent intending purchase in the next twelve months.

This compares to a 42.7 per cent luxury watch ownership rate in Hong Kong and 21.2 per cent in Kuala Lumpur.

The steady and relentless march towards digital camera technology continues in Singapore.

Digital video cameras are now owned by 3.5 per cent more elite Singaporeans than at end March 2004, bringing total ownership across this group up to 35.9 per cent.

Car ownership jumped an impressive 4.6 per cent to 56.6 per cent - an especially good sign of confidence.

And indicating that the confidence continues, 9.5 per cent of respondents intend to purchase a private vehicle over the next twelve months.

The number of elites who own a second property is up 1.2 per cent to 9.3 per cent.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Go Singapore! :okay:

Business Times - 06 Oct 2004

LETTERS TO THE EDITOR
Money laundering is not a problem in S'pore

I REFER to The Business Times articles 'Money laundering poses growing threat in S'pore' (Sept 30) and 'Police confirm spike in dubious dealings' (Oct 1).

In the Sept 30 article, the headline implied that money laundering is a growing threat in Singapore. This is misleading, and the basis on which your headline was crafted was not explained anywhere in your article. The contents of your article mainly explained that it is necessary for DBS to establish a comprehensive anti-money laundering and counter-terrorist financing framework.

Money laundering is not a problem in Singapore, and is, in fact, very much under control. Such cases in Singapore are few and far between. We believe that money laundering happens in all countries, but where the enforcement is lax or non-existent, these offences go undetected. The fact that we are able to detect them in Singapore reflects well on our monitoring and enforcement system. This comes out very clearly from the evaluation carried out jointly by the International Monetary Fund and the World Bank in 2003, in which the two institutions emphatically endorsed Singapore's strong anti-money laundering regime.

As for your report on Oct 1, the headline would have given readers the impression that there has been an increase in criminal activities relating to financial transactions in Singapore. Although your article correctly pointed out that the significant increase in suspicious transactions reporting by the financial institutions was a result of concerted efforts by the Commercial Affairs Department (CAD) through its outreach programme, it failed to explain that not all the suspicious transactions translate into criminal activities.

In the same article, it was reported that 'Mr Tan declined to give further details as such information is sensitive', giving the impression that CAD is not above board in its disclosure of information to the public.

CAD director Tan Siong Thye was interviewed by several journalists, including a journalist from BT, after delivering his keynote address at the Asia-Pacific Financial Crime Conference 2004. He answered all the questions, and to certain queries he explained comprehensively that it might not be appropriate for CAD to elaborate as this might compromise CAD operations. This was accurately reported in The Straits Times article 'Watch for terror funds, banks told' and the Streats article 'New terror fund checks needed' on Oct 1.

The headlines and contents of BT's articles carried over two consecutive days would have given readers the impression that money laundering is a serious problem in Singapore. This is erroneous and undesirable as it creates a negative image of Singapore internationally as a financial hub.

I trust that this letter clarifies the situation for the benefit of your readers.

Tristan Sim
Assistant Director,
Media Relations
Singapore Police Force

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 06 Oct 2004

S'pore's fiscal principles sound

THE article 'HK's investment strategy beats Singapore's: S&P' (BT, Oct 1) referred to a Standard & Poor's report that questioned whether the government could have done more to cushion the economy from shocks and whether funds could be more efficiently managed if they were released into the private sector.

S&P concluded that Singapore has been running fiscal surpluses even in crisis years. Unlike S&P, the Singapore Government does not include capital receipts in its definition of budget surplus/deficit - that is, operating revenue less total expenditure. We have excluded capital receipts because they do not constitute a stable source of income.

Singapore adopts a more prudent approach because we should spend according to our means on an ongoing basis and not live off gains from the past. However, the government has not hesitated from cushioning the economy with assistance to individuals, households and businesses - even if this should lead to a budget deficit - during downturns. In 2003, for instance, the government provided a Sars relief package worth $230 million in April and another assistance package for individuals and businesses worth $1 billion in August. These came on top of the GST offset package of Economic Restructuring Shares, rental rebates, and service and conservancy charge rebates given earlier in the year.

As for the investment of our reserves, we maintain a globally diversified portfolio so as to preserve and enhance the long-term purchasing power of our assets. Investment returns vary according to investment objectives and strategy, and should be evaluated against appropriate benchmarks and time horizons.

