IE Singapore's helping hand for firms going overseas

Trade agency provided assistance to 28,000 companies in 2014
By Chia Yan Min, The Straits Times, 17 Feb 2015

LOCAL companies have steadily expanded their international footprint despite the challenging environment at home and abroad, says trade agency IE Singapore.

Firms that received help from the agency noted that expanding overseas was a necessary step as the small domestic market with its high business costs put a cap on long-term growth.

IE Singapore provided assistance to 28,000 companies last year, a 5 per cent increase from 2013, the trade agency said at its annual year-in-review briefing.

About 80 per cent of these were small or medium-sized enterprises (SMEs). Half of Singapore's SMEs now derive some revenue from overseas.

IE helps Singapore-based companies expand overseas, and promotes international trade.

About $34 billion in direct investment flowed out of Singapore in 2013, bringing the country's total stock of direct investment abroad to $503.5 billion.

More than half - about 57 per cent - of this investment was in Asia, primarily in China, Hong Kong and Indonesia.

Though global economic conditions remain uncertain, IE is confident about long-term growth prospects in Asia, and has been seeing strong interest from Singapore companies keen on growing regionally, said chief executive Teo Eng Cheong.

He added that a key sector with strong growth potential is urban infrastructure development, adding that Singapore will continue to position itself as the region's infrastructure hub.

The trade agency facilitated 342 projects across a range of sectors and markets, some of which were the result of "joint action plans" with companies.

These plans, which the agency started developing in 2013, aim to give firms more strategic targeted help. IE developed 107 joint action plans with companies in 2013 and 2014.

IE also gave out $44 million in grants last year to help companies with capability development, market access and manpower for internationalisation.

The trade agency plans to develop more joint action plans this year, as well as drive more partnerships with trade associations and deepen its project facilitation capabilities in various markets around the world.

Mr Melvin Tan, managing director of engineering services firm Cyclect Holdings, said its overseas business is growing faster than its Singapore operations due to shrinking margins and intensifying competition at home.

The company, which derives 20 to 30 per cent of its revenue from abroad, worked with IE on expanding into Myanmar. The trade agency introduced the firm to potential clients, partners and contacts in the country.

The company also has a presence in Malaysia, Brunei, Indonesia, the Philippines, Japan and China.

"Going regional is a necessity for growth in our industry... Increased competition, costs and tight manpower are all challenges. Going overseas provides many more opportunities which are not available here," Mr Tan said.

Mr Faizal Bahardeen, the founder of CrescentRating, said that the company had been struggling to break into the Japanese market before IE offered its help last year.

The firm focuses on the halal travel market, providing consultancy and training services to organisations and governments on "Muslim-friendly" travel.

CrescentRating, which intends to move into South Korea this year, has seen revenue grow more than 200 per cent since venturing into Japan.

"The tourism industry is beginning to see the Muslim travel market as an important sector," said Mr Faizal.