German SMEs tap into Singapore market

Over 1,800 German firms in Singapore from the industrial sector are looking to expand into the ASEAN.

The business ties between Germany and Singapore provide a growth environment for any enterprise of scale. Even with over 1,800 German companies set up in Singapore, opportunities arise for the small and medium-sized enterprises (SMEs) — known as the ‘Mittelstand’ — to enter the ASEAN region. Prospects for Singapore SMEs are also ripe as they can look to their German counterparts for services in smart city development, high-end manufacturing, electronics and chemicals. 

In an exclusive interview with Singapore Business Review, Singaporean-German Chamber of Industry and Commerce (SGC) executive director Dr. Tim Philippi talks about collaboration opportunities for German and Singaporean SMEs as well as trade fairs and events that both can tap into.

Q: What innovations and developments by Germany businesses can Singapore businesses anticipate?

Successfully taking part and managing the digital revolution is something both Singapore and Germany have a common interest in. In 2017, following the Smart Nation Initiative we saw Singapore setting foot into the next milestone to boost the digital ecosystem.

With much to gain from a fully digitalised economy in the future, the nation is rapidly embracing ‘Industrie 4.0’. The so-called fourth industrial revolution has opened new doors for companies. German companies, the inventors and driving force behind ‘Industrie 4.0’, are also offering various co-operative opportunities for Singaporean businesses.

For German companies, especially in the digital sector, Singapore is a preferred destination in Southeast Asia. Not only does it have the state-of-the-art infrastructure and facilities, Singapore has also established herself as a promising starting point for expansion and market entry into the ASEAN region.

The Singapore government’s strong support for companies has created a positive business environment that significantly facilitates market entry and enhances business-level cooperation for German companies. The EU-Singapore Free Trade Agreement will also facilitate the knowledge and business exchange between Germany and Singapore and further strengthen the existing good business relations between the two countries.

Q: What are the opportunities for Singaporean businesses in Germany?

Germany is an attractive place for investments in Europe from an investor’s point of view. Not only is the geographical location of Germany an advantage for any business venture into Europe, there are also many other factors which affect the success of businesses from various industries. There is a first-class infrastructure which enables excellent transfer of goods via air, sea and land through harbours, airports, railways and motorways, also public and personal transportation is readily available.

Furthermore, Germany has highly trained professionals in all fields and stable social and professional partnerships to enable a business-friendly environment for international investors. Given these excellent advantages, it is normal for any businesses to set foot into Germany when they think about the European market.

Some of the promising industries for Singaporean companies include Chemical and Pharma, Automotive, Electronics and Engineering, ICT, Logistics and Supply-Chain sectors.

The service sector, for example the financial industries as well as management consultancy services also offer possible opportunities for Singaporean businesses. With the rising importance of the start-ups and entrepreneurial ecosystems, Singaporean businesses may also consider developing their innovative solutions in Germany or in cooperation with German companies. It is also a well-known fact that Berlin in particular, is recognised as one of the world’s best locations for start-ups.

Q: What are the opportunities for German businesses in Singapore?

For German companies, the major opportunities are available within the industrial sectors of Singapore for smart city development, high-end manufacturing, electronics and chemicals. In fact, German companies cooperate with many local entities to implement new processes in relation to smart city development and high-end manufacturing.

There are already many German companies set up in Singapore, about 1,800 and growing, but there are still many good opportunities for the small and medium-sized enterprises (SMEs)—known as the ‘Mittelstand’—to enter the ASEAN region. The ‘Mittelstands’ are the backbone of the German Industry and are often world class leaders in their respective fields or industries.

Q: Are there any trade and investment events that Singapore companies can get involved in?

The Singaporean-German Chamber of Industry and Commerce (SGC) is a bilateral chamber and organises many events and activities yearly for Singaporean and German companies to participate in. From speaker-driven business luncheons to delegations and conferences, our events are targeted to specific industries and sectors hence offering Singaporean companies niche networking opportunities.

These are good starting positions for Singaporean companies to get involved. Our annual Energy Efficiency conference, Start-Up and other industry specific delegations such as Water and Sewage Management may offer some avenues for Singapore companies to get involved in. Our Trade Fairs arm of the chamber also organises Singapore pavilions at trade fairs in Germany all through the year for Singapore companies to take part in.

Q: What is your outlook on Germany and Singapore’s business relationship? How else can the two economies support each other moving forward?
Germany and Singapore’s business relationship is set to improve in the coming years. Digitalisation will be a key driving force for both German and Singaporean companies to get innovative – to develop solutions to address the needs of both nations. Furthermore, the recent ratification of the EU-Singapore Free Trade Agreement (FTA), will open doors to German and Singaporean companies to further expand their business and trade activities in both directions.

On this note, Germany being Singapore’s main trading partner in the EU and Singapore in turn being Germany’s main trading partner in ASEAN motions the attractive potential for mutual economic activity. Singapore offers numerous opportunities to develop in a variety of sectors including biotech and health, environment and water technology, digital and interactive media and climate protection where German companies co-operate locally. Furthermore, the continuous strengthening of ‘Industrie 4.0’ also provides very good prospects for German and Singaporean businesses to collaborate successfully to achieve sustainable innovation.