The G902 Professional Profiling Module focuses on establishing a niche in the competitive food industry and examining the impact of the economic recession on Singapore’s food sector. Farah Shila Bte Mohd Zaini, a student at the School of Hospitality pursuing a Diploma in Integrated Event Management since 2009, conducted this analysis on September 22, 2009.
This report consists of an executive summary, an overview of Singapore Food Industries’ (SFI) growth, an evaluation of the recession’s effect on SFI, strategies for overcoming the recession, recommendations based on a SWOT analysis, and available resources.
In terms of background information, it is worth noting that Singapore has historically faced challenges due to its limited natural resources. Consequently, it has focused on industrialization since the 1960s. Although initially met with skepticism from its citizens, history has proven this approach successful for various industries including food.
The food industry is highly competitive and constantly evolving to meet consumer demands and technological advancements. As the global population grows, companies face challenges to develop innovative methods for manufacturing and packaging food to stay ahead of competitors. This report examines the effects of the economic downturn on Singapore’s food industry and strategies for recovery. The case study will focus on Singapore Food Industries Limited (SFI).
Additionally, this report will discuss the obstacles faced by the Singapore food industry and the strategies they employ to overcome them. Additionally, it will explore the process of carving out a specialized position in the highly competitive food industry. The following is an overview of Singapore’s food industry growth and the initial stages of development.
During the initial phase of industrialization in Singapore, Multinational Companies (MNCs) were the pioneers in investing in this budding market. Local manufacturers in Singapore perceived themselves as falling behind their foreign competitors and sought ways to regain their competitive edge.
This is because, as industrialization begins to develop, food manufacturers gradually discovered that they were lagging behind their competitors when they compared similar food products. They found that their current equipment and traditional packaging methods were not as efficient or effective. In order to remain competitive and keep up with the advancements in Food Science & Technologies (FST), these manufacturers gradually realized that they need to adopt new strategies. This includes producing higher quality products, improving product quality, and embracing innovation.
Singapore Food Industries Limited (SFI) [pic] is a leading integrated food company in Singapore, operating since 1973. Despite its cost reduction measures, SFI continues to produce top-notch products that outperform competitors and foreign firms. Over three decades, SFI has grown in size, diversification, and market reach. Originally focused on supplying raw food materials, SFI now offers food distribution and catering services.
Additionally, SFI offers food manufacturing and food processing services. The company was listed on the Singapore Exchange’s Main Board in November 1999 to expand and diversify its operations. In the UK, SFI’s operations contribute more than 50% to the Group’s turnover. Singapore’s businesses primarily focus on food distribution, food preparation, manufacturing and processing, as well as Abattoir and Hog Auction. Since its inception, SFI has successfully achieved and maintained consistent growth in the food industry.
In 2007, SFI showcased its robust growth once again, recording a pre-tax profit of S$48. 6 million on a turnover of S$714. 9 million. The company’s success in the industry is largely attributed to its competent team of experienced individuals from diverse backgrounds, possessing a range of skills. This team effectively manages the importance of delivering high-quality, innovative, and creative products and services. With their expertise, SFI is able to adapt to the constantly evolving dietary requirements and demands of their target consumers, driven by changes in lifestyle and demographic patterns.
The impact of the Economic Recession on Singapore’s food industries is analyzed. This analysis considers the issues and challenges resulting from the sub-prime housing loans from US commercial banks and the poorly structured financial products from US investment banks. These factors have caused a serious downturn in the world economies, starting in the last quarter of 2007. The global economy has deteriorated significantly since World War II, greatly affecting industries in Singapore as well. They have also had to endure the economic consequences.
During an economic downturn, the government introduced the ‘Resilient Package’ and allocated S$4.9 billion from national reserves to support struggling companies. However, the food industry in Singapore remained largely unaffected as it is a vital sector. The manufacturing output of the food industry has consistently grown from S$3 billion in 2000 to S$4.6 billion in 2005, indicating a remarkable growth rate of 28% over six years.
Mr Sunny Koh, Council Member of SMa & Chairman of F Industry Group, highlighted this positive trend while signing an MOU between SMa and RAS. He emphasized that Singapore’s economy has surpassed expectations in the second quarter of this year. This demonstrates how well the food industry is performing compared to other sectors, showcasing its resilience and growth even during an economic downturn.
Despite the common belief that the food industry can easily bounce back from economic downturns, recent studies reveal a slight decline in the Food and Beverages (F) industry in May of this year compared to 2008. To overcome the economic recession, waiting for an upturn is one option. However, since SFI is a Singapore food manufacturer, it is crucial for them not to passively wait for an economic upturn.
In order for Singapore food manufacturers to maintain their competitiveness in the global market, they can pursue various methods. One approach is to focus on multiple preparations, ensuring they are well-positioned when the world economies rebound. This can be achieved through enhancing product facilities, fostering innovation in product development, providing training for staff and workers, enhancing sales and distribution networks, conducting thorough evaluations and analyses of business strategies, strengthening company resources, and improving productivity. However, it is essential for them to exercise caution and perceptiveness throughout this process, ensuring that the improvements align with the specific requirements and capabilities of the manufacturer or industry.
During the economic recession, overstraining is extremely risky. However, the strength of the Singapore food industry lies in the fact that food is a necessity in human daily life. This constant demand for food allows the industry to recover quickly in drastic economy fluctuations, unlike other sectors such as electrical engineering.
Furthermore, the food industry in Singapore can rely on the correlation between population growth and demand for food to ensure a consistent and steady increase in demand. Unlike other sectors that are prone to unpredictable fluctuations, the stability of the food industry minimizes the risk of significant losses.
