Capital investments necessary to stand out in Singapore

Because of the small size of the Singapore fresh produce market, competition among importers is fierce. As soon as someone finds a new product, rival importers rush to jump on the new trend. That forces companies to find ways to stand out, and in a country where many importers ship and sell their products without refrigeration, Hu Lee Impex Pte Ltd has found that a complete cold chain infrastructure helps them stand out.

“Earlier importers of Cameron Highlands’ Iceberg Lettuce didn't invest in pre-cooling facilities,” explained COL(R) Lau Bock Thiam, CEO of Hu Lee Impex. “But that lack of pre-cooling limits you from selling your product at the retail level, so we invested in pre-cooling facilities and refrigerated trucks, and now our star product is Iceberg Lettuce from Cameron Highlands”

“If you don't have an innovative approach, you will be phased out,” said Lau. “Singapore is a very small market, and everyone knows what you're doing today and will compete with you tomorrow; it's dog eat dog. You can survive selling traditional products, but the margins are razor-thin. The high-end products are the future.” Those products don't necessarily have to be novel in themselves, but something about the way they're processed, packaged or marketed must be novel. In the case of Hu Lee, Lau explained that the decision was made to invest in equipment that adds value by making Ready-to-Eat and Ready-to-Cook processed vegetables. While the initial costs may seem high, the returns make up for initial investments. In addition to new facilities and equipment, it also means maintaining HACCP certification, even when it gets expensive.

“Before you introduce a product to the market, you need a lot of marketing, promotion and planning,” said Lau. “So we have to have an understanding with our suppliers that they will primarily sell to us, because everyone else will want to copy anything you do.” Lau believes it's a losing proposition for all importers when everyone runs to the latest fad and undercuts each other.