We have achieved good long-term returns on our assets, and our investments continue to perform creditably when compared with international market benchmarks - such as the Morgan Stanley Capital International (MSCI) equity indices - as well as against market peers.

A significant portion of the portfolio is already being managed by external fund managers. These managers provide an additional benchmark for assessing performance.

Donald Low
Director (Fiscal Policy)
Ministry of Finance

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

SINGAPORE : Singapore and India have just concluded their ninth round of discussions on a Comprehensive Economic Cooperation Agreement.

A joint statement says the talks in Singapore last week saw good progress.

This is the first time the two sides are meeting since the new Indian government under Prime Minister Manmohan Singh took office.

In particular, the talks saw the conclusion of a chapter on e-commerce cooperation, which will facilitate the e-delivery of Indian software, media and music products.

Discussions on telecommunications services were also nearing conclusion and there was also a better understanding and forward movement in other areas.

The next round of negotiations will be held in New Delhi from 27 to 29 September. - CNA

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/105191/1/.html

Published: 5th October 2004 19:03 BST+1
Karolinska Institutet opens office in Singapore

Karolinska Institutet is to open an office in Singapore as the resources it needs to maintain its leading position in medical research are not available in Sweden. KI ranks among the largest medical universities in Europe, but the main research investments are being made in Asia. "We have to be there," says KI’s rector, Harriet Wallberg-Henriksson

http://www.thelocal.se/article.php?ID=467&date=20041005

Business Times - 07 Oct 2004

MADE IN SINGAPORE
The S'pore edge in leather tanning

Heng Long is one company taking advantage of the excellent infrastructure here to supply the fashion and luxury industry, finds CHEN HUIFEN

THE next time you see a Hermes handbag sporting crocodile leather, take note. That exquisite reptile leather could have been made in Singapore.

While manufacturers in other activities may have shifted to cheaper locations in the region, leather tanning is one industry that has held its ground here.

Among the handful of local tanneries that have stayed put is Heng Long Leather Co. The company has been tanning and processing imported crocodile, alligator and ostrich skins for about 58 years here. From a 4,000 square metre factory at the Defu Industrial Park area, it supplies the fashion and luxury industry, which uses the leather to make handbags, wallets, belts, watch straps, garments, footwear and sometimes even upholstery.

'We are here because of history and the skills of our people,' said Heng Long director Koh Choon Heong. 'We have workers who have been with us for a long time. Besides, tanning is 90 per cent science, and 10 per cent art. The art part is very important.'

As for science, Mr Koh is referring to the production technology in tanning, which is something that can be learnt and duplicated easily. However, the art of creating quality finishes for any piece of leather to meet the desired touch and shine demanded by the fashion industry is something that takes a long time to acquire.

'A lot of our workers have acquired this skill of making and understanding the product,' he added. 'Therefore, if we were to relocate to China, for example, it may take a long time to retrain people.'

Singapore also offers excellent transport infrastructure for the company, which exports to more than 20 countries. About 50 per cent of its sales come from Asia, 30 per cent from Europe and the rest from North America.

In addition, Singapore has one of the best environments for an industry that is sometimes misunderstood by the public.

'The AVA (Agri-Food and Veterinary Authority) works very closely with the industry to ensure that the importing and exporting of products made from endangered species like crocodiles are regulated in such a way to facilitate the business and not hinder the business,' he said. 'In many other countries, it may take weeks to get a permit, whereas in Singapore, it usually takes about two days.'

Higher efficiency pays

Under the rules of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), an importing party must receive an export permit from the country of origin before it can make an application to bring in products derived from endangered species. Mr Koh explained that the higher level of efficiency in Singapore's administration often gives companies here an edge over those in other countries.

'Singapore is trusted by other countries,' he added. 'That aspect of our business is important because if you have to wait two, three weeks for a permit before you can bring in or send out goods, in today's trading environment, it's too slow.'

The company is also very sensitive to the issues of wildlife preservation, even though only 5-10 per cent of its raw hides are sourced from the wild and the bulk comes from farms. It is a steering committee member of the Crocodile Specialist Group, an international non-government organisation (NGO) committed to the protection and conservation of endangered crocodilian species. And the company only sources from farms that are approved by the CITES.

