JTC nudging SMEs towards increased productivity

[SINGAPORE] The new breed of industrial buildings rolled out by JTC Corporation may well give small and medium-sized enterprises (SMEs) - used to doing everything themselves - cause to think about how to run their businesses.

"If you look at MNCs, they tend to specialise and outsource things that are non-core. But this may not be the case for our SMEs," says JTC CEO Png Cheong Boon.

"For example, a food manufacturer tends to have its own delivery trucks and warehouse. Therefore, it ends up having to provide services such as delivery and warehousing on top of its core manufacturing and it doesn't enjoy the economies of scale that come along with outsourcing such services to a specialised operator.

"We encourage companies operating in our space to redesign their processes and consider outsourcing. In that sense, we are trying to use our innovative spaces to support and in some ways accelerate the transformation of our industries."

The future JTC Food Hub in Senoko, for instance, will feature shared integrated cold-room warehouse facilities operated by a third-party logistics service provider, who will in turn offer a full suite of logistics services to tenants.

This is a challenge for business owners in that they have to relook existing assets or employees, and it requires them to review their business models, acknowledges Mr Png.

"Our sense is that when companies looking for more space are faced with this kind of growth opportunity, and resources are tight, they tend to be more open to figuring new things out," he said.

The Food Hub (due to be completed by 2017) is not the first of the innovative spaces to be rolled out by JTC, which has in recent years stepped up the development of its built facilities.

The high-rise multi-tenanted Surface Engineering Hub in Tanjong Kling, for instance, clusters companies to generate economies of scale, synergies and partnership opportunities between the companies. In addition, the firms are able to leverage the centralised wastewater treatment plant, which helps reduce operating costs over time.

"JTC no longer builds 'plain vanilla factories' as this is a segment well served by private developers. Instead, we are stepping up efforts to plug the market gap by building the next-generation industrial facilities with innovative and productivity-enabling features - which the private sector may not be able to provide," said Mr Png.

As part of JTC' s plans to roll out 16 innovative spaces, the agency is also looking at ways to transform and upgrade the furniture and furniture-related industry, as well as concepts on the drawing board that include plans for a poultry processing plant, a chemicals hub and, in the longer term, a multi-user shipyard.

In the meantime, JTC is also stepping up its engagement and discussions with various trade associations.

"Now, we are working more with trade and industry associations to see what are their issues on the ground, what are their land and space needs, and whether there is something JTC can do to help or facilitate," said Mr Png.

"And because associations are more aware of what we are doing and what we can do, they are also a lot more forthcoming in sharing their requirements with us."