WHILE the Covid-19 pandemic has created the most unexpected circumstances for businesses, German companies are still keen to be in Singapore and do business from here despite the changing global economic and commercial conditions.
Singaporean-German Chamber of Industry and Commerce (SGC) president, Jens Rübbert, says that Singapore is still an attractive location for German companies to do business in the region. "Singapore is the hub in the region and even though there are changing global economic and commercial dynamics, the advantages of Singapore will remain unchanged," he says in an interview with The Business Times
."German companies come here for several reasons: strategic location, stable legal environment, no corruption, excellent infrastructure, widely spoken English, and the long-term predictability of a generally business friendly environment."
Giving examples of recent German investments in Singapore, Mr Rübbert says that last year, Evonik opened its second methionine plant located on Jurong Island.
"The investment for building this plant was more than S$750 million. Together with the first methionine plant which was opened in 2014, the combined investment in both Singapore plants is more than S$1.5 billion. The new plant created more than 100 jobs in all kinds of professions, such as environmental, safety and health domains, technicians and many more. With Evonik's growth in Singapore, new jobs were created for researchers and scientists too."
In the logistics sector, DB Schenker recently started operations of its new warehouse in Singapore with an investment of about S$150 million.
"These examples highlight very clearly the investments German companies made that have contributed to Singapore's economic growth and underline the regional role of Singapore for German companies," he adds.
Mr Rübbert says that as Singapore is the gateway to Asia, many of Germany's small and medium enterprise (SMEs) have chosen Singapore to establish their regional base.
"There are many opportunities for them to explore and grow: smart city development, high-end manufacturing, electronics and chemicals. The 'Mittelstand' (SME) is the backbone of the German industry, and not surprisingly, often world-class leaders in their respective fields or industries.
"This is also why we are focusing more on the 'Mittelstand' when organising delegations from Germany, to support them on their expansion into Asia from the very first step," he adds.
Meanwhile, to better understand the impact of Covid-19 on businesses and the general economy, the chamber did seven flash surveys over the past few months and shared the results with its members. The surveys showed that the majority of German businesses in Singapore see the Covid-19 outbreak as severely disruptive
."One main reason is the travel restrictions. Because most of our member companies have their regional offices for Asean in Singapore, the inability to travel has led to lower sales performance since they cannot meet their partners and clients. Another factor is the work-from-home regulation. As much as it is necessary, it is challenging, and the majority of the members feel that it is important to return to the office," says Mr Rübbert.
"Findings like these - and there were more - helped our members to navigate through the tough times and better prepare themselves for the future. Furthermore, we provided individual services to support our members and clients against the Covid-19 backdrop," he adds.
The chamber caters to individual requests with its trade promotion and service department supporting members. And with regard to the chamber as a platform for members to meet and exchange insights, physical events have not been possible since April. Therefore, the chamber has taken the events online, in the form of webinars to ensure that information exchange between its members remains possible.
"Various topics were covered in our webinars, ranging from coping with the Covid-19 crisis to future technologies such as artificial intelligence and sustainability, which are key topics for both Germany and Singapore.
"Also, the SGC committees meet online. For instance, the Sustainability Committee discussed how German and Singaporean companies can collaborate to achieve sustainability goals. This led to inter alia the presentation of our Grün Book, a publication detailing Singapore's Zero Waste Masterplan, German recycling capabilities, and a case study on international cooperation for a recycling plant, to the newly appointed Minister for Sustainability and the Environment, Ms Grace Fu," says Mr Rübbert.
Looking ahead, the German chamber chief says that the outlook is not the best as reflected in the survey results from the member companies, which encompass both large multinational corporations and the so-called 'Mittelstand' companies.
"But we have to look forward and see how the situation will evolve. Singapore serves as a regional headquarters to many German companies and as a regional centre for Asean. Therefore, the sooner travel can resume the better for the companies which have the responsibility of looking after their clients in the region who contribute extensively to their sales output," he adds.
The German chamber has about 560 members, comprising mainly German companies. About one-third each are in the manufacturing and services sectors and about 10 per cent each are from Wholesale and Trade, Finance and Insurance, and Transport and Storage.
"German companies have been in Singapore for many years. They stayed on in difficult times and benefited from positive developments in good times. Concurrently, Singapore has also benefited from the presence of these companies bringing investments, manufacturing, headquarters, technical training and increasingly research and development facilities to Singapore. Many also have regional headquarters for Asean/APAC. As of now, German companies provide about 45,000 jobs in Singapore," says Mr Rübbert.
© 2020 Singapore Press Holdings
This article was written by Narendra Aggarwal from The Singapore Business Times and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.
