Singapore a magnet for German businesses
They are expanding their presence in the Republic amid global uncertainties
WITH its strategic location and robust governance, Singapore has long attracted global businesses looking to establish a foothold in Asia. In recent years, German businesses have been expanding their footprint in Singapore’s commercial landscape, signalling growing confidence in the Republic as a hub for innovation, trade and advanced manufacturing.
Despite the disruption caused by the pandemic, the number of German companies here has grown to around 2,200, up from around 2,000 three years earlier, according to figures from the German Embassy in Singapore. Both German multinationals and small and medium-sized enterprises use Singapore as their regional base, making it easier to expand into other South-east Asian markets.
Some recent investments by German companies in Singapore include logistics group DB Schenker, which earlier this year broke ground on its RedLion2 facility. The project represents an investment of over 100 million euros (S$144.2 million) that will increase the company’s logistics footprint here to nearly four million square feet. Located at Tampines LogisPark, the facility is slated for completion by the first half of 2025.
Meanwhile, speciality chemicals company Evonik has embarked on the construction of a new alkoxides production plant, adding to its investments in the Republic that have crossed the S$1.5 billion mark. Amid uncertainty in global markets, German companies in Singapore are also setting an example of how to diversify their operations. In June, for instance, Siemens announced plans to establish a new plant here, which allows the company to reduce its reliance on singular supply chains.
A springboard to the region
One German company that has long leveraged Singapore’s advantages is leading logistics player DHL. The group has been a part of Singapore’s economic landscape since 1972, operating initially as a door-to-door international express document delivery company. Over the years, DHL has expanded its network, establishing multiple service centres. In 2016, it established the South Asia Hub here to serve as a hub for this region, connecting Singapore to the rest of the world. The company has also added substantial air capacity in recent years, doubling its air cargo volume throughput at Changi Airport by the end of 2021, compared with 2019.
Today, Singapore plays a central role in DHL’s multi-hub strategy for its air network in Asia-Pacific. This is supported by four main hubs – Central Asia Hub in Hong Kong, North Asia Hub in Shanghai, South Asia Hub in Singapore and Bangkok Hub, which link to 50 DHL Express gateways in the region.
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“As we have learnt from the pandemic, it is more important now than ever to foster supply chain resilience, and this strategy has helped us to ensure that flights and deliveries continue regardless of situations. We’ve never stopped operations for a single day even during the worst of the pandemic, which also saw us delivering 11 million doses Covid-19 vaccines in Singapore,” said Christopher Ong, managing director, DHL Express Singapore.
“As a location, Singapore is extremely well-connected, cosmopolitan, and is known for its strong governance. All of that has helped to grow our hub capacity in Singapore and Asia tremendously.”
DHL applies a global outlook to its operations while adapting to local work cultures in Singapore. Its Certified International Specialists programme stands as a testament to this philosophy. The company has been recognised as one of Singapore’s Best Workplaces by the Great Place to Work Institute, having been ranked in first place for three straight years since 2020.
Looking ahead, DHL is working towards its commitment to achieve net-zero emissions by 2050. The company has been transitioning its fleet to electric vehicles, and has partnered BP and Neste to utilise sustainable aviation fuel.
Driving growth
Another established German company in Singapore is BMW Group Asia, which made its entry in 1985. The regional office here oversees 14 markets across South-east Asia, South Asia, and the Pan Pacific Islands for both the BMW and Mini brands. The company has been proactive in diversifying its electric vehicle portfolio, launching several first-ever models such as the BMW iX3 and i4 during the pandemic.
However, Singapore is more than just a market for BMW; it is also a business incubator and a regional hub for strategic corporate functions such as financial services and treasury.
“Singapore’s support for business development, coupled with its strategic location within the region, makes it the perfect launchpad as an incubator for our importer markets,” said a spokesperson for BMW Group Asia.
Meanwhile, diversity drives BMW’s global corporate culture, which is well-aligned with the multicultural ethos of Singapore. In Asia, the group’s 180-strong workforce is represented by 23 nationalities, and women comprise 33 per cent of its management team.
Sustainability is a key priority for BMW Group Asia. Housed in Keppel Bay Tower, Singapore’s first commercial building powered 100 per cent by renewable energy, the company is making significant strides in integrating sustainability into its operational fabric.
Like many German companies, DHL and BMW have not only capitalised on Singapore’s strategic advantages, but have also made commendable efforts in sustainability and cultural alignment.
Said Ong: “Singapore is a great location as a launchpad for German Mittelstand. These are small and medium-sized German companies with strong technical skills and expertise, and the potential to expand their footprint to the rest of the world, including Asia. With its diversity in cultures and political stability, as well as availability of talent, Singapore is poised to be a great place to start their foray into Asia.”
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