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Food manufacturing SME proposes integrated dairy hub

Singapore

HOMEGROWN food manufacturer SMC Food 21 has proposed that a one-stop hub for the dairy industry be set up here, to give Singapore companies a boost in tapping the region's growing demand for products like infant milk powders, cheese, yogurt, chocolate and ice cream.

The proposed facility could offer food-manufacturing companies a suite of shared services such as research and development labs, yogurt and cheese processing, as well as warehousing, said SMC Food 21 general manager Mike Lim at a media briefing on Thursday.

In addition, the hub could also facilitate technology transfer between multinational dairy companies and local firms and develop deep skills in the food manufacturing workforce.

The company's proposal was announced alongside a visit to its factory in Jurong by newly-minted Trade and Industry Minister Chan Chun Sing.

SMC Food 21 blends ingredients like sugar, milk and cocoa into intermediate products called pre-blends, which its customers then use to make chocolate, ice cream, soup and other finished food products.

The company, founded in 1999, has plants in Singapore, Malaysia and Thailand, and employs about 400 staff in all. It logged turnover of US$125 million last year.

Singapore is not the cheapest place to manufacture products, said SMC Food 21 managing director Cheng Liang Chye. But the company uses quality and high-value-added production processes to stand out, in order to "capture markets or partner with international companies that require such high-tech and high quality".

The company's biggest export market is Japan, and it is now looking to ramp up growth in China.

"Many multinational food companies may not want to invest in bricks-and-mortar manufacturing, instead preferring to focus on brand-building and marketing," Mr Cheng noted. "There is thus room for companies like ours to partner with these multinationals to grow their business at a much faster rate."

The firm has invested about S$20 million to S$30 million in a new facility adjacent to its existing plant in Chin Bee Crescent. The new plant will focus on making functional foods - products that potentially have a positive effect on health beyond basic nutrition.

Demand for such foods, which include dairy-based nutritional formulas for infants and adults, is growing in the region as the population ages and people become more health conscious.

The new factory is expected to boost SMC Food 21's output and revenue by about three to five times, said Mr Cheng.

Mr Chan, making his first factory visit since taking on his new portfolio at the Trade and Industry Ministry, said SMC Food 21 is a good example of how Singapore hopes to develop its food manufacturing sector.

"As the middle-income group in Asia grows, demand for good-quality products will continue to rise and this is where SMC has a niche...While we may not be the cheapest in terms of land and labour, we can be the best in terms of quality," he added.