THE FOOD INDUSTRY IN SINGAPORE

Abstract

The food and beverage industry manufacturing sector is the third largest manufacturing sector in Singapore, after the petroleum and electrical and electronics industries, generating an annual output in excess of $2 billion. In 1985, there were 284 food manufacturers and 14 beverage manufacturers in the industry, employing 11,959 workers and generating value-added amounting $563.1 million. Products of the industry include processed meat, coconut oil, spices, biscuits, noodles, soft drinks and beer. Besides catering for the domestic multi-racial market, the industry's products are exported worldwide to markets in USA, Europe, Middle East, South East Asia, China, Japan and Australia. The aim of this Academic Exercise is to study the development of the food processing industry so as to give a better -understanding of its role in the economy, the problems that they may encounter and, finally, the prospects that they hold for future development. After the Introductory Chapter on the objectives, scope and methodology, the literature review, sources of information and limitations of this study, Chapter II gives a current review of the status of the food processing industry in Singapore. The trends in the industry's output, value-added, employment, imports and exports between 1971 to 1983 are analysed and the investments undertaken by manufacturers in the industry will also be highlighted in this chapter. The food processing industry consists of various manufacturing activities ranging from meat processing to beverage manufacturing. For discussion purposes, these activities have been regrouped under various sub-sectors. Chapter III seeks to analyse the distribution and performances of some of these sub-sectors. Major investment issues and problems encountered by each of the sub-sectors will also be discussed to the extent where available data permits. Findings from interviews will be included in this chapter. Chapter IV highlights the factors that have influenced the development of the food processing industry during the period of study, from 1971 to 1985. An attempt to evaluate the extent to which these factors have influenced the perform4nce of the industry will be made in the second part of this chapter. In the concluding chapter, Chapter V, the problems encountered by the food processing industry such as inadequate supply of local raw materials, quality problems, lack of R & D activities, high cost of production and non-competitiveness and constraints in export markets will be discussed. The chapter also looks at the prospects of the industry and concludes with a brief recommendation of the direction which the industry should take in order to achieve higher future growth. This Academic Exercise is concerned with only a few important macroeconomic aspects of the food processing industry. Its coverage is by no means comprehensive or exhaustive. However, it hopes to provide basic information and analysis of the status of the food industry in Singapore.