Making better use of land, moving ops abroad

$60m plan deviates from 'old' thinking of keeping jobs at home
Jonathan Kwok Straits Times 26 Feb 13;

THE Government has unveiled a $60 million grant to help firms make better use of Singapore's scarce land - even assisting some firms to move abroad if core functions stay here.

Finance Minister Tharman Shanmugaratnam said the Land Productivity Grant will support companies wanting to intensify the use of land here.

He said the offer to help firms move abroad would save land and that business associations such as the Singapore Business Federation-led SME Committee had asked for the incentive.

Mr Tharman did not mention how much each firm can expect to get under the grant.

Experts said the relocation grant is a bold move and deviates from the Government's traditional thinking of keeping jobs within Singapore.

"It's an acceptance of the fact that in order to compete globally, some things cannot be done in Singapore any more," said Ms Tan Bin Eng, a partner at Ernst & Young.

"Some activities may need to be done offshore."

Ms Tan said that traditionally, the focus was on keeping jobs in Singapore but now the Government is effectively saying it is more important that small and medium-sized enterprises are productive and globally competitive.

"In order to do that, some jobs need to be offshore and they are willing to step in to help the SMEs in this respect," said Ms Tan.

"The Land Productivity Grant is good, in terms of a signal."

Mr Cheng Liang Chye, managing director of food ingredients firm SMC Food 21, said his firm already has plans to move more operations to Malaysia, and has already purchased land there.

"This will come as a bonus," he said.

More details need to be announced about the qualifying criteria for firms and the payout they can receive, but Mr Cheng said the money would be useful to help firms defray the costs of moving.

Firms will need to spend money on relocating equipment, while costs will be incurred when staff travel between Singapore and the other country, he noted.

Engineering firm HSL Constructor, which has overseas offices but is not looking to open more, also welcomed the scheme.

The firm, whose operations include marine civil engineering and ground engineering, acquired some land here from JTC Corp in 2011 and is now developing it to the maximum plot ratio.

"We look forward to how the Government can help us" with the cash for firms intensifying land use, said managing director Lim Choo Leng.

"We are using a big sum of money and investing heavily to intensify the land use. We have to maximise the land allocated to us as we are a land-scarce country."