Budget 2016: With help for SMEs, entrepreneur hopes for slice of foreign market

Budget 2016: With help for SMEs, entrepreneur hopes for slice of foreign market

Mr Daniel Tay, who owns cheesecake shop Cat & The Fiddle, hopes to expand overseas.

Foodnogstic's cake cutter

SINGAPORE: For food entrepreneur Daniel Tay, doing business online lets him have his cake and eat it too.

Mr Tay's company Cat & The Fiddle is Singapore's first online specialist cheesecake shop. He said he has been able to keep prices affordable while avoiding high rents.

"At the store, if it is not sold, then it will be thrown away, so that's not a very nice business model,” he said. “So what I really like about online sales is it's on demand. I keep it frozen, and as and when my customer wants a cake we just deliver it to them - very fuss free."

The 2016 Budget announced on Thursday (Mar 24) outlined several measures to help local enterprises like Mr Tay’s grow. These included tax incentives and support for automation projects. The aim is to place a "stronger emphasis on technology and innovation", to help firms enjoy economies of scale and expand overseas.

Mr Tay said he is looking to do just that. His store opened in 2014, selling five cakes a day. It sells about between 50 and 100 now.

To meet the increasing demand, Mr Tay said he has invested thousands in machinery and equipment. For example, at the heart of his central kitchen is a S$200,000 ultrasonic automated cake cutter, with a blade that vibrates about 20,000 times a second.

Foodnogstic cake cutter

This allows him to save on labour costs, and make production a piece of cake.

"In the traditional way of making cheesecake, the maximum you do is probably 80-100kg per mix,” he says. “It takes about probably 30 minutes to mix a full batch of 100kg. Today I have a high speed mixer. We bake maybe 300kg in 5 minutes."

Mr Tay added that going automatic means he does not need skilled workers. This flexibility is one reason why he is confident that he will be able to bring his cheesecake business to China and the region, including Malaysia and Indonesia.

"Even though let's say we failed and we only managed to get 0.1 per cent of the market share, that's about 1.5 million, or 1.3 million people per year buying our cheesecake,” he said. “It's worth a try. It's worth investing in China."

In his 2016 Budget speech, Finance Minister Heng Swee Keat said food manufacturing is now a "thriving sector" because of companies like Foodgnostic, which have embraced new technology, e-commerce, and overseas expansion. Several measures, like the Automation Support Package and National Robotics Program enhancements are also in place to drive more local firms towards this new model.

One expert Channel NewsAsia spoke to said going both overseas and digital are "very pressing needs" for local SMEs.

"What they really need to look at is transforming themselves via productivity. And looking at how the Government is investing in ICT (info-comm technology),” said Vice President, (Membership and Training) at the Association of Small and Medium Enterprises (ASME), Ang Yuit. “How do you align yourselves to leverage on this resource that's going to expanding in the next two three years?"

But ultimately, both Mr Ang and Mr Tay said the onus is on firms themselves to embrace these changes.

"You're spending on things that you don't see,” Mr Tay said, referring to running an online business. “It's like you do search engine optimisation, something that you spend but you're not sure you get. You can calculate your returns but you calculate in a very different manner. It's not about just good food. Now your mindset of marketing has to change.”

Mr Tay said he intends to bring his cheesecakes to China by early 2017.

Catch Mr Daniel Tay and other guests "live" as they engage Mr Heng Swee Keat in discussion, on Ask the Finance Minister, Monday (Mar 28), 9.30pm on Channel 5.

Source: CNA/xq