'The potential of this industry is limited by the availability of supply,' he said. 'You can grow (supply) but not so fast, because you have to keep the breeders, which take 8-10 years before they start producing eggs. The industry is growing, but at a pace that is not fast enough to meet the pace of demand.'

As it is, Heng Long is feeling the demand pressure. At full capacity, the tannery can process about 15,000 to 20,000 crocodile skins a month. But orders are piling up.

'We have to increase our staff to about 100 (from 85 now) in order to meet current demand,' he said. 'Hopefully, it can be done within the next one to two years, depending on our operations ability and how fast we can find additional industrial space to expand our operations. On this, we are working closely with relevant government bodies to explore various options.'

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 07 Oct 2004

Datacraft launches Global Services Centre in India

SINGAPORE - Datacraft has launched a Global Service Centre (GSC) in Bangalore, India, to provide high-end support to local, regional and global customers.

The company consolidated its Managed Services operations into the GSC at Bangalore with Singapore as the Disaster Recovery Centre.

Datacraft's strategy to consolidate its five STARtrac Centre to one GSC is in line with its parent Dimension Data's strategy, to consolidate multiple centres into five centres globally.

It was also based on the customer demands to provide consistent services regionally and globally.

Datacraft decided on Bangalore because of a vast pool of English-speaking technical resources, excellent infrastructure and supportive business environment,among other things.

Datacraft is listed on the main board of the Singapore Exchange and is a component company of the Straits Times Index.

Headquartered in Singapore, Datacraft spans more than 50 major offices and has over 1,100 employees across 13 Asia Pacific markets.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

OCT 7, 2004
East Europe team in S'pore to woo investors
By Erica Tay

TYRES made by a Singapore-owned company are becoming a common sight on Russian roads. Coffee being sipped in Central and Eastern Europe is likely to be supplied by a Singapore firm.

These success stories by Singapore companies in markets that once lay behind the impenetrable iron curtain of communism are set to become more common.

A delegation representing 27 former communist countries in Europe and Central Asia has arrived in Singapore to woo local businesses to invest in their emerging markets.

Early inroads into these little-explored markets have been achieved by tyre company Amtel, which controls a third of the Russian tyre market, and coffee importer Food Empire, a major supplier of instant coffee.

Representatives from the European Bank for Reconstruction and Development (EBRD), whose job is to facilitate the 27 countries' transition to market economies, spoke to potential investors at a seminar organised by IE Singapore yesterday.

These countries include Poland, Romania, Russia and Kazakhstan.

The seminar followed a trip by Singapore businessmen to Kazakhstan earlier this year, organised by IE Singapore.

A total of 65 representatives of Singapore companies including small and medium-sized enterprises and large corporations attended the one-day seminar, hailing from industries as diverse as information technology, infrastructure and manufacturing.

Already, two of the seminar participants are in talks with the EBRD to invest in multi-million-dollar projects.

At the seminar, IE Singapore deputy chief executive Alphonsus Chia urged companies to look beyond the popular investment destinations of China, India and South-east Asia, as 'it gets crowded easily when everyone rushes to the same place for their pot of gold, and success becomes harder to achieve'.

The EBRD's head of business development, Mr Bruno Balvanera, said the bank is helping investors with services such as guarantees and loans with longer-than-usual maturities.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Time is GMT + 8 hours
Posted: 07 October 2004 2133 hrs

Finland urged to use Singapore as a gateway to Southeast Asia
By Debra Soon, Channel NewsAsia

HANOI : Prime Minister Lee Hsien Loong met several world leaders in Vietnam, including Finland's Prime Minister Matti Vanhanen.

Mr Lee is in Hanoi to attend the Asia Europe Meeting.

Mr Lee's press secretary said he wanted to touch base with his Finnish counterpart, since Finland will be the host of the next ASEM summit in 2006.

The two leaders also exchanged views on terrorism and economic developments in Asia and Southeast Asia.

The Singapore leader hopes to see closer links between Asia and Europe, which he sees as two very important and vibrant continents.

