Friday 26 September 2014

$413m plant opens amid booming baby nutrition industry

Nearly $2 billion in investments in sector over past five years: EDB
By Rennie Whang, The Straits Times, 25 Sep 2014

SINGAPORE may be a laggard when it comes to producing babies but it is becoming a force in the infant nutrition sector.

The opening of a US$325 million (S$413 million) production and research facility in Tuas today underscores how large the baby food industry is becoming - and how fast it is growing here.

Almost $2 billion in investments have been made in the sector over the past five years, according to the Economic Development Board (EDB). This is a nearly six-fold increase from the 2004 to 2008 period, when $350 million was invested in the sector.

About 2,000 jobs have been created since 2008, 90 per cent of them skilled. Around 70 per cent of positions have gone to Singaporeans and permanent residents.

The top five global companies in the sector - Abbott Nutrition, Danone, FrieslandCampina, Nestle and Mead Johnson Nutrition - have set up research and development (R&D) and regional bases here. Three have also established regional manufacturing facilities.

These five firms have about two-thirds of the global market in paediatric nutrition.

American firm Mead Johnson is the latest to expand here with today's official opening of a manufacturing and research and development facility. The facility, which has been running for a few months, is the third largest of its kind in the world and the largest outside of the United States.

"The central location of Singapore as a transport hub is very important, as is its free trade agreements with some of the most important trading partners in the region," said Mr Peter Kasper Jakobsen, president and chief executive of Mead Johnson Nutrition, in an interview with The Straits Times on Tuesday.

"The skills and capabilities available in Singapore that are underpinned by a strong education system are paramount... The transparency of business here is also a significant comparative advantage regionally."

EDB assistant managing director Thien Kwee Eng told The Straits Times at the same interview that the outlook for paediatric nutrition is bright.

The sector is worth US$32 billion and is expanding at 7 to 8 per cent annually, much of it driven by Asia, where growth hit 14 per cent last year.

"We are a strong location for manufacturing. Infant formula is about trust, safety and quality; Singapore represents that in many senses of the word," said Ms Thien.

Research infrastructure here has been built up to support the sector's growth.

For example, a birth cohort study with more than 1,200 participants has been gathering data on mothers and their babies for firms to draw on.

The $148 million Singapore Centre for Nutritional Sciences, Metabolic Diseases and Human Development (SiNMeD) was set up last year to focus on nutrition and aims to establish Singapore's first doctorate programme in nutrition soon.

Paediatric nutrition presents a stable, resilient sector, said Ms Thien, one that has grown despite economic downturns, and one that offers career progression.

Mr Reddy Sanjeeva, 30, is one employee who has benefited.

Mr Sanjeeva, a permanent resident here, was working as a technician in the semiconductor industry but was looking for a career switch. He was hired by Mead Johnson as a production technician about eight months ago and later, through training and projects to develop his leadership skills, appointed acting supervisor for his team.

"Singaporeans can look forward to working for employers like Mead Johnson, who are committed to training up the local workforce to serve in a growing industry," said Ms Thien.

Paediatric nutrition companies also work with a host of suppliers and partners in branding and marketing, research firms, advertising agencies, as well as packaging and design companies. "Given (these firms') global reach, Singapore companies can look forward to multi-region projects beyond our shores," Ms Thien added.

Mead Johnson has been selling its products in Singapore under the Enfagrow, Enfamil and Enfamama brands since 1969 and set up regional headquarter operations here in 2012. Five years ago, it employed just 15 people in Singapore; today, it has 250 staff.

Its sales here have been growing by double digits over the past few years and were about $30 million last year.

Sales in Asia have been expanding at a similar pace.

Its Tuas facility will be a supply point for three smaller finishing facilities in China, Thailand and the Philippines, and will also serve markets as far as India.

Mr Jakobsen said he was heartened by education progress here, with three degree programmes now focusing on nutrition.

"Singapore is getting to the point where there is a critical mass in this sector... I'm confident we'll see in the next few years great transfers of knowledge and benefits from research studies. We are following (the developments) with a great amount of interest," he said.

No comments:

Post a Comment