MUNICH - About an hour’s drive out of Munich in a town called Bad Tolz is a production facility that produces equipment such as valves for aircraft. It might be miles from home, but the facility is owned by Singapore Aerospace Manufacturing, a subsidiary of Singapore precision engineering and technology group Accuron Technologies.
It has 250 staff and serves customers like Boeing and Airbus.
Accuron’s group chief executive Tan Kai Hoe said the acquisition was a way for the company to diversify its service and product offerings, while allowing further investments in Europe. Accuron also has facilities in France, Austria, Britain and Northern Ireland.
“If you want to grow, you do have to go overseas, there’s no two ways about it because the market in Singapore is just not able to sustain an international engineering manufacturing group,” he said.
“So you select where to go, based on where customers are, the kinds of skilled workers and technology that you need.”
Indeed, more Singapore companies are setting their sights farther than the immediate region of South-east Asia and China, with a growing interest in expanding into Europe, according to Enterprise Singapore (EnterpriseSG).
In 2023, the agency supported 220 companies in exploring Europe, including markets in Germany, the Netherlands, France, Sweden and Britain. This was 20 per cent higher than in 2022 and nearly 50 per cent more than in pre-pandemic 2019.
EnterpriseSG director for Europe Alan Yeo said: “These numbers have increased steadily, especially post-Covid when there was pent-up demand, and we saw a spike in the number of companies willing to come out to see opportunities in Europe in the last few years.”
He noted that Europe has some of the world’s largest economies and offers opportunities in technology and innovation. Singapore companies can leverage the region’s tech expertise and partner companies to acquire technologies. Sectors that hold promise include advanced manufacturing, healthcare, digitalisation and biomedicine, he added.
Singapore companies can play in Europe’s green economy space, as Europe’s governments and companies are keen on the green transition, he said. The green economy includes the offshore wind sector, e-mobility, smart cities and agri-food tech.
Europe has a large consumer base, which provides opportunities for Singapore’s lifestyle products and services.
In particular, Europe’s consumers are ready for sophisticated products or those with sustainability attributes, Mr Yeo said.
Mr Lee Pak Sing, EnterpriseSG assistant managing director for trade and connectivity, said that Singapore firms can play a role in trade and logistics, such as in helping European products to reach Asian markets or taking Asian products to Europe as materials.
For instance, local firm Apeiron collects used cooking oil in the region and sells it to European firms to make biofuel, hence playing a role in the sustainability chains of European companies.
Germany as the gateway
When it comes to picking which European country to start in, Germany is a good bet as one of the world’s largest economies that offers a gateway into the region.
Mr Yeo said it has a strong manufacturing sector that contributes about 20 per cent of the nation’s economy, which mirrors Singapore’s as well. It is also a leading innovation hub in Europe, he added.
Some Singapore companies have used acquisitions in Germany as their entry point into the continent.
For Accuron’s Mr Tan, Germany’s strategic location in the middle of Europe makes it a good place to start the company’s expansion into Europe.
Other draws of the country include its stable political and economic environment, which ensures a secure setting for long-term investments, he said.
He added that Germany’s strong industrial base and its dedication to a strong education in science, technology, engineering and mathematics mean there is a skilled manpower pool available.
Accuron chose the merger and acquisition approach so that it could quickly establish a market foothold, tapping existing networks and integrating technologies, processes and expertise into the company, Mr Tan said.
Another company that took the acquisition approach in Germany is Singapore-listed Nanofilm Technologies International, which acquired thin-film coating solutions provider AxynTeC, which serves the industrial, decorative and medical industries in areas like Southern Germany, Austria and Switzerland.
Its group chief commercial officer Ian Howe said: “Today we have a very strong footprint in Asia, but we also see big potential in European markets. We see that advanced materials are established in Europe and the lead original equipment manufacturers are open to the technologies we deploy. So we do see business in Europe for Nanofilm, starting with the advanced materials space.”
Advanced materials solutions are those that have novel or enhanced properties, such as enhanced wear resistance.
Mr Howe added that Nanofilm agreed to join forces with AxynTeC because it was important for Nanofilm to start its European expansion in Germany, which is the largest and most active market for its products.
AxynTeC has a 25-year history and is well respected in the industry, which makes it a good platform for Nanofilm’s growth and accelerated entrance into Europe.
Opportunities for start-ups
While big companies may be able to acquire small and medium-sized enterprises to get a foot in the European door, Singapore start-ups also have opportunities to enter Europe through Germany.
EnterpriseSG runs a programme called the Global Innovation Alliance, which has networks in 21 cities globally, including Munich and Berlin.
Since 2019, the agency has supported more than 500 Singapore tech companies through the programme, which has benefited over 700 participants in their firms’ overseas expansion efforts.
On average, the number of Singapore firms that participated in the programme in Europe grew at a compound annual growth rate of 43 per cent from 2020 to 2022.
Germany is an innovation hot spot that offers opportunities for Singapore firms in med-tech, climate tech, smart city and Industry 4.0 solutions, said Start2 Group’s Linda Nguyen Schindler, who is director of the Artificial Intelligence Competence Centre, Asia.
Start2 Group is EnterpriseSG’s partner for the global innovation alliance acceleration programme in Munich and Berlin. It also helps to bring German start-ups to Singapore for collaborations that can allow both sides’ entry into their respective markets.
One Singapore start-up that benefited from the global programme is TeleMedC, which develops artificial intelligence diagnostic technologies to detect early changes in the eye to prevent blindness.
The company started operations in 2017 and participated in the EnterpriseSG programme in Germany in 2021. Through the programme, TeleMedC met a contact who helped the firm to settle in Hamburg, getting a two-year research grant to work with the local university hospital.
“TeleMedC is now signed with multiple healthcare partners to roll out this summer. Having progressed well in Germany, we now feel confident that it can be our gateway to other markets in Europe,” said the company’s founder and chief executive Para Segaram.
He added: “It takes time to understand the local market, laws governing hiring, accounting, and we had to rely on translation software and the internet search engines to learn the subtle nuances of communication and work culture.”
Start2 Group chief executive for global and Europe Matthias Notz noted that there are opportunities for German start-ups to connect with those in Singapore, adding that Singapore is a launchpad for the Asian market.
“That’s important because the start-up ecosystem consists of collaborations. You cannot innovate without collaboration. It’s not the collaboration within Munich or between Munich and Frankfurt. It’s the collaboration on a truly international level,” he said.
German company Tiramizoo, which develops software to help companies optimise last-mile deliveries, came to Singapore in 2019 and opened a subsidiary in Kuala Lumpur in 2023.
Along the way, it worked with Singapore start-up dConstruct Robotics, which delivers solutions for mobile robotics applications. Through this collaboration, dConstruct Robotics opened a subsidiary in Munich.
Tiramizoo chief executive Martin Straeb said: “We have gained partners and been working with other companies in Singapore, which helps us gain knowledge in robotics, for example.”
Source: The Straits Times
Link: Here
August 01, 2024
