Welcome Speech by Mr Teng Theng Dar, Chief Executive Officer, Singapore Business Federation, at EBIS Conference 2009 "Surviving the Economic Downturn - Business Financing and Market Opportunities for Singapore SMEs"
on 7 May 2009
1. Good morning, esteemed partners, distinguished guests, fellow business colleagues, ladies and gentlemen, it is my immense pleasure to welcome you to today's EBIS Conference.
2. It is timely that EBIS is facilitating today's platform to provide pragmatic, insightful information in the face of the current economic recession. The current market environment is challenging to all businesses in Singapore, and more particularly so, the SMEs in Singapore.
3. On top of the economic gloom has been looming over us, we are yet again plagued with problems from the Influenza A H1N1 pandemic. However, the nation has responded quickly and effectively in face of the Influenza A H1N1 as we are now better prepared because the lessons learned from SARS.
4. Similarly, this crisis-stricken period could also come as a blessing in disguise as it offers as an opportune timing to force businesses step out of their comfort zone, reshape their businesses to meet new conditions and learn from these experiences to be better prepared for the next trial.
EBIS: Market Opportunities
5. Despite shrinking global demands, market opportunities still lie somewhere out there. The question, weighing top on all minds of top business executives and decision-makers, is, where?
6. Companies are now set into full force to brave new markets in search of information on where the new opportunities lie. However it is important that when SMEs explore new markets, they do the due diligence and market research.
7. The value of business information has thus now demonstrated itself. 'Knowledge is power.' as the saying goes. Without information, without knowledge, we would not be able to go anywhere far.
8. Yet, many SMEs are hesitant about approaching information providers for their information and reports. The key factor impeding them from doing so, as reflected by the SMEs, is the financial constraints. A customized business report of such could easily cost them thousands of dollars at market rates.
9. EnterpriseOne Business Information Services (EBIS) can be used as one the key tools that supports SMEs in their business information needs. Equipped with professional consultants, EBIS prepares customized reports specifically tailored to unique business needs of companies. Companies will also be able to access reliable market intelligence and business resources to understand market opportunities, identify viable business leads and support business decision making.
SBF: BCM
10. I would also like to take this opportunity to encourage organizations to identify the potential impact that threatens their organization in the current economic situation. Companies should take proactive measures to enhance their business reputation, consumer confidence and protect their business infrastructure.
11. With a holistic management process for building resilience and the capability for an effective response, organizations will be able to emerge out of a crisis without disrupting the operations; thus minimizing the financial impact during crisis.
12. Such organizations will be differentiated from their less prepared competitors and will be recognized as a reliable and sustainable business partner.
13. Business Continuity Management (BCM) is not just for the "big boys" but for the survival and growth for all businesses, regardless of their size. However SBF also notes that investments in such challenging times are not easy especially for SMEs.
14. Hence as the focal point of the National BCM Programme, SBF has been working with relevant government agencies to:
a. ensure that relevant BCM resources are more accessible to SMEs
b. provide financial incentives to draft BCM certification costs
EBIS: Financing
15. With the current economic situation, there are variations in the key concerns and hindrances facing SMEs. One of the most commonly cited and greatest concern is Cashflow to expand or sustain businesses.
16. The FundsAssist programme that EBIS runs as part of the Financial Facilitator Programme led by SPRING Singapore, makes available help to SMEs. EBIS provides professional guidance on the various financing options and facilitates the loan applications to the financial institutions. This programme could also tap on the strength of EBIS to assist in preparing business plans for the loan applications.
17. Hence, this Conference serves to address this dual-fold challenge. Through this conference, companies can get:
a. a better understanding of the various financing options that are available to them to improve their credit position
b. to learn about the various lead generation resources and tools that they can tap on to enlarge their customer base and also hear first hand from other companies about their unique ways on expanding their businesses in challenging economic situations
Conclusion
18. With all the doom and gloom about the sustained impact of the financial crisis, it is important that SMEs remain positive and far-sighted. They must show willingness to move out of their comfort zone and make the necessary changes to adapt to the new economic situation. For all SMEs who are willing to, Singapore Business Federation is always at their service, ready to assist in seeing them through the tough times.