He hopes more Finnish companies can use Singapore as a gateway to Southeast Asia. - CNA

Copyright © 2004 MCN International Pte Ltd

News Update as at 17.00 hrs (IST)

Info-Tech
STT, Telekom Malaysia close to buying AT&T stake in Idea

SINGAPORE: Singapore Technologies Telemedia (STT) and Telekom Malaysia are close to acquiring the 33 per cent stake held by AT&T Wireless in Hyderbad-based Idea Cellular Ltd in a deal estimated at over $200 million.

"Telekom-STT combine will acquire one-third stake in the company, which is the fifth-largest mobile operator in India. We hope to conclude (the deal) as soon as possible", the Kuala Lumpur-based New Strait Times quoted Telekom CEO Mr Abdul Wahid Omar as saying. There were some issues to iron out, but we are quite close to it, he said.

Industry sources said due diligence by STT-Telekom Malaysia combine was almost complete.

Telekom and STT have agreed to buy AT&T Wireless Services stake in Idea Cellular, for more than $200 million, according to industry estimates.

The two partners also plan to raise their stake in Idea Cellular to 49 per cent later, the maximum foreign holding allowed by the Government in telecom sector.

AT&T Wireless agreed to put its stake in Idea Cellular on the block following its global acquisition by Cingular Wireless. The ST Telemedia-Telekom Malaysia combine was chosen to acquire the stake for which international players including Millicom and Telstra had put in their bids.

Telekom's presence in India is part of an extension in the South Asia, Mr Omar said.

"We are the number one mobile operator in Sri Lanka and the second in Bangladesh. In India, we see it as a natural extension of our presence in that (South Asia) market", he added. - UNI

http://www.thehindubusinessline.com/businessline/blnus/15081706.htm

Business Times - 08 Oct 2004

HK relooks hedge fund rules in bid to outdo S'pore

Regulator says it will ease some rules and tighten others

(HONG KONG) The Hong Kong Securities and Futures Commission said it may relax regulations to make it easier for hedge funds to operate in the city of seven million people.

The regulator wants to stop financial companies from locating in rival business centre Singapore, said Chan Chi Keung, a spokesman for the regulator.

It is also planning to strengthen rules governing transparency and disclosure at hedge funds.

'We are considering relaxing certain regulations, but at the same time, considering tightening other requirements pertaining to disclosure and transparency,' said Mr Chan. 'It's not a total relaxation.'

Alexa Lam, executive director of the securities regulator, said she wants to streamline and accelerate the application and licensing process for hedge fund officers and make easier an entry test for applicants, according to the South China Morning Post yesterday.

Hedge funds use high-risk techniques to make large capital gains. Hedge funds typically are available to high-net worth and institutional investors.

There are 13 hedge funds managing US$500 million in Hong Kong, says the Hong Kong Investment Funds Association.

Hedge funds represent less than one per cent of the 1,711 funds in Hong Kong managing US$534.3 billion, according to the association. Equity funds make up the majority of funds, with 891 in operation.

In 2002, Hong Kong followed Singapore and allowed fund managers to apply to offer hedge fund investments to individual investors in a move aimed at bolstering its attractiveness as a financial and fund management centre.

Hong Kong set the minimum investment for single hedge funds at US$50,000, below Singapore's threshold of US$55,700.

In November 2002, HSBC Holdings and JPMorgan Chase & Co's JF Funds were chosen to sell retail hedge funds to individuals for the first time. Previously hedge funds could only sell to institutional investors.

'Hong Kong was one of the first cities to make hedge funds available to retail investors,' said Sally Wong at the investment funds association. 'More hedge funds will be good for investors.' - Bloomberg

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

OCT 9, 2004
S'pore and EU launch talks on partnership
Thailand makes similar announcement; the agreements will be building blocks of an eventual Asean-wide pact with EU

By Laurel Teo

SINGAPORE launched official bilateral negotiations with the European Union (EU) yesterday on a wide-ranging partnership and cooperation agreement, after starting exploratory talks earlier this year.

Similar negotiations have begun between Thailand and the EU, it was announced at a joint press conference by all three parties here yesterday.

The announcement, made on the sidelines of the fifth Asia-Europe Meeting, in the Vietnamese capital, was presided over by Prime Minister Lee Hsien Loong, European Commission President Romano Prodi, Thai Premier Thaksin Shinawatra and incoming European Council President Jean-Claude Juncker.

