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SINGAPORE: Market players say there are still opportunities for food and beverage (F&B) companies in Singapore to grow, despite the grim economic outlook.
But they say the sector is expected to grow by about five percent over the next three years, significantly lower than the earlier industry forecast of eight to 20 per cent.
Items that have been eating away at revenues of food businesses include manpower costs and high rentals.
And given the current economic conditions, homegrown company Old Chang Kee says it is all the more important for Singapore’s F&B operators to go international.
This will help to diversify sources and income.
"We have just opened up our Chengdu concept shop and we play very much on the culture, (and) how to adapt to the culture. For example, in China, we have different (flavours) of curry puffs," said the CEO, Old Chang Kee, William Lim.
Apart from China, Japan and Korea are also seen as attractive markets.
Some industry players also note that it is important to keep up with marketing efforts.
"Through branding, we can also build our franchise, and franchising is a way to grow our brand without a lot of capital being taken out from us," said the chief financial officer and director of Waraku Holdings, Francis Thong.
Waraku Holdings has operations in Singapore, Hong Kong, Malaysia and Indonesia.
Amid the global credit crunch, access to funds is a challenge.
Suppliers are also less inclined to extend credit terms.
Still, F&B operators say they hope to use this period to retrain workers and restructure their operations.
As of last December, the F&B industry provided employment for over 135,000 people. It also contributed to about 1.3 per cent of Singapore's GDP in 2007.
- CNA/yt
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