New centre to help eateries, retailers improve productivity

Govt to also help restaurant body fund upgrading drive

RESTAURANTS and retailers can look forward to getting help next year from a new centre to boost productivity.

It will help local companies spot weaknesses and train them to improve themselves.

Spring Singapore, which is setting up the centre, said it is short-listing suitable parties to run the centre.

More details will be released early next year, including the cost and location.

Announcing the initiative at the Food Services Productivity Conference, organised by the Restaurant Association of Singapore (RAS) yesterday, Trade and Industry Minister Lim Hng Kiang said the nominal value-add of the food services sector grew 8 per cent each year from 2007 to last year, but its workforce swelled by 6 per cent yearly in the same period.

"From both a social and economic standpoint, this may not be sustainable," he said.

During the Budget debate in March, Deputy Prime Minister Tharman Shanmugaratnam singled out the food and beverage sector as one industry where productivity has lagged the most.

Last month, Senior Minister for Trade and Industry Lee Yi Shyan cited an independent report which found that local restaurants are profitable despite low levels of automation because they rely on a large base of low-cost workers.

In his speech to some 400 conference participants yesterday, Mr Lim said that while the Government is willing to lend a helping hand to local firms, "companies must recognise that it is no longer business as usual".

There must be significant improvements to how they run their businesses, he stressed.

A slew of new measures were also rolled out yesterday to coax local restaurants to step up their productivity drive.

This will help restaurants cope with the fewer foreign workers in the sector even as they continue to rely heavily on foreign labour.

There will be a fresh round of government funding for the RAS to subsidise restaurants when they hire consultants to identify inefficiencies or organise study trips to learn best practices overseas.

Both RAS and Spring declined to reveal the exact amount of funds involved.

Spring said the money will come from a government grant scheme targeted at industry and trade associations.

"Releasing information on the grant amount given to each trade association would result in unnecessary comparison," a spokesman said.

He said that since 2005, 28 trade associations have received funding to carry out projects worth $120 million under the scheme.

Home-grown ice cream chain Udders went ahead to automate its kitchen even before the latest round of help was announced.

Its founder, Mr David Yim, said the chain expanded from five to seven outlets this year but was able to keep its central kitchen staff to six.

It bought a machine to pasteurise ice cream.

Without it, he would have needed another four workers to make the ice cream by hand.

"Now, we turn the machine on at night, and the ice cream is ready the next morning," he said.

While government grants are helpful, RAS' immediate past president, Mr Ang Kiam Meng, said it is still up to the restaurants to boost productivity themselves.

"The industry is a bit obese and needs to trim some weight. The government help is like subsidising us to go to the gym, but we must still lose the weight ourselves," said Mr Ang, who is also CEO of Jumbo restaurants.

tohyc@sph.com.sg