Overseas push brings rich dividends for local firms

IE S'pore survey shows that their turnover from abroad grew at a faster clip of 4.2%

The survey of nearly 700 companies, conducted in the second half of last year, also showed that more than half of the Singapore firms had a presence in China and Malaysia. PHOTO: REUTERS

Expanding into markets abroad has paid off for companies here, with overseas revenue growing at a faster rate last year, according to IE Singapore.

It found in a survey that their turnover from abroad rose 4.2 per cent last year compared with 2015, and outpaced the total revenue growth of 1.3 per cent.

Small and medium-sized enterprises set the pace, with overseas revenue making up 53 per cent of their total turnover - a 3 percentage point increase from 2015.

Large companies recorded an increase of 1 percentage point, with overseas turnover accounting for about 40 per cent of total sales.

The survey of nearly 700 companies, conducted in the second half of last year, also showed that more than half of the Singapore firms had a presence in China and Malaysia. They were increasingly interested in Vietnam, Myanmar and India as well.

At the same time, about 61 per cent of the jobs created for international expansion were for what are called PMET positions - professional, managerial, executive and technical - more than the 53 per cent of the new domestic-focused jobs.

"While overseas expansion created jobs both in Singapore and overseas, the majority of the jobs based in Singapore went to Singaporeans and permanent residents, and SMEs had a higher propensity to send Singaporeans and PRs to take up the jobs based overseas," IE Singapore said.

It added that Singapore companies continue to show interest in China, Myanmar and Vietnam this year.

SMEs are showing renewed interest in Vietnam and India, while large enterprises are also looking at the United States and Britain.

Take Sembcorp Industries. It has already made its foray into emerging hot spots.

The group announced in March last year that it had signed a power purchase agreement with Myanmar Electric Power Enterprise in Myanmar to supply 225MW of power for 22 years.

That same month, Sembcorp held the ground-breaking ceremony for its Nanjing International Water Hub on Jiangxinzhou in Nanjing city's new central business district of Jianye, in China's Jiangsu province. The project is designed to host research facilities, and business and conference space, to facilitate the development and commercialisation of new water technologies.

IE Singapore facilitated more than 450 projects globally last year - most of them in China and South-east Asia. About 30 per cent of these projects transformed the business of the companies.

Mr Lee Ark Boon, the agency's chief executive, said: "Internationalisation is core to sustaining Singapore's growth and IE Singapore will continue to support companies venturing beyond our shores, in particular to South-east Asia, China and India.

"IE Singapore will continue to deepen our in-market presence and network, to identify and create opportunities, and help our companies seize them. Through internationalisation, companies will transform and create high-quality jobs locally and secure sustainable growth for Singapore."

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A version of this article appeared in the print edition of The Straits Times on February 17, 2017, with the headline Overseas push brings rich dividends for local firms. Subscribe