SMC Food 21 proposes setting up dairy hub

Trade and Industry Minister Chan Chun Sing (third from right) touring SMC Food 21's facility in Chin Bee Crescent in Jurong, which meets stringent standards for the manufacture of infant milk formula. The firm has invested about $20 million to $30 mi
Trade and Industry Minister Chan Chun Sing (third from right) touring SMC Food 21's facility in Chin Bee Crescent in Jurong, which meets stringent standards for the manufacture of infant milk formula. The firm has invested about $20 million to $30 million in a new facility next to this existing plant. The new factory is expected to boost SMC Food 21's output and revenue by about three to five times.PHOTO: LIANHE ZAOBAO

It could offer S'pore firms suite of shared services such as R&D labs, warehousing

Home-grown food manufacturer SMC Food 21 has proposed setting up a one-stop hub for the dairy industry here, to give Singapore companies a boost in tapping the region's growing demand for products such as infant milk powder, cheese, yogurt, chocolate and ice cream.

The proposed facility could offer food manufacturing companies a suite of shared services such as research and development labs, yogurt and cheese processing, as well as warehousing, SMC Food 21 general manager Mike Lim said at a media briefing yesterday.

In addition, the hub could facilitate technology transfer between multinational dairy companies and local firms, as well as develop deep skills in the food manufacturing workforce.

The company's proposal was announced alongside a visit to its factory in Chin Bee Crescent by newly minted Trade and Industry Minister Chan Chun Sing.

SMC Food 21 blends ingredients like sugar, milk and cocoa into intermediate products called pre-blends, which its customers then use to make chocolate, ice cream, soup and other finished food products. The company - founded in 1999 - has plants in Singapore, Malaysia and Thailand with about 400 employees in total. It logged turnover of US$125 million (S$167 million) last year.

Singapore is "not the cheapest place to manufacture products", said SMC Food 21 managing director Cheng Liang Chye.

  • $167m

    SMC Food 21's turnover last year.

This is why the company uses quality and high value-added production processes to stand out, in order to "capture markets or partner with international companies that require such high-tech and high quality".

The company's biggest export market is Japan and it is now looking to ramp up growth in China.

"Many multinational food companies may not want to invest in brick-and-mortar manufacturing, instead preferring to focus on brand-building and marketing," Mr Cheng noted.

"There is room for companies like us to partner with these multinationals to grow their business at a much faster rate."

The firm has invested about $20 million to $30 million in a new facility next to its existing plant. The new facility will focus on making functional foods - products that potentially have a positive effect on health beyond basic nutrition.

Demand for such foods, which include dairy-based nutritional formulas for infants and adults, is growing in the region amid an ageing population and rising health consciousness.

The new factory is expected to boost SMC Food 21's output and revenue by about three to five times, said Mr Cheng.

Mr Chan, who was making his first factory visit since taking over the Trade and Industry portfolio, said SMC Food 21 is a good example of how Singapore hopes to develop its food manufacturing sector.

"As the middle-income group in Asia grows, demand for good quality products will continue to rise and this is where SMC has a niche... While we may not be the cheapest in terms of land and labour, we can be the best in terms of quality," Mr Chan added.

A version of this article appeared in the print edition of The Straits Times on May 11, 2018, with the headline 'SMC Food 21 proposes setting up dairy hub'. Print Edition | Subscribe