INTRODUCTION Government and business have striven to create a secure and sincere environment
Springboard for regional trading

SAESL’s $185 million plant will overhaul Rolls-Royce engines for Singapore Airlines

his former British colony is one of the best places in southeast Asia to use as a launch pad into the region. Though just a small island on the tip of the Malaysian peninsula, it has a sophisticated business environment where investment capital can be raised for joint ventures with local partners.
The island authorities stress Singapore’s secure and stable environment, which has helped this 250-sq-mile republic to become a major regional trading and business hub. There is a keen awareness that, with the entry of China into the World Trade Organisation, Singapore’s importance can only grow.

Lee Yi Shyan, chief executive officer of the Singapore Trade Development Board (TDB) says: “We always had the view of turning ourselves into a gateway to Asia and I hope people will use Singapore as a hub. We also hope to be a gateway to China as we have the advantage that we speak the languages used there and we have penetrated their markets.”
He adds: “We cannot underestimate the competitive power of China. We are talking about not only raw materials but also high-end manufacturing. We see them as competitors and, whether you like it or not, the Chinese economy is going to expand.”
To adjust to the inevitable rise of Chinese manufacturing and global exporting, the TDB recently underwent a change of name to International Enterprise Singapore. Part of the strategy behind this is to make Singaporean companies expand in the region, as well as to provide potential investors in Singapore with a wider choice of partners who know how to do business with China and with the southeast Asian countries.

Venture capital has helped transform the economic landscape

“Singapore as a brand name carries a lot of reassurance and foreign investors may be quite comfortable to partner local companies and then continue into China,” he says. “China is a growing market, but doing business in China is not easy. Because we have many years’ experience in this region, we can potentially cover a market of 2.8 billion people. Adventurous business people in the UK may want to consider partnerships, joint ventures and possibly even franchising with Singaporean companies.”

A prime example of how British companies can take advantage of Singapore’s strategic location is a new aircraft engine repair-plant which opened in February. Singapore Aero Engine Services Private Limited (SAESL) is a joint venture between SIA Engineering Company, Hong Kong Aero Engine Services and Rolls-Royce. The $185 million plant will overhaul the Rolls-Royce Trent engines of Singapore Airlines’ Boeing 777 fleet, as well as service a growing number of customers in Australasia, Asia-Pacific and the Middle East.
John Horsburgh, chief executive officer of SAESL, says: “Civil aviation in Singapore is one of the growth areas and is very important. We want to build up a company big enough to support the rest of the region, so our business plan is to draw up to half the business from Singapore Airlines and the rest from other airlines that have Trent engines in the region.”

The Singapore government and the business community work hard to promote a “secure and sincere environment”, adds Mr Horsburgh. “The critical success of any joint venture is to make sure the right partner is selected. That is the make-or-break of any joint venture, and there are many very good and strong companies in Singapore that would make such a joint venture a real possibility.”
Ko Kheng Hwa, managing director of the Singapore Economic Development Board (EDB), points out that there are more than 100 venture capital companies which, between them, manage funds worth some $7.8 billion in the country. So there is no shortage of venture financing.
“For every dollar we put into a venture, there are other companies willing to put in a few more,” he says. “The EDB is 41 years old this year and we have helped to shape the economic landscape. We have played a key role in transforming the economy into a business hub and over these years gross domestic product has increased 40 to 50 times.”