However, spiralling business and manpower costs are a concern for them
MOST Norwegian firms in Singapore expect to see their businesses expand in the next 12 months, as Norway became the sixth-largest foreign investor here in 2005.
However, many are increasingly concerned about spiralling business and manpower costs in the city state.
In a survey by the Norwegian Business Association in Singapore (NBAS), it was found that some 88 per cent of 60 respondents expect more businesses here in the coming year, while 12 per cent said business prospects would remain at the same level.
There are more than 150 Norwegian business entities in Singapore comprising firms which have opened offices or relocated to Singapore, making Norwegian-owned companies one of the fastest growing classes of overseas business investors in the republic, NBAS said in a statement.
Citing figures from the Department of Statistics, NBAS said that Norway pumped in foreign direct investments (FDI) of $7.9 billion here in 2005, the latest year for which figures are available. This makes it the sixth-largest foreign investor here in 2005.
In terms of European investors, Norway now ranks the fourth-largest investor in Singapore behind only the UK ($50.2 billion), the Netherlands ($31.7 billion) and Switzerland ($21.7 billion).
The survey revealed that Norway’s business presence in Singapore remains very focused on the shipping/logistics and the marine/offshore sectors.
Some 59 per cent of responding firms consider themselves from these sectors, underscoring the already large and growing influence of Norwegian companies on Singapore’s maritime sector.
The steep rise in the cost of office rental, manpower costs and the difficulty in attracting senior executives and talent were widely remarked upon by respondents.
Some 25 per cent of respondents said office rentals were the main concern for Norwegian companies based in Singapore, while 21 per cent are worried about rising wage bills.
A further 21 per cent cited recent steep rises in living cost as their biggest concern, but only 9 per cent said their main concern for their Singapore location was the ‘increasing attractiveness of other locations’ in the region.
Norwegian firms were asked about the main reasons for their firms locating in Singapore and many cited reasons such as the legal infrastructure, strategic location and expanding activities in Singapore in the light of the booming shipping markets.
Other reasons include Singapore’s status as a leading oil trading centre, good communications, the good quality of life for overseas managers and the ‘good business environment and secure systems’.
Still, there were companies that felt that Singapore workers need to be taught initiative and decision-making as they ‘are not used to the flat structure of a Norwegian working culture’, said one respondent.
Another advised Norwegian firms that are setting up operations here to ‘use service apartments and offices in the first few months in Singapore as it is difficult to take major decisions on location for the office and family before you are actually in Singapore and can see how things function’.
The respondent adds: ‘It is also often difficult to hire the right people and, therefore, much better to have temporary staff in the beginning to allow enough time to have proper interviews and discuss this with other Norwegian companies that have been in Singapore over a longer term.’
Source: Business Times 26 Oct 07