Manufacturing 'still key economic pillar'

Sector offers good jobs and broadens Singapore's economic base: PM Lee

By Aaron Low, The Straits Times, 2 Nov 2012

MANUFACTURING will remain a key pillar of Singapore's economy as it provides good jobs and broadens the economic base, said Prime Minister Lee Hsien Loong yesterday.

Factories here, which account for about a fifth of Singapore's economic output, have been in the doldrums of late - badly hit by the weak global economy.

But over the long term, manufacturing has brought many benefits to the country's economy, said Mr Lee. "It creates good jobs for Singaporeans and integrates well with services and innovation," he added. "It broadens our economic base, so we are not overly dependent on one sector."

The economy itself is changing, and Singapore is pushing ahead to maximise all of its resources, from land to training its important workforce, he said.

"We are trying our best to raise productivity across the whole value chain, upgrading our workforce, embracing new technologies and strengthening the overall eco-system."

He warned that Singapore cannot aim to be in all industries, and that the economy should aim for high-value, knowledge-intensive industries

Sectors such as biomedical sciences will be here for a long time, said Mr Lee, at the 40th anniversary of pharmaceutical giant GlaxoSmithKline's (GSK) manufacturing presence in Singapore.

The biomedical sciences sector has grown significantly to become a major industry employing about 18,000, of which 70 per cent are Singaporeans

The sector, which includes drug and medical devices production, as well as research and development, accounts for almost 5 per cent of total economic output here, noted Mr Lee.

CIMB economist Song Seng Wun agreed that manufacturing remains an important part of the economy here, as it adds to employment and opens up opportunities for specialised education.

"Biomed, however, does not have quite the same positive spillovers in the economy compared to electronics. But biomed firms make huge investments, which means once they are here, they will stay a long time," he said.

One of the pioneers in the sector is GSK, having set up its first manufacturing plant here in Quality Road back in 1972.

It has invested $1.6 billion in Singapore, and now employs more than 1,000 staff here in its research and development facility and four manufacturing plants.

Its Asian and emerging markets headquarters here is also responsible for 40 per cent of the company's total revenue, which stood at £27.38 billion (S$53.7 billion) last year.

Mr Lee said GSK has an "enduring partnership" with Singapore, noting that it also contributed $50 million to a scholarship fund that has helped hundreds of Singaporeans to study overseas.

Yesterday, GSK chief executive Andrew Witty announced that the firm will be investing another $50 million to upgrade its plant in Quality Road.

He said the plants here are among the world's best, having developed innovations that allow them to perform at the highest levels of manufacturing.

GSK's local head and site director Lim Hock Heng added that one of the firm's priorities is to always have a strong local workforce. Nine out of 10 staff at its Jurong and Quality Road manufacturing plants are locals, he said.