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Productivity of S'pore firms still weak: DPM Tharman

In the nation-wide push for productivity, Singapore firms are not up to par, said Deputy Prime Minister Tharman Shanmugaratnam on Friday.

SINGAPORE: In the nation-wide push for productivity, Singapore firms are not up to par, said Deputy Prime Minister Tharman Shanmugaratnam on Friday (July 11) on the sidelines of a visit to two local SMEs.

Mr Tharman, who is also Chairman of the National Productivity and Continuing Education Council, said that certain sectors are lagging behind in productivity.

However, he added that innovation taking place on a micro level will help to change the landscape in the long run.

Mr Tharman was on a visit to JTC Space@Tanjong Kling.

The factory incorporates structural features that allow companies to install their own systems to move goods and machinery between floors easily, so they can enjoy lower land rental and optimise industrial land usage. Firms are able to make more efficient use of land by operating on multiple floors.

One of its tenants, manufacturing firm Chan Kian Metal Works, has a goods handling system within its three-storey unit which enables it to integrate its production line vertically and improve productivity.

Another tenant, precision engineering firm Delta Optics, moved to the factory about two months ago from its previous location at Ayer Rajah Crescent. Its new factory now offers more than three times the production space for the same amount of rent.

With more space, Delta Optics is now able to undertake higher value-added activities, and space productivity has improved by 2.6 times.

"We used to just make optical inserts for our customers. Now we can offer more complete solutions -- from optic designs, prototyping, insert-making, mould design and assembly, mould testing, to short lens production," said Lee Kam Sung, director of sales and marketing at Delta Optics Technologies.

Firms like Delta Optics are ahead in the drive for productivity.

The government has set a target of two to three per cent productivity growth each year up till 2020.

Speaking at the tour of the site, Mr Tharman said that Singapore firms are not up to standard, with some industries doing better than others.

But with innovation happening at a micro level, he expects to see a changed economic landscape in the next decade.

“The macro figures in productivity are still weak. One reason is construction, which has been a laggard. But for the non-construction sector, we're no longer at zero per cent. It's now running at about one per cent,” said Mr Tharman.

“And in some industries, if you take precision engineering, if you take food manufacturing, it's increased by more than a quarter in just the last four years... At the micro level things are changing, and it eventually filters through into a changed environment at a macro level."

JTC is currently exploring the development of an improved version of the "small footprint factory" concept, which makes a broader range of manufacturing processes possible.

Source: Ministry of Trade and Industry

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