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SINGAPORE
may have lost its number one spot to Shanghai
as the world's busiest container port, but
it moves up the value chain into a world
where tonnage means less than dollar volume
produced by its own high-end electronics
and pharmaceuticals that not only require
high skills to make, but can also get to
market.
Singapore's
location is a big plus as a transshipment
gateway to Asia, but it has retained more
manufacturing that one would have expected,
and has managed this trend-bucking accomplishment
by moving up the value chain.
Combining
this with the well-oiled machinery of the
Singapore government that paves the way
to greater output and sales, it gives on
reason to be positive about the Lion City's
economic prospects.
Then
there is the increasing wealth of southeast
Asian hinterland itself. The Straits of
Malacca may be the gateway to the wider
Asia-Pacific; besides, Singapore is at the
centre of a region where the rise in per
capita income and the development of the
productive base in places like Indonesia
or Thailand is also having a profound impact
on the Lion City's fortunes.
"Within
the ASEAN region we are seeing the growth
of a middle class of 600 million people.
That's greater than the three Chinese coastal
cities or Latin America," said Kelvin
Wong at the Singapore government's Economic
Development Board.
Singapore's
expansion alone over the second quarter
shows a growth rate of 3.5 per cent, notes
the UK's Transport Intelligence in its recent
country survey. This is well down from the
5.6 per cent average posted between 2007
and 2013. But despite the Lion City's noted
efficiencies, its projections are cautiously
limited to two to three per cent GDP growth
a year in the medium term - much like the
rest of the world.
Said
the government's Mr Wong: "LSPs [logistics
solutions providers) need to have strategic
capabilities and be able to integrate into
high value supply chains and manufacturing.
Many of the components produced in Singapore
are at the intermediate stage, so this makes
an understanding and familiarity of the
product essential. So, LSPs need specialised
capabilities and thus higher margin and
less commoditised services."
To
navigate one's economy through such tricky
wind and weather, Singapore focuses on assembling
complementarities, and looks to logistics
services to help provide the agility needed
to get their delicate wafer thin devices,
vital components in the high-end electronics
assembled elsewhere, so as to market ahead
of the fierce competition they face. Ditto
for the refined pharmaceuticals and health
care products, which demand temperature
control, stringently detailed regulatory
compliance and must travel long distances
without losing that vital state-of-art market
pricing.
Electronics
accounts for five per cent of Singapore
GDP and 25 per cent of all manufacturing,
with pharmaceuticals coming in second place.
But rather than producing finished products,
Singapore tends to make components, silicon
wafers and hard drives for assembly operations
in Thailand or China.
DHL
has worked with a number of electronics
companies in Singapore such as German semi-conductor
manufacturer Infineon Technologies, collaborating
to produce the logistics needed.
Infineon's
regional supply chain director Roxane Desmicht
said the high level of automation requires
skilled labour, which even applies in sophisticated
warehousing today where so much just-in-time
assembly and dispatch is done. "This
is much easier to find in Singapore than
anywhere else in Asia. Uniquely you have
better people, if you need a provider with
EDI capability or a programme to eradicate
defects, it's here," Ms Desmicht said.
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