Foreign Affairs Minister George Yeo and outgoing EU Trade Commissioner Pascal Lamy were among the officials present.

The agreements will offer a comprehensive framework for greater cooperation and dialogue in political, economic and cultural issues. These include trade and investment, education and culture, science and technology, the environment, energy, and cooperation in regional as well as international organisation.

But the EU leaders were reluctant to confirm a timeline for negotiations.

Mr Lee, however, said he did not think there were any key sticking points, as this was not a free trade pact involving negotiations over tariffs.

Instead, both parties would seek areas in which to remove obstacles, make it easier for companies to do business, and also look for win-win arrangements in terms of information exchange and IT.

'So I don't see this as being as complex and contentious as an FTA,' he said.

Both he and Mr Thaksin reiterated their stand that while the agreements may be bilateral, they act as building blocks for an eventual region-wide agreement between Asean and the EU.

Said Mr Thaksin: 'Thailand and Singapore now act like a pathfinder. If things are moving very well and other countries would like to join, then they can join in.'

In his opening remarks, Mr Lee also mentioned that Asean members were conscious that they must band together to achieve progress.

'Individually, the members of Asean cannot make an impact on the world stage. But collectively, Asean is a market of half a billion consumers,' he said.

Asean aimed to study the EU example 'to learn from its experiences and adapt them to our own context', he added.

In particular, as trade is the glue that will bind Asean together, a key part of the new agreements negotiations would be devoted to trade facilitation.

He said: 'We seek to remove as far as possible barriers to trade, whatever forms they take.'

Although Mr Lamy was quick to dispel any speculation that the agreements could lead to bilateral FTAs, stressing that the EU remained committed to multilateral trade pacts, his successor had earlier hinted otherwise.

Mr Peter Mandelson, who will take over in November, had reportedly said last month that the EU would assess each case on its own merits bilaterally, even before the Doha Round of World Trade Organisation trade talks is concluded.

Mr Lee, who is attending his first international meeting as prime minister, also touched base with other leaders earlier in the day.

He had a brief discussion with Italian deputy PM Gianfranco Fini on United Nations Security Council reforms, and was also seen shaking hands in a warm exchange of words with Chinese Premier Wen Jiabao.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

Singtel keen to invest in cellular telephony

ISLAMABAD (October 09 2004): Singaporean telecom company Singtel Executive Vice President Dr Stephen Rotheram on Friday called on Prime Minister Shaukat Aziz and expressed keen desire to invest in Pakistan in the sectors of fixed and cellular telephony.

He also lauded the liberal investment climate in the country.

Talking to the three-member delegation, Prime Minister Shaukat Aziz said that Pakistan would welcome the Singapore investment in the field of telecom and information technology.

He said the environment in the country was conducive and their investment was fully protected.

The prime minister said Pakistan has achieved economic stability and its foreign reserves have achieved substantial growth over the last few years.

Labour market and other inputs were cheap and infrastructure had been developed, whereas great incentives have been provided to the investors.

While commenting on the telecom services in Pakistan, the prime minister said, the government had already started the privatisation process of the Pakistan Telecommunication Company Limited (PTCL) and a number of foreign investors have shown keen interest.

"We will welcome the Singtel participation in the telecom infrastructure development," he added.

The Singtel executive vice president also congratulated him on becoming the prime minister.

Copyright Associated Press of Pakistan, 2004

This story was printed from TODAYonline

Hyflux secures multi-million deal with Dubai

Weekend • October 9, 2004

Tay Tsen Waye
waye@newstoday.com.sg

A multi-million-dollar deal secured by local firm Hyflux has transformed Singapore's efforts on economic engagement with the Middle East into a tangible plan of action.

The water treatment specialist company yesterday signed a deal worth more than US$400 million ($672 million). It will design, build and operate water and waste-water treatment plants in water-scarce Dubai in the United Arab Emirates (UAE), over the next three years.

Hyflux's coup comes hot on the heels of the Singapore Government's newly-minted strategy of increasing economic cooperation with the region. Already, no fewer than six free trade agreements are in the pipeline with Middle East countries.

The deal will see Hyflux sell up to 20 per cent its shares and warrants to Istithmar, an investment holding company owned by the UAE government.