19. In this light, SBF is pleased to co-organise today's conference with the Association of Small & Medium Enterprises.
20. I would also like to state our appreciation of the partnership of Singapore National Employers Federation, Singapore Manufacturing Federation, Singapore Chemical Industries Council, The Market Place, and Media Buzz, as well the generous support of StrategyLand, Crest Capital, RSM Chio Lim, Marsh and Far East Organization, which all make today's conference possible. Your standing with us is encouraging and we thank you.
21. Finally, to the most important partners in this conference, you the business owners and drivers of the Singapore economy. This conference was put together to offer a range of feasible and practical solutions that would improve your top-line and bottom-line sustainability. I do wish each and every one of you the very best of today's conference and that you would leave armed with a bevy of useful insights and practical tips and measures to not only stay afloat in the current climate, but also on top till the upturn of the economy.
22. Together, we will emerge more resilient from this recession. Thank you.
Opening Address by Mr Lawrence Leow, President, Association of Small & Medium Enterprises at EBIS Conference 2009 "Surviving the Economic Downturn - Business Financing and Market Opportunities for Singapore SMEs"
on 7 May 2009
1. Good morning, my esteemed colleagues from SBF, SCIC, SMa, fellow business owners, ladies and gentlemen, it is my pleasure to be with you today.
2. ASME is pleased to co-organize today's EBIS conference with our partner from Singapore Business Federation. The theme of today's Conference: "Surviving the Economic Downturn: Business Financing and Marketing opportunities for Singapore SMEs", is a true reflection of the key concerns facing our business community today.
3. We are indeed living in a most extraordinary time, which I feel, will go down in history, to take its place amongst other significant economic milestones. One would have not imagined that a robust global economy that we had witnessed in the earlier part of 2008 would turn sick so fast. What started out as a self-limiting, US-centric sub-prime problem, would today affect the economies all over the world.
4. No economy in this global village has escaped unscathed from the financial tsunami: even fast growing economies such as China and India, have had their growth rates curtailed. The International Monetary Fund (IMF) expects the world economy to grow on average by only 0.5% in 2009, revising its previous forecast down significantly. Developed economies are expected to contract to an average of - 2% in 2009 - the first such fall since the 1940s.
5. Due to the highly open nature of Singapore's economy, the impact of the global slowdown is clearly felt at all levels within the business community here, especially the SMEs. The gloom weighs heavier as Ministry of Trade & Industry (MTI) makes repeated downward revision of the country's growth forecast to -9% just this April. It has been projected that Singapore’s GDP would return to steady positive growth only in 2011-12.
6. The economic crisis is expected to claim many corporate casualties. A record number of companies are expected to go bankrupt in 2009 with 200,000 insolvencies predicted in Europe alone -- according to world's largest credit insurer Euler Hermes. In the US, there is likely to be an explosion of failed businesses as an estimated 62,000 firms go under this year compared with 42,000 in 2008. More companies are likely to breach their loan covenants in 2009 as the slowdown intensifies, prompting a surge in company restructuring and failures. The global financial crisis has shown to have an appetite for not only small companies, it has also brought down many unexpected business giants such as Lehman Brothers to their knees and I suspect the list will extend to quite a few more significant and recognizable names in the near future.
7. Just when you think, things cannot get worse, the world has to reckon with the recent outbreak of the Swine flu pandemic. To a country like Singapore, who had experienced first-hand, what a pandemic outbreak such as SARS can do to bring an economy to a standstill, it is understandable that the local business community is jitterish. The gloom and doom seems to refuse to shake off.
8. So is there no silver lining in this cloud of gloom? Is there nothing that can be done to improve our economic destiny? My affirmative response to all you is that there is much that can and will be done to help our business community ride out this tough economic period.
