To grow beyond a small market and tight labour conditions, SMEs must expand in the region
by Koh Joh Ting
WHEN it comes to growth, a small and medium-sized enterprise (SME) in Singapore likes to dream big beyond the republic’s borders. According to a survey of 33 companies by APF Group, which initiated the inaugural SME1 Asia Awards, five said — in response to a question how the company plans to beat the oft-cited challenges of in-sufficient manpower, small market size and high business costs — that regionalizing is the way to grow.
This trend is similar to what the fastest-growing companies in Singapore are doing, said DP Information Group chief Chen Yew Nah earlier this year at the Fastest Growing 50 (FG50) press conference. She noted that record 17 SMEs are in the FG50 list, showing that smaller companies are able to respond to post – crisis conditions.
Also, 10 companies with the fastest revenue growth have taken advantage of the emerging markets in Asia.
MHC Asia Group
An example of an SME aggressively riding the Asian tiger is the MHC Asia Group, a managed health-care company. Its chief executive officer, Dr Low Lee Yong, says it is always on the lookout for new scalable ideas to expand its business into the region.
Recently, MHC has signed a memorandum of understanding with Indonesia’s biggest health-care leader, Lippo Group, to take its business of managed health-care and third party administration there. It has also received requests from India, Abu Dhabi and Bangladesh.
“Every country has employers and insurance companies which require a third party administrator (TPA) like us to provide them with a system to reduce administrative work in medical claim processing and managing health-care costs,” says Dr Low. He adds that as MHC is regarded as a leader in managed care and TPA, it has many potential overseas partners seeking its help. In fact, the impending downturn is helping MHC, he says.
One reason is that employers and insurers want to manage and streamline medical claim processes to be cost – effective. Another reason is that companies need to contain health-care costs urgently.
SME bosses agree that having the right manpower with the loyalty and skills is vital. To retain skilled staff in a niche industry and improve work-life balance, for instance, IP Mirror has invested in software to ensure that staff has all the tools — even access to sensitive office documents —to conduct work from home.
“Our staff can also pursue their studies on post-graduate scholarships from the company:’ says Ms Lam.
The SME5 polled say the Government can help prepare them for expansion. Mr. VS Kumar, founder and managing director of Network Express Courier Services, says the Government can help businesses internationalize. “The Government could cater for some funding to support research and the engagement of expert consultants well-versed in identified growing markets ~ and help brands penetrate new markets:’ he says.
MHC’s Dr Low says home-grown MNCs can also play a part in helping Singapore’s SMEs. “The Government could help to link us up with Singapore companies such as our local banks which already have operations in other countries. “With this ready customer base, we can jump start with greater ease in countries in Asia:’ he adds.
Source: SME1 Asia Awards 2011 Special Article in Strait Times 22 November 2011