Launched last year with an initial capital of US$2 billion, Istithmar was created to centralise investments made by the Dubai Ports, Customs and Free Trade Zone Corporation, as well as affiliate companies.

Its role is to nurture government-linked projects in various sectors including financial services, real estate and tourism.

Under the partnership, the two companies will set up a joint venture utility company in Dubai and undertake an initial US$400 million worth of projects for the real estate development projects of Istithmar's affiliate, Nakheel Corporation.

As the largest property developer in the Middle East, Nakheel is responsible for the world's most ambitious man-made resort islands off Dubai, including The World and The Palm. The deal will see Istithmar become Hyflux's second largest shareholder and could lend considerable power and financial clout to the Singapore-listed company in a region recently championed by Senior Minister Goh Chok Tong as a key economic ally.

The potential of the region is clear.

With a combined gross domestic product of US$1 trillion, a regional population of 400 million, and a collective growth of 4 per cent this year and 5 per cent the next, the region is prime for business opportunities. And where better to start than in Dubai, the UAE's thriving, tourist and financial hub.

"This is a golden gateway of opportunities for Hyflux," said chief executive officer Olivia Lum, who told Today that negotiations with Istithmar had started six months ago.

"Without the joint venture, we would have had to compete with other local companies, which would have been very difficult as we have no track record in the Middle East," she added.

"Certainly, it helps too that Singapore has a very good relationship with Middle East countries. And local companies have a reputation for being transparent and with good corporate governance."

Investment analysts have welcomed the move to diversify into a new market after 12-year-old Hyflux's successful forays into China, Indonesia and Malaysia, where it has provided water filtration and recycling systems.

Said Phillip Securities' Jessica Tan: "The deal effectively catapults Hyflux into the huge potential for water and waste water treatment in the Middle East.

Indeed, given the severe shortage of fresh water — annual rainfall does not exceed 110 millimetres – desalination is the UAE's main source of water.

Since its first desalination plant was built in 1960, more than 900 million gallons a day of desalination capacity has been installed, according to a Middle East Economic Digest Weekly Special Report in May.

An additional capacity of 400 million gallons a day is being planned.

With water demand rising by some 9 per cent year, "building bigger plants is a matter of necessity for Dubai", the report said.

Despite recognising that the UAE may be a mature market with many established players offering water treatment services, Ms Lum remains unfazed: "We offer the most competitive solution and bring value to the project. Our technology is the most advanced so that sets us apart from all the traditional treatments."

Hyflux boasts a highly versatile proprietary membrane technology that enables it to treat water for both consumption and industrial use.

Regional economist Song Seng Wun of GK Goh Research said that with Dubai's sights on becoming a premier financial services and tourism centre, the issue of water would be especially critical to sustain a burgeoning population.

""Dubai has in a sense modelled itself along Singapore and has certainly put in effort to transform into a playground of sort for the region's wealthy," he said.

"So, all the basic infrastructure and amenities must to be in place. And being in the middle of a desert area, the services that Hyflux can offer become even more important." — Additional reporting by Jaime Koh

Copyright MediaCorp Press Ltd. All rights reserved.

OCT 9, 2004
Third-Quarter Economic Results
Singapore likely to report 8-9% growth
Growth likely to slow from 1st half's 10% in line with global trend but MAS may still allow Sing $ to keep appreciating

By Audrey Tan

SINGAPORE'S economy is likely to have grown by between 8 and 9 per cent in the third quarter, marking the start of a slowdown from growth of 10 per cent in the first half of this year.

But the Monetary Authority of Singapore (MAS) is still likely to keep its policy of a gradual and modest appreciation of the Singapore dollar, to head off any inflation risk from soaring oil prices, economists say.

The third-quarter economic results and MAS' half-yearly Monetary Policy Statement will be released on Monday.

Analysts say that Singapore's economy is likely to have cooled down in the third quarter as global growth shifted to a lower gear, China took steps to slow its economy and the technology cycle peaked. But a deceleration of this magnitude is nothing to worry about, they added.

Buoyed by robust global economic growth, Singapore's economy had expanded at 'unrelenting' rates since the second half of last year.

IDEAglobal economist Nizam Idris said: 'Now is a good time for the economy to consolidate and to cool off after 12 months of unrelenting double-digit growth.'