9. Let me put a twist to all this negativity that has been permeating in the air. As you know the Chinese word for crisis carries 2 meanings: one stands for danger and the other for opportunity. As strange as it may sound, I feel that a period of crisis, offers us an opportunity to examine ourselves more carefully and forces us to take decisive actions that we may have been more complacent about in the good times.
10. Crisis will force us make the necessary changes to become better and stronger. Quoting a motivational author, Stuart Wilde, he said "In a time of crisis we all have the potential to morph up to a new level and do things we never thought possible." So in a way, this financial crisis brings with it an opportunity of rebirth and growth. For example, as a result of the crisis, the world can expect a very different banking system of tomorrow, one that would guard against the excesses of the industry, a factor that have brought down some of the largest financial institutions in the world.
11. The crisis has also seen the governments of the world intervene as they have never before to help support their business community and citizens. Some of the steps that have been taken would have been inconceivable only a year ago - as just one example, the willingness of the different governments to offer wide-ranging guarantees potentially covering almost all the liabilities of the banking system.
12. Singapore's 2009 National Budget has reflected similar stance. Incurring the largest budget deficit since our independence, (6% of GDP in FY2009). The government announced a $20.5 billion Resilience Package to support the business community and Singapore ride the financial crisis.
13. While it goes without saying that the financial crisis today has shrunk global demands, slowed down export and caused companies to collapse. But out of the chaos, emerges new opportunities. A study conducted by Ernst and Young involving over 330 leading international companies showed that respondents felt that the crisis had:
a) reduced risk of new entrants
b) caused competitors' withdrawal from their market; and
c) increased the number of bankruptcies among competitors
d) improved the terms that they could negotiate with their suppliers and were able to broaden their supplier base
e) offered immense corporate acquisition opportunities
14. Respondents also felt the crisis would force companies out of their typical comfort zone to:
f) explore new market opportunities
g) work at improving their operational efficiencies
h) reshape their businesses to meet new conditions
i) take more proactive measures to protect their assets and shelter them from payment
15. Hence it is not surprising that evidence from earlier recessions showed companies that which emerged strongest out of these crises were the one who, despite being surrounding by economic panic were able to:
a) identify opportunities to sustain their development during the downturn and
b) to take strategic decisions that distinguished them from their competitors.
16. In order to emerge out of the ashes of an economic turmoil, we cannot allow uncertainty to immobilise us into inaction. All too often, the immediate reaction for companies that are feeling the pinch of a slowdown is not only to cut cost, but also delay investment in strategic initiatives.
17. Companies with foresight knows that the search for cost cutting measures must be balanced out with investment to better secure new opportunities and efforts to improve operational processes. Companies that emerged successfully from previous downturns focused on reducing expenses without sacrificing their long-term health.
18. In fact, the bestseller book "Built to Last", by James C. Colin, provides empirical evidence of how companies emerge stronger out of a crisis. Out of the 18 visionary "Built to Last Companies" identified, 15 of them had lived through the Great Depression of the 1930s. These companies grew from strength to strength because they used the crisis situation as an opportunity to maintain a sustainable business model that will not only survive the downturn, but emerge stronger and in the best position to take advantage of the new growth opportunities as the economy improves.
19. Similarly, it is my hope that 2009 could be the year in which financially sound Singapore SMEs make it to become the next generation of companies that would be recognized as "Built to Last", imbued with the ability to take advantage of opportunities in the midst of the financial chaos. I am confident that we have the mettle to do so, after all was not Singapore, as a country and nation, born out of political turmoil. As a country, we have withstood many tribulations, only to emerge stronger and more resilient. Hence I am confident that we will do the same this time around.
20. I urge all present today to take advantage of the Conference to:
a) better understand the financing resources that they can tap on to keep their operation going and
b) access business opportunities that the current economic conditions offers.
With this I wish you a fruitful day of learning and networking. Thank you.
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