International Enterprise (IE) Singapore, the government agency promoting international trade and partnering
Singapore companies in going global,
and United Overseas Bank (UOB) have partnered to accelerate
trade
and
internationalisation for
Singapore companies through a memorandum of understanding (MoU) that marks
IE
Singapore’s first
strategic
partnership with a Singapore bank.
IE Singapore and UOB aim to assist
200 Singapore companies in their overseas expansion
over the next three years,
especially to Southeast Asia, China, Japan and Europe. Companies expected to benefit from the IE Singapore-UOB
collaboration
include
those in consumer-related sectors, business services, digital solutions, infrastructure, real
estate,
tourism, hospitality, logistics and trade.
In line with IE Singapore’s strategy to build and
strengthen wholesale trade in
Singapore, UOB will provide advisory and solutions on trade financing
for
Singapore
companies expanding overseas.
Both parties
will also develop innovative initiatives and
financial tools to ease the internationalisation process.
This includes
piloting
new
fintech solutions to raise cross-border trade efficiency.
The collaboration will
provide Singapore companies with
customised trade and financing solutions,
deeper
access to in-market connections, business partners and professional service providers
across Asia, including
business tieups with UOB’s global clients. UOB will offer financial solutions such as
supply chain financing, cross-border financing, venture debt, cash management and
settlement, as well as professional services including public listings, bond issuances
and corporate finance advisory.
In
particular, its Foreign Direct Investment (FDI) Advisory Unit is strong in cross-border banking,
especially in
Southeast Asia. The unit has already helped more than 1,700
companies fulfil regional growth ambitions since 2011, and will work with IE Singapore to provide greater links to local
government agencies, industry partners and professional service providers.
Said Chua Taik Him, Deputy
CEO, IE Singapore,
“This connectivity collaboration
helps
IE
Singapore
and UOB to
reach
out to more Singapore companies, offering them better
market insights, business intelligence and a more comprehensive choice of financial
solutions. Through strengthening such cross-border business infrastructure, we hope to
drive the growth of wholesale trade and overseas expansion of Singapore companies.”
Frederick Chin, MD and Head of Group Wholesale Banking, UOB, said, “At
UOB, we channel the same commitment that transformed
us into a leading
regional
bank into helping companies fulfil their
growth
ambitions
both domestically and
in
overseas markets.
We do this by providing our
unique combination of local
presence
and expertise, astute market insights, regional network connectivity and seamless
cross-border solutions.
Through
our collaboration with IE Singapore, we will be able to
deepen
further
our support of Singapore
companies
as they spread their wings
overseas.”
Lee Ark Boon, CEO, IE Singapore, noted that
there has been heightened economic uncertainty in 2016. "Weak external demand is affecting
Singapore’s trade. Competition has also intensified as regional countries continue to
develop their economies. Nevertheless, Asia remains a bright spot and there are vast
opportunities for Singapore-based companies to tap into," he said.
"As a small country with an open economy, connectivity is core to Singapore’s
prosperity. We started as a trading port and over the decades, we have built up the
depth and breadth of our international linkages to become one of the most connected
countries in the world
2.
Today, our excellent connectivity forms the backbone for trade
and investments. Connectivity goes beyond the physical flow of
goods – combining physical trade and
logistics networks with emerging financial and digital innovations. This provides
opportunities for our companies to create new business models, which gives us the
competitive edge."
Lee used the example of the evolving Singapore wholesale
trade sector to illustrate his point. "We will require connectivity in the form of electronic payments, e-marketplaces and other value-added services.
5. Hence, it is crucial that key business services functions, such as finance, logistics and
professional services, are fully integrated into the overall ecosystem, leading to more
seamless business and trade flows to and through Singapore," he said.
The collaboration
taps
the rising potential of
ASEAN, especially
in
intra-regional
trade.
In the past five years, intra-ASEAN trade almost doubled from
US$332 billion to US$600
billion in 2015, and
total
intra-ASEAN trade
is expected to
hit
US$1
trillion in 2020
1.
The region’s growing middle income class, increasing
connectivity
and
expansion
of
e-commerce will create
greater
demand for
goods and
services,
which will in turn
drive
the increase in
cross-border and B2B transactions.
Lee noted that the partnership combines complementary strengths to
offer better financial and professional services; as well as market access through each
other’s overseas network for Singapore companies looking to expand regionally,
especially in ASEAN. "ASEAN is a key market for Singapore. A recent study
3
by the Ministry of Trade and
Industry (MTI) shows that the ASEAN-5 economies, comprising Indonesia, Malaysia,
Philippines, Thailand and Vietnam, have overtaken the US as the largest final demand
market for Singapore.
"As the ASEAN Economic Community deepen its roots, it will further boost intra-ASEAN
investments and trade flows, underpinned by our region’s rising middle class and
urbanisation. On the trade front, it is forecast that intra-ASEAN trade will grow to
US$1 trillion in 2020.
ASEAN as our economic hinterland is no longer rhetoric but
reality and opportunity," he said.
Wee Ee Cheong,
Deputy Chairman and
CEO,
UOB, said both organisations have "a shared
vision and deep commitment to helping Singapore businesses grow". "The world today is of slower growth yet more volatile and less predictable.
Asia is not
spared. However, the fundamentals here work in its favour, whether it’s
demographics, intra-regional business flows or the rising middle income. As for ASEAN, the economy is valued at more than US$2.5 trillion. Its growth continues to
outpace those of the EU and US.
"Connectivity initiatives present further opportunities. We have One Belt One Road,
Asean Economic Community, Regional Comprehensive Economic Partnership and the
Free Trade Area
of the Asia Pacific. These and ongoing digitalisation will draw markets
closer," he said, adding that continued engagement, a practical, paced approach and learning from past lessons could help to realise the collective potential of the region.
According to a recent
UOB Asian Enterprise Survey, limited growth in
domestic markets was one of
the top barriers to growth cited by Singapore enterprises.
"From our survey, we also know that Singapore companies seek strong local business
connections when they trade and expand overseas.
With this MoU,
UOB and IE
Singapore will work together to provide jointly the connectivity that these companies
need in their overseas ventures,
in particular, in Southeast Asia, China, Japan and
Europe," Wee said.
"As partners, we will also explore the
use of innovative tools and initiatives, including fintech solutions, to help Singapore
companies conduct cross-border trade more effectively," Wee added.
"With UOB’s own roots as a small and medium sized enterprise (SME), we have deep insights and full appreciation of what it takes to pioneer a business, to grow
it in your home market and then to take it regionally. We also understand the
importance of having the right partnerships to help accelerate the process of growth
and expansion."
UOB had previously partnered IE Singapore in its Internationalisation Finance
Scheme to facilitate overseas expansion.
1 Source:
Asian Banking and Finance, 16 October 2016.
2 Singapore ranked first in the McKinsey Global Institute Global Connectedness Index in 2014, and in
the top three positions of the DHL Global Connectedness Index from 2007 to 2013.
3 Extracted from Singapore Minister S Iswaran’s speech at the MTI Economic Dialogue on 6 September 2016. Iswaran is Minister for Trade & Industry (Industry) and Co-Chairman of the Committee on the Future Economy.