He is expecting 8.5 per cent growth for the Singapore economy in the third quarter, compared with a year ago. This means that compared with the second quarter, third-quarter growth will be flat.

'Flat quarter-on-quarter growth is not a worry,' he said. 'Economic conditions have remained generally favourable. Our forecast also builds in oil prices at US$50 a barrel for the rest of the year.'

So far, high oil prices, China's slowdown and the moderation of the global technology cycle have been 'relatively unthreatening', said United Overseas Bank (UOB) economist Jimmy Koh.

'The effect, we suspect, will be more apparent in the second half of next year,' he wrote in a research note published yesterday.

UOB is forecasting Singapore's economic growth to have moderated to 7.9 per cent in the third quarter, compared with a year ago.

But even as the economy enters a more moderate growth phase, MAS is still expected to maintain its policy stance of a gradual and modest appreciation of the trade-weighted Singapore dollar, economists said.

MAS shifted from a neutral policy of 'zero per cent appreciation' to its current tightening stance in April.

A stronger Singapore dollar is generally seen as detrimental to growth, as it makes exports more expensive. But by making imported goods cheaper, it also keeps imported inflation in check.

In April, MAS cited the strong growth outlook for the Singapore economy and the risk of rising inflationary pressures when it tightened monetary policy.

Analysts say that this stance continues to be appropriate as oil prices threaten to head upwards. JPMorgan economist Lian Chia Liang said: 'The rise in global energy costs since the last policy announcement leads to an added worry that supply shocks could accentuate this upward movement in prices.'

So far, oil prices have not caused Singapore's inflation rate to rise above 2 percentage points, a level widely seen as the highest the central bank will tolerate.

'The potential threat of an external boost to inflation remains significant,' he added.

Singapore's bias is also towards monetary 'tightness' as most of the goods consumed here are imports, he added.

In fact, if third-quarter growth is stronger than expected, the central bank may further tighten monetary policy to ward off overheating pressures, he said.

Yesterday, the Singapore dollar rose 0.3 per cent to $1.6842 against the US dollar on talk that MAS may tighten monetary policy further on Monday. But most economists are expecting no change in MAS' policy stance.

Dr Chua Hak Bin, senior regional economist at DBS, said: 'To hold the current stance is correct, given the moderation in growth rates. There are risks that could emerge in the next six months as there are concerns that oil prices will rise further or that the tech cycle could plunge.

'But there is nothing to stop MAS from changing its policy stances then.'

Copyright @ 2004 Singapore Press Holdings. All rights reserved.

OCT 9, 2004
Nakamichi wins IHQ status, will invest $20m
By Erica Tay

ENTERTAINMENT system maker Nakamichi, a familiar name among hi-fi aficionados, is the latest multinational corporation (MNC) to locate its global headquarters in Singapore, where it has plans to double investment and staff strength.

The manufacturer of designer audio and visual equipment, regarded by some as Japan's answer to Denmark's Bang & Olufsen, will be awarded International Headquarters (IHQ) status by the Economic Development Board (EDB) next Monday.

This will give Nakamichi preferential tax treatment.

In an interview with The Straits Times yesterday, Nakamichi Corporation managing director Christopher Yip said the company will double its investment here over the next five years to $20 million.

It has invested $10 million in Singapore since consolidating its worldwide operations here three years ago

Next year, it plans to double staff numbers here from the current 40, making Singapore its global centre for product design and development, as well as sales and marketing.

Nakamichi is known for outfitting luxury cars such as Mercedes-Benz and Lexus with hi-fi sound systems.

On the decision to consolidate its Tokyo, Hong Kong and Singapore operations here, Mr Yip said: 'We're encouraged by the Singapore government's efforts to promote innovation.'

He also cited the Republic's excellent intellectual property framework and good legal system as pull factors.

Nakamichi products are developed by its award-winning design team in Singapore, made in Malaysia, then sold around the world.

The awarding of IHQ status to Nakamichi is in line with EDB's push to develop Singapore's industrial design sector as part of a move to improve the competitiveness of the manufacturing industry.

Other MNCs with Singapore-based in-house design teams include Motorola, Philips, Sony and Toshiba.

EDB figures show that more than 100 professional industrial designers currently work in Singapore.

Copyright @ 2004 Singapore Press Holdings. All rights reserved.