Opportunities: In order to ensure the success of the Singapore food industry, it is crucial to continuously innovate and develop new products while also enhancing industry standards. A potential approach to achieve this is by establishing a Food and Science Technology Center that allows food market industries to stay updated on their target audience’s evolving desires, requirements, and demands. This can enable companies to better cater to their customers’ needs by providing improved quality and availability. One possible way to accomplish this goal is through a collaboration between the National University of Singapore and Polytechnics in creating a dedicated research and development facility.
This collaboration will be discussed in more detail later in the report. Companies should actively seek out opportunities to stay updated on the food industry market and take advantage of any opportunities that will enable them to grow or enhance their product’s standing in the market.
Regularly reporting on the industry market will also help companies become aware of any changes in competitors’ strategies and make adjustments of their own to consistently keep up with their competitors. However, due to the low barriers to entry in the food industry, companies often face intense competition from both new and existing companies.
Furthermore, the presence of food items has caused consumers to become more careful and choosy when buying products, which may discourage entrepreneurs from entering the food industry. As a result, this could impede the growth of new businesses and weaken the economy.
In addition, although there is potential for expansion in Food and Science Technology (FST) programs within the food sector, there is currently not enough demand for FST graduates in Singapore or on a regional level.
The Food and Science technology industry’s research and development may be impacted by limited natural resources. This is demonstrated by challenges such as water scarcity and energy inefficiency, which can result in reduced food availability and higher prices. Consequently, there will be a decline in the demand for food. Furthermore, in modern society, people often fail to consider that their current meal could potentially be their last. It is crucial to recognize that 20% of cases of foodborne illness require hospitalization.
Furthermore, about 2 to 3% of individuals endure long-lasting issues caused by these difficulties, leading to significant repercussions for the food industry. This was particularly evident during the bird flu epidemic, which severely impacted the food import sector and consequently caused a decline in the overall food industry. Going forward, I will explore effective approaches for establishing a distinctive presence within Singaporean food industries. Recommendation: To overcome fierce competition in the market, it is advised to engage in partnerships with other companies and create exceptional products that specifically cater to the demands of the target market.
The National University of Singapore (NUS) and certain polytechnics have been offering the Food and Science Technology (FST) Programme since 1999. This programme aims to establish a niche in the Singaporean food industry, improving product quality and reducing market competition. Previously, the polytechnics only produced skilled technicians for the food industry. However, many senior positions in the Singaporean food sector are currently held by foreigners or locals who obtained their degrees overseas.
There are approximately 350 food companies in Singapore with over 10 employees, contributing to a sector worth around S$4 billion per year (representing 4% of total manufacturing output). Employment within the food sector is estimated at 18,000, with about 10% being graduates. It is important to consider this context in relation to the global food industry value estimated at US$492 billion.
The sector and demand for FST graduates in Singapore is not strong. However, the Programme was designed to be a small specialist program that produces high-quality graduates. This program has always been in demand and useful to the industry. Its creation aimed to acknowledge and address a specific niche market. The decision was made to develop a program that complements existing offerings in both the University and Polytechnics.
Since FST is a multi-disciplinary subject, the Programme was created to be interrelating and cross Faculty within the University. The FST staff is also needed to provide the integrative and specialist aspects. Due to administrative purposes and in part to reflect its reliance on Chemistry, the Programme will then sit within the Chemistry Department but will operate independently. The Programme is suited to be academically sound but also one that reflects the needs of the modern sophisticated and complex food industry.
There was a Mission Statement produced for the NUS and Polytechnics collaboration programme; The Regional Centre of Excellence for Research and Teaching in Food Science and Technology. The programme aims to be recognized as an innovative and valuable resource by the local, regional, and international food industry. Therefore, to overcome the second weakness faced by the Singapore food industry, polytechnics should create more awareness of the FST learning opportunities offered by them and collaborate with international universities established in food and science technology so that students will be able to gain better and proper training in the sector.
Locally trained FST students will be able to gain more recognition and provide their service in research and development. The food industry in Singapore is growing and advancing, as shown by the introduction of a compulsory Hazard Analysis and Critical Control Points (HACCP) for food production by the Agri-Veterinary Authority. The government must acknowledge this fact and urgently produce more locally trained FST personnel to properly focus on the food industry in Singapore.
Conclusion: Singapore’s preparedness for unfortunate events is undeniable, as it has gone through significant transformations to become a leading player in the food industry. Overcoming challenges and achieving remarkable feats, Singapore has continuously improved itself during difficult times. Currently, Singapore is self-reliant in its food industry and no longer depends on other nations for support. Its commitment to research and development, strategic growth, and overall dedication has yielded substantial outcomes.
With the amount of capital invested in the food industry and the government drive from their initial state, Singapore has ensured future success. Education and innovation have increased awareness about the food industry, leading people to contribute to its success. As competition grows, Singapore must develop more plans to enhance and improve the industry, which will boost efficiency and strengthen resources and productivity.
References and Plaudits:
- Food Science and Technology in Singapore: Innovative
- Opening Address by Mr Sunny
- Singapore Food Manufacturers’ Association
- Letter to Shareholders
- National Diploma in Food, Nutrition and Health
Resource scarcity is a significant threat to the food industry, as mentioned in an article retrieved from http://www.bakeryandsnacks.com/Publications/Food-Beverage-Nutrition/FoodNavigator-USA.com/Financial-Industry/Resource-scarcity-poses-major-threat-to-food-industry [pic]. Other challenges include contamination and health issues. To address these issues, it is important to develop a research and development centre for food and science technology, as well as regularly report on the economic and market industry. Additionally, the low barrier entry in the food industry should be taken into consideration. It is worth noting that FST-trained individuals in Singapore may not find strong demand within the Singapore food industry. However, it is crucial to remember that food is a necessity for human daily life.
